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Constance Hunter: latest market views
Economist Intelligence Unit
Summary
Constance Hunter is chief economist at the Economist Intelligence Unit, a former AIG executive vice president and head of strategy and ESG, and former chief economist at KPMG.
Chorus has 9 views from Constance Hunter across 2 episodes on Bloomberg Surveillance since October 28, 2026.
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Election results reflected inflation and foreign policy, not unemployment, since the jobless rate is very low.
Hunter argues the election was not determined by the unemployed, because many voters likely had jobs and the unemployment rate is very low. She says the vote reflected foreign policy with Iran and possibly Ukraine, and inflation, which was the number one issue, with people still feeling the effects of COVID-era price-level increases.
“I wouldn't say that this was an election determined by the unemployed. We have a very low unemployment rate.”at 9:02
Bloomberg Surveillance: Instant Reaction: US Adds 165,000 Jobs, Topping All Forecasts ·
Current inflation is cost-push rather than runaway demand-pull, and the Fed is tightening to curb it.
Hunter says the goal is to avoid runaway demand-pull inflation, but what is visible is largely cost-push inflation. She points to the Fed trying to curb it, noting Barkin, a 2027 voter, saying the Fed should raise rates.
“what we don't wanna see is we don't wanna see runaway inflation that's demand pull. And so what we see here is a lot of cost push inflation, and the Fed is trying to to curb that.”at 10:32
Bloomberg Surveillance: Instant Reaction: US Adds 165,000 Jobs, Topping All Forecasts ·
Cyclical job gains now dominate hiring, signalling underlying economic momentum beyond health and government hiring.
Hunter contrasts the post-COVID period, when headline job gains were dominated by noncyclical health care, government and social assistance hiring, with the current year, when cyclical jobs are dominating hiring. She reads this as evidence of underlying economic momentum, though she notes it may take time for people to feel it.
“we can see a surge in in cyclical jobs, and cyclical jobs are not... Are dominating the hiring. That suggests that there's some underlying economic momentum.”at 11:19
Bloomberg Surveillance: Instant Reaction: US Adds 165,000 Jobs, Topping All Forecasts ·
Resolving the Iran war and securing Strait of Hormuz flows would lower oil prices and relieve consumers.
Hunter says the consumer is okay but depends on the Iran war and gas prices. Oil is being moved out of the Gulf under expensive escort operations, and the market is pricing in all risks. If a resolution produces a durable structure for getting oil out through the Strait of Hormuz, oil prices should fall, giving immediate relief to household budgets.
“If we see a resolution to the Iran war, I think you... And you see a really durable structure built around getting oil and gas out of the Gulf Of Hormuz, then you're going to see oil prices come down. That's gonna give immediate relief to people's pocketbooks.”at 12:05
Bloomberg Surveillance: Instant Reaction: US Adds 165,000 Jobs, Topping All Forecasts ·
AI infrastructure & data centers
Public opposition to the AI buildout needs sensible policy now, or backlash will grow later.
Hunter notes that markets have focused on a curb on AI buildout this week and asks whether it is an end or just more sensible policy. She argues the public is strongly against the AI buildout, so if policymakers do nothing about it, there will be significant backlash down the road.
“are we talking about an end, or are we talking about some more sensible policies that make it more palpable to the general public? Because public is really against the AI build out, and we have... We don't do anything about it, then we would have such significant backlash down the road.”at 13:31
Bloomberg Surveillance: Instant Reaction: US Adds 165,000 Jobs, Topping All Forecasts ·
Whether the Fed hikes today or in December barely matters for the underlying economy.
Her team is split. One side sees underlying non-energy inflation moderating, so it expects one hike and then a downward trajectory. The other side wants more hikes. The key question is whether energy price spikes spill into services. Whether the Fed hikes today or in December, or insures a cut while signaling toughness on inflation, changes little for the underlying economy.
“If you look at the underlying economy, does it matter if they cut... If they hike today or hike in December, it really doesn't matter that much for the underlying economy.”at 4:45
Rising global frictions push up prices and demand, unlike the friction-reducing 1990s.
The 1990s backdrop had falling frictions: free trade was advancing, more countries were becoming democratic and capitalist, institutions supported coordination, and the peace dividend followed the fall of the Berlin Wall. Today frictions are rising and global institutions are not easing them, so security and supply constraints are pushing up prices and in some cases demand. That makes today's inflation backdrop different from the 1990s tech boom.
“we are increasing frictions, where global institutions are not easing global frictions... security, supply... are really pushing up prices and in some cases pushing up demand.”at 6:00
AI is a small share of CPI for now, but its inflation effect could grow.
AI-related spending is not a large percentage of the consumer price basket, so it is not a big inflation driver today. The open question is whether that share grows as AI expands, which would add demand-pull inflation. She says it is unknown and that the team is closely monitoring it.
“It's not a large percent of the basket, but the question is, can that grow... As this continues to grow? And that is, I think, an unknown, but something that we are closely monitoring.”at 6:25
Card debt tracks consumption, but delinquencies are rising among a significant stretched cohort.
Measured against overall consumption, credit card debt and spending are growing in line, so the aggregate ratio is not alarming. The concern is that delinquencies are starting to tick up. The stress sits among a significant cohort of households and consumers who are really stretched.
“I think you need to look at credit card debt and credit card expenditures as a ratio of overall consumption. ... it's really in line. But then if we look at where our delinquency is starting to tick up... And there's a significant cohort of them.”at 8:01
Shows
- Bloomberg Surveillance · 2 episodes
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