FORMER CONGRESSMAN JIM RAMSTAD'S LEGACIES.

>> Eric: AND WE START TONIGHT WITH THE DELAYED U.S.

JOBS REPORT FROM THURSDAY.

THE SEPTEMBER NUMBERS SHOW MORE JOB GAINS, BUT ALSO AN INCREASE IN UNEMPLOYMENT.

AND WITH NO OCTOBER NUMBERS OUT YET, THE OVERALL ECONOMIC OUTLOOK IS UNCLEAR.

LOUIS JOHNSTON IS BACK TO HELP US SORT THROUGH ALL OF THIS AS WE HEAD INTO THE HOLIDAY SHOPPING SEASON.

HE TEACHES ECONOMICS AT THE COLLEGE OF ST.

BEN'S AND ST.

JOHN'S UNIVERSITY.

WELL, PROFESSOR, THERE IS MISSING DATA.

BUT WHAT DOES THE FED DO NOW WITH THE UNEMPLOYMENT ABOVE THAT 3% THRESHOLD >> I THINK THAT'S THE BIG QUESTION.

RIGHT NOW IT LOOKS LIKE THE FED IS KIND OF DIVIDED THE BOARD BETWEEN SOME WHO WANT TO CUT THE RATE AND SOME WHO WANT TO WAIT 'TIL WE GET SOME MORE DATA.

SO RIGHT NOW IT'S 50/50 ON WHAT THEY'RE GONNA DO.

>> Cathy: ARE YOU WORRIED THIS UNEMPLOYMENT RATE'S AT IA FOUR-YEAR HIGH, I KNOW THESE FIGURES ARE OLD BUT THE UNEMPLOYMENT RATE'S AT A FOUR-YEAR HIGH?

>> NO, ACTUALLY I'M NOT, IT'S AT 4.4%.

IF YOU HAD ASKED TEN YEARS AGO, EVERYBODY WOULD HAVE BEEN GOING, HOARY, IT'S FANTASTIC.

I'M NOT TOO WORRIED ABOUT THAT.

I'M WORRIED ABOUT PEOPLE NOT BEING ABLE TO GET JOBS WHO ARE OUT THERE LOOKING FOR THEM.

>> Cathy: OKAY.

SO LET'S THOUGH TALK ABOUT SOME OF THESE BIG LAYOFFS THAT HAVE BEEN HAPPENING.

THAT DOESN'T GIVE YOU PAUSE?

>> EXACTLY.

THAT'S WHAT BOTHER DOLLARSED ME BUT THEY HAVEN'T HAPPENED YET THAT'S WHY THEY HAVEN'T SHOWN UP IN THE UNEMPLOYMENT NUMBERS.

PEOPLE HAVEN'T LOST THEIR OBS, THEY HAVE ANNOUNCED THE LAYOFFS.

AND PART OF WHAT'S GOING ON IS NOT UST LAYING PEOPLE OFF BUT NOT DOING NEW HIRES.

>> Eric: THIS IS AN EFFECT FROM ARTIFICIAL INTELLIGENCE?

>> PARTLY ARTIFICIAL INTELLIGENCE.

PARTLY FROM JUST BEING CAUTIOUS WITH ALL OF THE UNCERTAINTY FROM TARIFFS, WITH LACK OF DATA AND THINGS LIKE THAT.

THE WAY I LIKE TO THINK OF IT IS THAT THE JOB MARKET IS KIND OF FROZEN.

PEOPLE ARE JUST HOLDING BACK, THEY'RE NOT FIRING PEOPLE BUT THEY'RE NOT HIRING PEOPLE EITHER.

>> Cathy: INVIDIA IS VERY INTERESTING, SPEAKING OF AI, THE CHIP MAKER, THEY'RE ON FIRE WHEN IT COMES TO THEIR STOCK PRICE BUT I WONDER IF THERE IS AN AI BUBBLE THAT'S ABOUT READY TO BURST.

>> THE PROBLEM WITH BUBBLES IS YOU DON'T KNOW THEY'RE ONE UNTIL THEY POP.

BUT I AM WORRIED ABOUT IT AND THE REASON I'M WORRIED ABOUT IT IS THAT IF YOU LOOK AT THINGS LIKE THE AMOUNT OF INVESTMENT SPENDING THAT BUSINESSES ARE DOING ON BUILDINGS AND COMPUTERS AND STUFF LIKE THAT, ALMOST ALL OF IT IS IN THE AI SECTOR.

AND THAT DISTURBS ME BECAUSE IT'S NOT HAPPENING IN THE OTHER SECTORS OF THE ECONOMY.

IF AI STARTS TO PULL BACK, THAT'S GOING TO PULL A LOT OF THE REST OF THE ECONOMY DOWN WITH IT.

>> Eric: AT LAST REPORT CONSUMER CONFIDENCE WAS WAY DOWN.

WE ENTER THE HOLIDAY SHOPPING SEASON THIS COMING WEEK.

WHAT IS THE PROGNOSIS >> YES.

WELL, THE PROGNOSIS RIGHT NOW IS THAT IF YOU LOOK AT THE DOLLAR AMOUNT OF SALES THAT WILL PROBABLY GO UP.

BUT SINCE PRICES ARE UP, THE AMOUNT THAT PEOPLE ARE ACTUALLY BUYING PROBABLY IS GOING TO STAY THE SAME AND GO DOWN.

SO IF YOU THINK OF A BASKET WITH STUFF IN IT, THERE'S PROBABLY GOING TO BE FEWER ITEMS IN THE BASKET THAT COST MORE.

>> Eric: FARM ECONOMY?

>> FARM ECONOMY IS IN DEEP TROUBLE.

RIGHT NOW EVERYTHING THAT I'VE BEEN READING IS THAT FARMERS ARE SELLING AT A PRICE LESS THAN WHAT THEIR PRODUCTION COSTS ARE.

AND SO AND IF THEY CAN SELL IT.

SO THAT IS GOING TO LEAD TO PROBLEMS GETTING BANK LOANS,, IT'S GOING TO PUT PEOPLE IN DEBT.

I'M VERY WORRIED ABOUT THAT.

>> Cathy: WE OF COURSE COVERED THE FARM CRISIS IN THE '80s WHERE TRACTORCADES WERE RINGING THE STATE CAPITOL IN ST.

PAUL.

REALLY A TOUGH TIME WITH ALL OF THE FORECLOSURES.

ARE YOU THINKING THAT COULD BE ON THE HORIZON?

>> I DON'T KNOW IF THAT COULD BE BUT I'M GLAD YOU BROUGHT THAT P BECAUSE IT'S CONNECTED TO THAT.

WHEN WE'VE SPEND THE PAST 40-PLUS YEARS DOING IS IN REACTION TO THAT COLLAPSE.

WITH THIS TARIFF REGIME WE'VE BASICALLY TORN ALL THAT DOWN AND NOT BUILT ANYTHING NEW UP.

IT'S NOT CLEAR WHAT KIND OF FARM ECONOMY WE'RE GOING FARM ECONOMY WE'RE GOI GOING TOF WE'RE NOT GOING TO HAVE ONE BASED ON EXPERTS.

>> Cathy: I WANT TO GO BACK TO HOLIDAY SHOPPING FOR JUST A SECOND AND CIRCLE BACK IN A MOMENT.

IS IT AS IMPORTANT AS IT ONCE WAS?

THERE WAS ALL THIS ATTENTION ON WHAT CONSUMERS ARE GOING TO SPEND AND HOW IMPORTANT HOLIDAY SHOPPING IS FOR BUSINESSES.

STILL THE CASE, RIGHT?

>> IT'S IMPORTANT FOR THE RETAILERS BUT OR THE ECONOMY AS A WHOLE, NO, BECAUSE PEOPLE SPREAD THEIR PURCHASES OUT OVER THE COURSE OF THE YEAR SO IT'S NOT GOING TO DECIDE WHETHER THE ECONOMY BOOMS OR BUSTS BUT IT IS GOING TO DECIDE WHETHER COMPANIES LIKE TARGET, WAL-MART, OUTFITS LIKE THAT, WHETHER THEY HAVE A GOOD YEAR OR NOT.

>> Eric: DO WE KNOW IF TARIFFS ARE DOING WHAT THEY WERE SUPPOSED TO DO, OR?

>> WELL, THEY ARE IN THE SENSE THAT IMPORTS ARE DOWN SO WE'RE IMPORTING A LOT FEWER GOODS FROM JAPAN, HINA AND THE PLACES WE'VE GOT DATA ON.

>> Eric: U.S.

MANUFACTURING THEN?

>> THAT'S THE QUESTION, IS MANUFACTURING IN THE U.S.

GOING TO RESPOND TO IT, AND SO FAR, NO.

>> Eric: WHAT HAS TO HAPPEN?

>> WELL, I THINK WHAT YOU HAVE TO DO IS YOU HAVE TO THINK ABOUT WHAT DOES AMERICAN MANUFACTURING NEED IN ORDER TO COME BACK AND CUTTING OFF SUPPLIES FROM ABROAD IS NOT THE WAY TO DO IT.

YOU HAVE TO THINK ABOUT THESE SUPPLY CHAINS.

AND THAT'S, THEY'RE OT THINKING THROUGH THAT IN WASHINGTON.

>> Cathy: OKAY, WE MIGHT NOT SEE YOU BETWEEN NOW AND THE END OF THE YEAR SO WHAT ARE YOU GOING TO BE LOOKING, IN YOUR CRYSTAL BALL FOR >> I'M GOING TO BE LOOKING FOR WHETHER THE FED CUTS RATES OR NOT.

I'M GOING TO BE LOOKING OR WHAT HAPPENS TO THE INFLATION NUMBERS WHEN WE FINALLY GET THEM BECAUSE THEY'RE NOT GOING TO GET AN OCTOBER INFLATION REPORT, THEY'RE GOING TO SKIP STRAIGHT TO NOVEMBER.

GOING TO SEE WHETHER THAT'S HOLDING STEADY OR GOING UP.

>> Eric: ARE INTEREST RATES HELPING THE HOUSING MARKET?

>> A LITTLE BIT RIGHT NOW.

AND THAT'S WHY I THINK THE FED IS SPLIT.

THEY'RE WORRIED THAT IF THEY DON'T CUT RATES THAT'S GOING TO NOT HELP THE HOUSING MARKET, THAT'S GOING TO MAYBE PREVENT SOME JOBS FROM GROWING.

AND THE OTHER SIDE OF THE COIN IS, YEAH, BUT IF WE CUT THOSE INTEREST RATES WE MIGHT CREATE INFLATION AND THAT WILL HURT BOTH OF THOSE THINGS.

>> Eri