0:02 Our next guest says we're entering a new
0:05 year in a bifurcated economy and that
0:06 its growth is fragile. Joining us is
0:08 Mark Xandy, chief economist at Moody's
0:10 Analytics. I just want to say, Mark,
0:12 hasn't the hasn't the economy surprised
0:15 you in a in a positive way this year?
0:17 There were so many calls, so many gloom
0:19 and doom calls, especially around the
0:21 Trump tariffs and what that would mean
0:23 for inflation and for the economy. And
0:27 here we are ending 2025 and it and it's
0:28 been quite strong.
0:30 >> Yeah. You know what's weird though? I
0:32 mean, I went back because I wrote this
0:34 piece on the this the 2026 outlook like
0:36 most economists do. And I went back and
0:38 looked at what my expectation was for
0:43 GDP growth in calendar year 2025 as of
0:45 December 2024. So a year ago, you know,
0:48 what would happen in 2025 and the GDP
0:51 growth number was 2.2%. So, you know, at
0:54 least back in December of 2025
0:57 or 2024, I thought 2025 would be an okay
0:59 year. But having said that, you know, as
1:00 we came in,
1:01 >> would you have said that in April after
1:03 the tariffs were were announced?
1:04 >> No, that's exactly where I was going.
1:06 Yeah, that I certainly would not have I
1:08 I would have thought that it would end
1:10 up being a much weaker year, something
1:11 closer to half that kind of growth rate,
1:13 like a 1% growth rate. And the thing
1:16 that you know obviously just it's pretty
1:17 obvious the thing that was the big
1:20 positive surprise was the impact of
1:22 artificial intelligence both you know in
1:23 terms of the investment spending but
1:24 most importantly through the runup in
1:26 stock prices and the wealth effects
1:28 that's generated and the effect that's
1:29 had on consumer spending. So you're
1:31 right you know as of April I was much
1:33 more pessimistic about the year it ended
1:35 up being much better than I anticipated.
1:37 >> So you say it's bifurcated is that
1:40 because in part of this the rising stock
1:41 market which has helped the wealthier
1:44 cohort. Yeah, in part I mean, you know,
1:47 it's uh there's such a dichotomy. When I
1:49 talk to folks, I you know, I get such a
1:52 a very perspective on the economy. Some
1:54 people are incredibly optimistic. Things
1:57 are booming. Other folks are incredibly
1:59 pessimistic. Things couldn't be worse.
2:01 And it and I think that goes just to the
2:04 fact that the economy itself is what the
2:06 word is bifurcated. It's just operating on
2:08 on
2:10 totally different levels. You can see in
2:11 lots of different ways. You know, large
2:14 companies, they're doing great. Smaller
2:16 companies, not so much. You can see that
2:18 in, for example, in the ADP data. You
2:21 can see high-end consumers, wellto-do,
2:22 they're their financial situation is
2:24 about as good as it's ever been. You
2:25 know, folks in the that are lower
2:28 income, middle income, not much
2:30 industries. I mean, the tech industry,
2:32 obviously, healthc care doing really
2:35 well, adding a lot a lot of jobs. But
2:37 then manufacturing and uh the real
2:40 estate industry, agriculture,
2:42 transportation just they're they're
2:43 literally contracting. They're in
2:45 recession. So I can go on and on and on.
2:47 You know the economy just feels very
2:50 bifurcated here moving on again
2:51 operating on different dynamics and
2:53 that's why I think people are getting
2:54 such different perspectives on thing. If
2:56 you add it all up, you know, the economy
2:59 is growing. It's okay. It's growing
3:01 around its potential, but it's a as I as
3:05 you said, it's a fragile growth. I mean,
3:07 I don't know that the economy can
3:09 operate this way for very long without,
3:10 you know, something going off the rails
