Podcast Summary
Economic forecasters face off in Planet Money Predictions: Diane Swank, the Terminator, won two out of three categories against Song Wan Seung in predicting home prices, jobs, and inflation for 2022. She will now face a new challenger for the rest of 2023.
On Planet Money Predictions, economic forecasters make predictions about the economy and return to discuss their accuracy. In the latest episode, Diane Swank, the Terminator, and Song Wan Seung faced off against each other to see whose predictions for home prices, jobs, and inflation in 2022 were more accurate. Diane, the reigning champion, won two out of three categories, and she will now face a new challenger in the second half of the show to predict for the rest of 2023. The accuracy of these predictions helps us understand the state of the U.S. economy. Listeners are encouraged to explore investing through exchange-traded funds (ETFs) with GlobalX ETFs, a sponsor of the show. ETFs allow investors to buy a basket of assets in a single trade, and GlobalX specializes in ETFs that track emerging trends and income potential.
Experts' Inflation Predictions Vary Widely: Experts' inflation predictions can differ significantly, highlighting the uncertainty in economic forecasts. Staying informed and considering various factors is crucial for accurate assessments.
Economic predictions are uncertain and even experts like Diane Swank and Sung Won Seung can get it wrong. During the last episode, they were asked to predict the change in the Consumer Price Index (CPI) for the rest of 2022. Diane predicted a cool-down with a 2.3% increase, but the actual answer was a 6.5% rise. Sung, on the other hand, predicted a higher inflation rate of 5.5%, which was closer to the actual figure. This category was won by Sung. Another topic discussed was the housing market, which was experiencing a significant surge in demand due to the pandemic and remote work trends. Despite their differences in predictions, both experts agreed on the importance of staying informed and considering various factors when making economic assessments.
Assessing Predictions on Housing Prices and Jobs: Despite varying predictions, Sung's 12% housing price increase and 350,000 jobs per month were closer to the actual numbers compared to Diane's 8% and 200,000 jobs per month, making Sung the predictions winner.
The predictions made by Sung and Diane in the categories of housing prices and jobs were assessed during a discussion on a game show. Sung predicted a 12% increase in housing prices and 350,000 jobs per month, while Diane predicted a more modest 8% increase in housing prices and an average of 200,000 jobs per month. The actual numbers were a 5.8% increase in housing prices and an average of 352,000 jobs per month added to the US economy. As a result, Sung won both categories, making him the predictions winner. However, Diane acknowledged the challenges of making accurate predictions in the current economy.
Two Economists Predict Inflation Trends for 2023: Both economists agree that inflation will decrease in 2023 but have slightly different predictions: Wayles expects a decline to 3%, while Sung predicts a 4% rate.
Despite the economic volatility experienced in 2022, with two negative quarters but also significant job creation, economists are looking forward to 2023 with predictions about inflation. Joe Bruce Wayles, the chief economist at RSM, and Sung Wan Seung are two economists pitting their predictions against each other. They both agree that inflation, currently at 5%, will decrease but have slightly different predictions. Wayles expects a decline to 3% by the end of the year due to the unsnarling of global and American supply chains and easing food and gasoline prices. Sung, on the other hand, predicts a 4% inflation rate in 2023. Both economists believe the Federal Reserve is making progress in its fight against inflation, even if not as much as desired.
Expected inflation to remain higher than pre-pandemic levels due to labor market tightness: The labor market's tightness is leading to continued wage increases and higher inflation, making it the new normal for some time
Inflation is expected to remain higher than pre-pandemic levels due to rising labor costs. Both Joe and Sung agree that the labor market will stay tight, leading to continued wage increases and higher inflation. The US economy is predicted to add around 150,000 jobs per month on average through the end of the year, according to Sung, while Joe expects 125,000. Despite some cooling off in the housing market, home prices are predicted to increase by around 1.5% this year. These factors contribute to an economy with a tight labor market and higher inflation, which may be the new normal for some time.
Experts' nuanced views on economic landscape: Sung predicts flat housing price gains, Joe sees 75% recession probability, some suggest rolling recession, predictions for inflation, jobs, and housing are tight
Our economic experts have differing but nuanced views on the current economic landscape. Sung believes housing price gains will be flat due to high mortgage rates and economic uncertainty, while Joe predicts a 75% probability of a recession within the next year, but is currently leaning towards no recession as long as government functions properly. Some experts propose a "rolling economic recession" where sectors take turns going into recession. Overall, predictions for inflation, jobs, and housing point to a tight range, making this a close competition with small differences.
NPR's Planet Money team's dedication: Listeners enjoy engaging episodes thanks to the team's hard work, with bonus content available for supporters
NPR's "Planet Money" podcast is produced with the help of dedicated team members, including James Snead (producer), Kathryn Silva (engineer), Ciara Juarez (fact-checker), Molly Messick (editor), and Jess Jiang (acting executive producer). The team's hard work results in engaging and informative episodes for listeners. For those who want even more content, becoming a Planet Money Plus supporter offers access to bonus episodes featuring extended interviews and behind-the-scenes material. Sign up at plus.npr.org to support NPR and enjoy these additional benefits.
