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The More Money Show with Steve Moore on the Red Apple Podcast Network.
And I hope you're having a wonderful, wonderful Christmas season. So, my next guest, as I mentioned earlier, is a guy who's become a good personal friend and a mentor of mine. He is an icon in business. His name, of course, is Bob Nardelli. You all know Bob. He's been a regular on my show, but most importantly, Bob served as the number two guy at General Electric. He was amazing there. And then of course was with Chrysler as the CEO there and then most importantly with Home Depot and that was an amazing run you had there too, Bob, running these incredible companies. So merry Christmas. Thanks for joining.
Yeah, Steve, merry Christmas to you and to all your listeners out there. It's always a treat and an opportunity for me to be on the air with you, Steve.
Boy, do we have a lot to talk about, Bob, and I'm so glad that you're carving a little time out of this. It's the weekend before Christmas, so it's a very frantic time for everyone. I want to get right down to it, Bob, and talk to you about the consumer, about consumer prices, about affordability, because there's nobody who knows more about this than you do. So I have to say I'm somewhat flummoxed, Bob, about the fact that so many of the statistics are showing that people's incomes are up. Yeah, prices are up for some things. No question about it. But we're seeing inflation falling. We're seeing incomes rising. We're seeing people's 401k plans that have more money in them and yet people according to the polls are kind of in a grumpy mood and I don't quite understand it. I wonder if you have any thoughts about this.
Well, first of all, let me say that you nailed it the other day. I know the estimate for inflation CPI was about 3.0.
You were on with Maria and called 28 and sure enough it came in at 27.
Even I was too, right? You're still the economic genius out there, Steve.
By the way, Bob, that's a great number, right? I mean, a big improvement.
Yes. Yeah. Year over year, right? 2.7 is a big improvement. And then, of course, core came in at 2.6, a tenth better. And that's what excludes the food and energy. And I think that may be part of what you're referencing, Steve, is that the consumer, you know, I think the number you and I talked about is anybody at 150 or lower is probably feeling the pinch on food and energy. Now, President Trump in this administration is doing a phenomenal job just as you've outlined. I think what's happening is the people at the entry level are probably paying a little bit more pinch than three-quarters above them. But this is going to get better. I think it's going to get much much better as you say and you heard the announcement on medication and drugs the other day from the Oval Office. I think he's just going at this like a madman. Thank God to get all these things down. I hope he goes after the insurance program. I hope he goes after home insurance, property. I mean, there's just a plethora of things that are really choking the average consumer today, Steve, that we got to keep working on. Affordability.
So, Bob, affordability is the buzz word right now. So, do you, you know, you served as the amazing CEO at Home Depot for many years. Do you still follow kind of what's going on at Home Depot in terms of, you know, with their sales and so on? Because they're one of the four or five biggest retail companies in the country. I'm wondering, you know, because people are spending money. That's the thing. People are spending and yet they say they can't afford anything. So, how are things that the retailers are telling us that people are buying things? And same thing with the online retailers.
Yeah, that's a great question, Steve. You know, we hired Ted Decker in 2002 and he's the chairman and CEO today and he and that team are doing a fabulous fabulous job of continuing to reposition Home Depot not only as the number one consumer location, but now the pro customer, he really owns the pro customer. So that's an interesting point. I think what happens in the cycles that I've seen is, you know, when housing is booming and it's not right now, right? I mean, lumber prices are down. When we talk about employment, a lot of the laborers in the home construction business, you know, carpenters, electricians, plumbers are down. So, Ted has taken the number down slightly quarter over quarter and that's really driven by same-store sales, the comp sales as they call them. And so there is some adjustment there about, you know, investing in your home for resale or appreciation and maybe the environment now we're kind of tilting a little bit, Steve, to if it's not broken, don't fix it, right? And conserving some of the home improvements that could be done and having to make tradeoffs, particularly this time of the year with the holidays and gift giving and so forth. So the consumer has to prioritize like you and I do and any business we run. So, I think that's a little bit of what's going on out there, Steve.
But consumers are spending money. I mean, I saw some of these statistics over the Black Friday weekend and just over the last couple weeks. It looks like consumers are spending money.
Yeah. No question. I think the number you and I talked about was like $46 billion online between Black Friday and Cyber Monday. So, there's no question people are out there spending. And the key to this is going to be, you know, we got to see what happens at the turn of the clock here, January, February, whether they've loaded up on their credit cards and, you know, extended themselves a little bit. I hope not.
I don't know. This is a really confusing time and you and Art and Steve are really the experts on all this economy stuff.
So, Bob, we got to take a quick break. Can I hold you over for one more because we're just getting into it with Bob Nardelli. I hate to carve more time out of your weekend, but could you hold over?
Absolutely. I'd be happy to do, Stephen.
We're going to take a quick break, folks. This is the More Money Show. I'm talking to the great guru of business and finance, Bob Nardelli, and we'll be right back.
Free. All you have to do is go to unleashprosperity.com, click on the hotline and you will get a free economic newsletter every morning. And by the way, you can read it five or six minutes every morning. There's a quick update about what's going on in the economy and we also add some humor as well.
So Bob, welcome back. Thank you so much for holding over. So you believe that the consumer is in pretty good shape right now or, you know, because there seems to be a disconnect between, you know, what the official statistics are telling us which is a strong economy that is growing with higher incomes and yet people tend to be very somber about things and one of the things that people are worried about is housing. You know a lot about housing because you worked at Home Depot. Give us a sense of why it is, do you think, that housing prices have risen so much?
Yeah. Well, it's I think it's a couple of things, Steve, and some of it is availability, number one.
Right. It's the supply, right? If you have less supply, the prices go up.
Exactly. Exactly. So, but the other thing that you and I have talked about is availability. So, if you think about housing today and the interest rates that many of us enjoy, these low mortgage rates and so forth, right? And I'm not going to trade. I'm going to protect this 3, 4%. Why should I jump out, jump in?
