Jill on Money with Jill Schlesinger State of the Economy With Diane Swonk
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Nov 28, 2025 Diane Swonk, Chief Economist at KPMG, shares her insights on the U.S. economy amidst fluctuating trends. She explains how AI investments and wealth effects sustain growth despite a K-shaped recovery where affluence skews benefits. Diane highlights that childcare costs push skilled women out of the workforce and discusses the challenges posed by recent government shutdowns. With a forecast of 3.2% CPI, she warns that wage growth isn't keeping up with inflation, complicating consumer budgets during the holiday season.
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Who Counts As Affluent Today
- 'Affluent' here means households earning roughly $175k–$200k and those with large stock portfolios.
- These households are less hurt by inflation and prop up spending in travel, hotels, and other services.
Care Costs Are Removing Workers
- Affordability issues are reducing labor force participation, especially among educated women who drop out due to costly childcare.
- Lost labor and unpaid care duties shave significant hours and weaken overall economic capacity.
Tax Refunds Could Fuel Sticky Inflation
- Record tax refunds next year will provide a temporary boost but may coincide with tariff-driven price rises.
- That combination risks sustaining inflation rather than letting it fade.