The Indicator from Planet Money

Tariffs. Consumer sentiment. Cape Ratio. Pick The Indicator of The Year!

December 19, 2025

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  • The episode of "The Indicator from Planet Money" features a "Family Feud" style debate where hosts Darien Woods, Kenny Malone, and Greg Rosowski argue for their respective economic indicators of 2025: the CAPE ratio, consumer sentiment, and tariffs. 
  • Kenny Malone's argument for consumer sentiment was repeatedly derailed by accidentally reading scripts from previous years when the indicator won, highlighting its recurring relevance. 
  • Greg Rosowski argued that tariffs represent a paradigm shift in the U.S. economy, noting the average effective tariff rate rose from 2.5% in 2024 to 16.8% in 2025, the highest since 1935. 
  • Darien Woods championed the CAPE ratio as the indicator of the year, linking its historically high level (second only to the dot-com bubble) to stock market fears, the AI boom, and the widening K-shaped economy. 

Segments

Indicator of the Year Setup
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(00:00:16)
  • Key Takeaway: The annual ‘Family Feud’ pits three economic indicators against each other to determine the defining story of 2025.
  • Summary: The Indicator from Planet Money hosts engage in their annual debate to select the economic indicator of the year for 2025. The three contenders are consumer sentiment, tariffs, and the CAPE ratio. Listeners are invited to vote for the winner by emailing indicator@npr.org.
Consumer Sentiment Argument
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(00:02:47)
  • Key Takeaway: Consumer sentiment has been near historic lows (in the 50s) for the past year, signaling deep public pessimism about the economy.
  • Summary: Kenny Malone argues that public feeling about the economy, measured by the University of Michigan’s Consumer Sentiment Index, is the key indicator. Pre-pandemic sentiment hovered around 100, but for the past year, it has been stuck in the 50s. This low reading reflects widespread negative feelings regarding inflation, jobs, and housing.
Tariffs Argument
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(00:04:38)
  • Key Takeaway: The average effective U.S. tariff rate increased dramatically from 2.5% in 2024 to 16.8% in 2025, marking the highest level since 1935.
  • Summary: Greg Rosowski champions tariffs as the defining economic story, citing the imposition of high tariffs globally, including on a territory populated largely by penguins. This policy shift caused stock market volatility and led to legal challenges, such as a lawsuit filed by Costco against the Trump administration. The high tariff rate signals a major paradigm shift in trade policy.
CAPE Ratio Argument
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(00:07:05)
  • Key Takeaway: The CAPE ratio is at its highest level ever, excluding the period just before the dot-com crash, indicating extreme stock market expensiveness.
  • Summary: Darien Woods, dressed as Dracula, presents the Cyclically Adjusted Price to Earnings (CAPE) ratio as the indicator of the year due to its frighteningly high reading. This metric suggests stocks are highly expensive relative to their actual earnings, potentially leading to long-term underperformance. The high ratio is linked to the AI boom, fears of a bubble, and the K-shaped economy where the wealthy benefit disproportionately.
Voting Instructions and Credits
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(00:09:30)
  • Key Takeaway: Listeners can cast their vote for the indicator of the year via email or Instagram comments.
  • Summary: The three options—consumer sentiment, tariffs, and the CAPE ratio—are presented for listener consideration. Votes can be sent to indicator@npr.org or via comments on the Planet Money Instagram. Production credits are then listed for the episode.