McBride argues that sentiment is among the least useful categories of economic data because it records opinions rather than activity. Political identification can heavily influence responses, making some surveys better indicators of which party holds the presidency than of actual economic conditions.

Sentiment measures opinion rather than observed activity
Political affiliation can distort reported economic confidence
Survey components can weaken otherwise quantitative models
Sentiment should not be treated as equivalent to hard economic data

“I think probably the one people should ignore the most is anything doing with sentiment.”
Bill McBride · 04:12

“there are some surveys that that's all it does is really tell you who's president, right?”
Bill McBride · 04:36

#sentiment#surveys#politics#economic data

Hot Take· 1

Hot Take09:26

An Inverted Yield Curve Was Not Enough to Call a Recession

McBride challenges the idea that yield-curve inversion should mechanically trigger a recession forecast. The curve remained inverted even after the expected downturn failed to arrive, demonstrating that historical indicators must be interpreted alongside the unusual conditions shaping the wider economy.

Yield-curve inversion is not a guaranteed recession forecast
Many economists overweighted the signal
The curve remained inverted after the predicted recession failed to occur
Exceptional economic conditions can weaken historical relationships

“In twenty twenty two, I didn't see there was no reason to expect a recession at all.”
Bill McBride · 09:26

“the key things that people were looking at was the inverted YO curve, which is still inverted”
Bill McBride · 09:47

#yield curve#recession#forecasting#macroeconomics

Explainer· 1

Explainer08:08

Why Months of Supply Matters More Than Raw Housing Inventory

McBride identifies inventory as the central housing-market variable but notes that raw inventory remains below normal. Because sales have also fallen sharply, months of supply provides a better balance-of-market measure and suggests price growth could flatten as supply normalizes.

Housing conditions reflect both supply and demand
Raw inventory remains below normal levels
Low sales make months of supply especially informative
A return toward 2019 supply levels implies flatter home prices

“I think the key to watch is inventory.”
Bill McBride · 08:08

“I've been looking more at months of supply and that is probably going to get back to twenty nineteen levels later this year”
Bill McBride · 08:32

#housing#inventory#home prices#supply

Story· 1

Story08:52

How Pandemic Supply Distortions Produced a False Recession Signal

Many economists expected a recession after the yield curve inverted and housing starts fell. McBride avoided that conclusion by accounting for pandemic-depressed sectors such as automobile sales, where easing supply constraints created room for renewed activity and offset apparent weakness elsewhere.

The inverted yield curve encouraged recession forecasts
Housing starts also declined sharply
Automobile sales had been suppressed by supply constraints
Supply normalization created offsetting economic growth
Pandemic-era signals required different interpretation

“what they weren't looking at was other parts of pandemic economics, if you will.”
Bill McBride · 09:54

“Auto sales had been really depressed because of supply issues”
Bill McBride · 09:59

#recession#pandemic#supply chains#auto sales#forecasting

Takeaway· 1

Takeaway08:14

The Demographic Tailwind Still Supporting Home Demand

Despite affordability and mortgage-rate pressures, McBride points to a large cohort of people in their thirties entering prime home-buying years. This demographic demand exists alongside constrained inventory, helping explain why housing prices may remain resilient even when transaction volumes are weak.

A large cohort is currently in prime home-buying years
Demographics support underlying housing demand
Low inventory offsets some effects of weaker sales
Transaction weakness does not automatically imply a price collapse

“We still have pretty good demographics.”
Bill McBride · 08:14

“We have a large cohort in the home buying age group in their thirties.”
Bill McBride · 08:18

#housing#demographics#homebuyers#demand

Frameworks in this episode

Past-Present-Future Economic Dashboard

Regime-Dependent Indicator Selection

Rent-Lag Inflation Filter

Insights & moments

⚡Myth Buster· 1

Why Sentiment Surveys Can Say More About Politics Than the Economy

◆Hot Take· 1

An Inverted Yield Curve Was Not Enough to Call a Recession

✶Explainer· 1