LIZ ANN SONDERS: I'm Liz Ann Sonders.

KATHY JONES: And I'm Kathy Jones.

LIZ ANN: And this is On Investing, an original podcast from Charles Schwab. Every week, we analyze what's happening in the markets and discuss how it might affect your investments.

Well, hi, Kathy. So we just finished getting all the new news on tariffs. We were supposed to tape this part of the episode earlier today. This being "Liberation Day," as it's being called, but we opted to wait until after the announcement, and these were some big numbers with, in particular, the reciprocal tariffs going on a country-to-country basis ranging from, what did we just talk about before we went rolling here? 10 to 46%?

KATHY: Yeah, it looks like 46% is the highest I see. That's in Vietnam.

LIZ ANN: Right, and as a reminder to everybody, the tariffs are paid by U.S. importers of goods from these variety of countries. They're not paid to the U.S. directly by the countries that are being targeted. I always feel like I want to mention that because as recently as last evening, I was doing an event, and I talked about this, and I had five people come up to me afterwards and said, "I didn't realize that's how tariffs worked." As we tape this now, Kathy, we're seeing certainly a big move in my end of the world with futures down quite dramatically as we got news of this. What are you seeing in your world in terms of the reaction by yields or maybe currencies?

KATHY: Yeah, I'm seeing Treasury yields fall pretty precipitously. The dollar has been whipsawing. First it was up, then it's down. Right now when I look at where it's trading relative to pre-press conference, it hasn't moved that much. So I think the foreign exchange market's still trying to figure out what's going on here, trying to figure out what all this means and how it's supposed to work.

LIZ ANN: What do you think it means for the Fed?

KATHY: Well, so first let me apologize for my voice in this episode. I am recovering from a bout of laryngitis. It is tree pollen season all over the East. And I have been traveling up and down the East Coast enjoying all the tree pollen, to which I'm allergic. So I apologize. My voice isn't great.

LIZ ANN: Well, I'm showing my age now, but you sound like Brenda Vaccaro, which is not a bad thing.

KATHY: Yeah, she has a very, very distinctive voice. But I'm hoping it'll clear up in the next few days. But you know, I think what the … you know, the market is trying to figure out is what the Fed is trying to figure out. You know, the Fed has a dual mandate trying to maintain price stability and maximum employment. And what we really see is that, you know, you get with tariffs at least a one-time price increase, if not ongoing depending on how they're rolled out and sustained over time but you also get negative growth impulse from that and so that is going to be the difficulty they're going to have to balance. Can they look through, as they like to say, the tariffs as a one-time price increase? Or are they going to expect that this is going to be an ongoing thing that pushes prices higher over time, which is basically what inflation is? So I think they're in a really tough spot here, and they'll just be watching for signs of what the economy is doing and particularly what employment is doing. 

They also have to worry about financial conditions. So if we had some sort of event in the markets as a result of this or anything else, then they might have to respond to that. But I think right now they're really in the same spot most of us are in trying to figure out how much of this is going to flow through to households. I believe about 30% of CPI, or Consumer Price Index, is goods and about 70% services. So we know that flow through to consumers on the goods side will be there. But some of it will be in services too. And so that's going to be the question, what is the impact there versus how much decline in demand there will be in response to this. And then how will other countries respond in terms of what they do? So a lot still to be figured out here, I think. And I think if I were at the Fed, I'd be sitting and waiting and watching and trying to do some calculations right now to figure out what the estimated impact will be.

LIZ ANN: And I think that's what economists now are going to be scrambling to attempt to do is try to assess the impact through all the tentacles that run from tariffs into the economy. And we had already seen a pretty noticeable bump up in recession forecasts from firms and economists that publish those. I'm hard pressed to think that some of those that do that are going to reverse and move those down. But it may be premature to try to quantify a lot of this. I think maybe one of the next kind of tells coming up in the near term, to get a sense of the broader impact of this, will be earnings season. So that that starts in about a week. And it was a pretty interesting earnings season for the fourth quarter, which was reported in the, you know, mid-January into February period of time, given that specifics like mentions of stagflation went parabolic. Mentions of tariffs and tariff-related uncertainty went parabolic. 

Now I think you probably will see analysts try to get companies to put a little more meat on the bones in terms of what's the likely impact on profit margins because, of course, you know, we already said that these tariffs are paid by U.S. companies importing goods and products and inputs from all these various countries. And when you look at some of the metrics out there, I think all of the regional Feds do it, which is looking at the differential between prices paid and prices received. The prices-paid components have shot higher, but the prices received have not. And that gap tends to signal profit margin pressure. That problem is pretty universal across all the regional Feds. So I think it'll be interesting to see whether we start to see that impact on estimates specific to profit margins. Interestingly, the earnings estimates are still pretty lofty for 2025, although they've come down, but still about 10% or so. What's interesting about that is revenue estimates are somewhat subdued. So what analysts have, for lack of a better way to phrase it, been banking on, in keeping those estimates relatively high is continued decent profit margins. And that's now being called into question, or at least it should be. So that's, I think, one of the next periods here coming up, starting in about a week. And then, of course, we're taping this prior to Friday's jobs report. But that's the imminent next data point or set of data points that matter a lot.

KATHY: Yeah, absolutely. And with that in mind, I'm going to go ahead and say we're going to have to just evaluate this tariff situation and its implications over time. We're going to need a little more time to figure this out. And we have to see what the counter is from other countries, the retaliation, if there is any from other countries or negotiations that take place. I think this is a story that's just beginning. It's not ending.

LIZ ANN: Yeah, I think what we have not been liberated from is uncertainty. 

KATHY: No end to that. Right.

LIZ ANN: We have some numbers, we have some percentages, but that does not eliminate the uncertainty.

KATHY: No, no, and one thing I did want to mention is they mentioned the calculation of the tariffs included non-monetary tariffs and currency manipulation. I'm going to be really, really curious to see what those calculations are. What does that mean? How are they coming up with those numbers? 

LIZ ANN: The fine print at the bottom of the page.

KATHY: Yeah, exactly. So because that could have a lot of impact on the currency market.

LIZ ANN: You know, I mentioned the jobs report that's coming up that we don't have the benefit of knowing it as we tape this, but that's a topic in the next part of this episode. So with that in mind, tell us about our guests this week, Kathy.

KATHY: Sure, so it's Dr. Nela Richardson. And she is the chief economist for ADP Research. I'm sure many people recognize the name ADP as the big payroll company. Nela is a contributor to Bloomberg and Marketplace from American Public Media.

She frequently appears on CNBC, Fox Business, CNN, Yahoo Finance, and in The Wall Street Journal, Fortune magazine, and The New York Times. Her weekly column, "MainStreet Macro," examines economic conditions and their effect on small and large businesses, workers, and households. Prior to joining ADP, she was at Edward Jones and also served as chief economist at Redfin and worked as an economist for Bloomberg.

She has a PhD in economics from the University of Maryland and has held research positions at the Commodity Futures Trading Commission, Harvard University's Joint Center for Housing Studies, and Freddie Mac. Nela is a member of the Stanford Digital Economy Lab Advisory Group, the National Academies Committee on National Statistics, the World Economic Forum, Global Futures Council, and the U.S. Monetary Policy Forum. 

Hi, Nela. Thank you so much for being here. Really looking forward to our conversation.

NELA: It's a pleasure. I'm a big fan of yours, so I'm delighted to join the podcast.

KATHY: Well, let's jump right into it because there's just so much information that I think you could share that I'm excited to hear about. But first of all, if you could kind of describe ADP, what it does, how you put together your employment data, as opposed to, say, what the Bureau of Labor Statistics does, I think it would kind of set the stage for the rest of our conversation.

NELA: Absolutely. Well, ADP, for people who don't know, to your listeners who don't know, is a software technology and service company. And it's in the field of human capital management and payroll services. What it means, though, in terms of the data, is that ADP pays people. We have about a million clients around the world in which we provide payroll services for. So if you don't know us, just check out your pay stub. There is a bigger than one in five chance that ADP is on your pay stub. We pay over 25 million U.S. workers, 40 million workers around the world.

So it has a huge global footprint as a company. What it means effectively in terms of the labor market is that we have a really sharp-edged view of private sector hiring. And our view is different than government statistics. And so we thought that this would be a great data point to offer to economists, to policymakers, to analysts as a private sector view of what's going on with hiring in the workforce.

KATHY: And that's the major distinction with what the Bureau of Labor Statistics does, right? Because they will include both public and private sector in their survey. And do you ask different questions, or do you provide different information than they do? I guess theirs is more survey-based, and you are actually using your internal data, correct?

NELA: Yeah, that's a huge distinction. So people are very familiar with the government BLS employment situation report that comes out usually the first or second Friday of the month. That survey is based on an establishment survey of employers, and they are asked a question—basically, "How many people did you pay this week?" And they get a response from those panel of employers. ADP is quite different from that. We don't use survey data at all. Our data comes from the administrative payroll, the actual act of paying people, paycheck data, payroll data specifically. And so there is no survey attached to it. We know how many people get paid because we pay them, and we record how many people we pay. So that is what we offer. It's a very simplistic view of the raw data underlying both surveys, but that distinction is helpful when you are considering different sources of data, one coming directly from client payrolls, the other coming from government service.

KATHY: You know, every time the ADP survey comes out, which is usually a few days before the BLS numbers, I always have to include the caveat that this may not necessarily match up with BLS. You know, it's not necessarily the same. But it does give just a huge amount of information that we can look at and see how it looks relative to the government statistics. 

NELA: We actually refreshed our data in our national employment report about two years ago. We did a couple of things because we recognized that we had a large enough share of workers that we could provide a comprehensive view of national employment. And so what we did is, first of all, we partnered with the Stanford Digital Economy Lab. The second thing we did is we stopped trying to chase the BLS report. We no longer wanted to forecast a survey with raw data, with actual payroll data. So what we did is make our national employment report completely independent. So it's not a forecast of the BLS. It really looks at the raw employment count coming from our client firms, and then we weight that by something called the quarterly census of employment and wages, which is a near-complete population census of workers, but it comes out with a six-month delay. So our numbers are weighted in the same way that the BLS report is weighted, but that raw data is coming from a different source, as you mentioned.

KATHY: That's great. Thank you. I appreciate that description of the differences. So let's get into it. What are you seeing as the major trends right now developing in the labor market? We've had a bit of a slowdown in the pace of hiring and kind of a tick up in the unemployment rate. But that's just very surface-level information. What are you seeing that you think is kind of dominating the trends right now?

NELA: Well, if I look at 2024 hiring and then compare it with the last couple of months, so let's start with 2024, we had super stable hiring. In fact, it was so stable as to be almost stasis, that balance between supply and demand. It looked to me like the labor market was losing a little bit of dynamism. And if you talk to companies, the Great Resignation has had an effect in 2024 hiring. So many people came and went that now turnover rates are super low, and workers are staying at companies a lot longer than even the companies expected them to. You match that with initial jobless claims which are … have been at historical lows for about two years now. You're seeing a market where there's not a lot of people coming and not a lot of people going. That's great in the short run but that stability is not characteristic of the U.S. labor market. We've had that dynamism that allows companies to attract high-productive workers and allows high-productive workers to move on to better opportunities. And that seemed a little sluggish.

Now, you fast forward into the last two months, solid, stable hiring reflected in 2024 data. We've seen a little bit more volatility. The February jobs report was softer than the preceding three-month trend in the national employment report from ADP. We also saw something unexpected in manufacturing, a pop-up in manufacturing. In fact, last month was the first time in recent memory where the goods sector outperformed the services sector. And we can get into why that happens, but it's really been a service-dominated market where large firms did most of the hiring. But those trends are starting to kind of ripple differently in 2025. So I think we're seeing different patterns in even the first two months of this year than we saw in the stable hiring in the service sector and weak hiring in the manufacturing sector that defined 2024.

KATHY: You know, I did notice that in the last couple of months' numbers, and I also wanted to comment on that dynamism aspect. I think it's not just the labor market. I think it's the economy in general seems to be kind of in this, has been in this, very stable kind of sideways movement. And I always think the economy is not meant to be static. It's meant to be dynamic. It's meant to grow and shift and change.

And so if you're seeing that in some of the labor market data in 2025, I think that's really good news. So tell me a little bit more about what you think is going on in manufacturing that suddenly is getting that to get a boost in hiring.

NELA: I only have an incomplete answer to that question because I think it deserves more time and more study, but manufacturing has been weak for a very long time. It was weak going into the pandemic. It got a burst of demand, pandemic-driven, through the pandemic, and then it just resumed its weak pattern the last couple of years. So I'm very cautious in my assessment of what we're seeing now, which is a boost in hiring. We saw it in February in keeping with survey data from ISM Manufacturers Survey that showed in January some … a bit more optimism than producers had been showing more recently. But that optimism evaporated in February. So I don't know where that leaves hiring. Is this a one-time boost in manufacturing, or is this sector finally turning a corner? That's one of those watch points that I'll be paying very close attention to.

KATHY: Yeah, and then we'll have the complication of tariffs on top of that. So presumably, if you're onshoring more manufacturing jobs, you would have more hiring in the manufacturing sector. But we're not really sure if and when that might occur, or in what industries, or what trade-offs businesses are going to make. So I do think it's a trend, though, really worth watching. It's going to be pretty important.

So is that the biggest change you've seen in the past six months, is this pop-up in manufacturing? Or what have you seen just very recently in the labor market data that caught your eye?

NELA: I think there's been a couple of things. The executive orders around federal funding to education and healthcare had a big impact in the February data. If you think about that particular sector, education and healthcare, it's dependent on a lot of federal funding. So this is where the universities are. This is where a lot of social assistance programs, hospitals themselves, many hospitals get federal grants. So we saw last month what I call a hiring hesitancy. Just a little bit of the uncertainty trickling into a hiring decision. That's not inconsistent with what we've seen in other times. 

We saw the hiring hesitancy last summer, for example, and as soon as we got that September rate cut, it was almost like, "OK, we've gotten through this phase of uncertainty, let's hire again." So what companies do in times of uncertainty is they just stop hiring. They kind of stand in place. And we've seen that in the data. We're seeing it now. 

I think another interesting trend that I'm paying close attention to is hours. People are not working as many hours as they used to before the pandemic, particularly women. So women now work an hour less a week. I know it doesn't sound like, "Oh, it's an hour," but in aggregate, when you're looking at 25 million, that's a pretty robust trend. So we don't know if that's because companies are kind of building their bench strength. So they're hiring more workers, but the workers are working fewer hours. Or this is a lifestyle choice of a worker, something that we're still trying to figure out. What I do know is that over the last few years, the part-time share in our very representative national sample of workers has gone from 37% to now like 45% of workers who work hourly but are working less than 35 hours a week. Why is that? I'm not quite sure. It could be worker driven. It could be firm driven. But the net effect is people are working less.

KATHY: That's really interesting because that means in aggregate, if you just take hours worked times our hourly earnings, you're getting less income in aggregate. So that is something that can have an impact on consumer spending and the economy in general. So that is a noticeable trend. I too have wondered, is that just people coming out of the pandemic just said, "You know what, you know, the return to office is too difficult, or I have to cut my hours for this or that reason." Or is this the firm saying, "You know, we don't really want to lay people off because we had so much difficulty hiring for so long, but we don't have enough work. So we're going to cut hours"? I think that it sounds like that remains to be seen, but I think it's important going forward to see how that that develops.

NELA: That's right, and that's why labor market softness won't show up quickly because the first place it's going to show up is a reduction in hours for that very reason so that there is some attachment of a worker to a firm after it took so long to get people back. And so looking at hours in both the reports that come out this week, the ADP numbers, as well as the BLS numbers are going to be very important.

KATHY: So do you have a view on how the limitations on immigration will affect the labor market going forward?

NELA: Well, immigration has been credited for restoring the balance in the labor market. This was a demand-driven labor market. Firms really needed to ramp up their hiring coming out of that pandemic, especially in consumer-facing jobs like hospitality, like restaurants. And so that is a place where you do see immigration show up. Also, construction has been very material to housing construction and house-price inflation. We are in a decade-long housing shortage, which has really increased affordability issues when you think about higher mortgage rates. But part of that construction costs are labor costs. And a lot of labor comes from South America, so about a third. And in some places in the South, over half of their construction workers could come from South America. So anything that dampens immigration could have a profound effect on key sectors like construction, leisure and hospitality, restaurants, hospitality in general. All of that plays a role in terms of keeping labor supply in balance with labor demand.

KATHY: Yeah, and we've, you know, I'm from the Midwest, and I have talked about this with some family, and there, the agricultural sector is certainly affected and, you know, finding a worker to work on a dairy farm in Wisconsin is very difficult at all. And then finding someone who was, you know, natively born in the United States to do it, who may have other, a lot of other opportunities, is really, really difficult. It's very, very hard work. I think agriculture is one of the areas that really is feeling the pinch. And we'll see how it all works out. But it does seem as though that's going to have a big impact on probably the rate of job growth and maybe on wages as well.

NELA: Well, underlying all of this, Kathy, is the fact that the U.S. is aging. And that's critical to our assessment of immigration, because for many cities, towns, those in the Midwest, I'm from the Midwest too, were it not for immigration, you would see population decline. So it's not just on the worker side. It's on the consumption side as well, just keeping up with the pace of growth in the economy. But what it means effectively is that 10,000 people in the U.S. are reaching retirement age every day. So we have a profound shift in demographics away from the labor market, and how we solve that, whether it's through immigration or AI or a number of other innovations in the economy, will determine not only the health of the labor market but the pace of growth.

KATHY: That brings up a series that you did for NPR on demographics, as a matter of fact. And it looked like you visited a place that was like the oldest county, I believe. And now you're going to the youngest. And I thought it was really fascinating that you were focusing on the impact of the migration of retirees to various parts of the country and the local, the very micro impact on the economy as well as the macro impact. Could you talk a little bit more about that, this retirement communities and what impact that's having?

NELA: Yeah, that was a fun project. It continues to be. It's a great partnership with Marketplace on NPR, by American Public Media, and ADP. And ADP shows up on the data side. We looked at the county with the oldest labor force using ADP data. And we went to that county expecting a different story than what we told. We went to that county expecting the immigration story. We didn't find that. What we found is the influx of retirees into that county, Cumberland County, from the East Coast, from the West Coast, and from Florida. In fact, there were so many retirees coming into this county, they had a name for them, called halfbacks. And those are the people from Chicago and New York who moved to Florida, decided it was too hot or they didn't like golf as much as they thought, and they moved halfway back to Tennessee. 

But what we saw is a real have-and-have-not story where the retirees were putting pressure on house prices. The service industry had reoriented itself to wealthier retirees. The healthcare system even had to change its scope to accommodate the very poor and the much, much wealthier. And it showed an example of what happens to a community when the growth is unbalanced, when you have a bunch of, an influx of, wealthy retirees next to a place that has a very low average income compared to the rest of the United States. But we would argue, I think … all of us who are involved in this project, that there are demographic stories being told in every county, whether it's the oldest workforce or the youngest workforce. And those demographics will define the labor market over the next 10 years. And what it means on net is that the U.S. workforce is going to grow by a small fraction, about 0.4%, according to the BLS, 0.4% annually over the next decade compared to 1.3% over the previous decade. So it's a much slower labor market supporting a much bigger retiree consumption base.

KATHY: And that would imply that just overall GDP growth will probably slow down, absent a surge in productivity. So I guess that's where the AI and technology comes in, right? Are you seeing any trends in hiring in those fields where that's jumping real fast, and it's attracting a lot of younger workers, or maybe even retirees are going into it—I don't know—are you seeing anything there?

NELA: Right now, a lot of these advanced technologies on AI seem very frontier. They're really being innovated in tech firms looking for a purpose at the company level, large company level. The use of GenAI and AI has been around for a long time, but it's also much more well-defined. It's solving a particular problem as opposed to changing the way we work.

That's much bigger. So we haven't seen the full impact of AI technology yet show up in the labor market, but it's starting. It's on its way. And I think where you're going to see it first is entry-level knowledge workers. So the college set for young people coming out, I get questions about what advice I'd give them. Soft skills matter again. So learn how to use a telephone to call people. I know that's a whole other podcast. And then a facility with adapting, because your job will change dramatically from month to month, year to year, if you're just starting out in the labor market.

That's what we know is on the horizon. And so a lot of work that we're doing at ADP, and in particular ADP Research, which is what I lead, is to get workers ready for the changes to come. Because we know they're coming, and they'll be rapidly changing once they arrive in the workplace.

KATHY: You know, one of the things that occurred to me about this is that, you know, for a long time, like my children were encouraged to learn other languages because we were globalizing. And the idea was if you could speak Mandarin, or you could speak Spanish, or you could speak another language, you were opening up more opportunities for yourself in the workplace. 

And now I watch some of these AI programs that translate automatically from language to language, and I think, you know, maybe that isn't, although I always think learning another language is a great idea, but maybe learning the language of AI and all that that means is really the way of the future and less about globalizing and being in another place as being able to automate the communication between various parts of the world and various segments of the world.

So fascinating stuff, but it's interesting because there's a lot of gloom-and-doomers saying, "Oh, no one's going to have work anymore because AI is going to take our place." And it sounds as if what you're saying is, no, people who can use AI will have jobs. 

NELA: Yeah, I know it's commonly said that people who don't use AI will get replaced by people who do. I would go a step further than that. I don't think it's static. I think it's continuously improving, continuous learning. And for companies, there's a trap that it's easy to fall into, which is to confuse training with education. A lot of us, especially in companies that have a big compliance function, go through training. We sit through module after module and we are trained. 

KATHY: Oh do we ever. Yes, we do. We're all familiar with that. Yes.

NELA: But that is not education, and that is not learning. And so, yeah, having a knowledge base of AI and a facility with it will be helpful, but having cultural awareness, whether it's through language or just working across borders, is going to be hugely important. Because if AI is done correctly, it will not replace things that humans are good at. It'll replace things humans can't do, not things that we can do well. And so what can humans do well? Well, they can connect with other humans well, or most of us can. And so I would argue that in the new world, we will be challenged to figure out and to differentiate human intelligence from AI. And those differences will become quite clear. And it's not about replicating AI, but it's really about those creative tasks, those innovation, collaboration that AI doesn't do so well.

KATHY: Yeah, that's a great distinction and hence why you said soft skills are going to be very important again. 

NELA: Yeah. 

KATHY: OK, I'm going to finish up just and sort of throw it open to you and tell me, you know, what are you sort of itching to investigate or research because you do run the whole research area at ADP, and what do you think is kind of focus of attention now that maybe isn't so important right now?

NELA: So we spend a lot of time as economists talking about the two data points that we can see—when people are hired and when people are let go.

But there's a lot of action that happens in between those two data points. And I'm privileged to work at a company that gives some visibility to that. So at ADP Research, we think a lot about what happens between a first hire and a termination, whether it's voluntary and involuntary. One of the things that happens is teams and team structure. So what type of team structure is best? Is virtual as productive as completely together?

We spend a lot of time thinking about that. We also think a lot about promotions and when to promote and how to promote. We think a lot about compensation and bonus structure, which bonuses are most effective in keeping loyalty. And we don't just look at hard data. We actually do a lot of survey data because how people feel about work translates to eventually what they do about work. So we want to know what kinds of teams and team structures make people more engaged.

What makes them more productive? What makes them more open to new technologies? Building that trust as an employer. So there's a lot of different conversations to be had about the world of work, and data informs those conversations. So we're just getting started at ADP Research. We do a lot on the whole spectrum of work. I think there's a lot to worry about. Honestly, when it comes to the global economy, we know that global growth is at some of the lowest points that we've seen historically. We have these big demographic trends that are changing the face of work, not just in the U.S., but in almost every wealthy country. The prime age worker is moving away from the advanced economies into Africa and Southeast Asia, and we need a solution for that. We need the workers as an advanced economy, and they need the jobs and technology as an emerging one. So there's a lot to think about. What I'm not worried about, though, is the resilience of the U.S. economy.

We're a wealthy country, but we're also quite innovative. And I do think that this country can grow and adapt to whatever technology or global occurrence. I do think that there is resiliency here and innovation here that allows for adaptive behavior. And that will be the key to growth in the new world.

KATHY: Well, I appreciate that because right now we're kind of looking at a lot of hurdles in the way, a lot of things that are worrying us about economic growth and where we're going in the future. So that's a great note to end on. I really appreciate your comments.

NELA: Thank you, was a joy to be with you, Kathy.

LIZ ANN: All right, so Kathy, looking ahead to next week, what do you think investors should be watching, maybe besides finishing their tax returns?

KATHY: Well, yeah, that's an important task to get done, and I need to get on it actually. So we are taping this before we get the unemployment report. So that's really going to be a major focus of attention between now and the next time we record. But we'll also be getting some other data that … between now and then too, the services numbers, and since we've had so much focus on the survey-based data points. But it's going to be really interesting to see some more of those as we go through kind of the time period that we're evaluating all the new policies that are coming out. 

In addition, consumer credit, something we've been watching pretty carefully, see how comfortable people are in terms of taking on debt. And then we'll start to get some of those inflation numbers, including the CPI, or Consumer Price Index. So those are the big ones for me. And of course, there'll be some minutes of the last meeting of the Federal Reserve. The Fed Open Market Committee minutes will be out as well. So a lot of data to digest over the next week or two. How about you, Liz Ann?

LIZ ANN: Well, one that I'll be watching that also comes out early in the week is the NFIB Small Business Optimism Index. So NFIB is the National Federation of Independent Business. And it's pretty widely watched. And I think we talked about it on a prior episode, that group of small business leaders tends to be Republican-leaning. And you did see a huge jump in the overall Optimism Index in the aftermath of the election.

But in the last month or two, that has really plunged. Not only the overall headline index, but they have an uncertainty component. They ask a lot of individual questions about "What do you see as your biggest problem?"—concerns about employment or inflation. So I think there's always a lot of nuggets there, but I think that will be widely watched.

We also get the Producer Price Index, so that comes in conjunction with the Consumer Price Index. And we also, I don't know that this is going to start to mean much, but we get the combination of wholesale trade sales and wholesale inventories. I think in this type of environment, especially with tariffs, the differential between orders and plans and sales versus inventories might provide a little bit of a tell on how the tariffs are impacting behavior. And then we get, at the end of the week, the next update from University of Michigan, their consumer sentiment, but they also have other metrics like inflation expectations. So that's what's on my radar.

That's it for us on this very busy week. Thanks as always for listening, and you can always keep up with us in real time on social media. I'm @LizAnnSonders on X and LinkedIn. Make sure you're following me and not my imposters on that or any other platform. And Kathy?

KATHY: I'm @KathyJones—that's Kathy with a K—on X and LinkedIn. And you can always read all of our written reports, including charts and graphs, at schwab.com/learn.

LIZ ANN: And if you've enjoyed the show, we'd be really grateful if you would leave us a review on Apple Podcasts or a rating on Spotify or frankly feedback wherever you listen. And you can also find all of our prior episodes on YouTube. Just search for "On Investing podcast." Again, we're thrilled you're listening, and we'll be back with a new episode next week.

For important disclosures, see the show notes or visit schwab.com/OnInvesting, where you can also find the transcript.