#41 – The CPI Report, Global Birth Rate Concerns, And Wes’s Five Reasons For Being Bullish About The United States

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Wes is joined in the studio by Connor Miller, Chief Investment Officer for Capital Investment Advisors. They review the underperforming jobs report. They deliberate the cumulative effect of inflation and how that might usher in negative vibes despite encouraging CPI numbers. They explore the Wall Street Journal’s article about the global decline in birth rates and its potential to bring significant economic, social, and geopolitical consequences. But, they remind listeners that, fortunately, the U.S. is still seeing population growth, partially from immigration, and will likely continue to for the foreseeable future. Finally, they dig deep into Wes’s five reasons for being bullish about the United States.

Read The Full Transcript From This Episode

(click ‘Details’ below to expand and read the full interview)

Wes Moss [00:00:01]:
The Q ratio, average convergence, divergence basis points and b’s. Financial shows love to sound smart, but on money matters we want to make you smart. That’s why the goal is to keep you informed and empowered. Our focus providing clear, actionable information without the financial jargon to help 1 million families retire sooner and happier. Based on the long running WSB radio show, this money Matters podcast is tailor made for both modern retirees and those still in the planning stages. Join us in this exciting new chapter, and let’s journey toward a financially secure and joyful retirement together. Welcome to money Matters. I’m your host, Wes Moss, along with the great Connor Miller, who joins me in studio.

Wes Moss [00:00:53]:
Connor, thank you. Being here is always my friend.

Connor Miller [00:00:56]:
Wes, always great to be on with you.

Wes Moss [00:00:58]:
There’s so many things to talk about. The, obviously, the big economic news of the week was inflation now at the lowest we’ve seen now in a couple of years. So new three year low, but cooling more slowly than was expected. So it came in definitely not hotter than expected, but warmer than expected. So we’ve got new inflation numbers. We, if you couple that with the jobs number from last week, we’re seeing, we saw 254,000 new jobs. So that’s a good number. But then we also just saw jobless claims that came out on the same day of CPI this past week that had a pretty big jump.

Wes Moss [00:01:37]:
So job list claims, obviously not good to go higher. So economic data this week, the bigger story that, of course, we’ve all been, we’re so close to because we’re right here in, we live in Georgia, we’re in Atlanta, and so many of our friends are not far away and have had a harrowing week in the state of Florida and bracing for the impact of Milton, then living through the impact of Hurricane Milton. And that to some extent, the pictures, the text messages, the phone calls that I had the day before knowing that the hurricane was coming and then the day after. And now the last couple of days, as people have kind of been digging their way out, this has just been a nerve wracking time. And I think the closer you are to Florida, you live in Florida, you think that there’s something going on and wrong with the world.

Connor Miller [00:02:30]:
Yeah. What else could go wrong?

Wes Moss [00:02:32]:
My business partner for so many years, Mike Reiner, has been in Florida and been in Sarasota, kind of the direct hit area near Siesta key. But for years he’s told me that, hey, it just doesn’t, Sarasota doesn’t get hit, this area doesn’t get hit. And it hasn’t really for. It’s been really decades since it’s gotten something this direct. And I just can’t help but think, I mean, some of the photos that I got from folks that live down there are. It’s almost like out of a Sci-Fi movie. The fact that the eye of the hurricane, which to some extent was somewhat helpful to that particular area that’s so low lying, the longboat key is essentially at sea level, which was flooded only a couple of weeks ago. For Helene, the worst fears and the Wall Street Journal had a topography elevation map that if it had been a cat five hurricane that hit, the storm surge could have just been literally two or 3 miles in if the water had risen 15 plus feet, which was a possibility.

Wes Moss [00:03:41]:
Fortunately, it didn’t happen. Some of that had to do with the direction in the eye of the hurricane going right over some of these areas. And fortunately, it wasn’t as bad as expected. However, it’s still a massive amount of damage, a massive amount of lives lost. Multi billion dollars. We don’t know the exact damage, but it’s, it’s 20 billion plus, maybe more in property damage. Could have been 50 billion, could have been 100 billion. At one point, I calculated it could have been a half a trillion dollars.

Wes Moss [00:04:11]:
With so much expensive real estate that’s all along that coast. So it’s just been a really, I think it’s been a kind of an emotional week. Now, if you’re in Kansas or if you’re listening in Wyoming, you’re like, well, it’s just another hurricane in the Gulf, but when it hits close to home, especially after we got flooded in Atlanta a couple weeks ago from Helene, and of course, what’s happened in North Carolina and Florida for Helene, it just, to me, it is one of these. It’s such a big catastrophic event that it kind of wakes you up and you think, wait a minute, this is rough living right now. And it reminds me of the times that were in Connor Miller, which is here we are in the fall of 2024, and we’ll get to these inflation numbers, we’ll get to the economic numbers, which in large part I would say are pretty darn good. And that in itself may be the dichotomy that we live in. Things are pretty good, but not everybody feels like they’re all that good. The statistic that grabs me is that, and this is emblematic of the time that we live in.

Wes Moss [00:05:18]:
Conor, you were surprised by this, but if you. This is from a recent Wall Street Journal Newark study NORC’s, the National Opinion Research center, that go back to 2012. So go back a little. Go back twelve years. 53% of Americans said, oh, the american dream is super attainable. It’s easy in America. Over half of Americans said that. Then where were we in 2016? Well, it came down a little bit.

Wes Moss [00:05:49]:
Still pretty high. Almost half, 48% of Americans said, yeah, the american dream is attainable today. Only a third of Americans say that. So 36% of Americans still believe the american dream is attainable, down from over half. From over half down to a third in arguably the greatest nation, not arguably the greatest nation on the planet and the greatest economic system on the planet. But maybe it’s just because I felt that we’ve gone through this and I wasn’t even in Florida, but so many folks we know, loved ones, friends, family, clients that I’ve worked with for so long that they’re down there, it kind of just reminds me of, look, the fall of 2024 is a rough fall. Live in the southeast, it’s probably a lot. It may be rougher.

Wes Moss [00:06:38]:
Right? In the summer, I think about California. You’ve got forest fires. Well, this is our season down here in the southeast. And you see these images of, and projections for days prior and then images on days later of towns and cities and communities that get battered by hurricanes, that get battered by wind, torrential rain, these mind bending storm surges. We’ve got Iran and Israel are literally firing missiles at each other. And the election is way less than a month away. And it’s become this multibillion dollar, mudslinging flight. Flight.

Wes Moss [00:07:16]:
It’s not a flight, it’s a fight, a mudslinging fight. And the polls are so close, who knows that we’ll even know who wins in several days after the election. And then you put it all together this week, we even had a politician in the US bringing all of that scary stuff together and just blamed the government for creating the recent hurricanes. It’s like the ultimate. I’m sitting here thinking through all the bad things happening, and then it was like, there’s no better cap that encapsulates it than a message out of Washington that the hurricane is actually because of the government. So there’s a lot to be, I think, scared about, and there clearly has been. And this is why people think the american dream is much less attainable. So there’s a lot to be scared about and maybe just disappointed about.

Wes Moss [00:08:08]:
And it shows the sentiment of our nation. So the fact that the american dream seems so much further away for so many people I’d say that’s pretty bad, and that’s pretty discouraging. However, despite all of those headlines and the week that we just lived through and the themes that are forced upon us so often, there’s still much more to be excited about and bullish about than bearish about when it comes to the United States and the system that we’re lucky enough to operate in is the noise from Washington, and this is the heightened. This is almost peak Washington right now. We still got. Maybe there’s a couple more. We’re in peak Washington for the next month to two months. Hopefully, it’s shorter than that, but it can make it feel like the wheels are coming off.

Wes Moss [00:08:59]:
But America’s core strength doesn’t come from politics. It comes from us collectively, and that’s this army of american productivity and then the mobilization of how we help each other. I mean, I was listening to the governor of, I think, Virginia talking about how many of their national guard it was mobilized through the program that we have. I think it’s the EMAC program. There’s a program that states have already signed up to be part of because they don’t want to have to go through a bunch of red tape when a disaster hits. Yeah, it’s EMAC, which is the emergency management assistance compact that states just say, look, if you’ve got trouble, we’ll send people down to help. That’s exactly what states have done. Thousands of folks from multiple states have gone to help where it’s needed.

Wes Moss [00:09:45]:
So if you think about it’s all this bad and all these issues, yet, and we’re so divided, yet, yet we immediately come together to help each other. And that is that army of american productivity kind of encapsulates that to me, as frustrated as we are with the divide that comes out of Washington, the United States is not Washington, DC. Connor Miller.

Connor Miller [00:10:11]:
Yeah, I think that’s the beauty of America. Right? We get punched in the mouth just like every other group of people on the planet, every other country. And it’s our response. It’s almost like a family. Right? You fight. We fight about politics, but then ultimately, when our neighbors need us, we’re there for each other.

Wes Moss [00:10:33]:
Yeah. It’s just. It is. The United States is a microcosm of the neighborhood in the United States, and you’ve got mom and dad are living at home or next door, and you’re fighting. Your brother lives down the street, and everybody’s mad at each other, and it gets worse over the holidays, and then somebody’s house gets flooded or burns and boom, we’re there to help. And I think that’s what this week is always. It’s not great that we have to have these reminders. I don’t think we do.

Wes Moss [00:11:00]:
As we try to continue to remind. One of the themes here is just on money matters, is we’re so fortunate to be in this economic system and we continue to be much more enthusiastic, rationally optimistic and just bullish in general on the prospects of the system that we’re in here. And the system we’re in is the system that we. These are the cards that were dealt. They’re pretty good cards relative to being anywhere else in the world. To be able to get to a place financially, which is, again, this show is called money matters, not rah rah America, but to get to a place where we’re financially in a place that we have economic freedom. And that’s what, that’s obviously a big theme here. So today we’ll go through five reasons that you should.

Wes Moss [00:11:47]:
We should. Conor and I are the still very bullish about the state of the United States. And it comes down to, and again, some of these are controversial topics. Number one is education. Number two is demographics. To me, that is the most important one of all. Just like you cannot fight the jet stream and a 150 miles wide hurricane, you cannot fight that it’s coming through. You cannot fight demographics.

Wes Moss [00:12:15]:
They are what they are and they’re extraordinarily important to the future productivity of the United States. Our geography and agriculture, our energy complex in the United States. And then really just the rule of law, the Constitution, the rule of law, all, you put all that together and it’s pretty hard not to be excited and thankful to be part of the army of american productivity here in the United States. For the economic data of the week, inflation hits 2.4%. That’s the CPI number and that’s the lowest we’ve seen in three years. But coming down less quickly than we like. We’re looking at wages, of course, and then job list claims that were up, which is not a good number to be up. So, Conor, what sticks out to you and all of that, all the economic data soup that we had this week where you get the Fed, we don’t know if they’re going to move 50 basis points or 25.

Connor Miller [00:13:20]:
Yeah, look, I think overall the economy, which really the biggest driving force of that is the labor market, has been relatively strong. The last official employment print that we got was good. The unemployment rate came down. There was a little bit of fears there after it started. To tick higher. Obviously, we did get the jobless claims number, which was not what we wanted to see. So a little bit of conflicting data there. But look, I think you got to start with inflation.

Connor Miller [00:13:48]:
That’s what’s on everyone’s mind in a vacuum. 2.4% from a year ago is a good number, but I think it doesn’t feel great because of what we’ve experienced. All kind of just done with this. We want to stop talking about inflation. We want things just to go back to the way they were.

Wes Moss [00:14:12]:
If you’re comparing inflation to wages, right? So if you think about this, if wages are going up by 5%, inflation’s at two, and that happens year after year after year. If you’re getting a 5% raise, you’re getting a real 3% raise. So you’re 3% above inflation. The reason so many studies and surveys in America and the sentiment has been so bad for the last couple of years, is that if you look at 2022 and just chart, the inflation line was way higher on the chart than the wage line. So your wages were going up essentially half the pace of inflation. And that’s a real issue. So you’re getting a real life net, not a raise, but you’re getting less money in your pocket after having to pay for things. And that happened for a very long period.

Wes Moss [00:15:02]:
That happened for a long period of time. But really it’s been since. And you don’t feel this right away, but starting around the second quarter of 2023, it’s been about a year and a half, the pace of wages started to go above CPI, so CPI was coming down, wages were growing at a pretty decent rate. And here we are now with about a year and a half of that of hourly wages, weekly earnings, both outpacing overall CPI by a pretty significant number. I still know if people really feel as though they’ve been getting big raises relative to inflation, but at least the economic data is doing so. When we get back, Social Security cola, the cost of living adjustment, was just announced this week for 72.5 million beneficiaries that will see a raise for their Social Security starting next year. We’ll talk about that number when money matters returns. If you’ve ever done a Jane Fonda workout, or if you remember as a kid, Rocky running the steps, and if Michael Keaton is still Mister mom to you, then guess what? It’s officially time to do some retirement planning.

Wes Moss [00:16:18]:
It’s Wes Moss from money matters. Weren’t those the good old days? Well, with a little bit of retirement planning. There are plenty of good days ahead. Schedule an appointment with our team today@yourwealth.com. dot that’s your, yourwealth.com dot. According to Conor Miller, the number one economic stat of the week was the inflation print, 2.4% better than, not as good as expected, but still now as a rate, the lowest CPI we’ve seen in about three years. So we’re making some progress. Certainly does nothing to help with all the inflation that’s already been, the cake’s already risen.

Wes Moss [00:16:59]:
It’s just rising just ever so slightly slower or a lot, a lot slower.

Connor Miller [00:17:03]:
And remember, the Fed, their long term target is 2%, so we’re not too far off from that target. They don’t want to bring down prices. You still want to have some inflation baked into the system. So 2% is their long term target. So we’re getting closer there.

Wes Moss [00:17:18]:
Well, speaking of inflation, and this number kind of makes sense here, but the Social Security just announced this week, 72 and a half million Americans who collect Social Security going to get a raise. The Cola cost of living adjustment is going to be two and a half percent to your Social Security and supplemental Social Security income benefits for 2025. That was just announced this past week. That means the average, average Social Security recipient is going to get an extra $50 a month on top of what they get. That’s the lowest, though, we’ve seen because inflation has come down. So if you’re getting as a family and let’s say you and a spouse together are getting $4,000 a month at two and a half percent, that’s a $100 raise for a couple. If your Social Security together combined is $4,000 or of course, if it’s more, it’s a bigger raise than that. It’s always fascinating to look back over the course of history and see just some of these increases.

Wes Moss [00:18:20]:
And there were several, there were a lot of years where there was no Social Security increase. And I remember, I think it was probably as early as there was a period of time that we had so many years of such little Social Security growth that people forgot it even went up when it comes to inflation because we had, in 2009 there was zero growth. In 2010 there was zero growth. 2012 it was 1.7, then it was 1.5. You didn’t really notice a 1% increase. And then it was a 1.7 in 2014, and then in 2015 it was back to zero, and then it was a third of a percent in 2016. So again, getting the picture that Social Security barely went up for about a decade. And the only thing I can say that’s been positive about the rampant inflation that we had over the last couple of years is at least it helps Social Security payments keep up.

Wes Moss [00:19:17]:
And in 2021, Cola was up almost 6%. Then the next year was up almost 9%, 23 up 3.2. And this year it’s coming back down to earth, up 2.5%. But it’s been on top, on top, on top of all of those raises. So, Connor Miller, are you still bullish on the United States of America? Hurricanes, politics and Twitter all put it together and just makes for a soup.

Connor Miller [00:19:46]:
Look, I’ll go out on a limb. I still believe in the american dream. You’re one of very few, one of a third, right.

Wes Moss [00:19:54]:
A little more than a third of folks believe that the american dream is still attainable. And I get it. Part of that is inflation. Part of it is inflation because you feel like you’re going backwards. And then the other part of it, it’s got to be Washington, DC. And just the, I think it was last week or here on the show we talked about, we looked at the Gallup poll or the Pew research poll that shows the confidence levels Americans have in DC and how we’re governed. It’s basically as low as it’s almost ever been. I mean, there’s a time in America, american history not so long ago when 60, 70% of Americans said, yep, I’m trusting the government to do the right thing and the best thing for me and my family.

Wes Moss [00:20:36]:
And then it got down to like 16% last year of people saying that they thought that those are some good, that’s some good calls happening out of DC. So you’ve got that. Then you’ve got political divide. Throw in Middle east, which continues. Seems as though it always flares up. Not to mention we’ve got the strife with some of our partners in Asia. We’ve got still war in Ukraine and Russia. And then put it all together and it makes for just a scary soup.

Wes Moss [00:21:09]:
Here we are less than a month from the election. However, all of that said, the United States is not Washington, DC. It’s more, much larger than that. We’re a much bigger, broader family than that, that come together in weeks like this when we get hit hard by weather. But if you think about this, we still have, and this is almost controversial to say, but we still. Education in the United States, wow, education is terrible in the United States. It’s really not that bad, right? Particularly the university system is elite. You can make a case that pre k through twelve grade public education might not be the best in the world, but it’s so localized, right? My public school system, I think is pretty darn good.

Wes Moss [00:21:54]:
But your public school system, you might not love depending on where you are in the country, but it’s really hard to argue with our higher education system. Of the top 100 universities in the world, 58 of them are right here in the United States. 70% of the top ten colleges in the world are here in the United States. Us universities, 60% of all Nobel Prize winners in science and technology since 1901 have come from the United States. So it’s hard to argue with the power of our higher education system. Now you can say, wes, you’re crazy. Connor Miller. Why don’t you talk about how much it costs to go to one of those universities only for the rich.

Wes Moss [00:22:42]:
How do you pay for it? Maybe that’s a whole other problem. But it’s hard to argue that we don’t have the best by far higher education system in the world.

Connor Miller [00:22:52]:
Look, and hopefully it’s going to get better, right? I mean, you think about the technological advancements with artificial intelligence, just the availability of information that we have today relative to 1020, 30 years ago. Hopefully that availability of information will begin to drive some of those costs down and make it more accessible and affordable for everyone.

Wes Moss [00:23:14]:
Speaking of innovation, if you look at patents worldwide, patents again, the whole world and all the patents in any given year, 50% of all the patents come from the United States. And the american inventors are still a powerful force of innovation. Now we get to demographics. This to me is my favorite because it’s like gravity. It happens and it doesn’t stop now. Well, I’d say it’s not. Maybe that’s not right. In the intermediate to long term, it’s very hard to change demographics, right? So we know these numbers over the course of 2030, 5000 years, gravity does tend to pretty much stay constant, doesn’t it, Connor? So it doesn’t ever change.

Wes Moss [00:23:56]:
Demographics can, but it’s ultra slow. And as long as the trend is in your favor, you have a very, very high probability that it stays a positive, or tailwind, if you will. Luckily, we’re in the tailwind camp. If you look at countries like Japan, and these are still large economic superpowers, Japan, China and many european countries are actually going to be shrinking over the next several decades. Japan’s population is expected to drop from, call it 125 million, down to less than 90 million by the year 2060. Now that’s not the case here for the United States. So we are projected to grow from, call it where we are today, 340 million or so to over 400 million people by the year 2060. Now, it’s not tremendous growth.

Wes Moss [00:24:49]:
It’s not a double digit growth rate when it comes to adding to the population, but we’re expanding. And when it comes to simply the amount of kids we’re having in the United States, it is still a net positive relative. Essentially, the birth death rate still is a positive, and it should remain that way for the next several decades. And to me, I don’t know what other tailwind for an economy you can wish for. The median age of the United States, it’s 38 and a half. So it’s a median age in the United States. It’s younger than where it is in China. Japan’s median age is 49.

Wes Moss [00:25:26]:
So we have this demographic advantage in terms of workforce sustainability. Right? What labor force is more sustainable? The one that has the average age of 35 or the one that has the average age of 55? Right. We have a lot more Runway in the United States. And the labor force in the US last year, 2023 grew by over a million and a half people. It’s a lot of new people producing goods, services to create more consumption, and the wheel keeps going. So the demographics, to me, is such an important piece of why we’re so bullish about the United States.

Connor Miller [00:26:04]:
And when we look at the economic data, one of the things that our team looks at, and this gives us a lot of confidence about the us economy, is you look at that prime age working population. So those that are 25 to 55, those are considered your prime working age years. The number of people in that camp that are employed is essentially at an all time high for the US.

Wes Moss [00:26:26]:
Here’s a quick demographic statistic I found this week. It took 200,000 years, and this is a cool video to actually watch. The migration of the humans on Earth took 200,000 years for the earth to reach a population of 1 billion. So 200,000 years that it only took 200 years to get to 7 billion current birth rates. By 2100, Earth’s total population should peak at around 11 billion people here around the globe. Again, that’s a tailwind for that. Certainly a tailwind globally. But I think that particularly here in the United States, it keeps me positive.

Wes Moss [00:27:10]:
We had a population declined. I would have a very different opinion about investing in America. But the good news is the pie continues to get bigger. Geography and agriculture. The United States is an agricultural, natural resource. Fertile land, clean water. Again, relative to the rest of the world, absolute goldmine here in the United States. And it is something that many countries just cannot say.

Wes Moss [00:27:38]:
And again, looking just at innovation, the amount of oil we produce, which energy is a whole separate category here of why we’re bullish on the United States, but just the innovation of drought resistant corn. As an example, if you go back to around 1940, that happened, we were producing 50 bushels of corn in the United States per acre. Today, it’s 180 bushels per acre. Again, because of one little innovation. Oh, these seeds will probably grow without a whole lot of water. Well, fast forward a couple decades and we’re a massive producer of this and supply the world with food. So, yes, there are hurricanes that hit us and elections that divide us. And there was a pickleball brawl the other day I read about in the Wall Street Journal on the pickleball court in a retirement community in Florida, over politics, recessions that are inevitable, chaos all over the world.

Wes Moss [00:28:34]:
Yeah, our national debt is scary in itself. But just like we mobilize after this hurricane, multiple hurricanes, a strike against us, the strength of the US lies in the togetherness of us as a people. And it comes out really every second of the day in the army of american productivity. It literally is everywhere around us. And that’s why it’s hard not to be optimistic about our future. So I think we’re a better place five years from now and ten years from now and 50 years from now. And our best days are absolutely still ahead. And speaking of togetherness, Connor Miller, thank you for being here in studio with.

Connor Miller [00:29:16]:
Me, as always, thank you for having me on, by the way, easy to.

Wes Moss [00:29:19]:
Find me and Connor miller@yourwealth.com. you can visit us at your wealth.com. have a wonderful rest of your day.

Mallory Boggs [00:29:34]:
This is provided as a resource for informational purposes and is not to be viewed as investment advice or recommendations. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. The mention of any company is provided to you for informational purposes and as an example only, and is not to be considered investment advice or recommendation or an endorsement of any particular company. Past performance is not indicative of future results. Investing involves risk, including possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. The information provided is strictly an opinion and for informational purposes only, and it is not known whether the strategies will be successful. There are many aspects and criteria that must be examined and considered before investing this information is not intended to and should not form a primary basis for any investors decision that you may make.

Mallory Boggs [00:30:28]:
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