What Goes UpThere are better ways to combat inflation than destroying demand with interest-rate increases, according to Nela Richardson, chief economist for payroll giant Automatic Data Processing Inc. She joined the latest What Goes Up podcast to give her take on half-century record American employment, decades-high inflation and signs of softness in the US housing market.
“It’s about productivity,” Richardson says. “Productivity grows you out of inflation when more workers produce more output for the same amount of cost. That’s what productivity is. That’s what gets you out of the inflation wage-price spiral conundrum.” But to do that, she says, business and government need to invest in jobs and workers—something they haven’t been good at recently. “It takes more partnerships with community colleges to build an agile and skilled workforce in the places that the economy needs it,” Richardson says.
Hello, and welcome to What Goes Up, a weekly markets podcast. My name is Mike Reagan. I'm a senior editor at Bloomberg, and I'm Aldana Higher, across Asset reporter with Bloomberg. This week on the show, Well, despite all those doom and gloom predictions about a recession on the horizon, the job market remains red hot, with the unemployment rate at just three point five yet with inflation out of four decade high. Many economists believe that some pain in the labor market is needed to get consumer prices under control. But is that necessarily true. We'll get into it with a veteran economist, but Voldonna, I have to ask you first, how many cups of coffee do you drink? Aday? Do you want to guess? I want to guess. I want to say zero cups? Zero? Yeah? Zero? Yeah? How did you know? Because I felt like it was a trick question even though I asked it. Yeah, how could you know? Zero? I'm so like hyper usually I know, but it's something also very healthy with the cauliflower. I love cauliflower. If they were cauliflower coffee, I would have that. Yeah, yeah, no, I stopped drinking it. Earlier this year. Actually, no caffeine at all. No caffeine really. Yeah, it was giving me a headache every time I didn't have it. So I don't think it's for health reason. I mean, I think it's healthy for you. Right, Well, I don't know. I the headache. I've never gotten past the headache I needed every day. How do you get out of bed in the morning. Then well, I had food poisoning, so I couldn't eat anything like at all, and so that's when I stopped just drinking it. I don't know now I feel about the coffee I drink. How much coffee do you drink? Well, the pants are you buying? If you're buying I'm buying, Yes, then like five cops. But we're not going to Starbucks. That's like seven dollars. Will go to like the Little Stance, the little carts. But our our guest, actually I think she drinks a lot of coffee. I have a feeling. Our guest today is Nila Richardson. She's a chief economist at ADP Miila, thanks so much for joining us. Oh, it's great to be here with you. Thanks for having me. Well, the I think the reason we're talking about This is because you had a blog post recently where you h It was titled Inflation and Coffee, a love story about how you go through how how prices have gone up but the Fed's not really paying attention to things like food costs, and you said, there's a problem with this kind of thinking. So I was hoping we could just start out with with you talking about this my love of coffee and my dislike of inflation. That's a that's a great way to start. Yeah, I mean, I do love coffee, and I think that actually coffee is a good prop for what's going on in the global economy, not just domestically. So coffee prices. You mentioned that seven dollar a cup of coffee across the street. Coffee prices are actually up almost six from a year ago. And you know, when everything is going up, isolating one thing seems like you're piling on. But coffee is kind of unique because for all those years and months leading up to the pandemic, prices were either flat or falling. So to see this big surge and you're over your coffee prices, it's like for a lover of coffee, it's traumatic has been for me. Um, I won't say how many cups I drink. I'm generally just a morning coffee person. But um, you know, coffee is important to some of us. But food prices just rit large have been going up. And the point of the blog is, you know, coffee represents a global supply chain that's quite complicated, that has been affected by the pandemic. It represents the big surge in food prices that we've seen over the past year. It represents the fact that Main Street sees food and gas as inflation. But when the Federal Reserve makes monetary policy, they exclude food and gas prices and volatile prices and look at core inflation, what's known as those baskets of goods that are not affected by something that's really really volatile, like coffee. So um, While I get a lot of attention to coffee, the Fed doesn't. I'm sure they drink it. I guess their argument, Neila, is that, as you say, those prices can be so volatile. You know, if there's a bad harvest in Columbia or if there's a hurricane, the oil prices are going to go up. Are they wrong to do that? Though? Do you think I mean, should should you know, should the headline number carry more weight for the Fed. Do you think I think the headline number should carry more weight because it feeds consumer expectations, and we know that the long term driver of inflation is what people think will happen with inflation. So if you think that prices are going up, you are going to behave in a way that actually causes prices to go up, Like go to trade to Jews and hoard a bunch of coffee and your your cart because you think that you know next month is going to be higher. Not saying I do that. It's that that example is a little too real. They're yeah, well, you know, experience is our best teacher. So um with the FED. While the Fed is not looking at coffee or food or gas specifically, when it's really focused on its interest rate policy, it is well aware as we all are, that consumers see it and that's what consumers are judging. And if that feeds back to long term inflation expectations, then we have a problem that spirals beyond, you know, the window that the FED is executing its policy. And well, I know, Neila, you pay a lot of attention to consumers, so maybe you can talk a little bit more about consumer sentiment right now, because I wanted to ask you if it's not the case that the wealth effect is also very real right now where we're seeing obviously uh downturn in the stock market and also a slowdown in the housing market, And does that not also affect the way consumers are thinking about things? I think it does. I think that's an important attribute of consumers spending. You know, that's the bulk of the economy. And so when consumers, especially wealthy consumers, feel confident about the economy, they spend more. But at the lower end of the income spectrum, it's not about confidence, right, Um, you're spending on necessity, so you spend when you have it at the lower income and so we've seen a transition of who's driving the spending in the economy from those people who benefited from those direct payments from the federal government through the heart of the pandemic. That translated into a lot of spending, which helps the US avoid a prolonged downturn and led to a pretty speedy recovery. Now on the other side of inflation, when things are slowing down in the stock markets and in the housing markets because of higher interest rates, you might start to see a slowdown in the spending of upper income folks UM, where the wealth effect is more prominent in their decision making. Yeah, well, I know, Neil. And now at a DP your your sort of laser focused on the job market too, So let's get into that. A little bit. Wage growth has picked up, but it is still lower than the rate of inflation, you know, So in other words, what they call real wage growth is negative, which means if you get a raise, it it doesn't necessarily feel like you're getting a raise because you're all your consumer goods are rising even faster. And you know that obviously triggers a lot of concern about what they call the wage costs spiral, you know, where labor demands higher wages to keep up with inflation. Are you seeing any signs of that? I mean, is that is that a risk that this inflation might prove to be stickier than um everyone's hoping. Let me take the second part of that question about is there a risk that inflation is stickier than we think? Yes. Now, the second question that proceeded to that is the wage is going to be the main driver of that stickiness. I do think that wages because they have accelerated so quickly over the past year and a DP data and we have some really good data on this, as you know, paying over twenty five million workers in the United States. It's showing that that that wages wage growth has been elevated and is now kind of bottling me out at this higher level. So in our latest report for August, we show that wage growth for the medium worker who stayed in the same job for the past twelve months with seven point eight percent. Now they put that in perspective in spring of that medium wage growth would have been around two percent, so a huge acceleration. But the seven point eight percent is basically in line where we've been for the past several months. So we're not seeing it go up dramatically, um, but it is elevated, and I think that's the story of inflation overall. Um. Perhaps we are slowing down from acceleration, UM, but for many items from coffee to your paycheck, Uh, those prices are are elevated and the growth rate or is kind of leveling out, it's still growing, right, So do do you think there's you know, the only way to cure inflation is in part to weaken the job market a little bit. Now, I don't think that's the best way at all. I think that's a horrible way to care inflation by destroying deman. I think that's the worst way. I think a better way, a way that you know, involves more than just the FED. That's the fed's tool, but it's about productivity. Productivity grows you out of inflation when more workers produce more output for the same amount of costs. That's what productivity is. That's what gets you out of the inflation wage price spiral conundrum. But that takes some other muscles that the economy hasn't really used all that well. It takes business investment, it takes government investment in jobs and workers. It takes more um partnerships with community colleges to build an agile and skilled workforce in the places that the economy needs it. So we're relying on a tool that is blunt, yes, but also painful by its own by the fed's own words. And there are better tools we just we we haven't had to use them in this economy until now. So then, can you talk a little bit more about the jobs market, because we have been having a very strong jobs market where we're getting numbers that are just so much better than a lot of times what economists are expecting overall. How long do you foresee that happening? And do you foresee a potential slowdown in the jobs numbers? Yeah, the slowdown isn't inevitable in the job numbers. I mean, we've already seen it. You can't expect an economy in normal times. They're as close to normal as we're going to get from here on out. To produce half a million or four hundred thousand jobs a month. That's not the US economy or any economy I'm aware of. Um, something more normal makes sense, and I think what you're seeing that is not necessarily a slowdown, but a normalization of job gains and post pandemic, right, And so we're still seeing some really solid job growth. And what we're hearing from clients at ADP is that they're still trying to find qualified workers. That's the top concern of many of our especially small business clients, who have been out competed by larger companies who were really aggressive and hiring over the last year. There's those large companies are slowing down, but they're just making room for smaller companies to higher instead. So when we think we'll see some pretty steady games ahead, um, but slower than what we've seen over the past six months. Right. Well, you know it's interesting. You know, I keep thinking back to uh I forget who invented it, but it's called the misery index, you know, and it's basically just very simple formula. Yeah, the inflation rate to the unemployment rate, and you know that's supposed to give us an indication of how miserable we all are. I mean, I guess it depends on how much coffee you had in the day to on an individual basis, but you said it. Let the records say I I did not say that data. But you know, I think the of the the issue is that the you know, the unemployment rate can obviously be very low, but if that inflation is high, real wage growth is negative, it sort of makes a lot of people miserable. Rather than say, in a recession where you get tempercent unemployment, you've got ten percent of the people miserable, as you know what I mean, as opposed to in this environment, you seem to have everybody miserable with inflation. So is that the equation do you think that the FED is trying to solve right now that UM inflation is almost a bigger sort of destabilizing risk in society and the economy then a recession and and sort of, you know, a recession is the lesser of two evils for the FED trying to trying to sort of chart its course. Yeah. I think that's a great question, Mike. I mean, it's always positioned as inflation or recession. But you know, I'm embarrassing to think that you can have both, especially when I don't have coffee. But for the for the FED, I mean, it really is and in my view two for the very reason that you said, inflation is job number one for the economy because without getting inflation under control, workers don't benefit from a growing economy. All of their paychecks are eaten up by inflation. And so in order to get that product ativity that leads to growth, you have to have inflation that's manageable. The the the economy just can't operate without having stable prices UM. And so I think the FEDS priority list is in the right order. It has to be about inflation until inflation is under control. But then, Nila, how realistic or maybe unrealistic is the FEDS to present target on inflation. Yeah, those goal posts probably would They would love to move them. Um. Some of those uh, disinflationary forces that we've relied on for the past ten years leading up to the pandemic are just not working so well anymore. The whole idea of the globalization bringing prices down, of having just in time inventory that kept priced and costs low, those things are kind of fragmenting at the scenes. And the way that we're sourcing um really um things like semiconductors around the world. It changes the landscape for inflation um. And so in my view, this episode of inflation is just one of a future world where inflation is more frequent and more persistent. It's not that the FED is doing, um, a one and done battle with inflation. This is going to be an ongoing war um and so what they do now I think sets the tone for the future. So um, Yeah, I actually forgot your original question I got in my own tandent, But I said, how how how unrealistic is two percent? And and so maybe just to add to your point, how how much longer do you foresee them? You know, if if we're going to be continuing to seek persistent inflation fro how much longer do you think? Yeah, I I don't have a crystal ball in the length of time, um, but I think it could be the inflation does stay a bit elevated, or for the purpose of this audience, that interest rates half to stay um at higher higher levels than they are now in order to keep inflation under control for several months or even you know, and the next year or two. Uh. And that's probably not great news for a lot of people. Um, But the two percent target, I don't think the Federal Reserve would change that at this point. Um. You don't change the goal post in the middle of the game. You have to wait till after. And that's because it's not just about inflation. It's about the Fed's credibility and changing it to to something higher. Um. They kind of already did that before the pandemic, but that was to get inflation up, and now they're trying to push it down, and so changing the target to three or four percent, as I've seemed suggested, really would they have their credibility would take a hit in doing that, you know, Neila, Obviously it used to be not so much anymore, but he used to always be. Every month in the market, the biggest main event of the month was the Job's report, and which means that two days earlier, you guys come in, ADP comes in and scoops the government with your own jobs report, and that is also highly anticipated but by everyone and often market moving. I understand you guys have made some changes to the methodology. Could you tell us a little bit about you know, about what you did. Absolutely, and honestly, Mike, the Jobs Week is still my favorite time of the month. I'll let you guys break down the CPI, but I'm always looking forward to jobs Week. You can't take vacation those weeks. I take it world. I don't have to be in the office, but now when one to, Honestly, I miss all the fun. But what we've realized that ADP is the need for real time data, especially during the pandemic um and we knew that with the scale we had and the breath of data that we could offer paying over twenty five million workers, that we could be more than just a today forecast of the BLS numbers. We could actually provide an independent estimate based on ADP client UH actual pay of what's going on in the labor market. So this is not survey data. This is real pay data, and it's very well crowd source. We have we we our whole business model is based around paying people and paying them on time, and so it's it was an important I think advancement and the way that we use data as an estimate, and I think it's not going to be the first. The need for real time data on the economy from the private sector has grown exponent exponentially. The government institutions realize this. They are incorporating some of this in their own statistical infrastructure. It's just another supplement of what's going on in the economy. There's a lot of people who will talk about the future of work and give you a forecast, but when you look and see what's actually going on in the economy, that really helps drive business decisions because it's based on something real, on a model. Yeah, I was, yeah, I was gonna ask, you know. Okay, So every month the government, I think in the Establishment Survey, they survey something like a hundred and some thousand businesses and get the responses. You guys have the actual hard data from twenty some million pay rolls. Isn't that a more You know, I'm kind of a softball for you here, Nila, But isn't that a It seems to me like you have a more accurate view on the labor market than the government. Should the market be paying more attention to your report than the BLS reports? You think the market should pay a lot of attention to the ADP National Employment Report. So I'm on record for saying that. And it is an independent estimate, and I would say that the b the b LS estimate is also an important and has a long lived lifespan in terms of providing data. So I am not on the record is saying that this is a replacement for government data. I don't think that. I think that this is a private sector view, uh that is highly complementary to government resources. And it doesn't have to be an either or it should be an And so this audience is sophisticated. They're really good with numbers. They can hold two numbers together. And what we've tried to do at a DP is make it as easy as possible. So when we launched the new n e R, we did it with twelve years of weekly data, cut by sector, cut by geography, industry, and establishment size. So it's really an opportunity dig into the numbers c where the n E R and the BLS matchup, see where they differ, see how it performs over the business cycle. And we're really excited to be able to provide that level of detail. And and last note on this, we did it in collaboration was the Stanford Digital Economy Lab. Standard has been a great partner, but we wanted to make the methodology as rigorous um and transparent as possible, so partnering was important for us. Can you talk more about the differences between your number and the b l S number because you because your yours comes out two days before the b S BLS number, inevitably somebody tends to point out that there is a discrepancy between the two, that they don't always match up, and sometimes the gap is pretty wide. So maybe you can tell us a little bit more about that lately. And you shouldn't expect them to match up because they're totally different samples. The BLS is based on the c S Survey run by the Census Department, which essentially asked establishments how many people did you pay this week? Right? So to survey data, and there is some issues around survey response rates that have been um made more apparent during the pandemic. We're all feeling a little survey fatigue these days, and establishments are no different. UM. So what the ADP data does is it it says not how many employees did you pay this week? Establishment, but we count how many employees are actually on your payroll. So it's a slight difference in and also perspective UM. And it's based on actual pay data. So if you look at your paycheck and you get that and direct deposit UM, that's what we're counting basically for all of our establishments. But the great thing about the number is we have such a breath and scale that we actually rewait that number with the Quarterly Census of Employment and Wages. I remembered it q c W, which is a near consensus of all the establishments in the countries, about nine d upwards of you know, fool data on all the businesses in the US. And so now we have something that is a private sector view, but it is really waited to to uh look at the national average. And I realized that that's a long answer, so any more detail. We have the technical note on our website ADP or I dot not dot org. And thank you for not like cutting me off, because I think I would have cut myself off if I had gone on on something. But you guys are so so polite. I'm actually not that polite because I'm I said, inevitably somebody points out the discrepancy between the A d P and the BLS. I'm that person. Yeah, yeah, don't don't worry, Nila. DNA is not played at all. I'm not sorry, Nila. Well, Nila, I know um and in sort of past stops at your career, maybe more so, but you definitely keep a pretty close eye on the housing market too, and we've seen obviously, uh some softening. They're uh not only in home sales, but actual prices have finally seemed to come off the boil a little bit. I forget the supperlative, like the biggest you know, month over month drop in in over a decade or something, the less case Shiller Index. How do you see housing um sort of landing from this red hot housing market that we had, And are there sort of knock on effects to GDP and inflation that could come as a result the tail when to housing is long. I'll start their demographics is destiny in the housing market. And you have a whole bunch of young people, millennials who still want to buy a house. Yes, they've been stunned a little by the rapid increase in both house prices and mortgage rates, but that's demographic tail and it's still singing loud and clear, and and so to me, I think the fact that where we are actually saying weakness in the economy is like the I was hanging through right because you already had a stricken market that has been undersupply chronic lander supply for over a decade. So this is the supply shortage story and housing. It's not about the pandemic. It's not about recent rises in lumber. This has been going on for ten years um and it was only because rates were supernaturally low that anybody could afford a house. And now you've taken that away. But it doesn't just affect demand, it affects supply. If you look at home builder sentiment, it has plummeted because not only has um the cost of constructing of house gone up, so has their financing costs. So you're depressing the entire housing market. With a higher interest rate, it's become smaller, and yet you still have this huge tail when coming. So I think of this as temporary. Whatever we're seeing in prices, it will um readjust again once people get over the sticker shock of a higher mortgage um and we won't fix it unless we build more homes, especially at the affordable sector. So last comment on this. You know we used to have a housing policy in the US, and you know it survived both Democratic and Republican administrations. We don't really have a national policy around homeownership the way we did when that you started my career. It's almost like it's a forgotten goal of the of the American dream to be a homeowner. Have we given up on it? What would you like that policy to to look like? I think it starts with affordable housing, whether it's rental or ownership. But because it used to be back in the olden times, like maybe two thousands um, home ownership was your your path to the middle class. If you bought a home and you had that for savings and it grew over time, then you created wealth for you and your family. Now you need wealth to buy a house. It's like, let me go create my wealth first, maybe in bitcoin or the stuff market, and then I can afford a house. We've inverted the American dream where you have to get wealthy first before you can become a homeowner. And I think that that's part of the discontent that you're seeing show up in the consumer sentiment numbers, and that's not going to be solved by just getting inflation down. That's kind of something that we're stuck with, and we need to actually be intentional about affordable housing. I'm really happy you brought this up because one of the questions I had for you is about where and how we're seeing the unequal effects of the FED hiking rates. So housing potentially is one area. I don't know if you had something else on mine. I do know you tracked this very closely. Credit card costs. I mean, uh, it's the reason why the country has stayed a flow. It's on the backs of the consumer. It's always the case, but the consumer has been incredible. It's like higher egg prices, okay, I'll buy it. Higher airline care is okay, I'll buy it. But they're starting to buy it less out of savings and more on credit card balances, and as someone who has studied Canada and looked at what the effect of consumer debt can do to an economy, and this is before the pandemic. Are friendly neighbors to the north or a tale sign of what could happen if consumer debt in the United States starts to rise and then explode to keep up with the current piece of spending. So I think it's really a watch point, especially for those in the lower income strata, because those are the ones who are affected most by inflat ship, by higher rental, higher rents, and higher food prices and gas prices. So guess hopefully they'll get some relief on that. Well, one area where there is uh some debt relief is the student loan issue. Um with the you know, the Biden program to forgive uh some student loans. How do you see that playing out? Is that gonna add some inflationary risks or is it you know, going to uh sort of have a more positive effect on the on the growth side that will would out weigh any inflation concern. It's a great question. I don't know. I'll just say it frankly. I wrote about student debt for goodness in my Main Street macro blog last week. And you know, the question of whether student did is a mountain or a mole hill when it comes to inflation is still to be determined, because who knows if people You know, there's been a forbearance on student debt repayment for for a while now, um so forgiving it out right, who knows what effect that will have? Will people buy more refrigerators because they don't have to pay and they haven't been paying a student loan debt? I do not know that. Um, I don't know what the marginal increase on inflation will be. What I do know, though, is that people with college degrees are much better served in the recession than people without. I do know that college enrollment is dropping, and I do know that productivity in the US is also on the decline. So we need a skilled workforce that I do know, and how to get there is an important question to ask for the future. Whether or not college is out of reach for people these days is another question that I think deserves some policy consideration. So, Nila, before the pandemic, you and I used to get together all the time at the Bloomberg golfices and we would talk about the stock market and drink coffee. We would drink coffee, yes, so much coffee from the Bloomberg golfice is, and we would talk about a love of New Jersey, right, I think, yeah, very fond memories of that. But anyway, you said recently in a note that the that the market isn't necessarily in lock step with the economy, and I wanted to ask you about this and what you mean meant by it. I think the market is reflecting some of the angst and the uncertainty that's been on Main Street all along. Now, so I'm gonna actually reverse my position on the market. I think the market was acting, in certainty fortified by the fact that they felt like they understood what the Fed would do, the inflation would come down and there soon be a pivot. And I think there's now a recognition that that may not happen, or it may take longer to happen than previously desires. Because what's happened I think over the course of that month is that we got another CPI reading and the core inflation bumped up instead of going down. And that was surprising. Um. It was even surprising to me who wasn't as sanguine about inflation. The inflation story is what I what I saw in the market. So I actually do think that the markets are reflecting uncertainty. I don't know how long the markets will do that, but that's the same uncertainty that mainStreet is feeling right now. Right Well, Nila Richardson, chief economist at ADP, is always a treat to get your take on the world and all things involving the economy. But I have to say, as a veteran of this show, you know, we cannot let you go until we hear about the craziest thing you saw in markets this week. Uh so, I'm confident you came prepared. But let's let's start with you. Okay, you're gonna love this one, all right. I think there's a company called horse Kicks Kicks. They're making custom designed high end sneakers for I give you this. No, I had to send it to her actually because I told her, go get your horse a sneak skis all right, Now, what's our market angle? Well, it's just okay, the price and everything, it's just a crazy story. So I had to I had to use this. The company builds itself as the world's first online custom sneaker retailer exclusively for horses. They have hoof sized versions of classic sneakers like Air Jordan's. I'm not joking. They're really, like, incredibly funny looking, and they cost guess how much per shoe? A thousand per shoe, and a horse has at least two needs to two shoes, right, couldn't need to strap on a regular pair of Jordan. I know you would think, yeah, no, they're actually so when you look at the pictures, they're tiny. They're really small, like little children sneakers or something. So four five thousands of yeah, my goodness, Yeah, to make your horse look very stylish. Had that all right? That's pretty good one. I'll give you that, all right, And that's pretty stiff competition. But but I don't know what do you got first? You got something crazier than uh whore Sarah Jordan's. I don't know if I can top that. I mean, I'll stick with there's so many crazy things going on that you are looking for crazy thing data points. I am, I am, I'm taken with this. This idea that California has replaced Germany as the fourth largest economy, that is pretty interesting. Yeah, it is interesting, And I wonder what California does with that information, because I mean, that's a lot of responsibility for California right and right now. Um, they've thrown a lot of political weight into the Supreme Court of protecting pregnant pigs. I am curious. Being the fourth largest economy in the world, what other things do we think California will do with that kind of stature. So I guess I posted as a question for the markets California do next, I would saying I think that was our own Matt Winkler here, bloombergy. That that's you didn't see that? That? That's really good. I like, it's pretty good. I mean it makes sense. It's you know, it's huge land wise, it's huge population wise. Uh, it's still a kind of valley and everything. You know, it makes sense. Almonds, Almonds, Yeah, almonds, Yeah, almonds are a big deal. Cauliflowers. They grew a lot of coliflowers. Oranges. All right, two good crazy things. I like them both. I'll give you mine. And first I have to ask, what's the most you've ever paid for a pair of earrings? I've never bought earrings Tom, you've never bought earrings and you do not have pier stairs. I've never noticed you got the headphones. You always have the headphones on, but you never bought them, not even wants you make your own. No, I just don't wear them. Right, But you do have Pierce steers. But how do they stay? I don't know. I've just never won them. More importantly, do you nil out? I think you have, if I remember correctly, you have song is not daughters? Right, So I have sons who I taught to shop very well for their mama. What do you think the most they've ever spent on a parier rings for mom is over at that Short Hills Mall. I know you're a high roller at the Short Hills Mall, but my small it is a nice sman my my sons do enjoy that. It's not my my shopping cart, but which they do enjoy it. I would say, given there, since I know how much they make in allowance, I would say the most is for Christmas, maybe fifty bucks. That sounds reasonable to me. Yeah, I have no idea. My wife I bought one pair of diamond earrings that were forversary, but otherwise, Okay, what if I were to tell you don't know who Blue Ivy is Beyonce's child. Beyonce's child. Yonce and jay Z have a child named Blue Ivy. Everybody knows this. I thought for a second you were trying to stump USh is ten years old. I don't know, you know. I mean, I know I'm a hip, hip old guy. I don't know about you, though, I don't you know. I mean, I mean it's Beyonce, So Beyonce's daughter, Blue Ivy and jay Z's thoughter as well. You know. She went earring shopping at what was it is? Some kind of it was the Wearable Art Gala in Los Angeles. Uh an auction which gives it our market angle. Uh And the story's courtesy of of Venity Fair. She bought a pair of diamond ear rings. Um from some designer who I think I should uh know who she is? But Lorraine Schwartz, Lorene Schwartz, famous earring designer. What do you think Blue Ivy paid for a pair of diamond earrings at the Wearable Art Galla in Los Angeles? Why? She's ten years old? She was the better, She had the paddle and she she hit the bid. Uh. I don't know. I imagine Blue Ivy's got some revenue coming in CREP speaking engagements, and I think she you know, sorry for the prices precise. What do you think blu Ivy spends on a pair of diamond earrings at auction? Am I going first? You always go first? Yes? Yes, okay, it has to be some absurd amount. But I thought fifty was was an absurd amount. Yeah, okay, but obviously bluv won't spend that little. Okay, let's go with seventy dollars. Seventy five thousand dollars. Uh, Neil, what do you think you're taking the I'll let you. You can do the over the under on seventy five thou, but if you go over you and it's under, then you lose, right, Yeah, yeah, yeah, I know. Whatever the result, my sons are going to ask for a higher allows. Since this is a newsy thing, I'm gonna say over. But I can't imagine how much over it would be From seventy, I'll go up to hundred. All right, I think you in with the over eighty thou smackers on a pair of diamond he Wow, I was closed, Yes, you were close, pretty close. You're pretty close. You win. I think you win because you were closer that way. Wait, you can't go over? Yeah I win a right, yeah, sorry you aners. Okay, I was gonna say ten to be honest, and then you you broke out with the seventy five thousand. I was like, okay, but ten year old time of hearings. Well, it'll only go up from here. I'm sure I'll probably worth more now that she that she owns what goes on, right, I just cannot imagine a ten year old. Every sort of earring or piece of jewelry my kids owned at that age is you know, handmade. It's covered in you know, melted gummy bears and uh made an arts and craft right, and just completely lost. So we'll see what to keep track of. I want to go to the playground and just follow her around. If she's wearing those eighty dollar earrings in case she drops, well, congratulations to Blue Ivy on her eighty dollar diamonds, and she is welcome to do all of our Christmas shopping. I know my girls have like four earring holes in their ears. They keep adding new ones, So I don't know if you need an eighty thousand dollar pair for every you have to raise their lawns to. Yeah, this is not good news for me. It's the bottom lineing the father of three daughters. But Niller Richardson, who is a Tirp by the way, I'm very happy to say I've got a daughter econ major at the University of Maryland, and I'm proud to uh proud to share the the Tirp pride with Nila. So it's an excellent economic tradition that she has just joined. So congratulations, I agree, I agree, thank you. What do we say? Go Tirps six and two Bowl eligible and football. So that's that's a good record. Yeah, all right, Neil, I think that's all our time. Thank you so much. It's always a real pleasure to catch up with you, and I hope we can do it again, something I have so too. Thanks for having me. Thank you, Nila. What goes up? We'll be back next week and so then you can find us on the Bloomberg Terminal website and app or wherever you get your podcasts. We love it if you took the time to rate and review the show on Apple Podcasts, so more listeners can find us and you can find us on Twitter, follow me at reag Anonymous, Bill, Donna Hirach is at Bildanna Hirach. You can also follow Bloomberg Podcasts at Podcasts. What Goes Up is produced by Stacy Wong. Thanks for listening, See you next time. Before
