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How Small Businesses and Consumers are Responding to Economic Uncertainty · Market Pulse

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  .
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  Welcome to the Market Pulse Podcast from Equifax,
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  where we break down the latest economic and credit insights to help you navigate
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  today's business landscape.
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  Well, welcome everybody to our next edition of the Market Pulse Podcast.
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  We have a very exciting conversation ahead of us. You know,
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  as a part of the recent small Business week and now small business month,
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  we figured we'd do a little bit of a little,
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  a little bit of a highlight on what's happening in the small business
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  marketplace. A little bit of opportunities, a little bit of threats,
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  see what's going on.
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  And we are extremely fortunate to have a couple of
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  exceptional experts in the space with us today from Fiserv
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  Darryl Tyndort, Director of Economic and Analytical Insights, and Mike Spriggs,
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  Head of Consumer Insights. I really appreciate you guys being here.
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  I think we're gonna have a really great conversation. Before we jump into it,
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  though, before we jump into that conversation,
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  we do want to throw th throw it over to Moody's Analytics for a quick macro
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  economic update and when we will get things going.
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  The US economy is chugging along,
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  but cracks are starting to appear in the first quarter.
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  Real GDP fell 0.3% annually. According to the preliminary estimates,
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  the decline was largely due to a surge in imports from firms who stocked up on
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  inventories in advance of expected tariffs. However, consumption activity,
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  which has been driving the economy forward for several years up at this point,
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  slowed and contributed less to growth than in previous quarters.
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  The good news is that the pre tariff inventory stockpiling that occurred in the
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  first quarter has kept price increases muted so far.
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  Consumer price inflation has been tame and continues to descend towards the
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  Fed's target. However,
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  as firms work through excess inventories and start repurchasing in coming
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  months, prices will start to rise.
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  The April Producer Price Index report also showed some evidence that some firms
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  are eating the cost of higher tariffs.
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  The PPI fell 0.5% on the month led by a sizable decline in
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  trade services. And now the PPI for trade,
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  for trade services is a measure of the change in profit margin
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  wholesalers receive when selling to retailers.
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  So the sharp drops suggests that wholesalers are absorbing tariff costs rather
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  than passing them along to retailers. And given the on, again and off again,
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  approach to trade policy from the Trump administration,
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  wholesalers may be betting that the current tariff framework will be short-lived
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  rather than alienating customers and risking market share,
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  firms are hoping that tariffs are reduced further and costs come down. Now,
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  this is a short term relief for consumers,
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  but it cannot be expected to be sustained. Longer term
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  credit. Stress also appears to be elevating after nearly a year of stability,
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  and much of this is a result of a spike in student loan delinquencies,
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  the rate of which is at an all time high with moratoriums on repayments and
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  interest accumulation and reporting delinquent borrowers to credit agencies.
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  At this point. A thing of the past late payers,
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  some of whom expected mass loan forgiveness have been caught flat-footed and
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  will soon face increased financial stress as their credit scores take a hit and
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  authorities garnish their wages and reduce some federal benefits.
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  Great. Thank you. Really appreciate that economic update.
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  So now we get to get into the fun part of the conversation. As mentioned,
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  we've got some, we've got some great folks out there today. I'm David Adams.
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  I'm the head of commercial product marketing here at Equifax. And again, our,
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  our Fiserv experts who are exponentially smarter than I could ever be.
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  So I can't thank you guys enough for being here.
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  If you guys wanna just say a quick hi and we'll get things going.
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  Sure. I'll start. I'm Mike Spiggs,
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  as you said head of Consumer Insights at Fiserv,
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  and we spend our time looking through all of the
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  card and cash and check data to try to understand what
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  consumers are doing on a daily, weekly, monthly, quarterly basis,
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  and try to relate that back to external factors that are happening in the
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  marketplace.
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  I'm Darryl Tyndorf director of Economic and Analytical Insights working with
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  with Mike as he mentioned. And I try to bring some of the,
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  the nuance between the economics and the consumer, you know,
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  understand that data story and kind of understand where we're going.
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  There you go. So it's, it's,
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  the way I interpret that is you're basically the guy out there predicting
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  everything that's gonna happen tomorrow in the marketplace, right.
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  , you know I don't know about prediction , but you know,
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  I can I can at least say, Hey, this is what I think.
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  Well, I was, I was kind of hoping you'd say you would. I got to, you know, it's,
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  so we got together, what, two, three weeks ago.
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  We got on the Market Pulse webinar. You guys were able to give a nice little,
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  you know,
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  we're able to give a really great update to kind of what's going in the
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  marketplace, but I'm like,
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  it's been three weeks and like the whole world has changed. You know,
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  it seems like uncertainty.
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  I think we know uncertainty is kind of the word of the day.
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  Ask anybody and everybody's gonna be like, Hey, what's gonna happen?
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  I don't know. You know, I'd be interested to get your guys' thoughts. What,
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  where do you think we are? Are we coming out of that uncertainty,
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  or is there still so much uncertainty? I don't know. What do you guys think,
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  Mike? Darrell, you know, Mike, you wanna go first?
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  I think we're in the middle of a global game of
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  hokey pokey. We're in, we're out, you know,
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  what's it gonna be? You know, who's calling the, the shots here? Right?
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  And that breeds uncertainty, right?
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  That's the whole anxiety of that game is like, oh, what am I gonna do?
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  What am I, every week is a new,
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  a different news cycle about deals and tariffs? Are they on,
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  are they at 140% or are they at 30%?
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  Just a lot of uncertainty. You asked, you know, is that gonna continue?
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  I for the foreseeable future, it seems like.
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  I can tell you from what we've been examining with consumer spending
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  once this cycle of uncertainty started,
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  consumers seem to try to take control of their own destiny and
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  made purchases on large scale on or large ticket items.
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  And then that seemed to kind of back off. And now as we're looking now, we're,
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  you know, through April and into May,
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  we're seeing a decided downshift in discretionary
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  spend, which seems to kind of align with people saying, okay,
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  I don't know what's gonna happen,
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  so I'm just gonna kind of hold onto my money until things become more clear.
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  That's, that's what we see in, in the, in the data,
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  the signal that we're picking up.
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  I think a lot of people are echoing that a little bit. It's when you're par,
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  I don't know, is paralysis, is that the right word, Darrell? Like,
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  are people paralyzed?
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  Yeah. You know, and I don't know about paralyzed. I,
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  I think I said this at the time of the election,
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  which was I thought that it was going to be very uncertain times, right?
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  And I think that lags were going to be
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  also the other statement that was gonna be used.
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  And what I mean by the lags is that we just don't know when we were gonna feel
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  any of these pressures because of the uncertainty, right?
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  So we saw Q1 GDP contract.
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  The argument has always, you know, started to come around like, you know,
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  that what's being forced was core GDP.
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  I would argue that core GDP is not entirely the most
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  accurate picture. There's, you know, consumption of demand.
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  And when we look at these GDP numbers,
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  really what I see is that it reflected the,
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  the consumer wanting the cheaper prices because it was focused on already
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  existing inventories,
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  not the production of inventories that we, the new production of inventories.
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  So with that, you know, ultimately, hey,
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  those goods are at cheaper prices. And so because of that,
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  we didn't see the price increases, right? With CPI that was released.
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  And what I mean by not seeing those increases is that ultimately it
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  eased was still high. And, you know,
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  everybody expected CPI to come in hot and
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  really, you know, inventories were stocked up on cheaper prices.
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  There wasn't an incentive to push those on yet to,
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  to consumers because nobody knew it was gonna happen.
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  And so we don't know it's gonna hit, right?
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  Tariffs are higher than they have been.
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  We are going to see increases in prices. It's just a matter of when.
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  And that's why I say that uncertainty in the lag component, really,
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  in my opinion is, is we don't know. And so consumers,
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  as Mike said, right, we saw them kind of pull back.
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  MRTS came out today kind of echoing what we've been saying, which is, you know,
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  consumers slowed in April. And that's slowing,
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  I would say,
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  is representative of the pressures that households are feeling and that
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  uncertainty pressure.
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  So we saw a similar, what you just described,
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  we saw a similar thing on our side. Some of our economists,
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  some of our analysts were looking at it. Like in March,
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  there was this like big bump in some spending and some lending.
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  And we're like, well, that's really strange. Well,
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  everybody's trying to get ahead of the tariffs, right?
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  And then everything kind of stopped there for a second, the next month,
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  where it's like, okay, nobody's doing anything. So like it's,
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  it kind of throws that CPI, you know, off a little bit. And Yeah, like some,
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  go ahead. It's.
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  It's, it's all unprecedented, right? And so,
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  and people are trying to respond in real time to whatever they think is
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  in their best interest, right? And so, just like what you, you guys saw,
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  we saw this off cycle spin, and it was really interesting.
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  We have the the good fortune of being able to kind of decompose small business
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  and big box and total market. And so what we saw in our,
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  in our numbers was across the small business, electronics,
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  retailers and furniture retailers, we saw this early book mm-hmm .
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  Like late February, early March, we saw that bump.
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  And then I guess once the new cycle kind of
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  substantiated the fact that yeah,
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  these tariffs are inevitable and they're coming,
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  then we saw the big box retailers and another off cycle
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  jump in volume across those same large ticket items.
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  Yeah. And, and, and goods across goods.
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  And so now all of that is kind of really settled out, right?
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  'cause Now we're into May, April was like we've been saying,
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  slowed downs a little bit lackluster for a lot of categories.
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  Some of the heavy discretionary spend areas like travel way down,
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  except for, here's an interesting thing.
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  We see a lot more activity now in public transportation. So, you know,
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  what that says to me is this return to work environment that we're in is now in
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  play. I, I think we're,
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  we're headed toward kind of just a really conservative time
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  in terms of how consumers are gonna spend over the, the foreseeable future.
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  Foreseeable future. All this stuff seems so intertwined to me. 'cause It's,
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  you know, there was,
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  there was conversations about fear and uncertainty and that was growing,
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  but like consumer spending was still propping up a lot of small businesses.
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  And now the consumers, you know, there's the deposits,
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  we're seeing deposits grow. People are holding their money back. I don't know,
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  I guess I'm trying to figure out, it's like, what,
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  what kind of pulls us out of this pause? Is it,
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  do consumers start spending more because they're okay and they're feeling
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  relaxed? Or is it like the, the tariff thing gets sorted out and all of that?
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  I don't know. Well.
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  You know, I think, I think what you end up seeing is, again,
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  with the uncertainty, we don't know what's gonna happen, right? Yeah.
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  And I think, you know, I,
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  I think we could end up having this up and down pattern because the,
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  the headline comes in as inflation eased, right?
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  So if inflation eased, you could see consumers, because, you know,
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  ultimately I haven't looked at the the employment numbers
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  claims. But, you know, job numbers came out that, you know, before they were,
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  they were, you know, stable incomes are still stable, but it was, you know,
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  the uncertainty what to do. And the,
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  they were tariffs were being implemented at the beginning of April, right?
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  And so now we're assuming prices go up,
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  and so we see the headline inflation ease.
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  And so that might bring some consumers out to spend,
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  especially those in the income brackets that can spend, right?
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  And so we could see that spending, but then, you know, as we said,
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  prices will increase,
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  then all of a sudden we could then see another pullback because prices increase,
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  right? This is that hokey pokey nature that we are, we're,
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  we're kind of alluding to here, which could be, Hey, we're in, we're out,
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  we're in, we're out. And it's because of that level of uncertainty, right?
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  Households and businesses do better with certainty.
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  They can plan ahead. And so, you know,
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  if prices are in line with something that they need, right?
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  We saw the change from discretionary to essential, and they need it,
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  they will buy it. Yeah.
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  I swear, you know, by the way, where are you? We are, you think,
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  gonna have to create a visual for the hooky pokey or just layer in the music on
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  top as our background? Yeah. , something like that. It's,
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  you know, darl, I forget who said it,
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  there was an really famous economist that said this. It was 10, 20,
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  30 years ago, whatever it was said, businesses,
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  it doesn't matter who's in office politically,
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  it doesn't matter what's happening in the marketplace up or down left and right,
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  it doesn't really matter as long as there's some level of confidence.
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  I think that's the key word.
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  There's some level of confidence that they know what's going on or what could
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  be coming. Hey, we think that this is gonna happen. We're fairly confident.
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  So even if they think it's gonna go down, okay, businesses can respond to that.
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  Consumers can respond to that if the other thing. So it's like, maybe,
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  maybe that's it. Maybe it's just,
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  it's the shift from uncertainty to confidence that we need and who knows what it
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  is that's gonna do that.
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  We just gotta be careful. I hope us as consumers, we're all consumers, right?
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  I hope we, as we listen to the news that comes out, we talk about,
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  hey inflation ticked down from two four to two three, that's great. Okay.
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  Does that give me a little bit more confidence to spend?
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  You just gotta be careful, right? Because that's the top line number.
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  And what we've been seeing is, you know,
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  when you start to pull that basket apart,
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  we still see some of the essential spend things that you gotta,
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  you gotta spend on, are still creeping up, you know,
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  housing and utilities and things like that. So that's still creeping up.
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  The the other thing is, we've been saying for a long time now,
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  certainly since the start of the year,
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  we've been talking about consumer resiliency. It's great,
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  but when you look at how consumers are spending,
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  there's a lot of credit being used.
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  There's a hard stop with that at some point, right? And so we just, I,
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  I just have a, a, a, a legitimate worry that, you know, at some point
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  the ability to spend is gonna dry up because, you know,
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  credit limits are gonna get maxed out,
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  and repayments are not probably gonna come in with the same,
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  at the same level that they are now. That's, that's what I worry.
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  Well, it'd be, well, we, we hear it with small businesses.
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  Access to credit is always the biggest driver. And when the, you know,
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  when the funds dry up again, that's when things go sideways. The question is,
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  you know, when is that gonna happen? If it's gonna happen? Knock on wood, it's,
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  I guess, you know, the, the jobs report,
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  I guess that's a nice part is as long as people are gainfully employed,
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  like to me that that's like, personally, I look at that and I'm going,
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  look, as long as I got a job, as long as other people have a job,
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  we can all pay our bills.
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  We can afford to feed our families and things like that. The bare essentials,
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  you know, we can dial things back. Like the, you mentioned the travel, you know,
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  a good example. Although, funny enough, one of the, in, in one of our,
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  we, our small business lending index,
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  one of the things that we've seen recently is we've actually seen entertainment
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  and retail and some of those nice to have components.
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  We've actually seen an increase in lending, although you're making me wonder.
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  It's like, has the increase in lending,
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  is it a result of needing the money in the capital because of the lack of
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  spending? Or is it money for investment.
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  Yeah. To stay afloat or to invest and expand? Yeah,
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  that's right. Yeah. Yeah. So the mix is as we examine, we got a,
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  we got an end a segment that we call leisure within our spend trend product.
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  Okay? And so it's kinda a, a hodgepodge of different stuff.
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  But what we've been noticing is that
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  some of the,
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  the lower cost family oriented things,
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  destinations within leisure are picking up a little momentum,
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  movie theater box office family entertainment centers you know,
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  where you can go and the kids can play laser tag or bowl or, you know,
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  and stuff like that, right? We've seen an uptick in that. So
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  It's not like consumers are just backing away from discretionary spend, totally.
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  But just like we've seen in restaurants, they're trying to figure out, okay,
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  of all the menu options that I have available to me,
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  how can I stretch my dollars, maximize the value for the,
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  for what I have to spend, right? So we see that in leisure.
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  We certainly see that in restaurants. And,
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  and Darryl's has done a quite an in-depth analysis on the impact of inflation
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  and restaurants, you know,
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  tariffs and inflation and two sides at the same point, right? So we,
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  we've been looking at that as well.
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  Restaurants have a hard time passing on higher prices to consumers right now,
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  right? They, you know, they want to, they wanna be competitive.
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  You know, Mike, you were just talking about, you know, the,
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  the cup of coffee example, right? Like, I mean, coffee beans have soared, right?
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  Due to that price point. And you know,
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  even though when we look at food inflation, that has eased, and so,
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  you know, currently it's still, you know,
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  relatively cheaper and easier to go to a grocery store
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  where, you know,
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  obviously they're insulated a little bit through, you know,
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  the elasticity of prices and so forth.
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  And so what ends up happening is they're also substitutes, right?
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  If it's too expensive, well, I can find another substitute, right?
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  And so there's that, whereas you go to a restaurant,
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  there's not necessarily a substitute. And so what we've seen is first off,
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  the trough of inflation for restaurants, you know,
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  went down to its bottom in January, it started to pick up again.
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  And so we've seen that ultimately consumers have changed their
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  pattern first decreasing at fine dining,
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  which you would expect, right? Consumer behavior, Hey, where am I going to,
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  where am I gonna end up pulling back first?
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  And it's the most expensive pieces that I don't necessarily need.
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  Then all other areas started to see that slowing effect.
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  And the one that is, you know, seeing some, still seeing growth,
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  it's slower than it was, but seeing growth is the quick service restaurants,
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  right? Because now I can stretch my,
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  my dollar and I would also make the argument right quick service restaurants
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  are not the,
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  the all encompassing bad eating out that I think we associate them with, right?
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  They have now adjusted, right? They've improved their menus,
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  healthy eating, you know, we, you know,
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  Kellogg's came out and said that they're seeing an,
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  an adjustment in their cereal aspect, right?
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  That consumers are not in demand of that they want healthier options. And so,
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  you know, QSRs did make that leap earlier.
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  And so, you know, they can get healthier foods at A QSR. And so,
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  you know,
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  I just wanna make sure that we're not pigeonholing that QSR is all bad when
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  it's not all bad. And so there's some aspect of stretching your dollar,
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  right? That people are doing at restaurants. And that's what we're seeing.
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  You know, inflation did take a big chunk of it, right?
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  Restaurants improved after the, the pandemic.
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  But now the, the, the growth levels are below pandemic levels.
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  That's the inflationary impact that has happened with restaurants. And so,
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  you know, the tariff piece, you know, could impact even more. So.
• 21:46
  I love what you said there in terms of it's not all bad.
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  There's, I think there's another aspect too,
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  I'd be interested to get your guys' opinion on this is some of the stuff
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  that we're seeing here, whether it's restaurants, either lack of, of,
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  of stuff that people are finding or,
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  or my people looking for people to extend their dollar in other places.
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  I think it's creating some opportunity, which I'll get to it,
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  which is side gigs, side hustles and things like that. You know,
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  we're seeing on our side, we're adding,
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  we're adding more than 400,000 new businesses to our databases a month.
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  And businesses that we're looking at credit, credit files and things like that,
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  which is exponentially higher than what we saw, you know, 3, 4, 5 years ago.
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  But what we're finding is we're finding a lot of those business are side hustles
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  where people are trying to make some extra money. And I'm wondering if,
• 22:43
  I'm wondering if it's just a combination of,
• 22:45
  are people opening up a side hustle because they need to or because they want
• 22:49
  to? And are people opening up side hustles and do these things? Because like,
• 22:54
  there's this perception, Darrell, that maybe, oh, this, this, this place is,
• 22:58
  is not good for me.
• 23:00
  I'm gonna do something myself and I'm gonna try and bring other people into it.
• 23:03
  I'm gonna try and find just grow. I think.
• 23:06
  It's both. And I don't think it's either or. I think it's both.
• 23:09
  And I think history has shown us that any economic disruption
• 23:13
  creates opportunity, right?
• 23:16
  And so for somebody with an entrepreneurial spirit they see
• 23:21
  an opportunity to serve a new,
• 23:25
  a newly created demand or some,
• 23:28
  some twist or change on existing demands. They feel that they can,
• 23:32
  they can solve that, right? And so it creates opportunity and they jump in.
• 23:36
  I think that that's definitely true on small scale, small business, you know,
• 23:41
  gig type work and large businesses as well, right?
• 23:45
  We saw that with restaurants during covid
• 23:50
  the way that they changed their business model to start to serve a population
• 23:54
  that wasn't gonna sit down and eat and make it profitable. We, we,
• 23:58
  we kind of witnessed that real time as we were, you know,
• 24:01
  as we continue to process transactions for, you know, all sizes of business. So,
• 24:06
  so that's true. At the same time, you know things are getting more expensive,
• 24:11
  money's getting tighter. Housing is going up, utilities are going up,
• 24:15
  insurance is going up,
• 24:17
  all of these essential spend things reducing the amount of discretionary
• 24:22
  dollars, but you still wanna enjoy your life. You still have a family,
• 24:26
  you still gotta buy shoes and, you know, pay tuitions and things like that.
• 24:30
  So I think it's, it's both hands satisfying, you know,
• 24:35
  taking advantage of a disruption in, in the status quo,
• 24:39
  but then also just trying to stay afloat.
• 24:42
  Well, and I think too, I, I think you know, and I don't,
• 24:46
  I don't know this for certain, and I think it'd be interesting to research and,
• 24:49
  and find out, because I, if I recall correctly,
• 24:52
  I thought right during covid and, and during some of our downtimes,
• 24:57
  there have been increases in LLC development.
• 25:01
  And it would be very interesting to see if, you know, or even, you know,
• 25:06
  survey oriented, however, the, the research will be conducted, which is,
• 25:10
  you know,
• 25:11
  is it a matter of developing that LLC as a,
• 25:17
  as a buffer if something does happen, right?
• 25:21
  Is it an LLC to bring in, you know,
• 25:24
  additional revenue to continue on that? If, again,
• 25:29
  hedging your risk, right? In sitting there saying, listen, you know,
• 25:34
  I, I don't know what's gonna happen, right?
• 25:36
  If a business can do better without me, they will.
• 25:38
  So I might as well have something on my side that can end up maintaining at
• 25:43
  least some sort of income or some sort of benefit to myself. So I think,
• 25:47
  you know, maybe that's, that's one thing that, you know,
• 25:50
  regarding the increases in in those LLCs. And I think, you know,
• 25:54
  two to the point of what you said regarding restaurants and adapting, right?
• 25:58
  You know, every industry during an uncertain time,
• 26:03
  we're talking tariffs, we're talking COVI, you know,
• 26:05
  it's all about the adapting piece, right? In some regards,
• 26:08
  this is what the argument is about small business, right?
• 26:11
  Small businesses don't have the underlying red tape.
• 26:14
  They can adapt quicker to nuances. Yes. And so if,
• 26:19
  you know covid hits, for example, right? How do I adapt?
• 26:24
  I increase technology,
• 26:25
  I increase getting my good or service to that individual in a safe manner
• 26:30
  during high price tariffs, right? What do I do?
• 26:34
  I stock up on my inventory. I find another, you know,
• 26:39
  supplier from a lower tariff place, or if I'm a restaurant,
• 26:44
  I find another means for that product in a different sort of food
• 26:49
  or in a different sort of,
• 26:50
  I find some other substitute or utilize it in a different
• 26:55
  mechanism. So I think, you know, the thing about business,
• 26:58
  especially small businesses, is their ability to adapt.
• 27:02
  And I think that kind of goes hand in hand with that thought process of, hey,
• 27:06
  you know, consumers aren't any different. So people aren't any different,
• 27:09
  which is, hey, there's uncertainty.
• 27:12
  Maybe me developing LLC is a smart move that somebody would still pay me to
• 27:17
  do these things if they're not gonna pay, like, you know,
• 27:20
  a larger term aspect of my employment that it could be contractual.
• 27:24
  Oh my, I think you are a hundred percent spot on on that one, Darryl.
• 27:27
  It went from, so 2019, I think the number was like 3.4,
• 27:32
  3.5 million small business applications were filed.
• 27:36
  2020 covid hit. We,
• 27:39
  I think the number was in the 4 million range, or maybe that was 2021, but 2021,
• 27:44
  it was in the fours and the fives,
• 27:46
  it stayed in the 5 million new business application ranges the last several
• 27:50
  years. And the thing that I think is so interesting about it is a couple things.
• 27:54
  One is I think there was a perception that, oh,
• 27:58
  to start a small business,
• 27:59
  I need thousands of dollars and I need all this stuff Now. It's like,
• 28:03
  for a couple hundred dollars you can go get an LLC set up and a license and
• 28:07
  maybe to maybe to use a, a funny line from a movie. You know,
• 28:10
  the difference between ordinary and extraordinary is that little bit extra,
• 28:15
  you know, in our, in our lives, you know, ordinary versus extraordinary,
• 28:20
  right? Like my impression is people are like,
• 28:23
  that little bit extra is okay,
• 28:26
  I can now take my my family out to dinner that I want to do. Or like you said,
• 28:30
  Mike, it's, it's, look, if something does happen or like this,
• 28:35
  this unexpected expense comes, comes up, I'm not going,
• 28:39
  do I buy food at the grocery store this week? Or do I pay this, this bill?
• 28:44
  'cause I have to. Yeah. It's like,
• 28:46
  I think people are just finding it as a way to just soften or just create a
• 28:50
  level of comfort, you know? Yeah. Confidence. Hey,
• 28:54
  confidence that I can get through what, whatever's coming my way.
• 28:59
  Like I no truer words. I think for what you said there, Daryl,
• 29:02
  a hundred percent spot on. So, but still so much uncertainty.
• 29:06
  I think everybody's a little bit, you know, okay, great.
• 29:09
  I'm gonna stockpile some cash, I'm spending a little bit too much.
• 29:14
  I don't know. Can,
• 29:15
  can we just fast forward three months and or look into our crystal balls and
• 29:18
  figure it out? Like that'd be easier, wouldn't it? Yeah, yeah.
• 29:20
  I just wanna get done with this and just move on to whatever it's gonna be.
• 29:24
  I just wanna get there, .
• 29:25
  Yeah, exactly. Let's just get there so that we know what to do and just.
• 29:29
  Wanna get there, man.
• 29:30
  Is the apocalypse upon us or is it rainbows in unicorns? I don't know. ,
• 29:34
  right? No. Anyways, I know we're, I know we're getting,
• 29:39
  getting close to time. I, I, I could talk to you guys for hours. Like this is,
• 29:45
  I love these kinds of conversations. It's such good things. I don't know. Any,
• 29:48
  any last thoughts? Any any, you know, any predictions?
• 29:53
  I know it's a scary thing. Where are we gonna be in six months? We gonna be up,
• 29:56
  we gonna be down, we gonna be figuring it all out.
• 30:01
  Yeah. You wanna go first or what?
• 30:03
  Yeah, I mean, I can, you know, I you know,
• 30:06
  I I think we're still gonna be uncertain. I don't know that we're gonna know
• 30:11
  when things are gonna hit. And you know what, it could be a,
• 30:15
  it could be a slow process, right? It could be that the,
• 30:20
  the function of, you know, passing on prices to consumers ends up slower.
• 30:25
  So we see a slower uptick every month in inflation, right?
• 30:29
  And a slower pace of decline, you know, in, you know,
• 30:34
  the Fiserv Small Business Index and MRTS and and PCE,
• 30:38
  what we're definitely gonna see is we are gonna see rising prices.
• 30:41
  It's gonna be, it's gonna be how adaptable
• 30:47
  businesses and especially small businesses and consumers are to,
• 30:52
  to that. And I think a lot of that will, will depend on, you know,
• 30:58
  watching the jobs numbers and income numbers,
• 31:02
  because I think that's gonna be our gauge about when consumers
• 31:07
  really decide to start to pull back.
• 31:10
  Yeah.
• 31:11
  Yeah. Dar I, yeah, I,
• 31:15
  I think I'll just speak from the consumer aspect of this, right?
• 31:18
  So consumers are gonna continue to be cautious. And I,
• 31:23
  I've got an anecdote hot off the presses.
• 31:26
  We just did a review of Mother's Day activity,
• 31:30
  and I hate to say mom, we're on a budget this year.
• 31:35
  So, so we didn't kinda, as consumers,
• 31:39
  we collectively didn't like go all in to spoil mom
• 31:44
  with gifts and all kinds of experiences like,
• 31:48
  like we've done even last year in years past.
• 31:52
  So I think that that speaks directly to the
• 31:57
  discretionary spin pullback, right?
• 32:02
  Summer's coming we usually see certain industries pop with
• 32:07
  summer travel is, you know,
• 32:10
  waiting on summer with bated breath,
• 32:13
  but like we've just been talking about travel has slowed down.
• 32:16
  So does that create an opportunity for those operators
• 32:21
  in our leisure segment to kind of pick up those dollars that
• 32:26
  are not being spent in big travel
• 32:31
  events and doing more staycation stuff where,
• 32:34
  you know consumers can figure out how to stretch their dollars, right? And,
• 32:39
  and local leisure activity providers taking advantage of that.
• 32:43
  So we may be on the cusp of another shift,
• 32:48
  another realignment as,
• 32:52
  as businesses that are aligned to kind of fill those new consumer
• 32:56
  needs as they align and figure out how to do that.
• 33:00
  We may see this shift and, and then this will become our new norm.
• 33:05
  Who knows?
• 33:06
  You know, Mike, as, as you said that I was thinking, you know,
• 33:08
  what we should do is we should look at our,
• 33:10
  our findings and compare it with the lipstick index, right? And kind of see,
• 33:15
  you know, kind of what ends up happening there.
• 33:17
  . Yeah.
• 33:18
  That would be that'd be interesting to see given, you know, the fact that,
• 33:22
  you know, the belief that, you know,
• 33:24
  obviously it was coined by Leonard Lauder but you know that as the
• 33:29
  economy weakens consumers shift, you know, towards, you know,
• 33:32
  more affordable luxury items like lipsticks and so forth and cutting back on
• 33:36
  their larger discretionary. So it'd be interesting to see.
• 33:39
  Thank you for the time. I really appreciate it.
• 33:41
  This has really enjoyed the conversation.
• 33:43
  Maybe we could do it again in a couple,
• 33:45
  three months or six months or whatever that might be when we get through some of
• 33:48
  this stuff and, and we figure it out. But Darrell, Mike, again,
• 33:51
  I really appreciate your time and thanks for a good conversation.
• 33:55
  Thanks David. Thanks David.
• 33:57
  Appreciate it. Great.
• 33:58
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• 34:02
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• 34:05
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• 34:09
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• 34:09
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• 34:13
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• 34:16
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• 34:19
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