What happens when the data takes a month off?

Overview

This episode explores the economic implications of the recent government shutdown, focusing on the challenges faced by the Bureau of Labor Statistics (BLS) in recovering lost data. It also delves into the rush to complete solar projects before a tax credit deadline, Disney's decision to stop reporting streaming subscriber numbers, and the economic ripple effects of phasing out pennies.

Notable Quotes

- You can't really go to a store and look at the shelf and figure out what the price would have been a month ago. – Jesse Rothstein, on the challenges of recovering lost economic data.

- It means that you have to have the resilience as an individual to spend significant periods of time looking pretty stupid and be willing to tolerate that. – Kirsty Gibson, on the challenges of long-term investing in volatile markets.

- A penny might not sound like much, but for some folks who are literally watching their pennies, it does matter. – Heather Haddon, on the impact of the penny phase-out on consumers and businesses.

📉 The Impact of the Government Shutdown on Economic Data

- The 43-day government shutdown disrupted the Bureau of Labor Statistics' ability to collect critical economic data, such as the October Consumer Price Index (CPI).

- Jesse Rothstein explained that missed data cannot be recreated, as surveys and price observations are time-sensitive.

- The BLS, already understaffed due to earlier budget cuts, faces challenges in prioritizing key reports like employment and inflation data while delaying others, such as the Job Openings and Labor Turnover Survey (JOLTS).

- Delayed or incomplete data could cloud the Federal Reserve's decision-making at its December meeting, potentially impacting interest rate policies.

🌞 The Solar Industry's Race Against Tax Credit Deadlines

- Solar developers are rushing to complete projects before a July 4th deadline to qualify for federal tax credits under the One Big Beautiful Bill Act.

- States like Oregon are cutting red tape to expedite solar project approvals, while developers face challenges such as labor shortages and competition for equipment.

- Despite the deadline, renewable energy projects are expected to continue growing due to state mandates and the decreasing cost of renewables compared to traditional energy sources.

📊 Disney's Shift Away from Subscriber Metrics

- Disney announced it will no longer report streaming subscriber numbers, claiming they are less meaningful for evaluating success.

- Analysts like Ross Benish suggest this shift reflects a broader industry trend as streaming platforms move from prioritizing subscriber growth to focusing on profitability and ad revenue.

- The change highlights how companies adapt their metrics to align with evolving business goals and market conditions.

🪙 The Economic Ripple Effects of Phasing Out Pennies

- The U.S. Mint has stopped producing pennies, leading to a dwindling supply in circulation. Businesses and consumers are grappling with the implications.

- Fast food chains, which rely heavily on cash transactions, are facing challenges as armored car services run out of pennies.

- Retailers are seeking government guidance on rounding rules, while some consumers are opting for credit cards to avoid rounding issues, shifting costs to businesses through swipe fees.

🤖 Structural Changes and Long-Term Investing

- Kirsty Gibson, an investment manager, emphasized focusing on companies driving structural changes, such as artificial intelligence and climate solutions, rather than short-term market fluctuations.

- She noted that while AI represents a paradigm shift, its future impact remains uncertain, with potential for both overestimation and underestimation in different areas.

- Long-term investing requires resilience and acceptance of being wrong at times, as navigating unknowns is part of the process.