Episode summary
Traders Up Bets for Post-Shutdown Data Dump
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo · Guests: Tiffany Wilding
Summary
Tiffany Wilding of PIMCO said the shutdown has made it harder to read the economy, but private-sector data still suggest conditions are broadly stable. She described the U.S. as a story of winners and losers: large tech and the AI build-out remain strong, while labor demand is weaker from tariffs, immigration shifts, and some AI-related displacement.
On growth, Wilding said the shutdown will hit fourth-quarter GDP and could shave 1 to 1.5 percentage points off the quarter, creating a real risk of a negative print. She expects that to reverse in early 2026 as government activity restarts and households receive sizable refund checks that support consumption.
On inflation, Wilding said tariffs have not lifted prices as much as many expected. Instead, companies appear to be managing them by cutting costs and protecting margins, with labor costs a key adjustment. She argued the labor market has “grind[ed] to a halt,” and said construction, lower-income consumers, and smaller businesses are among the clearest pressure points.
Key takeaways
- Wilding said the shutdown could shave 1 to 1.5 percentage points off fourth-quarter GDP and leave open a negative quarterly print.
- She expects a rebound in first-quarter 2026 as government activity resumes and larger refund checks lift household spending.
- Wilding said tariffs have not produced the inflation surge many feared; companies are instead cutting costs and managing labor.
- She sees the labor market as unusually weak, with labor demand and labor supply both decelerating.
- Wilding said lower-income consumers, auto borrowers, and smaller mid-sized firms are showing the most strain.
Notable quotes
“We think the economy is kind of a story of winners and losers right now”
“the shutdown will absolutely impact fourth quarter growth. We think that one one, two, one and a half percent is what it could shave off”
“we absolutely could see a negative fourth quarter GDP print”
“we certainly haven't seen it to the extent that many thought we would”
“we have seen the labor market really grind to a halt this year”
How the episode opens
It's been obviously very difficult or more difficult to to get a sense on what's going on in the economy, just that with the data that hasn't been released, you know, but but nevertheless, with private sector sources of data, you know, we can get some insight, you know, and it does look like things are pretty stable. We think the economy is kind of a story of winners and losers right now where you have, you know, obviously the big tech companies, the AI build out, that's that's very strong. But on the other side of that, you have various factors that have hit the labor market, including the immigration story.
We think lower demand as a result of tariffs and of course, some AI related displacement that's resulting in, you know, some loss of tech related jobs is the other piece of that that looks weaker. Know, I think in terms of monetary policy and the Fed, the fact that we haven't gotten the labor market data is is it makes it more difficult for monetary policy. Go ahead.
Surprised the U.K. did have a negative statistic on GDP. Are you like a sub 1% GDP?
Could that be the shock of the shutdown we just lived? Yeah. I mean, yeah.
So the shutdown will absolutely impact fourth quarter growth. We think that one one, two, one and a half percent is what it could shave off of of the fourth quarter. So we absolutely could see a negative fourth quarter GDP print.
But nevertheless, as you know, as the government has already reopened, that activity will come back online and you'll see a an offsetting pickup in the first quarter of next year. I think the other thing to keep in mind in the first quarter is that you're also going to get refund checks to households that are quite large this year.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- government shutdown data delays
- fed decision making
- december meeting
- october jobs report
- unemployment rate
Companies and tickers mentioned
- PIMCO
Watch the episode
Watch “Traders Up Bets for Post-Shutdown Data Dump” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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