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P&L: Wall Street's Bro Culture Has Been Emboldened by Trump · Bloomberg Intelligence

0:04
Speaker 1: Welcome to the Bloomberg p and L Podcast. I'm pim
0:07
Speaker 1: Fox along with my co host Lisa Abramowitz. Each day
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Speaker 1: we bring you the most important, noteworthy, and useful interviews
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Speaker 1: for you and your money, whether you're at the grocery
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Speaker 1: store or the trading floor. Find the Bloomberg pim L
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Speaker 1: Podcast on iTunes, SoundCloud and at Bloomberg dot com. I
0:30
Speaker 1: want to bring in Katia Porto Kanskim mispronounced her name
0:34
Speaker 1: even though we had just been talking about it. Katya Porzkansky,
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Speaker 1: excuse me, Bloomberg News reporter who wrote a fantastic story
0:42
Speaker 1: on the Bloomberg It's one of the most well read
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Speaker 1: of the day. Um about bro culture on Wall Street
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Speaker 1: and how Donald Trump rising to be uh, you know,
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Speaker 1: the Reblican candidate is actually empowering the bro culture. Can
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Speaker 1: you talk a little bit about what your story was about. Absolutely?
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Speaker 1: I Uh. I went into this thinking that I could
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Speaker 1: write a story about the amazing uh discussions and dialogues
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Speaker 1: that are happening across Wall Street trading floors. It never
1:12
Speaker 1: happened before with people, you know, come with men coming
1:15
Speaker 1: up to their female colleagues and being like, Wow, let's
1:18
Speaker 1: really talk about this. But no, that's not that's not
1:20
Speaker 1: really what's happening. I spoke with about twenty women at
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Speaker 1: Hedge funds, private equity firms, Wall Street Banks. Um, and
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Speaker 1: that's really not what's going on, at least not in
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Speaker 1: most of them. Um. I've heard, uh, some really shocking stories,
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Speaker 1: some kind of some stories are kind of expected. But
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Speaker 1: give us to give us a shocking story. Well, one woman,
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Speaker 1: um uh, basically learned through all this that her her,
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Speaker 1: her boss doesn't really think that that uh, what Donald
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Speaker 1: Trump was describing in his remarks about on the bus,
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Speaker 1: those famous remarks, you know, are are that bad basically
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Speaker 1: And and she and she's a victim of sexual assault herself.
2:03
Speaker 1: And now she's wondering if, um, she will be supported
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Speaker 1: by her boss if if something ever were to happen
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Speaker 1: to her on a business trip or in in the
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Speaker 1: office environment. And she's also questioning his judgment, um, you know,
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Speaker 1: as her boss is just general judgment, if you know,
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Speaker 1: if if he's necessarily making good decision. So this sort
2:21
Speaker 1: of speaks to this point that that you know, former
2:24
Speaker 1: Microsoft's CEO Steve Balmer was making when he said that
2:27
Speaker 1: c e O s should not speak up in terms
2:31
Speaker 1: of who they support politically. But my question is, is
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Speaker 1: Donald Trump such an other candidate here that when you're
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Speaker 1: making comments like this that are so obviously degrading to women,
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Speaker 1: is it your responsibility as a boss or a leader
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Speaker 1: to make a public statement to show some sort of recognition, uh,
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Speaker 1: that you know, I don't agree with these statements exactly.
2:53
Speaker 1: I think that was what was really interesting from a
2:55
Speaker 1: lot of the conversations I had that if, um, if
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Speaker 1: you believe or your bosses or your colleagues are Trump
3:02
Speaker 1: supporters and they don't come out and just say, hey,
3:06
Speaker 1: by the way, I don't really agree with what he
3:09
Speaker 1: said about women, then you're on edge. You're kind of
3:12
Speaker 1: you're like, well, without having that conversation, you're going to
3:16
Speaker 1: be thinking to yourself, is that what my boss or
3:19
Speaker 1: my colleagues think about women? And you kind of the
3:22
Speaker 1: lack of a conversation is just as bad. Um. So
3:26
Speaker 1: that's what's what was really interesting about it, Because it's
3:28
Speaker 1: one thing when you're surrounded by women in an office
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Speaker 1: and everyone kind of is talking about things all the time.
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Speaker 1: But if you're that one woman on a trading floor
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Speaker 1: and you're surrounded by twenty people who are backing, Uh,
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Speaker 1: a politician that feels this way about women, you need
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Speaker 1: to have a dialogue. Did you get the sense that
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Speaker 1: people are actually emboldened to say even more aggressive statements
3:49
Speaker 1: with Donald Trump? So there are a few women that
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Speaker 1: I spoke with who sit on or by a trading
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Speaker 1: floor that said that they that the comments have added
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Speaker 1: fuel to the joke pool um and and then yeah,
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Speaker 1: and and emboldened them to say things, um that on
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Speaker 1: already a misogynistic day to day environment has gotten even worse.
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Speaker 1: And the other thing that they that several women mentioned
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Speaker 1: was it's not necessarily about Donald Trump, it's about Hillary Clinton.
4:17
Speaker 1: To a lot of the comments that are made about
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Speaker 1: Hillary and her ability to lead that sounds gendered. Um,
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Speaker 1: are putting women Republicans and Democratic Democratic women alike on
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Speaker 1: edge that Okay, this is this what they think about
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Speaker 1: leaders that are women, and therefore is this what they're
4:34
Speaker 1: thinking about me? And that was really powerful that if
4:38
Speaker 1: several women mentioned that that there's this constant, you know,
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Speaker 1: that double bind of I can't be a leader and
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Speaker 1: I can't be a woman and I can't make everybody happy,
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Speaker 1: um and and it's bringing up all these thoughts, uh,
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Speaker 1: which in this conversation, this inner dialogue, and they can't
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Speaker 1: really talk about it to anybody because they don't want
4:54
Speaker 1: to be ostracized and they don't want to be thought
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Speaker 1: of as emotional or overthinking it or speaking to that point.
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Speaker 1: I mean, what has the response been, Like, do people
5:04
Speaker 1: say that you're overthinking it? Almost everybody that I spoke
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Speaker 1: to said I can't talk about this at work and
5:11
Speaker 1: I can't talk about it on the record, So or
5:15
Speaker 1: did they think that I was overthinking? Well, no, that
5:17
Speaker 1: I mean, that's that's very interesting. But after you wrote
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Speaker 1: the article, I mean, what if what if the response
5:21
Speaker 1: has been like I've gotten several emails from women being
5:24
Speaker 1: like this is spot on several several emails, so it's
5:27
Speaker 1: it's all been positive, Uh, not all of it. I
5:30
Speaker 1: have gotten a few emails, um, you know, wondering, um,
5:35
Speaker 1: you know, what my motives were, or if this is
5:37
Speaker 1: an opinion that I have, And I again I have
5:39
Speaker 1: to stress this isn't an opinion. I went in thinking
5:41
Speaker 1: that this would be a very that you know, all
5:43
Speaker 1: of Wallster would have been enlightened or something about the
5:46
Speaker 1: struggles women face, and and it wasn't that so, um,
5:50
Speaker 1: so there's an environment out there that I'm you know,
5:52
Speaker 1: not necessarily privy to. And I learned a lot from
5:56
Speaker 1: speaking with these women. Are you surprised at all that
6:00
Speaker 1: we're we're still dealing with this level of sort of
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Speaker 1: base uh comments, You know what I mean by that, like, like,
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Speaker 1: in other words, that we haven't really been able to
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Speaker 1: address as a professional culture yet that that talking about
6:15
Speaker 1: women in this way is obviously not cool. Well, I
6:20
Speaker 1: think that the most overt stuff has kind of been
6:26
Speaker 1: taken care of. But the problem is that it's not gone.
6:29
Speaker 1: There's just this veneer, right, It's still there, but it's
6:33
Speaker 1: more subtle. It's not over harassment. It's discrimination. That is
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Speaker 1: the That was the consistent theme. Every single woman I
6:41
Speaker 1: talked to said she still faces some sort of discrimination
6:44
Speaker 1: or sexism at work and whither at work or doing
6:48
Speaker 1: business in the field, but maybe subtle, not necessarily so.
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Speaker 1: And that's what's even harder to address. It's not something
6:54
Speaker 1: you could just bring the hr and be like this happened.
6:56
Speaker 1: It's more that the constant things that just chip away
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Speaker 1: at you and and leave you behind. Well, and I
7:01
Speaker 1: should say, I mean Donald Trump is not necessarily representative
7:06
Speaker 1: of male leaders in corporate America. I remember a story
7:10
Speaker 1: a month or two ago about how any CEO who
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Speaker 1: had said what Donald Trump had said would have been fired.
7:16
Speaker 1: There's a quote in an article from last month, uh
7:20
Speaker 1: where a CEO of a boutique executive search firm said,
7:23
Speaker 1: any CEO who got caught making the kind of comments
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Speaker 1: Trump did would be out the door in twenty four hours.
7:29
Speaker 1: So this isn't necessarily representative of any excite any of
7:32
Speaker 1: me exactly. And that's that was actually one of the
7:34
Speaker 1: points that when the women I spoke to said, she said,
7:36
Speaker 1: if if this guy would have been fired if he
7:39
Speaker 1: worked with us here, but he's there running for president,
7:43
Speaker 1: what kind of license is that giving the people around
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Speaker 1: me to say something? So, even if things aren't happening
7:50
Speaker 1: right now, Um, if the effect isn't happening right now,
7:54
Speaker 1: it's bringing up questions in people's minds as so, what
7:57
Speaker 1: will be the lasting impact from this um either for
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Speaker 1: women because of the way that Hillary has been scrutinized
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Speaker 1: UM in these circles, or or for men to embolden
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Speaker 1: them From Bloomberg News, thank you so much, fascinating story,
8:11
Speaker 1: and regardless of people's opinions. Definitely a topic that's important
8:14
Speaker 1: just to talk about. Thank you so much for being
8:17
Speaker 1: with us, and Lisaid Brama's here with Alex Sherman. This
8:19
Speaker 1: is Bloomberg. Thank you. I want to bring Heidi Shareholds
8:33
Speaker 1: into the conversation. She is the chief economist for Labor
8:37
Speaker 1: Secretary Tom Perez and a longtime labor economist who came
8:41
Speaker 1: to the Labor Department from the Economic Policy Institute. HII,
8:44
Speaker 1: thank you so much for being with us. Oh, thank
8:46
Speaker 1: you for having me. H. So, what was your big
8:49
Speaker 1: takeaway from today's jobs numbers? I think the key thing
8:54
Speaker 1: about today's jobs numbers is that it shows that the
8:56
Speaker 1: labor market is continuing to reliably improve. We're seeing monthly
9:01
Speaker 1: job games that are strong enough, they're solid enough to
9:04
Speaker 1: start to start start tightening employment conditions. And the good
9:07
Speaker 1: thing about that is that it's in that is in
9:11
Speaker 1: turn boosting wage growth, so that solid job growth is
9:16
Speaker 1: really starting to act on boosting wage growth now. So
9:20
Speaker 1: workers are seeing now sustainable, meaningful wage growth and that's
9:24
Speaker 1: very good news for the American worker. We're not there yet,
9:27
Speaker 1: we still we still have progress. There's still progress to
9:30
Speaker 1: be made, but this is these are nice steps that
9:32
Speaker 1: we're taking. And so, Heidi, we we've seen the headline numbers,
9:35
Speaker 1: a hundred and sixty one tho jobs created last month
9:38
Speaker 1: for non farm payrolls, the unemployment rate drop to four
9:40
Speaker 1: point nine percent. What is underneath the headline numbers that
9:44
Speaker 1: we should be paying attention to? Is there one or
9:46
Speaker 1: two sort of bullet points that stick out to you
9:48
Speaker 1: as particularly interesting or important for this month? Yeah. One
9:52
Speaker 1: of the UM when I whenever I see a single number,
9:55
Speaker 1: I always want to check it against longer run trends
9:59
Speaker 1: because you know there can be month to month volatility
10:01
Speaker 1: in the numbers. We saw a hundred sixty one jobs
10:04
Speaker 1: added this month. If you look over the last three months,
10:07
Speaker 1: it was a hundred and seventy. So so what we
10:10
Speaker 1: saw today is in line with what we've been seeing. Um.
10:13
Speaker 1: The key thing that that I think is important, what
10:18
Speaker 1: that trend has been translating into that's not in those
10:21
Speaker 1: direct headline numbers is the wage growth. So over the
10:24
Speaker 1: last year, we where we saw two point eight percent
10:27
Speaker 1: growth on average wages, Inflation over that period is running
10:31
Speaker 1: at about one and a half percent. So that difference,
10:34
Speaker 1: that's what workers are taking home in terms of real
10:38
Speaker 1: or quote unquote inflation adjusted wage growth. And so that's
10:41
Speaker 1: good news. That's the that's the thing that's not in
10:44
Speaker 1: the headline. But that is a really salient part of
10:46
Speaker 1: this report. Well, but there was there were some blemishes
10:50
Speaker 1: in the report, in particular, uh, the participation rate in
10:54
Speaker 1: other words, the share of working age people who are
10:57
Speaker 1: employed or um looking for work. It's just there are
11:00
Speaker 1: more people still who are working either part time or
11:04
Speaker 1: have been out of work for so long that they're
11:06
Speaker 1: not even counted in these numbers. Uh, And that those
11:08
Speaker 1: rates of those people are still higher than it was
11:11
Speaker 1: before the last recession. I mean, how concerned are you
11:14
Speaker 1: about that? It is that is part of this the
11:18
Speaker 1: unfinished business of this recovery. In no way do we
11:21
Speaker 1: think that we are there yet to quote unquote, we
11:23
Speaker 1: are not, you know, sort of spiking the football. There's
11:25
Speaker 1: still work to be done. And labor force participation rate
11:29
Speaker 1: in particular is one of those areas. One thing about
11:32
Speaker 1: the specific movement that we saw this month that ticked down,
11:36
Speaker 1: but it's sort of been bouncing around. It's actually been
11:39
Speaker 1: pretty flat. And to get a little bit wonky about that,
11:43
Speaker 1: that's actually weirdly kind of good news because there's demographic
11:48
Speaker 1: changes that should be pushing that labor force participation rate down.
11:53
Speaker 1: In particular, we're seeing this huge cohorte of baby boomers
11:56
Speaker 1: hitting retirement age. So the fact that we're holding pretty
11:59
Speaker 1: steady while swimming upstream in terms of, you know, swimming
12:04
Speaker 1: against those demographic trends that would be pushing the labor
12:07
Speaker 1: words participation right down, that actually means that we are
12:11
Speaker 1: seeing people people being brought in who who by the
12:15
Speaker 1: strengthening labor market. I uh, do you think that if
12:19
Speaker 1: the FED does raise rates, which they're widely expected to
12:23
Speaker 1: do next month, um and then and then continues on
12:27
Speaker 1: on a pace that is perhaps two rate hikes next year,
12:30
Speaker 1: that the labor market will be able to continue making progress.
12:35
Speaker 1: You know. I will let other people comment on the result,
12:39
Speaker 1: the likelihood or results of any FED action, But what
12:42
Speaker 1: we are seeing is an economy that's really resilient right now.
12:46
Speaker 1: We're just seeing steady, reliable job growth that has been
12:50
Speaker 1: pretty resilient to various headlines that have been thrown in
12:54
Speaker 1: its direction. One of the question with respect to wage growth,
12:57
Speaker 1: are there particular industries that have been driving the overall
13:01
Speaker 1: wage growth that we saw last month. You know, one
13:04
Speaker 1: of the I think one of the um key features
13:08
Speaker 1: of the last couple of years in the labor market
13:11
Speaker 1: is that we have seen strong growth employment growth across
13:16
Speaker 1: the board, including a middle and high wage jobs. So
13:20
Speaker 1: we're really in the in the first part of the recovery,
13:23
Speaker 1: we really were seeing disproportionate growth in very low wage jobs.
13:28
Speaker 1: In the last couple of years, that has shifted dramatically
13:32
Speaker 1: and now we're seeing strong growth in middle and high
13:34
Speaker 1: wage jobs. And we saw that this month too. What
13:38
Speaker 1: industries are you talking about, in particular, professional and technical services,
13:42
Speaker 1: So that's the subsector of professional business services, that's higher
13:45
Speaker 1: wage jobs like computer systems people that come into a
13:50
Speaker 1: business and help with computer systems, accountants, architects, those kinds
13:53
Speaker 1: of professional business services. We saw decent jobs growth and
13:56
Speaker 1: construction in October. Those are those are relatively high paying
14:01
Speaker 1: job jobs. We're seeing strong growth in education and health.
14:06
Speaker 1: There's um this sort of tend to be for the
14:09
Speaker 1: most part, middle wage jobs, and so it's again the
14:13
Speaker 1: job growth is across the board, but we are we
14:16
Speaker 1: are definitely also seeing this growth and middle and high
14:19
Speaker 1: wage jobs. Heidi shareholds. Thank you so much for being
14:22
Speaker 1: with us. Hidi Shareholtz, chief economist for Labor Secretary Tom
14:25
Speaker 1: Perez on today's jobs report. I'm Lisa Bromoyd's I'm here
14:29
Speaker 1: with Alex Sherman filling in for pim Fox. This is Bloomberg.
14:41
Speaker 1: Will this be another Brexit? That's certainly what a lot
14:44
Speaker 1: of traders think right now. The US elections coming up,
14:47
Speaker 1: and you have some UH market makers, some exchanges that
14:51
Speaker 1: are preparing and requiring more margin, people that post more
14:56
Speaker 1: margin in order to gird against potential folatility. Here to
14:59
Speaker 1: break it all down with US is Lenan Nuien of
15:02
Speaker 1: Bloomberg News. UH. You wrote a fabulous story about this.
15:05
Speaker 1: So how are people preparing for potential volatility in UH
15:11
Speaker 1: in UH in currency markets right now? So what we've
15:14
Speaker 1: heard is that a lot of people are really preparing
15:17
Speaker 1: for the unexpected. As with Brexit, a lot of people
15:20
Speaker 1: were caught out, cut out, um, weren't prepared for the
15:24
Speaker 1: sort of political uncertainty that that followed. UM. So right now,
15:28
Speaker 1: no one on the street is taking anything for granted,
15:30
Speaker 1: they are staffing up double staff, overnight pizza, coffee, all
15:34
Speaker 1: of that, but also in terms of the weeds. You know,
15:37
Speaker 1: people are stress testing all their portfolios. They're looking at
15:41
Speaker 1: where their most vulnerable on the downside in case of
15:44
Speaker 1: something unexpected happening. So you're talking not only about investors,
15:47
Speaker 1: but you're also talking about UH dealers and exchanges. Can
15:52
Speaker 1: you talk a little bit about what the potential risk
15:54
Speaker 1: is for them that they're trying to protect against. Well,
15:58
Speaker 1: the markets have been very quid and so a month ago,
16:01
Speaker 1: obviously we saw the flash crash happen overnight in the Pound,
16:04
Speaker 1: and that's gotten people kind of sitting up because foreign
16:07
Speaker 1: exchange markets in particular have been very liquid um and
16:10
Speaker 1: so when something unexpected happens, when a headline comes out,
16:14
Speaker 1: markets can have this cascading effect in terms of prices.
16:18
Speaker 1: So that's something everyone is looking out for. There's also
16:21
Speaker 1: a question of you know, big volumes going through overnight. Um,
16:24
Speaker 1: you know, headline comes out suddenly, every everything's moving all
16:27
Speaker 1: at once, and you could get al goes tripping and
16:30
Speaker 1: causing big moves. We're seeing an interesting disconnect I think
16:33
Speaker 1: between investors who, as your story points out, seem to
16:37
Speaker 1: be you know, let's say panicking might be too strong,
16:40
Speaker 1: but certainly preparing themselves for Donald Trump win and see
16:47
Speaker 1: held I'm sorry. I'm sorry, Alex. I'll let you continue
16:48
Speaker 1: one second. When you said I don't want to get
16:50
Speaker 1: carried away with panicking, there is somebody quoted in your storyline,
16:53
Speaker 1: and I'm getting night sweats and flashbacks of Brexit. I
16:56
Speaker 1: mean that person that folio managed might be panicing. Correct.
16:58
Speaker 1: And by the way, as an aside to making the
17:01
Speaker 1: point I'm going to make, um, I have been bothered
17:03
Speaker 1: by the Breaksit comparison to this up until very recently
17:07
Speaker 1: because the Breaksit polls the day before. So we're like,
17:12
Speaker 1: until very recently, you know, the almost every you know,
17:16
Speaker 1: let's say, look look at five thirty eight, which has
17:18
Speaker 1: been sort of the dominant website on this. You know,
17:20
Speaker 1: the polling has been nothing close to that. Now recently
17:24
Speaker 1: the polls have started to tighten a little bit. And
17:25
Speaker 1: then maybe the Brexit comparison is a fair one. But
17:28
Speaker 1: my original point is that CEOs seemed to be nonplussed
17:32
Speaker 1: by the election. All you need to do is look
17:34
Speaker 1: at what M and A volume has been over the
17:36
Speaker 1: past month or so. The M and A in October
17:39
Speaker 1: has been was the highest M and A volume of
17:41
Speaker 1: all time ever. Uh, just weeks before the election. Well,
17:45
Speaker 1: that could be potentially because they wanted to take advantage
17:48
Speaker 1: of the low borrowing costs. To right, I mean, that's
17:50
Speaker 1: sorry as absolutely and that that may be a thing.
17:53
Speaker 1: But if but if the election was that big of
17:55
Speaker 1: an issue for them, if there was that much fear
17:58
Speaker 1: associated with it, that likely again no pun intended Trump uh,
18:03
Speaker 1: concerns about or or or you know, concerns about interest
18:06
Speaker 1: rates rising. I spoke to several people about this, several people, advisors, lawyers,
18:11
Speaker 1: who were in the boardroom, and they told me, honestly,
18:14
Speaker 1: the election doesn't even come up in CEO conversations really,
18:17
Speaker 1: so they're not concerned, maybe because they don't want to
18:19
Speaker 1: get um into into trouble. But Lennon, I wanted to
18:22
Speaker 1: ask you about which currencies in particular are most at risk.
18:25
Speaker 1: I mean, the Mexican pay so seems like a pretty
18:27
Speaker 1: ripe candidate, as well as the US dollar. What are
18:29
Speaker 1: people telling you, Um, it's going to be the U
18:31
Speaker 1: S dollar for sure. Obviously on the other side of
18:34
Speaker 1: that dollar trade, you have the yen, which is a
18:36
Speaker 1: safe haven currency. So obviously if something unexpected happens, the
18:40
Speaker 1: yen could get a bid Mexican payso has been super
18:43
Speaker 1: sensitive throughout this entire presidential election um process, and the
18:49
Speaker 1: retail brokers have raised their margins on the pay so
18:51
Speaker 1: because they want people to satisfide more more money in
18:54
Speaker 1: case some something crazy happens. Well, yeah it hasn't. Hasn't
18:56
Speaker 1: Mexico been raising interest rates just in order to support
19:01
Speaker 1: the paso because of the bets uh that that Trump
19:04
Speaker 1: could could become president and therefore wards and the value
19:07
Speaker 1: of the paso down. So this is something interesting. You know,
19:10
Speaker 1: we hear people in the markets talking about potentially intervention
19:14
Speaker 1: by the Mexican authorities and in the currency. Um. You know,
19:17
Speaker 1: obviously this is not this is pure speculation, but people
19:20
Speaker 1: are starting to have those conversations in the street about
19:23
Speaker 1: what's going to happen in the Mexican pay so so
19:25
Speaker 1: um come election nights. So yeah, there's a lot going on.
19:28
Speaker 1: So all nighters, all nighters. People are going to be
19:31
Speaker 1: staffed up over in Asia too. I would imagine Asia, London,
19:35
Speaker 1: the US. I think this is a kind of all
19:37
Speaker 1: hands on deck situation. I think everybody's gonna be staying
19:40
Speaker 1: up all night anyway to watch the results come out.
19:42
Speaker 1: Um Lenan and thank you so much for joining us. Lannion,
19:45
Speaker 1: who covers uh, the FX markets very very well for
19:49
Speaker 1: us here at Bloomberg News, thank you to talk a
19:51
Speaker 1: little bit about how the v alativity in the foreign
19:54
Speaker 1: exchange markets is already getting some people having night sweats
19:58
Speaker 1: and flashbacks of Brexit. This is Bloomberg. Well, now we're
20:11
Speaker 1: gonna turn our sights to the retailers of the world
20:16
Speaker 1: and what they're expecting for uh, this holiday season. Now
20:19
Speaker 1: that I guess that Halloween is over, we can start
20:21
Speaker 1: talking about Christmas. I've already seen the the Christmas candy
20:25
Speaker 1: and the stores. Craig Johnson, President of Customer Growth Partners, Uh,
20:29
Speaker 1: do you think that this is going to be as
20:31
Speaker 1: bad holiday season as some retailers seem to be suggesting. Well,
20:36
Speaker 1: we're pretty often contrarian, and uh, we think it's actually
20:40
Speaker 1: gonna be a little bit better. The the consensus is
20:43
Speaker 1: it's going to be up about three and a half
20:45
Speaker 1: percent year of year total sales um and we think
20:48
Speaker 1: it's going to be up four point one percent. We've
20:50
Speaker 1: been doing this for sixteen years, forecasting and and um,
20:55
Speaker 1: we think things are coming together in time for what's
20:59
Speaker 1: going to be a little bit better. It's not gonna
21:00
Speaker 1: be a blowout Christmas, gonna be a little bit better
21:02
Speaker 1: than people anticipate. Well, what types of stuff in particular. Well,
21:06
Speaker 1: the one thing that's new this year, um is that
21:11
Speaker 1: the health and beauty sectors has been very strong. And
21:15
Speaker 1: that's not just cbslau Greens, but it's things like Alta
21:20
Speaker 1: beauty salons, uh g n c Viaman world Dot, whole
21:24
Speaker 1: Health area, the whole beauty area which is grouped together
21:27
Speaker 1: with the with the major drug stores, is going to
21:30
Speaker 1: be a big driver. That's gonna be at seven point
21:32
Speaker 1: four percent, So that's going to be the strongest merchandise sector.
21:36
Speaker 1: Online e commerce will still be the overall fastest growing
21:40
Speaker 1: sectors that will grow about thirteen point nine percent year
21:42
Speaker 1: of the year UM. And as as sort of as
21:46
Speaker 1: a macro sector will certainly go. Pro and Fitbit are
21:49
Speaker 1: gonna need good holiday seasons after reporting their earnings this week,
21:53
Speaker 1: both of them disappointing. Do we expect consumer electronics to
21:56
Speaker 1: be big? Is there some sort of hot gadget this
21:59
Speaker 1: year may drive some holiday sales? The wearable technologies that
22:04
Speaker 1: they will get some amount of sale, but they're they've
22:09
Speaker 1: been on the market for a little while. That's not
22:11
Speaker 1: net new. The one thing that is new and and
22:14
Speaker 1: with with not just the Oculus, but but also the
22:18
Speaker 1: Sony the the VR, the virtual reality um uh technology
22:23
Speaker 1: has been coming on very strong and uh of course
22:26
Speaker 1: that operates in conjunction with video games and video games themselves,
22:31
Speaker 1: the consoles with Stubbin at least three years since any
22:34
Speaker 1: new generation of consoles, but now with the VR technology
22:39
Speaker 1: that is driving a lot of interest and um it's
22:42
Speaker 1: a great gift of bo item and it can really
22:45
Speaker 1: dramatically enlarge your experience, you know, whether you're in an
22:48
Speaker 1: Xbox environment or Sony PS four environment. Your kids old enough,
22:53
Speaker 1: they are older and beyond that. But no, but but
22:56
Speaker 1: my my son, we'll, we'll, we'll do it because you
22:59
Speaker 1: know a lot of kids, you know in in there,
23:01
Speaker 1: in there, not kids, people in their twenties. Uh, well, we'll,
23:05
Speaker 1: we'll do it. So but that that is the nature
23:07
Speaker 1: of the VR technology appeals both to the classic teen gamers,
23:11
Speaker 1: but also there's a lot of x teen gamers that
23:14
Speaker 1: are now entered well under the twenties and thirties that
23:17
Speaker 1: loved the thing. Yeah, my seven year old actually literally
23:20
Speaker 1: yesterday said to me that some of his friends have
23:22
Speaker 1: iPhones and that he should have an iPhone, and that
23:25
Speaker 1: one of his friends has two iPads. And I said, well,
23:27
Speaker 1: that's very nice for him, but too bad, so give
23:30
Speaker 1: him exactly. I don't think that that's gonna necessarily justify
23:33
Speaker 1: my giving him one. You know, hey, Craig, I was
23:35
Speaker 1: going to talk a little bit about the clothing shops
23:39
Speaker 1: that have struggled so much. You know what we're talking
23:41
Speaker 1: about Jay Crew or uh, you know some of the
23:46
Speaker 1: teen teen brands or Victoria's Secret. Um, what about those? Well,
23:51
Speaker 1: apparel is uh, it's gonna have it, Okase, He's not
23:56
Speaker 1: at all great on a unit demand, meaning you volume
24:00
Speaker 1: sales will We have about four or five which is
24:03
Speaker 1: which is nice strong growth. The problem is is is
24:07
Speaker 1: apparel just like food and consider electronics, there's a lot
24:11
Speaker 1: of price deflation in that. So that price deflaced of
24:14
Speaker 1: about three percent and change is going to pull that
24:17
Speaker 1: unit volume down to only about one and a half
24:20
Speaker 1: percent UH total sales growth and UH and and some
24:25
Speaker 1: sectors of apparel are just getting crushed right now because
24:28
Speaker 1: of the warm weather, particularly outwear sales, and so we
24:31
Speaker 1: see a lot of outerwear. Uh, you know, the heavier
24:34
Speaker 1: jackets and Parkers and so were on sale at fifty off.
24:38
Speaker 1: So that's a that's a people that are in that
24:40
Speaker 1: side of the business are getting crushed. Do you believe
24:43
Speaker 1: the excuse that some some out there have been saying
24:47
Speaker 1: that the elections have dampened purchases. I'm not sure I
24:52
Speaker 1: really buy that. It's you know, there's retailers are notorious
24:57
Speaker 1: for using any kind of excuse allows you sail. Oh,
25:01
Speaker 1: it's the weather is too hot, it's too cold. There's
25:04
Speaker 1: two medium, there's the elections. Um and Uh whether in
25:08
Speaker 1: now elections are the last refuge of retail scoundrels that
25:12
Speaker 1: are underperforming? Um Uh. Nonetheless, you know, any kind of
25:16
Speaker 1: major purchases, some people might be holding off on that
25:19
Speaker 1: a little bit. We've seen auto sales drop back a
25:21
Speaker 1: little bit, but we've also seen at the same time
25:25
Speaker 1: a big picture TV you know, the large TV sales,
25:27
Speaker 1: I mean the big guys seventy inches, those have been
25:30
Speaker 1: very very strong. Um and and if there's any kind
25:33
Speaker 1: of election impact is certainly not affecting that sector. But
25:37
Speaker 1: from a sales point of view, a dour point of view. Uh.
25:41
Speaker 1: The again, there's such price deflation and that when things
25:43
Speaker 1: are down fifty a year on a not a kind
25:46
Speaker 1: of amount a purrdge basis that that that that the
25:49
Speaker 1: number the dollar numbers will not be as great as
25:51
Speaker 1: again as the unit volume growth. With the monthly job
25:53
Speaker 1: supports coming out today, we did get some interesting data
25:56
Speaker 1: on the amount of hours Americans are working. I believe
26:01
Speaker 1: this past month it was about thirty four point four
26:03
Speaker 1: hours in a week. Uh you note, um as you
26:07
Speaker 1: sort of talk about retail sales that part of what's
26:10
Speaker 1: actually dampening growth for holiday spending is that Americans are
26:15
Speaker 1: not working consistently forty hour a week jobs. If they were, Uh,
26:20
Speaker 1: just how much better would would holiday spending on retail
26:24
Speaker 1: growth be? Huge? Because right now the barely forty of
26:29
Speaker 1: working age adults have a full time job. And if
26:32
Speaker 1: if people have the same you know versus you know
26:36
Speaker 1: ten or twelve years ago, that basically represents in terms
26:41
Speaker 1: of a full time job equivalent about fourteen fifteen million
26:45
Speaker 1: missing or fandom full time jobs on an hours basis
26:49
Speaker 1: right now. If you if you went back to the
26:51
Speaker 1: to uh, fifteen years ago, ten or fifteen years ago,
26:55
Speaker 1: Americans working age adults on average worked about twenty six
26:59
Speaker 1: hours a week, everybody all in, not just the people
27:02
Speaker 1: in labor at all. Now only the average adult only
27:05
Speaker 1: works only twenty two hours a week, So you can
27:08
Speaker 1: do the math. But what that's gonna do to your
27:10
Speaker 1: your incomes and that effects retail sales and everything else.
27:14
Speaker 1: So uh so we need we need to ramp up,
27:17
Speaker 1: you know, the full time growth, full time job growth,
27:20
Speaker 1: and not just be looking. Oh, unemployment is forged my
27:23
Speaker 1: nine percent, which is kind of a phony artifact statistic.
27:26
Speaker 1: So we've got to get the hours up and incomes
27:29
Speaker 1: and that's what at the end of the day, it's
27:31
Speaker 1: rise in overall disposable personal income that drives all consumers spending,
27:36
Speaker 1: and retail is the single biggest part of course of
27:38
Speaker 1: consumer spending. Greig Johnson, thank you so much for joining us.
27:41
Speaker 1: Craig Johnson, president of Customer Growth Partners, which is based
27:44
Speaker 1: in New Canaan, Connecticut, talking about holiday sales at retailers
27:49
Speaker 1: and how his contrarian view is that they're going to
27:52
Speaker 1: do better. Alex and a lot of people have been saying,
27:55
Speaker 1: I'm Lisa Brown, what's here with Alex Srman fiss Is Bloomber.
28:05
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