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Naughty or Nice? 2025 Economic Recap & 2026 Resolutions · Market Pulse

• Emmaline Aliff (00:00): Welcome to the Market Pulse Podcast. I'm your host, Emmaline Aliff leader of the Equifax Advisors. As a group, we identify economic considerations and leverage data and analytics to translate into industry insights and recommendations with the goal to support our clients during economic uncertainty while uncovering growth opportunities in consumer and commercial credit risk. I'm pleased to welcome back our panel of experts in the advisors team. Tom O'Neill, Dave Sojka, Jesse Hardin, and Maria Urtubey. Welcome. Tom O'Neill (00:31): Hey, Em. Hi. Jesse Hardin (00:32): Hey, how are you? How's it going? Emmaline Aliff (00:33): Yeah, it's going well. You know, one of the things that's you know, comes to mind for me, you know, we've you know, we've had our Thanksgiving holiday and we're heading into other holidays depending on what you celebrate is I've been personally, actively starting to use AI more specifically with trying to find activities to do with my children because they're all older now. My youngest is 14. And the, the things that I like to do with them for is, is pivoting away from presence and doing more experiential things. And so I've been leveraging AI to to identify things to do. And we've, we've gone down to the botanical gardens and I'm, I'm trying to find things that what, what will teenagers enjoy that I will also enjoy. And it's really been helpful in that regard for me. What, what are some ways that, that y'all have been exploring different pathways for this holiday season? Jesse Hardin (01:26): I, I'm not sure it's holiday specific, but it is timely. So we have a 15-year-old as well, and he's driving. So we just, just got a permit. And I being the, the spreadsheet lover that I am, I know we have to track his miles and and hours in the driver's seat. So I actually used the the, the chat GPT function to figure out how to code and did a little JavaScript, so kind of, kind of fun. Certainly opened my eyes to the realization that there are lots of coders that are probably at risk based on the flexibility that, that AI brings. Tom O'Neill (02:06): Very cool. Well, my, my kids are, are older than 15. They're, they're moving out now, so I, I suddenly have more, more time on my hands where I'm not driving them to practice or to dance or to things like that. So I, I've been doing things like sort of brushing off some of the, the, you know, music writing, you know, that's, that I, you know, had enjoyed doing and trying to get my Spanish up to speed. And, and then and then of course, trying to blend the two of them, which is kind of a disaster. But I, I thought, wouldn't it be cool to do a Spanish song, which didn't work out very well, but I turned to ai, said, okay, well take my English lyrics, put it into, you know, Spanish, and, you know, help me put this into song. give me some, some ideas around, you know, you know, putting this, and it actually turned out really nicely. . I'm kind of, that's cool. Yeah, kind, kind, kind of pleased with the end results, you know, and so I'm thinking, oh, I might try Russian next. Who knows? Emmaline Aliff (03:07): Yeah. It's, it has been very helpful from a language standpoint, my trip to Columbia was very similar. I had missed my flight back due to a delay. And my AI was able to help me fight all the things I needed to do at a foreign land. And I don't speak Spanish, so I have a lot of hope for your song, Maria. The the actual Spanish speaker, Maria Urtubey (03:27): , I, I'm continuing on the teenage needs and the use of ai. I'm currently in this, why it's a little dark time difference. I'm in Buenos Aires here for the holidays, and I have the teenagers and an added on extra visitor. A friend of my son is, is coming as well. So I've been using AI to plan how to best optimize the 10 days that he's visiting as a tourist, but doing things that will be you know, tempting and fun for a teenager, an 18-year-old teenager that is coming for the first time. So that's how we are looking into the use of these tools. Dave Sojka (04:12): And I'm I made the fantasy football playoffs in three of, in all three of my leagues that I'm in. Wow. Wow. Great. So I decided that's impressive. I decided to try, I decided to try leveraging ai even though I, you know, I, I pay for sites to help me optimize my lineups to actually leverage AI to say, okay, given all these choices, who's gonna give me my best option for, for victory? So we'll see if, if, if if Gemini is smarter than the experts. Emmaline Aliff (04:41): So you're abandoning your season long strategy that got you into the playoffs to to go down a new strategy. I can't wait for the outcome, . It's very, very bold. And I wouldn't expect anything different. Yeah. Tom O'Neill (04:57): Can AI give you better insights into Christian McCaffrey's hamstring than, than the experts? Jesse Hardin (05:05): Can I say? I'm rather surprised that nobody actually said anything about shopping on ai. It seems like that was a trend I saw somewhere where you could actually put in a, a little piece of code in in AI in it, or in one of the generators, and it would find the best deals for you. I didn't do it though. Emmaline Aliff (05:22): Wait, you still have time? You still have time? Yeah. Jesse Hardin (05:24): There you go. Emmaline Aliff (05:25): So, in, in this edition of our market Pulse podcast, we want to talk about Santa Scorecard. So, what's been naughty or nice, this economy for 2025, and what are some potential resolutions in 2026? And we're gonna do this ala a white elephant style of economic topics. So before we jump into that I'd like to welcome Shandor Whitcher from Moody's Analytics to share a quick economic update. Shandor Whitcher (05:55): The US economies is still expanding, but that expansion is become increasingly narrow. Inflation remains too high, growth is slowing, and the benefits of economic activity are accruing to a shrinking share of households. That disconnect is at the heart of why so many Americans feel worse off, even as top line growth and financial markets suggest. The economy is holding together prices for everyday necessities, groceries, insurance, electricity, car insurance, and healthcare remain elevated, and in many cases are still rising at the same time. Income growth is slowing, job growth is stalled, unemployment is edging higher, and workers have less leverage than they did even a year ago. The result is a growing gap between the cost of living and household's ability to keep up. Consumer surveys reflect this strain know, measures of consumer sentiment and confidence are back near levels last seen during the pandemic shutdowns. While politics undoubtedly color these responses, the underlying message is consistent. Shandor Whitcher (06:53): Households feel squeezed, especially when thinking about the months ahead. So the problem's not new, but it is intensifying. Again, inflation surge during the pandemic eased briefly, and now appears stuck around 3%. Well above the federal reserve's target and recent policy choices have made that stickiness worse. Oh, higher tariffs, restrictive immigration policies and broader deglobalization efforts are raising costs limiting labor supply and weighing on productivity. So together they keep inflation higher than it otherwise would be. Now, to the labor market, businesses aren't broadly laying off workers, but hiring is slowed to Accra hours worked are being cut back, and unemployment is rising, particularly for younger workers. So this all contributes to that khap economy we've heard so much about. So, higher income households are still spending freely supported by strong balance sheets and asset gains, but the bottom half of in, of the income distribution is struggling, increasingly relying on credit and showing clear signs of financial stress. So our base view is that the economy will slow in the year ahead with weakening job growth and higher unemployment. At the same time, inflation is expected to heat up, but for the economy to avoid a broad-based economic downturn. Now that said, the economy remains in a fragile position, and it won't take much to send things sideways. Emmaline Aliff (08:14): Thank you, Shandor and Moody's Analytics for your help in describing the economy for us. So over the last months in our podcast, we have discussed key economic themes many of which you just heard. The latest updates and predictions, you know, at the beginning of the year is something that we covered all the way down through the health of the consumer through through midyear. And now towards the end of the year. Today, we want to talk about what transpired in 2025 regarding the things like economic policy shifts, the changes that we observed in hard and soft economic data. And, you know, recall, you know, some of the things that we may have predicted at the beginning of the year of things that were happening. And so, as I was saying before, in keeping with holiday season, let's treat this like we're opening presents. Emmaline Aliff (08:59): So I think what, how we're gonna operate on this is from a white elephant standpoint you know be able to address the topic of the gift that you received for me and you know, and you can present it or describe it as a lump of coal or something that you are have been looking forward to as a great president. And then we can you know, come at the end and do some you know, you know, round robin types of things for for, for how we're, we're viewing each of these topics. Okay. Tom O'Neill (09:27): So, Emily, in true white elephant fashion, if you throw us a topic and we want to pass it along, can we do that ? Emmaline Aliff (09:34): And we can steal, someone can steal the topic. Tom O'Neill (09:36): Yeah. Someone steals the topic. Yeah, there we go. Yeah. Okay. Emmaline Aliff (09:39): All. So we're gonna, we're gonna start. So I, I, I, I have like, my, my list here and I'm gonna start with Dave. Okay. Dave. Dave got, Dave Sojka (09:47): Well, hang on. Lucky draw. We were Jesse Hardin (09:49): Supposed to vote. We were, what were we supposed to draw numbers to see who goes first? Emmaline Aliff (09:52): Oh, . Well, I just, I had, we didn't do that. So I, I had my I had , I had names and a hat here, and, and the name that I pulled out is Dave. Jesse Hardin (10:00): We'll give it to Dave. Dave Sojka (10:02): Okay. Alright. So for those of you audio, listen, you're not seeing this, but I, I do have a present, so I'm gonna reach in my bag and see what Emily just gave me. Mm-Hmm . Emmaline Aliff (10:12): Well, I didn't give it to you yet, Dave Sojka (10:14): You didn't, I thought you just did. Emmaline Aliff (10:16): No, but I'm, I'm about to give it to you. Okay. You, you're, yeah. So the, the present, the president that Dave receives today and, and you as you choose to open this you, you can, you can you, I think you have to address this one, but others can steal the topic away from you a after you do a little overview. So what I'd like you to talk about today, you get AI adoption at both personal and industry levels, and some of the potential impacts that it might have in the economy. Dave Sojka (10:46): Okay? Alright. So, again, I'm going look in my president here for that AI impact. No, I, I, I see, oh, I see. Positive impacts and, and, and looks like there's, there's three so far for the economy and, and one of 'em would be a fundamental economic shift. The second one says long-term growth of between 1.8 and two and a half percent annually. And the third says, oh projected improvement of debt to GDP to almost 40%. Wow. That's pretty good. Tom O'Neill (11:25): Okay. Can I steal? Dave Sojka (11:27): Sure, Emmaline Aliff (11:28): Yeah. Jump on in. So we got, we got, we have our first gift steal today, so, so wait, before we go, before we move on, I didn't explain the ground rules. You can steal once as we go through the round, and then you have to, you, you can, you can hop in otherwise, but Tom, you, you there, you have to you have to wait for others to steal first, and, and we can treat it kinda like an auction if we need to. Dave Sojka (11:50): first born. Jesse Hardin (11:53): Now Tom's deciding whether or not he wants to steal, but Emmaline Aliff (11:54): You got you, you got the steal. You already called it . Tom O'Neill (11:57): Okay, so , I'm lost . So, alright. So if I steal, does that mean that I have to look at Dave's present and Yeah. And term it's a lump of coal, or because that's what I was Emmaline Aliff (12:14): Gonna do, do either one. Yes. Go ahead and do it. Jesse Hardin (12:16): I, that's Tom O'Neill (12:16): Appropriate. All right. Because, because Dave, Dave looks at the AI adoption at the bo at both the personal and the industry levels as, as, you know, a series of of presence, which I get, you know, it's, it's nice and shiny and, and looks cool and all that stuff, but it has the real potential of being, you know, a lump of coal as well. You know, we talk about that fundamental shift in the marketplace and in industry as if it's just a good thing, which there are positives, but it is a shift. And that always brings about change, you know, by nature. And there will be those who benefit, and there will be a lot of those who don't benefit and are, are hurt by this. And so there are going to be, you know, changes on the, the job market, you know, level in terms of, of, you know, new opportunities, you know, for, for advancement and, and for new careers that we haven't even thought of yet. And there's also going to be those that are impacted because a lot of their work is now redundant or taken over by, by ai. And so when we look at the, the aggregate, it's nice to, you know, it's nice, nice to look at this as, as a bright, shiny present, but for, for many, this may be a lump of coal. Emmaline Aliff (13:35): I'm gonna comment. Any other, any other points to add there before we move on to the next present? Jesse Hardin (13:38): Yeah, I wanna comment real quick. I, I, I think I'll just I'll, I'll shed light on, on the present that Dave got and then Nicole, that Tom just alluded to. I do think, you know, it, it calls into question remembering that this is a new technology. It takes a while for us to, to find full adoption of new technology. And so I do think one of the interesting things is to see that from a from, from a technological standpoint, AI right now has been a, a bottom up approach. So we've seen a lot of adoption at the individual level. You see households using AI to make better decisions. We just talked about it. And so that's interesting to me. It's interesting when you think about the bottom up approach, whereas a lot of technologies have come from top down. They've come from corporations and governments and and, and then they push those down to the, the average person. So that's kind of interesting to see, but I do think it's gonna take a little bit of time to really get a feel for where we're going with ai. Emmaline Aliff (14:35): Yeah. And I, I think how, how things move and evolve in that is gonna be highly dependent on the development and continued growth in critical thinking skills. 'cause I think the, it's, you know, things like AI are only as good as the ideas that you put into it and your interpretation of that. So next present, I'd like to let me look at here. Who whose name I'm pulling, Jesse. Jesse Hardin (14:58): Ah, Emmaline Aliff (14:59): There we go. So Jesse, number two. You are going to get, let me see here. How about this is a, this is a light topic. Rate cuts react to that phrase, Jesse Hardin (15:12): Rate cuts . Well, it's interesting 'cause I got, I guess another present yesterday, right? We got another rate cut maybe not so much of a present when we look at the commentary behind the rate cut, potentially looking at a slowdown of rate cuts next year. But yeah, it's hard to, it's hard to debate the fact that the rate cuts that we got this year have really helped. So, you know, what we're talking about in general is monetary policy. So the Fed controls monetary policy. They raise rates when they wanna slow the economy down. They lower rates when they wanna stimulate the economy. And so when you think about where we are, we saw three rate cuts in the year sort of getting back to some equilibrium rate where the, the Fed feels comfortable enough with prices and and their dual mandate and the second part of that dual mandate being full unemploy or full employment. Jesse Hardin (16:00): And so we we certainly have, I think, more of a concern right now with respect to where employment is and, and growth in jobs. That's probably something that's gonna be very important to watch. And, and I may have been stealing my look ahead for next year. But certainly I think, you know, the rate cuts will help spur loans. People can go get a a car, they can get a house at a cheaper rate. And, and the, the bigger concern certainly is gonna be do we see any, any additional rate cuts next year? And the fed's gonna be looking closely at that. But yeah, I like my present. Nobody's stealing it from me. Emmaline Aliff (16:34): , Maria Urtubey (16:35): No, I I'm adding a Emmaline Aliff (16:37): Go ahead, Maria. Yeah, Maria Urtubey (16:38): No, I was going to add a comment. And, and Jesse, you mentioned mortgages. Definitely that's the one that we've been overseeing and, and trying to see to what degree these rate cuts over the year will affect them. Because there are some areas, depending where you're loca located. Not right now for me, but in northern California where I live and just as in New York or or Miami even, we were reading the other day and we were sharing that even a 0% interest rate on a mortgage might not even facilitate access to a medium mortgage loan for a medium income household. So it all depends going back to our, that we've been discussing for the last three plus years. It all depends where you are lo situated in that portion of the carrier in the bottom, it might be more of a struggle still. Dave Sojka (17:29): Yeah. And then just to kind of, well, I'll say close it out, but maybe others will chime back in from the consumer side, right? The rate cuts aren't immediate relief to them. And so that's always a big topic is am I gonna see an immediate reduction in my credit card rate? Am I gonna see a reduction? If I'm looking for a new or a used auto loan? Maria just touched on the mortgage side, so that tends to lag several months. So, you know, I think, you know, the popular opinion is probably not until we get into, you know, the, maybe the end of Q1 will we start seeing some relief. But I think it's the hope that the rate cuts offer. Emmaline Aliff (18:07): Yeah. Can can somebody, this is, this is a, a bonus gift for y'all who's got the update on the yield curve. Jesse Hardin (18:13): Yeah, I I can take that. I'll take, take my bonus gift. So yeah, the yield curve has, has reverted, I think as of middle of the year. So, okay, Emmaline Aliff (18:21): We're back on that. And it's holding, holding around there. Yeah. Jesse Hardin (18:23): Back on a normal trend. Emmaline Aliff (18:25): Okay. All right. So remember yeah. So Jesse, I think you're reviewing that as a, as a wonderful presence so far. That's at rate cuts have, have happened, be, you know, mainly 'cause we haven't seen such a negative impact to either inflation or to the labor markets. Now, some, some things, you know, time will tell with respect to you know, how the labor markets continue to potentially move as well as inflationary impacts from things like, you know, tariffs, et cetera. But we're not there yet. Okay. . So just just giving you some foreshadowing Tom O'Neill (18:56): And I can't steal it and, and, you know, present it as a lump of coal. 'cause I already used my steel. Right. I'm, that's Maria Urtubey (19:03): Done. Emmaline Aliff (19:04): But we, yeah, you never know. There might be other topics with, with other, other Tom O'Neill (19:08): Gifts that we have. I'll find my time. Yep. Jesse Hardin (19:10): And for those of you that are watching we, we some of us, you know, kind of dressed up festively, we didn't tell Tom that he had to dress up like a lump of coal . Tom O'Neill (19:19): This is just, I am the lump of coal too. Jesse Hardin (19:20): That was, that was a coincidence. That was all Emmaline Aliff (19:23): Coincidentally. And I do have my I do have all my colors on for the holiday season. So for the next gift I'm going to you know, you know, keep in mind this could be either a a coal or a wonderful presence. The, the last few, I think, you know, kind of more landed in the wonderful presence. So maybe we have a coal coming here. The, the next person is going to be Maria. Ooh. So I would like to ask you, maybe you can comment on what present here. Okay. student loan delinquency impact. We've been talking about this topic for quite some time. Like what, what is your view in terms of borrower stress, you know, you know, confusion, et cetera. Like what, what is the temperature on that currently? Maria Urtubey (20:05): Oh, so much to, to uncover there. I think it could be viewed as a call given. It impacts over 42 million consumers that hold three to four student loans, given it spreads a across generations, even though millennials hold the highest share even though gen X holds the highest delinquency rates, but it's Gen Zs that hold the, or, or have to carry the highest share of the debt when the payments resumed last October. So it could be a call with the possibility of, of course juggling this new dead wisely and getting of course, rewarded from that extra behavior showing in your report. But in most cases, what we've seen is that the historic delinquency we've hit in May was the highest over the last 20 years. So clearly it's been more of a, a cold and a positive side. Maria Urtubey (21:13): We've seen that some consumers have had their scores decreased by over a hundred points as a result of missing payments, which is a very big hurdle to deal with when you're trying to access other credits that you might need if you're at the bottom part of the K. So it, it has all these implications and there's an added on uncertainty, as you were saying, em, both from the servicer changing circumstances and servicer. There's still stay, there was a new one that save the saving plan might be stopped in February, and that would result in some deferred student loans coming into repayment as well, affecting 7.6 million consumers. So all, all over the place, there's a lot to take in. And a lot of juggling pieces. So I could, I, I could think it's more of a call versus that small group that can still benefit from of course responding paying as agreed to the, this commitment. Hmm. Dave Sojka (22:19): I dunno how we spin that into a, I want, I want that present. So, Maria, I think you're, I think you're kind of stuck with it. Yeah, Tom O'Neill (22:25): I think, I think you're, you're stuck with that, stuck that whole I'm, yeah. Yeah. You're stuck Jesse Hardin (22:28): . Well, I think the way it, I think the way it goes is Maria can steal somebody else's good present now, right? Yeah. Emmaline Aliff (22:33): She can, she can. Yeah. I think Maria Urtubey (22:36): I didn't even talk about garnishment. So that's another one that is looming. Mm-Hmm. On the student loan call Jesse Hardin (22:42): , I think you'd need some eggnog with some pretty stiff additive in that, if you want to take that one as the present. Maria Urtubey (22:48): Emmaline Aliff (22:50): And, and you know, given the, I think we, have we gone all around the, the room so far as everyone, because I, I think I need to reshuffle my names in the, in the bucket. Tom O'Neill (22:59): I haven't gotten a, I haven't gotten a white elephant. Emmaline Aliff (23:01): Oh, that's true. That's Tom O'Neill (23:02): True. I just, I just stole Jesse's. He stole Jesse Hardin (23:04): . Yeah, you stole Emmaline Aliff (23:05): Dave. Well, would you, would you like me to throw your name again? We draw names again. And we can start a new round. Let's do that. Let's start a new round. So that way, this next topic when it comes up, someone can immediately steal it after I assign it, or but keep in mind, you can't steal again, okay? Mm-Hmm . So for the next one, I have rising a rising delinquency rates in auto and mortgage. And the name I have is Tom, Tom O'Neill (23:35): But I can't steal you. You're, no, we can steal, you're Emmaline Aliff (23:39): Stuck with that. Someone can steal it from you. So we, we'll, we'll give them a second. Would anyone like to steal that or do we want Tom to, to talk about delinquency rights? Maria Urtubey (23:48): No, thank you. . It's like the student loan Cole Tom O'Neill (23:54): . So, I'm, I'm sitting here, I'm sitting here holding, you know, Dave's AI adoption and, and now you're giving me delinquency, right? Emmaline Aliff (24:01): How about, how about I steal it? ? Tom O'Neill (24:03): Okay, go ahead. Emmaline Aliff (24:04): I, I don't, I don't, because I, I'm, I don't know. I feel like I need a gift too. So for, so delinquency rates in, in auto and mortgage, I think they're, they're very interesting you know trends that are occurring to me. Of course, we have seen the rise in rates that that we've observed in auto specifically with the 60 to you know, 60 plus rate outside of rda Writeoff hasn't increased to the same pace that we've seen from a a pure delinquency based standpoint. But one of the things that you know, to consider about auto is that in the in the subprime sector, and we've talked about this over time, is that is the top of the payment hierarchy. So where much of the delinquency has been occurring or where people have been going delinquent in the near prime or prime, they're moving back down into the subprime category. Emmaline Aliff (24:52): And I think a lot of that does have to do with you know, the, you know, the stimulus drying up now o over time, and a new equilibrium starting to be established. And, and we're seeing some of those trends in, in some of the other statistics that that we've been measuring. But of course, as we head into the new year, I think it's gonna be critically important to manage and watch, because we have seen when someone goes delinquent on their auto, they're 10 times more likely to go delinquent on a credit card in the next month. So, just, just some things to, to think about from a stat standpoint. Maria Urtubey (25:24): And I was going to add some of the things we've seen also from situations such as delinquent populations, the change in how consumers are reacting to some of these metrics or realities. And when I presented, for example, in November, I was researching the spending potential this season. We were thinking consumers were going to be cautious, consumers were going to remain, or cutting back on discretionary spending. Some of the auto market is reflecting that they're now seeing, should I really spend on a new car or should I maybe downgrade and keep my car as currently is as, as for as long as possible before, of course, maybe parts and other pieces are, are hit a little bit harder from, from Terrace. But are there other ways to manage those needs to and am I spending, can I, should I move onto an a used car segment instead? Maria Urtubey (26:22): So, so also, I'm, I'm seeing a little bit of a change again, in, in the auto market in particular, in the holiday spending with that. I think, I think it was you that talked about the pivoting towards, again, more value and meaning. And then Jesse referred to how to use tools like AI to get the best deals. I think consumers are, are, are now leveraging what they have at hand and the reality of when, when they have limited spending to, to new, new scenarios, right? That could be also, Emmaline Aliff (26:58): You bring, yeah, you bring up great points around affordability in particular. And I think that that is such a, a critical point on, you know, the in individual level you know, you know, debt to income or disposable income type of capacity. And especially on the high end. 'cause There are people, even though delinquency rates have been on the rise, they're doing quite well. And, and that, and that does transpire in the, the in the K overall. So with the next topic, Dave Sojka (27:24): I think it's gotta go back to Tom. He, he just lost his, so Emmaline Aliff (27:27): It does go back to Tom. So with this one I am going to, now you can, I'm not going to offer any form of judgment, so you can determine whether or not this is it's a very interesting one to me. A a present that is wonderful to you or coal and the topic you get is equity, market resiliency. Tom O'Neill (27:49): Oh, oh, that is a good one. . That, that could be either . Do I, do I stay in character and go with the coal or, or p paint it as, as a president? I, I'm gonna start with it actually being a present, because that has been one of the more surprising developments and, and stories of 2025 is the, the, the market resiliency. I mean, you think of all of the things that really could have, you know, brought it down and, and yeah, briefly tariffs. Did, you know, we, we had a swoon when, when tariffs, you know, first came in and, and we were pivoting towards, you know, looking ahead to yeah, trade wars and, and uncertainty around what the tariff rates were gonna be, what we're gonna be implemented and all that. And then you add on policy, you know, uncertainty rate, you know, rate uncertainty, international conflicts, all all of these things that in times past have have not been good. Tom O'Neill (28:48): And, and yet the markets, you know, when we look at 20, 25 as a whole has, has been has been pretty strong. So I, I think on the surface, kind of like ai, it's, it's, it's a present, but if we start pulling that present out, you know, and, and dissecting a bit, there's, there's some coal hidden in there because it's, it's a very, you heavy, you know, market, you know, dominated by AI and by, you know, specific companies and, and a little heavy and concerned about a bubble and concerned about, you know, massive corrections. So I think as a whole, yeah, I, I, I like opening that up. If I'm looking ahead to 2026, am I gonna want to hold onto this gift? No, I may want to pass it off to one of you guys. Maria Urtubey (29:42): , Speaker 7 (29:43): . I like it. Emmaline Aliff (29:45): . Yeah. I think that the thing when I, when I, when I'm considering like the, you know, the various things that are occurring with equity markets, you know, is the, you know, we know that the, as the equity market performs, so does the top end of the market from spend standpoint. So it kind of carries things through. And where the thing we need to watch is what is driving that resiliency you know, in the midst of things like tariffs, rate cuts, et cetera, you know, we, we, you know, is the market moving up from financial results because of price increase? And where does that potentially change from an impact standpoint if individuals aren't able to afford things in the future? So that is the part that I'm particularly watching. I would agree with you that it currently, it, it is a it currently is a wonderful present, but like fruit, it could you know, you know, we, we could, it could expire, reaches expiration data at some point, or milk . So the next one that I've, I've got, was it, did anyone wanna weigh on else on that? I, I heard, yeah, Maria? Maria Urtubey (30:45): No, I was going to add no, I was going to add what you called out that it's mostly driven and, and, and Tom, you mentioned it as well by the affluent group group, it's like 11% that drives 73% of the total assets. Mm-Hmm. The 56% mass mark market that holds less than a hundred thousand dollars only holds less than 3% of that total assets. And they are, they have limited even savings as well. Currently our average is below 5%. So as you said, it depends. And it's this affluent group that is, is driving that household wealth mostly I was even looking at the spending. They are the ones that are able to pivot and still look at more luxurious vacations or, or, or gifts even using AI for that, but still outperforming of course, the broader trends, even though they look apparently very positive and we're they're projecting a 4% year over year growth in, in shopping this season, but it's mostly coming from that group. Emmaline Aliff (31:53): Yeah. And I think, I think you could bring up that great point, especially on the percentages of people sitting in the affluent as, as well as how that relates to spend. So there's a, there's a very small group that is holding up the equity markets, the spending and otherwise, and that, and that, that distributional spread is what we need to make sure we're actively watching for future impact. So I'm gonna move on to the next present in the interest of time. So my next person that I have is Jesse. Oh, all right. Jesse. No call for, for this one? Yep. It is a, it's a more recent topic and you can decide whether or not this is kohl or wonderful present as a reminder. And the topic is government shutdown specifically as it relates to economic information. Jesse Hardin (32:47): Ooh, yeah. That's, that's interesting. Emmaline Aliff (32:51): Light topic. Hard to, Jesse Hardin (32:53): Yeah, hard to, hard to see the present there. Yeah. You get to keep that coal. Yeah. Yeah. Yeah. Maybe does anybody wanna steal that a problem that we can't measure it? Emmaline Aliff (33:03): ? Jesse Hardin (33:04): Yeah. I mean, I, I think you know, interesting topic, it's, it's certainly relevant on the heels of the longest government shutdown in history. Certainly a, a concern as we move forward just with the, you know, some of the polarization in politics. I would say. In terms of the data, though, you know, I, I think we are seeing the impact to some extent, of not having a consistent stream of, of flow of data. We, when we think, a good example is when we think of the, the job growth numbers. We entered a period where the Fed was really looking to job growth, given what I had mentioned before about the Fed's dual mandate, meaning that the Fed's trying to look at price controls and, and where prices are going. And then they're also looking at the growth in the, in the job or labor market. Jesse Hardin (33:51): And so, not having a full stream of data to, to make decisions on is, is certainly a, a, a bigger challenge that the Fed probably didn't need. There was some some other third party data that could kind of, you know, bridge the gap. But it is a, a concern, and it's certainly a concern with with, with where shutdowns go, you know, shutdowns impact all forms of data correlation. And so that I think is something that we would wanna watch certainly as we get into the new year and potentially seeing impacts from, you know, future government shutdowns, is how do we bridge that gap knowing that that data is critical to make decisions that we need. Emmaline Aliff (34:32): Yeah, I think you bring up a great point, especially about being prepared. It's much like the, you know, any, anything with respect to supply chain interruption, like around something like, like tariffs where, you know, we're, you know, we're actively finding ways to find information around like employment when we weren't, when we didn't have it, for example, and finding ways that we can still make economic you know, recommendations and considerations based on new information we have. So I think on one hand it, it, the, you know, the, the impact of not having the data is part of the coal, but our resiliency and trying to find additional sources was part of the present to me. Jesse Hardin (35:12): Yeah. And I think that's a good point. I think the, the complimentary nature of the government data that we, that we see along with where third parties including ourself, you know, when we think of some of the things that we've implemented this year, market pulse index, a good example mm-hmm . So I do feel like there's a good complimentary nature there that will that will, I'm sure we'll continue to, to see nurture, you know, in the, in the coming year. Tom O'Neill (35:39): Yeah. And, and I, I actually, if I could pull the lens out a little bit bit and, and look at the government shutdown, not just in terms of the impact to the economic information that, that we've been talking about here, but just in general I think that same theme applies. We saw with the lack of information, how, how we adapted and we, we made do with what was available, and we found new uses for existing data and, and, you know, came across new, new data. But I, I think a, a little bit of that can be applied to the shutdown itself, at least from what I recall from previous shutdowns in terms of how industry and the markets pivoted and sort of, I, I wouldn't, I wouldn't say that we shrugged it off like it was no big deal because it was a big deal and there was real impact, but we carried on in a way that, that I don't recall us in previous shutdowns. And so I don't know if it's just we're getting used to it at this point, and, and that that's Jesse Hardin (36:45): A sad thought, Tom O'Neill (36:45): . Yeah. Which is a sad thought. Or, you know, if, if it just speaks to our, you know, increased adaptability or maybe both. Mm. Emmaline Aliff (36:55): Or, or resiliency. I, I love the adaptability. Yeah, adaptability, resiliency. It's yeah, that's, yeah, that's very a very thoughtful word, I feel. Okay. So my next recipients of a gift is going to be Maria. And Maria, I would like for you to comment on consumer response to in the spending world. And you already, you already hit on that a little bit. I hit on Maria Urtubey (37:25): Yes. But, but I love that Jesse brought up some of the additional insights that we can grasp from tools such as the Market Pulse index during November. We were looking specifically at that and expecting potentially that the baby boomers will be the only ones having some flexibility with their spending during the holidays, the younger generations cutting back, being very cautious, very thoughtful about what to get, if they would even be able to purchase gifts for friends and family. And we have seen that reflected through the Market Pulse index that positions the generation differences or regional score tier differences, et cetera, in a different light, giving us a more well-rounded perspective. And I'm glad I know that Tom you are evaluating, of course the, the updates to that. But from the recent, as I was mentioning before insight into spending, it seems it's, it's projected to be even a better season that we believed it will be with that 4% increase year over year with thoughtful giving, still being at the center, and clearly driven by the higher income groups. Maria Urtubey (38:47): That's, that's a a, a, a still a a thing. We are seeing improvement in terms of, again, having the younger generations leverage AI to be more thoughtful and, and be able to shop around with, with pricing opportunities through ai optimization, so to speak, of, of, of searches for, for specific gifts. And again, it's aspects such as market pulse index into the 2026 that might give us more insight into these ways that the generations might find shortcuts when, when the financial situation is not as promising as it is for older or, or higher income earners. Emmaline Aliff (39:33): Thank you so much. What I'd like to do now is I think that might be the end of our gift giving, but I want to pivot to a look ahead, and, and this is, you know, gonna be in the form of resolution. So this will be a free form versus me assigning topics to each of you. So hopefully you came or, you know, knowing what we've already talked about, I'd love for you to share some additional thoughts around things that you, that you know, from a look ahead perspective. And you could take whatever approach you want here, whether it's you know, the perspective of Cole or the perspective or the perspective of a wonderful present that you may be expecting, or just some, some things that you might you know, see from a change standpoint. And we know that the world is ever changing you know, and so I'll start here. Just this morning, I took my son to his orthodontist appointment. He's gonna be getting braces, and apparently I'm learning you know, from him and others that braces and glasses are now cool , and yeah. And I was like, okay, that's a, it's a very different world. And I don't know if, if that were the case, I might not have been a data scientist and an economist in the future. So, , Emmaline Aliff (40:42): So why, why, so jumping into the, the resolutions, why don't we, let's go ahead and start with Jesse. Jesse Hardin (40:49): All right. So if I think of one that could be maybe maybe more of coal now, but I think doesn't, doesn't coal turn into a diamond with high pressure? Mm-Hmm . Emmaline Aliff (41:00): It does. Jesse Hardin (41:01): So there's, there's my metaphor there. I would say I'm watching closely the job market and, and specifically job growth, looking at job openings, you know, do we see businesses creating opportunity? It just feels like that's such a lifeblood of our economy when you think of what a job means to a household and the income that it brings. And so, I'm gonna be watching very closely those job numbers we watch, the jolt survey survey we watch, well, just, I mean, I, I, I can't even actually talk as, there's so many metrics that we look at, but really just monitoring those metrics to see where job growth goes in 2026, because I think that's gonna really be a good telling sign for what happens with you know, largely with the economy and, and the moves that the fed's gonna make. Tom O'Neill (41:49): I'm, I'm gonna throw something out. You Emmaline Aliff (41:50): Wanna add to it? Tom O'Neill (41:51): Yeah. Oh, go ahead and add to it. I was, I was gonna switch. Emmaline Aliff (41:55): Oh, you're doing, you're doing your own. Great. Yeah, just hop in then. That's, that's perfect actually. Yeah, because I was gonna ask, I was gonna call on volunteers . Tom O'Neill (42:01): No, I was, I was gonna throw out you know, sort of a, a resolution, you know, form of, of prediction. That is perfect. We, Maria mentioned earlier, we, we've been talking about the Khap economy for three and a half years. Originally, we were talking about Khap recovery, and then that morphed into Kha economy, and now it's just the K because we have been seeing that growing gap between those who are, who are doing well you know, recognizing wealth from the markets, from increased housing prices, from increased savings, you know, increased income and so forth. And those who are struggling, you know, because of the pressures of inflation, of, you know, the pandemic of labor markets and so forth. And that, that gap between those populations have been growing and, and fewer people in the middle. Which is why there's, there's now the k I'm looking ahead to 2026 as potentially that stabilizing. Tom O'Neill (43:00): And, and we've talked about the market pulse index here, which, which is our way of, of looking across all of these different financial dimensions of, of a consumer or a household's life, you know, not just credit, but savings spends debt and all of these other things. And we're starting to see early signs where maybe that bottom part of the K is, is starting to turn around again, still early. We're closing off 2025. We can't say that that's been the case for the year, but I'm hopeful that, that that is the trend going into 2026, and that we can start talking about, yeah, these, these populations not being as divergent as they were before. And of course, Emmaline Aliff (43:46): Yeah. So, Tom, when you say turning around, are you referring to it as stabilizing or improving? Tom O'Neill (43:53): It's both. It is, it is stabilizing at the very, you know, least you know, within the populations. And in some cases, you know, some of those populations within the bottom part of the K are actually turning up faster proportionally than, than even some of the, the populations in the upper part of the K. Emmaline Aliff (44:15): Cool. Well, thank you. I look forward to that as well. It's it's a very active, as you already know, an interest topic to me because of the, the various things we're observing from a correlative effect that we're capturing, and really, from my perspective, only able to capture through the market pulse index. So with that, I'll open it up for anyone else have any resolutions they'd like to offer. Dave Sojka (44:39): Yeah, I'll go if I'm looking forward to really, I think it's around the household financial cushion and, and overall credit health kind of building on the market pulse index view of things. And so you know, what's the current, you know, focusing on household debt to income and GDP ratios, right? So what's the overall level of debt relative to the economy size? Thinking about it then, from a, an, you know, the overall American perspective, again, personal savings rates, again, low savings rates suggest that, that many consumers have then depleted their excess pandemic savings, relying more on debt for spending, which then goes to my last point, delinquency rates really again auto card student loan. As, as consumers lose their, their excess capacity as they're balancing affordability, are those then translating into rising delinquencies? That's what I would watch out for. So I, I'm hopeful, but cautious. Emmaline Aliff (45:45): Good, good points. And I think, Maria, you may be the one that's left to offer a resolution. Maria Urtubey (45:51): Yes. My resolution, I'm, I'm following in a way, the wait and see approach that was called out by the Fed. I think 2026 will be a little bit of a settling of the dust kind of year. So many things happen in 25 that you know, all these and specifically the consumer reactions, as I said specific to spending at the end of the year specific to how to approach switching cars or buying a new, a car, a new car, versus a used or not even making that move. I'm, I'm looking at even the impact to payment hierarchy. We know that student loan came back into plane 25 at the bottom of the list, typical historic observation. But I'm wondering if, we'll, we'll start observing a new shift like we did years back when mortgage went from the top to the middle ground and auto and, and home equity were at the top. I'm, I'm envisioning not a resolution, but I'm, I'm curious in this, wait and wait and see approach to, to observe what the data and the actual trends and consumer payment hierarchy, how things switch around, given the new idea on how to address affordability, limitations, juggling of multiple com, their commitments and other household objectives. So that, that's right. Emmaline Aliff (47:21): Great. so thank you so much. I, I do wanna just, you know, close it out here. Thank all of our listeners all of you know, all of you here who have participated in this conversation you know, love working with you know, each of you. So thank you to Maria, Jesse, Tom, and Dave for joining me today. Your insights today and throughout the year have really helped me both from a personal standpoint, but in addition to that being able to, to work through these challenges with our you know, with all of our stakeholders from, you know, from our, you know, customers through our investors and our ability to try to uncover the relevant themes of 2025. And I'm really looking forward to heading into the next year. And, you know, as we, you know, covered new trends that are happening in the various industries and verticals in the US market, and how we can connect these insights with with actions and how to how to navigate through that you know, that uncertainty that we've been experiencing. Emmaline Aliff (48:23): And so you know, again, to our listeners, thank you. I hope you enjoyed the topic today. And as a reminder, your feedback is important to us and critical to conversations like the one we had today. If you have any additional questions, suggestions, or would like to reach out in any way, we even take guests on, on podcasts please reach out to us at risk advisors@equifax.com and we look forward to hearing from you.