Bill McBride, an economic analyst with 20 years of experience, discusses the importance of key economic indicators like non-farm payrolls, GDP, and housing sales in predicting economic trends. He also explores the impact of rents on inflation measurement, the real estate market, and essential economic indicators for investors such as the unemployment rate and inflation figures.
Understanding the significance of employment data for real-time economic insights.
Analyzing rent impacts on inflation measures to identify trends closer to the Fed's target rate.
Deep dives
Economic Data Analysis
Bill McBride discusses the importance of economic data analysis, emphasizing major releases such as the Employment Report, GDP report, and housing data like new home sales. McBride highlights that surprises in data often drive insights into economic changes, mentioning that employment data offers real-time insights while housing data can predict future economic trends.
Inflation Dynamics
The podcast delves into inflation dynamics, focusing on the impact of rents on inflation measures. McBride explains that while rent prices surged in the past, current asking rents have stabilized. By analyzing inflation reports and excluding rent-related inflation, McBride identifies trends closer to the Fed's target rate, highlighting the delicate balance in considering rent effects on overall inflation.
Investor Focus Areas
Addressing investors, McBride highlights key data series for tracking economic cycles: unemployment rates, payroll reports, and inflation indicators like CPI and PCE reports. He suggests that during economic uncertainty, monitoring weekly unemployment claims is crucial, while emphasizing the significance of understanding where the economy stands within the cycle and the importance of selective attention to specific data releases.
Bill McBride of Calculated Risk has spent the past 20 years taking apart economic data, creating “opinion-free” analysis of the economy, and accurately identifying booms, busts, bubbles, and recoveries in real-time, including the great financial crisis and its subsequent housing bottom + recovery. He speaks with Barry Ritholtz about the data that matters, and the data that doesn’t, and how investors can tell them apart.