1 00:00:00,080 --> 00:00:13,040 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Ley. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:32,760 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. So 5 00:00:32,840 --> 00:00:34,440 Speaker 1: let's bring in my shoe Mcashownhi, you want to go 6 00:00:34,560 --> 00:00:37,279 Speaker 1: here in New York, Wells Funco Ahead of Interest, Rate, Strategy, 7 00:00:37,520 --> 00:00:39,960 Speaker 1: Business and News as usual for payrolls growth a little 8 00:00:39,960 --> 00:00:43,280 Speaker 1: bit late. To Mike is that we're looking for. It's interesting, Jonathan, 9 00:00:43,280 --> 00:00:45,240 Speaker 1: It's funny. I mean, payrolls used to be perhaps the 10 00:00:45,240 --> 00:00:48,360 Speaker 1: biggest indicator in the market, and now people simply don't care. 11 00:00:48,479 --> 00:00:51,199 Speaker 1: It's interesting if you look at the biggest move in 12 00:00:51,240 --> 00:00:53,880 Speaker 1: the tenure treasury on non farm payroll Day this year 13 00:00:54,080 --> 00:00:56,240 Speaker 1: six basis points. That was a couple of months ago, 14 00:00:56,520 --> 00:00:59,520 Speaker 1: and on average I'd say it's been maybe three. So 15 00:01:00,080 --> 00:01:01,639 Speaker 1: the market looks at it and says, you know what, 16 00:01:01,680 --> 00:01:04,560 Speaker 1: the fee seems on a pretty steady course. Labor markets 17 00:01:04,600 --> 00:01:06,520 Speaker 1: in great shape. Why should we get all fussed about 18 00:01:06,560 --> 00:01:10,160 Speaker 1: payrolls and probably shouldn't order launch alright, So Mike, we're 19 00:01:10,200 --> 00:01:13,160 Speaker 1: not alone in not caring as much about payrolls as 20 00:01:13,200 --> 00:01:15,000 Speaker 1: we do about Elen musk smoking pot is that it 21 00:01:15,640 --> 00:01:19,560 Speaker 1: I agree podcast the story. Well, here, here's what I 22 00:01:19,600 --> 00:01:21,760 Speaker 1: want to find out. Why has it gotten so boring? 23 00:01:21,840 --> 00:01:23,800 Speaker 1: Is it just because it's sort of an accepted fact 24 00:01:24,280 --> 00:01:26,440 Speaker 1: that the economy is growing, that you're going to get 25 00:01:26,480 --> 00:01:30,160 Speaker 1: a steady number of job gains, and that wages are 26 00:01:30,200 --> 00:01:32,160 Speaker 1: going to increase but not that much, so we're going 27 00:01:32,200 --> 00:01:33,880 Speaker 1: to be in this sort of goldilocks scenario. Is that 28 00:01:33,920 --> 00:01:38,280 Speaker 1: basically the understood theme, and nothing really could break that 29 00:01:38,880 --> 00:01:41,560 Speaker 1: less than a huge surprise. I think that's most of 30 00:01:41,600 --> 00:01:43,440 Speaker 1: at least. I mean, people look at the payrolls report. 31 00:01:43,520 --> 00:01:45,759 Speaker 1: Volatility of the payrolls number has been low, so that's 32 00:01:45,800 --> 00:01:48,360 Speaker 1: the first thing. And secondly, when you take a step 33 00:01:48,360 --> 00:01:51,920 Speaker 1: back and say, how would the FEDS policy actually change 34 00:01:51,960 --> 00:01:55,360 Speaker 1: if payrolls were to come in a little bit higher, low, 35 00:01:55,480 --> 00:01:57,520 Speaker 1: it wouldn't. That's the answer. And the labor market in 36 00:01:57,560 --> 00:01:59,600 Speaker 1: the US has been so good now for the last 37 00:01:59,600 --> 00:02:01,680 Speaker 1: couple of years. I think people think about the FED 38 00:02:01,720 --> 00:02:04,400 Speaker 1: policy and say, well, you've got the dual mandate, the 39 00:02:04,480 --> 00:02:06,880 Speaker 1: labor force side, the unemployment rate. That part is in 40 00:02:06,960 --> 00:02:08,680 Speaker 1: great shape, so it really is going to boil down 41 00:02:08,680 --> 00:02:10,760 Speaker 1: to inflation. So I'd say, to the extent people care 42 00:02:10,760 --> 00:02:13,400 Speaker 1: about the employment report, it's really going to be more 43 00:02:13,440 --> 00:02:16,240 Speaker 1: skewed towards hourly earnings, and they'll pay attention to those 44 00:02:16,800 --> 00:02:19,880 Speaker 1: less to non farm payrolls per se. But either way, 45 00:02:20,200 --> 00:02:23,000 Speaker 1: the potential for that particular report to move the market's 46 00:02:23,040 --> 00:02:26,040 Speaker 1: going down dramatically. And if you look at the we 47 00:02:26,160 --> 00:02:29,000 Speaker 1: like to calculate the move in the market relatively so 48 00:02:29,080 --> 00:02:31,400 Speaker 1: called normal day where there's not a big economic release 49 00:02:31,480 --> 00:02:34,000 Speaker 1: or an f OMC report or something like that, and 50 00:02:34,080 --> 00:02:37,200 Speaker 1: payrolls is converged to just about normal, whereas it used 51 00:02:37,240 --> 00:02:39,120 Speaker 1: to be a factor of at least two in terms 52 00:02:39,120 --> 00:02:41,080 Speaker 1: of volatility. So it's come off quite a bit. But 53 00:02:41,120 --> 00:02:43,640 Speaker 1: I think it's because people perceive the labor force and 54 00:02:43,680 --> 00:02:46,239 Speaker 1: the labor market is being great shape, Mike, to some extent, 55 00:02:46,280 --> 00:02:48,480 Speaker 1: we could cut a conversation that we did last month, 56 00:02:48,480 --> 00:02:50,800 Speaker 1: the month before that, the month before that on payrolls, 57 00:02:50,800 --> 00:02:53,040 Speaker 1: and it would play out quite well, quite beautifully actually 58 00:02:53,320 --> 00:02:55,720 Speaker 1: today to describe what we'd expect a little bit later. 59 00:02:56,120 --> 00:02:59,239 Speaker 1: We keep glossing over payrolls growth, the two D NO 60 00:02:59,440 --> 00:03:01,080 Speaker 1: and I think the be a story there. How do 61 00:03:01,120 --> 00:03:05,560 Speaker 1: you reconcile the Cools description of this labor market as 62 00:03:05,680 --> 00:03:09,480 Speaker 1: tight when it's an economy still churning out payrolls growth 63 00:03:09,520 --> 00:03:13,119 Speaker 1: to two hundred thousand. How do you reconcile those two things. Yeah, 64 00:03:13,160 --> 00:03:14,639 Speaker 1: it's impressive, and I think part of the answer to 65 00:03:14,800 --> 00:03:17,160 Speaker 1: Jonathan as people have been enticed back into the labor force. 66 00:03:17,200 --> 00:03:18,679 Speaker 1: You said a number of people have been out for 67 00:03:18,760 --> 00:03:21,000 Speaker 1: quite a while and they'll say, well, gee, now I 68 00:03:21,000 --> 00:03:23,519 Speaker 1: can actually get a job pretty easily. So it's time 69 00:03:23,560 --> 00:03:25,320 Speaker 1: to get off the couch or dust off the resume 70 00:03:25,400 --> 00:03:27,240 Speaker 1: or whatever it might be, and go out and get 71 00:03:27,280 --> 00:03:29,000 Speaker 1: a job. And I think that's why growth has been 72 00:03:29,000 --> 00:03:31,240 Speaker 1: pretty high, because I certainly take your point. If you 73 00:03:31,240 --> 00:03:33,959 Speaker 1: look at two hundred thousand jobs per month, that's way 74 00:03:33,960 --> 00:03:36,480 Speaker 1: above replacement. You probably need something like a hundred thousand. 75 00:03:36,600 --> 00:03:39,680 Speaker 1: So the increment of an extra hundred thousand jobs per 76 00:03:39,760 --> 00:03:41,840 Speaker 1: month has been really phenomenal, and I think it is 77 00:03:41,880 --> 00:03:44,119 Speaker 1: the answer there is people are being pulled back into 78 00:03:44,120 --> 00:03:47,400 Speaker 1: the labor force. It's been that strong. My I'm going 79 00:03:47,440 --> 00:03:50,960 Speaker 1: to channel my inner conspiracy theorist because it's Friday morning 80 00:03:51,120 --> 00:03:53,800 Speaker 1: and the jobs report isn't going to be that exciting necessarily. 81 00:03:53,960 --> 00:03:56,280 Speaker 1: I want to figure out you know, people say the 82 00:03:56,320 --> 00:03:59,000 Speaker 1: economy is strong and that jobs are being added and 83 00:03:59,040 --> 00:04:02,040 Speaker 1: everything is hunky door, and yet you're not seeing the 84 00:04:02,080 --> 00:04:04,680 Speaker 1: wage game that you're expecting to see. And in fact, 85 00:04:04,680 --> 00:04:06,040 Speaker 1: if you look at it, depending on them as you 86 00:04:06,080 --> 00:04:09,520 Speaker 1: look at it, it's either flat with inflation or lagging 87 00:04:09,520 --> 00:04:13,280 Speaker 1: behind inflation over the past year. So what is sort 88 00:04:13,320 --> 00:04:17,200 Speaker 1: of the secret here behind why and what's going to change? 89 00:04:17,240 --> 00:04:19,159 Speaker 1: I mean, and this this is this goes directly to 90 00:04:19,240 --> 00:04:22,200 Speaker 1: FED policy, because if it does change on a dime, uh, 91 00:04:22,320 --> 00:04:25,719 Speaker 1: then you could see bigger inflationary pressures and and faster 92 00:04:26,040 --> 00:04:29,720 Speaker 1: rate hikes. Yeah, it's a tremendous question, Lisa, and it's 93 00:04:29,720 --> 00:04:32,400 Speaker 1: been confounding central bankers really across the globe for the 94 00:04:32,480 --> 00:04:34,599 Speaker 1: last four or five years. You look at wage growth 95 00:04:34,600 --> 00:04:37,040 Speaker 1: in the US and it's been kind of okay, high twos. 96 00:04:37,120 --> 00:04:39,800 Speaker 1: But I agree with you if you compare that to inflation, 97 00:04:39,839 --> 00:04:42,480 Speaker 1: it's just barely positive on a real basis. So why 98 00:04:42,480 --> 00:04:43,920 Speaker 1: aren't we seeing more of a pick up? I think 99 00:04:43,960 --> 00:04:46,760 Speaker 1: a few things stand out. Number one, and people always 100 00:04:46,760 --> 00:04:49,560 Speaker 1: cite the impact of technology replacing workers and I think 101 00:04:49,600 --> 00:04:52,920 Speaker 1: that's been happening to a pretty reasonable degree. Is this unprecedented, 102 00:04:52,960 --> 00:04:55,520 Speaker 1: Probably not, but still it's it's been pretty severe. So 103 00:04:55,560 --> 00:04:57,960 Speaker 1: that's the first thing. And also, if you look at 104 00:04:58,000 --> 00:05:02,039 Speaker 1: the the initial comeback in the labor market was to 105 00:05:02,440 --> 00:05:06,320 Speaker 1: go to first part time jobs than relatively low paid jobs. 106 00:05:06,480 --> 00:05:08,200 Speaker 1: So I think the quality of the job, if you 107 00:05:08,240 --> 00:05:09,719 Speaker 1: want to think of it that way, of the average 108 00:05:09,800 --> 00:05:11,920 Speaker 1: job has probably gone down a little bit and that's 109 00:05:11,960 --> 00:05:13,680 Speaker 1: why you're not seeing the big pick up in wages. 110 00:05:13,720 --> 00:05:15,400 Speaker 1: But how do you change that? How do you get 111 00:05:16,240 --> 00:05:18,680 Speaker 1: wage growth up to four percent which you might typically 112 00:05:18,720 --> 00:05:21,560 Speaker 1: see in a recovery versus high twos. It's been really 113 00:05:21,600 --> 00:05:23,040 Speaker 1: tough and it's not clear to me we get there. 114 00:05:23,040 --> 00:05:24,880 Speaker 1: We probably don't in this case some Mike, does all 115 00:05:24,920 --> 00:05:28,400 Speaker 1: of that help explain why we've got relatively speaking, dovish 116 00:05:28,560 --> 00:05:31,880 Speaker 1: market pricing through the end of this year, through the 117 00:05:31,920 --> 00:05:36,400 Speaker 1: remainder of this year and into on rights, I think 118 00:05:36,400 --> 00:05:38,159 Speaker 1: it does, Jonathan. I think that's a big part of it. 119 00:05:38,200 --> 00:05:41,039 Speaker 1: People look at the inflation outlook and say, what could 120 00:05:41,080 --> 00:05:44,159 Speaker 1: really boost inflation dramatically is a wage growth? Probably not, 121 00:05:44,279 --> 00:05:46,560 Speaker 1: and that's typically the biggest drivers. So if you put 122 00:05:46,560 --> 00:05:49,039 Speaker 1: that on the sideline, I think the inflation outlook becomes 123 00:05:49,480 --> 00:05:52,000 Speaker 1: relatively benign. Now, there are other factors that are more 124 00:05:52,000 --> 00:05:55,120 Speaker 1: technical in the market, in terms of a big avalanche 125 00:05:55,160 --> 00:05:57,560 Speaker 1: of cash coming into the market and lots of people 126 00:05:57,600 --> 00:06:00,400 Speaker 1: who simply as excess money to put to work. Those 127 00:06:00,400 --> 00:06:02,760 Speaker 1: are all well and good, But from a fundamental basis, 128 00:06:02,760 --> 00:06:05,200 Speaker 1: I'd say, yes, it's the lack of inflation and really 129 00:06:05,760 --> 00:06:08,120 Speaker 1: very few scenarios that investors can see now that would 130 00:06:08,120 --> 00:06:10,679 Speaker 1: cause inflation to go up significantly. I think that's constraining 131 00:06:10,760 --> 00:06:12,720 Speaker 1: rates quite a bit. All right, Mike, you've been doing 132 00:06:12,760 --> 00:06:14,880 Speaker 1: this for a long time. Have you ever had a 133 00:06:14,920 --> 00:06:17,520 Speaker 1: period like this where it was so humdrum or you 134 00:06:17,520 --> 00:06:19,560 Speaker 1: basically looked at these numbers and I was like, yeah, 135 00:06:19,600 --> 00:06:24,960 Speaker 1: it's pretty much doesn't matter. Off, Yeah, that's Funnyly, so 136 00:06:25,000 --> 00:06:26,920 Speaker 1: you go back to two thousand sex and maybe early 137 00:06:26,920 --> 00:06:29,360 Speaker 1: two thousand seven people were saying exactly the same thing, 138 00:06:29,440 --> 00:06:31,320 Speaker 1: and then two thousand and eight was a little bit different. 139 00:06:31,400 --> 00:06:33,960 Speaker 1: So a little bit I do remember those stories. Interesting, 140 00:06:34,080 --> 00:06:36,800 Speaker 1: So is this a corollary to those times? I hope not. 141 00:06:36,960 --> 00:06:38,960 Speaker 1: I think two thousand and eight was bad enough once. 142 00:06:39,000 --> 00:06:41,640 Speaker 1: We certainly don't want to see a repeat, and you 143 00:06:41,680 --> 00:06:44,039 Speaker 1: always get asked the question, where's the next crisis? Is 144 00:06:44,040 --> 00:06:45,880 Speaker 1: it like the last one? Is probably not like the 145 00:06:45,960 --> 00:06:48,760 Speaker 1: last one. But do we see pressures building up? They 146 00:06:48,800 --> 00:06:50,840 Speaker 1: are a little more intense. Yes. I think people are 147 00:06:50,839 --> 00:06:53,960 Speaker 1: probably a little bit too blase about the markets right now. 148 00:06:54,040 --> 00:06:58,120 Speaker 1: We just had a pretty benign conversation about the payrolls report. 149 00:06:58,160 --> 00:07:00,560 Speaker 1: Maybe something busts out loose, But you look at the 150 00:07:01,360 --> 00:07:03,359 Speaker 1: really the backdrop and see how many people do we 151 00:07:03,400 --> 00:07:06,560 Speaker 1: think are relatively fully edged against big moves in the market. 152 00:07:06,600 --> 00:07:08,560 Speaker 1: I'd say very few. Clients don't want to buy a 153 00:07:08,560 --> 00:07:11,960 Speaker 1: protection against moves they think won't happen. So typically you 154 00:07:11,960 --> 00:07:14,040 Speaker 1: want to buy insurance. One's chief, not when you actually 155 00:07:14,040 --> 00:07:15,680 Speaker 1: have to get it, and I think people are probably 156 00:07:15,760 --> 00:07:17,760 Speaker 1: under insured. Hey, Mike, you're gonna stick with us Mike 157 00:07:17,760 --> 00:07:20,720 Speaker 1: Schumacher West Farco ahead of Interest Rate Strategy on this 158 00:07:20,720 --> 00:07:38,400 Speaker 1: payrolls Friday. It's the first Friday of the month, which 159 00:07:38,440 --> 00:07:41,840 Speaker 1: typically means Alan Kruger, Princeton University professor and labor market 160 00:07:41,960 --> 00:07:44,920 Speaker 1: expert renowned worldwide, usually drops by the studio. So we're 161 00:07:44,960 --> 00:07:47,840 Speaker 1: gonna catch up with Alan about payrolls in just a moment. 162 00:07:47,840 --> 00:07:49,400 Speaker 1: But Alan, first of all, you're on a one man 163 00:07:49,440 --> 00:07:53,080 Speaker 1: mission because you want a Bloomberg tennis charity tournament before 164 00:07:53,080 --> 00:07:55,760 Speaker 1: the US begins every year. Full disclosure, he just wants 165 00:07:55,760 --> 00:07:57,360 Speaker 1: to see Tom King. He just wants It's not what 166 00:07:57,400 --> 00:08:01,080 Speaker 1: it's all about. All of that part of it. I'll 167 00:08:01,120 --> 00:08:03,680 Speaker 1: confess that's part of it. But I am on a campaign. 168 00:08:03,920 --> 00:08:05,920 Speaker 1: I think it would be great for the Bloomberg image. 169 00:08:11,320 --> 00:08:14,080 Speaker 1: What image do you think we'd walk away with? Much 170 00:08:14,120 --> 00:08:19,560 Speaker 1: more athletic Tomkinan Shorts playing tennis against you, that's the 171 00:08:19,600 --> 00:08:22,880 Speaker 1: brand for Bloomberg. Just tucked up a pretty good tennis game. 172 00:08:22,920 --> 00:08:25,000 Speaker 1: So I'd like to see it, but I would recommend 173 00:08:25,000 --> 00:08:28,160 Speaker 1: double to make it a little less tense. We'll run 174 00:08:28,160 --> 00:08:30,000 Speaker 1: this by Mike and see what happens. Allen, have you 175 00:08:30,040 --> 00:08:32,400 Speaker 1: enjoyed the U s Open so far? It's it's the 176 00:08:32,440 --> 00:08:35,240 Speaker 1: best sports event in the world in my opinion, I'm 177 00:08:35,280 --> 00:08:38,120 Speaker 1: not I'm not soccer fan the way you are. They 178 00:08:38,120 --> 00:08:40,400 Speaker 1: tell me why you think that is, Allen? Oh, for 179 00:08:40,480 --> 00:08:42,800 Speaker 1: the price, it's great entertainment. I went there on their 180 00:08:43,080 --> 00:08:46,400 Speaker 1: hold On a second, this is such an economic answer 181 00:08:46,840 --> 00:08:48,760 Speaker 1: that we say, why do you think it's the best part. 182 00:08:49,000 --> 00:08:52,520 Speaker 1: The value, the price proposition is really stellar. There's no 183 00:08:52,559 --> 00:08:55,960 Speaker 1: better metric. I challenge you to come up with a 184 00:08:56,000 --> 00:08:59,200 Speaker 1: better metric. You see the world's greatest athletes. I went 185 00:08:59,240 --> 00:09:03,559 Speaker 1: to a nine hours on Thursday with my children, um, 186 00:09:03,600 --> 00:09:07,680 Speaker 1: and it's just a wonderful event that the only complain 187 00:09:07,760 --> 00:09:09,560 Speaker 1: I have some some of the fans in New York 188 00:09:09,559 --> 00:09:12,240 Speaker 1: are too talkative. I agree. I was there for Opening 189 00:09:12,320 --> 00:09:15,160 Speaker 1: night and I experienced the same thing. They had conversations 190 00:09:15,440 --> 00:09:18,800 Speaker 1: during the point. It's rude. It's rude to the players, 191 00:09:18,800 --> 00:09:21,240 Speaker 1: it's disrespectful to the game. And when I go to 192 00:09:21,280 --> 00:09:23,400 Speaker 1: the French Open or Wimblton, you don't see that there. Yeah, 193 00:09:23,440 --> 00:09:25,200 Speaker 1: it was very strange. It was a strange experience for 194 00:09:25,200 --> 00:09:26,959 Speaker 1: me too. But on the on the economics off the 195 00:09:27,040 --> 00:09:28,920 Speaker 1: visit to the U S Open in the early stages, 196 00:09:29,240 --> 00:09:30,800 Speaker 1: in the early round to lee so you can go 197 00:09:30,880 --> 00:09:34,040 Speaker 1: for fifty dollars and basically stay the whole day, which 198 00:09:34,120 --> 00:09:36,240 Speaker 1: is pretty good for a sporting event. At the caliber 199 00:09:36,320 --> 00:09:38,319 Speaker 1: of the of the U. S Open that can actually 200 00:09:38,320 --> 00:09:40,800 Speaker 1: bring your own food you have to wait in a 201 00:09:40,840 --> 00:09:48,160 Speaker 1: longer line. I love the economic proposition of the Open, 202 00:09:48,400 --> 00:09:51,960 Speaker 1: mixed with at tinged with a sense of why Americans 203 00:09:51,960 --> 00:09:54,680 Speaker 1: are rude and Europeans are not. Not what we were doing. 204 00:09:57,960 --> 00:10:02,480 Speaker 1: It was, I'm sorry, expense from all nations assembled the 205 00:10:02,720 --> 00:10:06,040 Speaker 1: h Okay. Look, we have Alan Krueger here. You're a 206 00:10:06,080 --> 00:10:09,600 Speaker 1: professor at Princeton University. You've been watching these jobs numbers 207 00:10:09,640 --> 00:10:12,280 Speaker 1: roll in month after month after month. We had Mike 208 00:10:12,320 --> 00:10:15,880 Speaker 1: Schumacher on earlier from Most Fargo saying this is a 209 00:10:16,040 --> 00:10:21,360 Speaker 1: snooze fest. No one cares. Do you agree, Well, people 210 00:10:21,400 --> 00:10:25,480 Speaker 1: care too much. I would say, uh, the most volatile 211 00:10:25,600 --> 00:10:27,760 Speaker 1: day in the financial markets, it's the first Friday of 212 00:10:27,800 --> 00:10:29,880 Speaker 1: the month when the jobs report is released. But it's 213 00:10:29,920 --> 00:10:33,480 Speaker 1: gotten less volatile. The markets in general have gotten les volatile, 214 00:10:33,559 --> 00:10:37,560 Speaker 1: which is a whole separate puzzle. But in general there's 215 00:10:37,600 --> 00:10:39,960 Speaker 1: more news released when the job's report comes out than 216 00:10:40,000 --> 00:10:42,360 Speaker 1: on other days. That's what the markets responding to. I 217 00:10:42,360 --> 00:10:46,880 Speaker 1: think it probably overreacts um but it sets the pace 218 00:10:46,960 --> 00:10:50,160 Speaker 1: for the rest of the month. And I know when 219 00:10:50,160 --> 00:10:51,800 Speaker 1: I worked at the White House, if we had a 220 00:10:51,800 --> 00:10:53,920 Speaker 1: week jobs report, it was going to be a bad 221 00:10:53,960 --> 00:10:56,120 Speaker 1: month coming up because you had to deal with questions 222 00:10:56,160 --> 00:10:58,120 Speaker 1: about how the economy was doing. But the chances of 223 00:10:58,120 --> 00:11:00,360 Speaker 1: a week Jobs Report today are pretty much nail. Yeah. 224 00:11:00,600 --> 00:11:03,480 Speaker 1: I wouldn't say no. I wouldn't say no. It depends 225 00:11:03,480 --> 00:11:07,959 Speaker 1: where you define week below a hundred fifty jobs, below 226 00:11:08,000 --> 00:11:11,880 Speaker 1: a hundred thousand jobs, there's a there's there's a reasonable chance. 227 00:11:12,040 --> 00:11:14,120 Speaker 1: So when do we start calling it the wage report 228 00:11:14,360 --> 00:11:16,040 Speaker 1: and not the jobs report? Because I feel like the 229 00:11:16,040 --> 00:11:19,520 Speaker 1: headline number almost that doesn't matter, but it's really not 230 00:11:19,559 --> 00:11:23,600 Speaker 1: what people are looking at. Excellent question, UM, and it's 231 00:11:23,640 --> 00:11:26,520 Speaker 1: not our best measure of wage pressure the Employment Costs Index. 232 00:11:26,640 --> 00:11:29,319 Speaker 1: I think it's probably a better measure of wage pressure, 233 00:11:29,480 --> 00:11:32,040 Speaker 1: more comprehensive, and I think we're gonna see a little 234 00:11:32,040 --> 00:11:33,920 Speaker 1: bit of a boost to wages this month because of 235 00:11:33,960 --> 00:11:38,680 Speaker 1: the base change moving from July to August of UM. 236 00:11:39,200 --> 00:11:41,440 Speaker 1: The top line is always going to be jobs. I 237 00:11:41,480 --> 00:11:44,280 Speaker 1: think the public can relate to jobs, they relate to 238 00:11:44,520 --> 00:11:49,920 Speaker 1: unemployment rate. The wage numbers don't necessarily apply to them. 239 00:11:50,040 --> 00:11:53,600 Speaker 1: Different parts of the workforce are seeing very different wage growth, 240 00:11:54,280 --> 00:11:56,720 Speaker 1: so I think it will always be the jobs report. 241 00:11:56,840 --> 00:11:58,880 Speaker 1: I've got to say that the monthly Pine Rolls report 242 00:11:58,920 --> 00:12:01,480 Speaker 1: has become frustrating for me on them because we seem 243 00:12:01,520 --> 00:12:05,320 Speaker 1: to be glossing over what is really impressive payrolls growth 244 00:12:05,520 --> 00:12:07,920 Speaker 1: that has been going on for years now of around 245 00:12:07,920 --> 00:12:11,200 Speaker 1: two hundred thousand added every single month. Now, I was 246 00:12:11,280 --> 00:12:13,720 Speaker 1: told more than two years ago that this would slow. 247 00:12:13,840 --> 00:12:15,959 Speaker 1: It's not. So let's talk about what the story is 248 00:12:16,000 --> 00:12:18,040 Speaker 1: actually in the headline number. What story is in the 249 00:12:18,040 --> 00:12:20,560 Speaker 1: headline number? Alan, First of all, one of those people 250 00:12:20,559 --> 00:12:22,840 Speaker 1: who told you that was probably me together with a 251 00:12:22,880 --> 00:12:25,959 Speaker 1: load of other people. And you look at our demographics, 252 00:12:25,960 --> 00:12:28,720 Speaker 1: that's what you expect, and the numbers are really striking 253 00:12:28,760 --> 00:12:31,080 Speaker 1: because we're not seeing people come back to the labor force. 254 00:12:31,160 --> 00:12:34,080 Speaker 1: Labor force participation it has been pretty stable over the 255 00:12:34,160 --> 00:12:36,679 Speaker 1: last few years. The prime age workers who may be 256 00:12:36,760 --> 00:12:40,880 Speaker 1: coming back, we're seeing demographic shifts cancel that out. So 257 00:12:40,960 --> 00:12:44,480 Speaker 1: overall participation rate has been constant. Given our demographics, given 258 00:12:44,520 --> 00:12:48,120 Speaker 1: our population growth, we only need job growth of around 259 00:12:48,120 --> 00:12:51,360 Speaker 1: a hundred twenty thousand a month to keep the unemployment 260 00:12:51,400 --> 00:12:54,280 Speaker 1: rate stable. So what's been happening is the unemployment rate 261 00:12:54,280 --> 00:12:57,720 Speaker 1: has come down more than people had expected. Uh, just 262 00:12:58,120 --> 00:13:00,880 Speaker 1: switching the puzzle. But it's the other side of the 263 00:13:00,920 --> 00:13:04,920 Speaker 1: same coin. We've had a remarkable run and less volatility. 264 00:13:04,960 --> 00:13:07,720 Speaker 1: At Leasta was mentioning in these numbers, that the report 265 00:13:07,760 --> 00:13:10,800 Speaker 1: is noisy, the numbers move around from month to month, 266 00:13:10,840 --> 00:13:14,040 Speaker 1: they get revised. Yet we've been seeing less volatility than 267 00:13:14,080 --> 00:13:18,080 Speaker 1: we normally see as well. Um So this recovery, I 268 00:13:18,120 --> 00:13:20,199 Speaker 1: told us to President Obama, this is not going to 269 00:13:20,240 --> 00:13:22,320 Speaker 1: be the strongest recovery, but it could be the longest. 270 00:13:22,600 --> 00:13:24,680 Speaker 1: And it looks on pace. If you know, we don't 271 00:13:24,720 --> 00:13:29,080 Speaker 1: have miss guided trade war. Uh, we don't shoot ourselves 272 00:13:29,080 --> 00:13:33,400 Speaker 1: in the foot. Uh. In other ways in economic policy, 273 00:13:33,400 --> 00:13:35,720 Speaker 1: this could well eclipse the Clinton recovery, which is the 274 00:13:35,720 --> 00:13:38,880 Speaker 1: longest one we've had. So one thing that was also 275 00:13:39,040 --> 00:13:41,920 Speaker 1: a misperception or something that people don't talk about, is 276 00:13:42,040 --> 00:13:46,120 Speaker 1: where the wage growth is actually coming from. My sort 277 00:13:46,160 --> 00:13:48,440 Speaker 1: of perception before digging into the numbers was that the 278 00:13:48,480 --> 00:13:51,720 Speaker 1: gap between the wealthy and the poor has been widening 279 00:13:51,760 --> 00:13:53,200 Speaker 1: and that the wage growth and just sort of in 280 00:13:53,240 --> 00:13:56,439 Speaker 1: general the benefits have been going to the upper tiers 281 00:13:56,480 --> 00:13:59,719 Speaker 1: of income earners. But that's actually not the case. And 282 00:13:59,800 --> 00:14:02,240 Speaker 1: I speaking with the chief US economists for the Conference 283 00:14:02,280 --> 00:14:04,520 Speaker 1: Board who said that the biggest wage gains are actually 284 00:14:04,520 --> 00:14:08,040 Speaker 1: being seen in blue collar jobs because people aren't going 285 00:14:08,080 --> 00:14:10,440 Speaker 1: into those they're going getting a college degree, incurring all 286 00:14:10,440 --> 00:14:12,720 Speaker 1: this deep, but they're not becoming plumbers or mechanics. Are 287 00:14:12,720 --> 00:14:15,280 Speaker 1: these other jobs that are really important? Can you give 288 00:14:15,320 --> 00:14:18,040 Speaker 1: us some insight into that. What we're seeing is the 289 00:14:18,040 --> 00:14:21,120 Speaker 1: normal cyclical pattern. So when the job market gets very tight, 290 00:14:21,560 --> 00:14:24,160 Speaker 1: the bottom tends to do better. The job market is 291 00:14:24,200 --> 00:14:27,160 Speaker 1: basically always tight for workers with a high level of skill. 292 00:14:27,720 --> 00:14:29,960 Speaker 1: When the job market gets tight, when the unemployment rate 293 00:14:30,000 --> 00:14:33,840 Speaker 1: falls below five percent, you see stronger wage growth for 294 00:14:34,320 --> 00:14:36,400 Speaker 1: workers with the high school degree with less than a 295 00:14:36,480 --> 00:14:39,680 Speaker 1: high school education, because that's the group that the job 296 00:14:39,720 --> 00:14:41,480 Speaker 1: market is really getting tight for it, and that's what 297 00:14:41,520 --> 00:14:43,400 Speaker 1: we are seeing in this recovery. That's what we saw 298 00:14:43,760 --> 00:14:46,440 Speaker 1: in the late nine nineties as well. And in the 299 00:14:46,480 --> 00:14:49,160 Speaker 1: late nine nineties that was the only time over the 300 00:14:49,240 --> 00:14:51,800 Speaker 1: last thirty years when an inequality fell in the US. 301 00:14:52,480 --> 00:14:56,520 Speaker 1: And now I'm not sure inequalities falling because although wage 302 00:14:56,520 --> 00:14:58,720 Speaker 1: inequality may be dropping a little bit because of the 303 00:14:58,760 --> 00:15:02,640 Speaker 1: tight labor market, the fact that uh financial markets are 304 00:15:02,640 --> 00:15:06,480 Speaker 1: so strong and that housing has been growing has been 305 00:15:06,520 --> 00:15:09,480 Speaker 1: causing inequality to grow. And that's probably more than offsetting 306 00:15:10,000 --> 00:15:12,400 Speaker 1: as a as as a matter of total income. What 307 00:15:12,520 --> 00:15:15,280 Speaker 1: we're seeing just with wages, and we have this discussion. 308 00:15:15,280 --> 00:15:17,320 Speaker 1: In absolute terms, we take the unemployment right and say 309 00:15:17,320 --> 00:15:19,720 Speaker 1: it has a three handle wise and wage growth higher. 310 00:15:20,320 --> 00:15:24,240 Speaker 1: Does the pace of the recovery influence the absolute number? 311 00:15:24,440 --> 00:15:26,200 Speaker 1: If this is going to be long and shallow in 312 00:15:26,280 --> 00:15:28,960 Speaker 1: terms of the recovery, does that influence what happens with 313 00:15:29,000 --> 00:15:32,320 Speaker 1: wage growth. That's a great question. We really don't know 314 00:15:32,440 --> 00:15:35,720 Speaker 1: because we haven't had other recoveries like this. Probably the 315 00:15:35,760 --> 00:15:38,520 Speaker 1: one that comes closest was in the nineties, and there 316 00:15:38,520 --> 00:15:40,840 Speaker 1: when the unemployment rate up below five percent, we saw 317 00:15:40,960 --> 00:15:44,360 Speaker 1: stronger wage growth. Here, it looks like wage growth is 318 00:15:44,400 --> 00:15:46,200 Speaker 1: a point point and a half below what we would 319 00:15:46,200 --> 00:15:49,240 Speaker 1: expect from what we saw in the nineties. Uh. And 320 00:15:50,160 --> 00:15:52,800 Speaker 1: it is a mystery, especially in the last year when 321 00:15:52,960 --> 00:15:55,800 Speaker 1: wage growth didn't even keep up with inflation. Yeah, Professor, 322 00:15:55,840 --> 00:15:57,320 Speaker 1: I know you've got to run, gotta run to TV. 323 00:15:57,680 --> 00:15:59,960 Speaker 1: He's great for us. On Payrolls Friday, you actually read 324 00:16:00,000 --> 00:16:02,240 Speaker 1: it's the payrolls report that drops eight thirty and he 325 00:16:02,280 --> 00:16:04,400 Speaker 1: does that live on CB. So, professor, thank you very 326 00:16:04,440 --> 00:16:07,320 Speaker 1: much for dropping by the radio studio. Professor Alan Krueger, 327 00:16:07,400 --> 00:16:23,560 Speaker 1: Princeton University, Professor, how about those numbers LEASA round Its Wow? 328 00:16:23,800 --> 00:16:26,440 Speaker 1: Really interesting you are seeing a sell off sort of 329 00:16:26,440 --> 00:16:29,760 Speaker 1: accelerating within the US treasure market, as you said, across 330 00:16:29,800 --> 00:16:32,240 Speaker 1: the curve. I want to just get a quick reaction 331 00:16:32,520 --> 00:16:36,080 Speaker 1: from Jim Glassman, JPMorgan Chase Commercial Banking head economist. Jim, 332 00:16:36,080 --> 00:16:38,880 Speaker 1: what was your take? Solid report? And you know it 333 00:16:38,880 --> 00:16:42,440 Speaker 1: can't be surprised about solid job reports. Job of claims 334 00:16:42,440 --> 00:16:44,400 Speaker 1: continue to come down, so they're telling us there's something 335 00:16:44,440 --> 00:16:46,240 Speaker 1: good going on in the economy. I think the real 336 00:16:46,280 --> 00:16:49,360 Speaker 1: focus now shifting to the way side. This moderate wage 337 00:16:49,360 --> 00:16:51,640 Speaker 1: trend has been making people think, well, maybe the FED 338 00:16:52,000 --> 00:16:54,120 Speaker 1: might hold back a little bit now and then. But 339 00:16:54,160 --> 00:16:56,480 Speaker 1: I think what we're beginning to see is that wage trends, 340 00:16:56,800 --> 00:16:58,640 Speaker 1: like a lot of businesses have been telling us, are 341 00:16:58,640 --> 00:17:00,680 Speaker 1: starting to pick up. So this is tow me good news. 342 00:17:01,040 --> 00:17:03,480 Speaker 1: It means the economy is starting to behave as you 343 00:17:03,480 --> 00:17:05,720 Speaker 1: would think and workers are doing really well. Jim, how 344 00:17:05,840 --> 00:17:08,920 Speaker 1: we're getting payroll's growth of north of two with the 345 00:17:08,960 --> 00:17:12,120 Speaker 1: participation right not going up, it's just come down. Yeah. 346 00:17:12,119 --> 00:17:14,280 Speaker 1: Pretty fascinating, isn't it. And I think it's a reminder 347 00:17:14,320 --> 00:17:16,800 Speaker 1: about something that we were talking about for years. Uh, 348 00:17:16,880 --> 00:17:19,080 Speaker 1: there were a lot of folks who were you know 349 00:17:19,080 --> 00:17:21,239 Speaker 1: sort of hidden unemployment, and I think what's happening is 350 00:17:21,520 --> 00:17:23,800 Speaker 1: the strong economy is pulling people back. We still have 351 00:17:23,840 --> 00:17:27,200 Speaker 1: about a million young people who dropped out of the 352 00:17:27,240 --> 00:17:29,720 Speaker 1: market and went back to school. You still have a 353 00:17:29,800 --> 00:17:32,240 Speaker 1: large number of people working part time, although it's getting 354 00:17:32,240 --> 00:17:34,359 Speaker 1: back to normal. And I'll bet you a couple of 355 00:17:34,400 --> 00:17:36,479 Speaker 1: years now we're going to find out that all this 356 00:17:36,800 --> 00:17:40,640 Speaker 1: focus on the job situation is drawing people from other 357 00:17:40,760 --> 00:17:42,600 Speaker 1: parts of the world. And when people hear that there 358 00:17:42,640 --> 00:17:45,840 Speaker 1: are jobs somewhere, we tend to find immigrations picking up. 359 00:17:45,880 --> 00:17:48,560 Speaker 1: And I'll bet you we don't know the data through 360 00:17:48,600 --> 00:17:50,480 Speaker 1: but but through two thousand and sixteen, but I'll bet 361 00:17:50,520 --> 00:17:53,280 Speaker 1: just some of this is reflecting a shift going on 362 00:17:53,400 --> 00:17:57,080 Speaker 1: in the immigration flows, legal immigration. Jim Glassman, thank you 363 00:17:57,119 --> 00:17:58,359 Speaker 1: so much for being with us for all of your 364 00:17:58,359 --> 00:18:01,600 Speaker 1: insights this morning. Truly a pleasure and really interesting thought 365 00:18:01,640 --> 00:18:04,199 Speaker 1: there to end on about immigration that we are probably 366 00:18:04,200 --> 00:18:07,240 Speaker 1: getting more than some people realized. Jim Glassman, JPMorgan Chase 367 00:18:07,240 --> 00:18:11,560 Speaker 1: Commercial Banking head economist. We want to get more insights now, 368 00:18:11,920 --> 00:18:13,720 Speaker 1: of course, not from Jonathan Farrell because he has to 369 00:18:13,760 --> 00:18:16,639 Speaker 1: run off to television. I'm going I will bring you 370 00:18:16,640 --> 00:18:18,639 Speaker 1: that interview with Larry Cartelo in about an hour and 371 00:18:18,720 --> 00:18:21,119 Speaker 1: tminous time. I am very much looking forward to it. 372 00:18:21,200 --> 00:18:22,800 Speaker 1: We will be listening to it, and I will give 373 00:18:22,800 --> 00:18:28,400 Speaker 1: you a full critique afterwards anytime. I know that you've 374 00:18:28,400 --> 00:18:30,320 Speaker 1: been waiting for that. I want to bring in Betsy Stevenson, 375 00:18:30,480 --> 00:18:33,760 Speaker 1: University of Michigan professor and former chief Economists of the 376 00:18:33,840 --> 00:18:37,560 Speaker 1: U S Department of Labor to get a reaction on 377 00:18:37,920 --> 00:18:40,120 Speaker 1: the job's report. And and really I want to follow 378 00:18:40,200 --> 00:18:42,879 Speaker 1: up on what Jim was saying. Are we getting more immigration? 379 00:18:42,960 --> 00:18:44,879 Speaker 1: Is that where we're getting all of these new jobs? 380 00:18:45,160 --> 00:18:49,560 Speaker 1: And uh, do you expect that to continue? So? Um no. 381 00:18:49,760 --> 00:18:53,960 Speaker 1: I have a different take on the participation rate coming down, 382 00:18:54,240 --> 00:18:56,600 Speaker 1: and it's kind of a nerdy statistical take, which is that, 383 00:18:57,280 --> 00:18:59,920 Speaker 1: you know, when we get this employment report, they're pulling 384 00:19:00,119 --> 00:19:03,439 Speaker 1: two different surveys. They're they're talking to businesses asking them 385 00:19:03,480 --> 00:19:06,120 Speaker 1: about who they've got on payroll, who they're paying, how 386 00:19:06,119 --> 00:19:09,520 Speaker 1: many workers they have, And then they're surveying helpful kind 387 00:19:09,560 --> 00:19:12,000 Speaker 1: of asking people, did you have a job, were you working, 388 00:19:12,240 --> 00:19:14,720 Speaker 1: how much did you earn? Those kind of things, And 389 00:19:14,760 --> 00:19:17,840 Speaker 1: then we compare these two surveys. Ideally, they should tell 390 00:19:17,920 --> 00:19:20,240 Speaker 1: us the same thing, and every once in a while 391 00:19:20,280 --> 00:19:23,000 Speaker 1: they don't. I think this report this month, it is 392 00:19:23,040 --> 00:19:26,320 Speaker 1: a solid report. I'm gonna agree there. Um, you know, 393 00:19:26,320 --> 00:19:28,440 Speaker 1: we're seeing the same kind of thing we normally see. 394 00:19:28,600 --> 00:19:30,399 Speaker 1: But there is a weakness here, which is in the 395 00:19:30,480 --> 00:19:34,280 Speaker 1: Helphold survey, people told us that they had fewer jobs. 396 00:19:34,640 --> 00:19:37,359 Speaker 1: That's not that immigration or something else. That's just this 397 00:19:37,600 --> 00:19:41,439 Speaker 1: data showed fewer employed people. When they went out and 398 00:19:41,440 --> 00:19:43,520 Speaker 1: they surveyed people and they said, do you have a job? 399 00:19:43,880 --> 00:19:46,719 Speaker 1: We saw big job loss this month in that household survey. 400 00:19:47,119 --> 00:19:50,480 Speaker 1: That's unusual. What is unusual for them to be in 401 00:19:50,520 --> 00:19:54,320 Speaker 1: different directions. And it's also the case that every month 402 00:19:54,440 --> 00:19:58,040 Speaker 1: I compare the job growth to employment growth we see 403 00:19:58,040 --> 00:20:01,119 Speaker 1: in one survey, the household survey, with that headline number. 404 00:20:01,520 --> 00:20:04,600 Speaker 1: Sometimes the household survey says, hey, that headline number is 405 00:20:04,640 --> 00:20:06,919 Speaker 1: stronger than you've even realize, and we've seen that in 406 00:20:06,960 --> 00:20:10,240 Speaker 1: recent funds. This month is actually saying something different, which 407 00:20:10,240 --> 00:20:12,560 Speaker 1: is that headline number is weaker than you realize. If 408 00:20:12,560 --> 00:20:15,400 Speaker 1: we aberg in just a little bit of the information 409 00:20:15,440 --> 00:20:17,840 Speaker 1: we're getting out of the household ture really interesting and 410 00:20:17,880 --> 00:20:20,360 Speaker 1: I want to continue talking about what numbers we ought 411 00:20:20,400 --> 00:20:22,480 Speaker 1: to be paying attention to and what the real picture is. 412 00:20:22,480 --> 00:20:24,040 Speaker 1: I do want to just bring you some breaking news. 413 00:20:24,119 --> 00:20:28,400 Speaker 1: Tesla's chief accounting officer, David Morton is resigning. This follows 414 00:20:28,560 --> 00:20:33,600 Speaker 1: the video of Helon Musk smoking marijuana on a comedy show. 415 00:20:33,880 --> 00:20:36,320 Speaker 1: But that is not clear that there's any relation whatsoever. 416 00:20:36,359 --> 00:20:39,840 Speaker 1: Stock down more than four percent in response, So we 417 00:20:39,840 --> 00:20:42,520 Speaker 1: will bring you more as we hear it again. Tesla 418 00:20:42,600 --> 00:20:46,080 Speaker 1: chief accounting Officer Dave Morton resigning. A lot of turnover 419 00:20:46,480 --> 00:20:50,560 Speaker 1: in the c suite over at Tesla. Bessy Stevenson with 420 00:20:50,680 --> 00:20:53,439 Speaker 1: US University of Michigan professor and former chief economist of 421 00:20:53,520 --> 00:20:56,960 Speaker 1: the US Department of Labor UM. So, Betsy were just 422 00:20:57,000 --> 00:21:02,080 Speaker 1: saying that probably the headline number is weaker than we realize. 423 00:21:02,320 --> 00:21:05,040 Speaker 1: Wage gains so not so much, and this came in 424 00:21:05,240 --> 00:21:08,000 Speaker 1: better than people expected, and perhaps this answers the question 425 00:21:08,320 --> 00:21:10,480 Speaker 1: why have we not seen faster wage growth? Well, maybe 426 00:21:10,520 --> 00:21:14,840 Speaker 1: we're getting it now now, So you know, I think 427 00:21:14,880 --> 00:21:17,760 Speaker 1: you need a longer time period to be able to 428 00:21:17,760 --> 00:21:20,359 Speaker 1: to say that we definitely, uh, this is good numbers 429 00:21:20,359 --> 00:21:23,000 Speaker 1: that we're seeing this month. Um. But if you look 430 00:21:23,040 --> 00:21:25,720 Speaker 1: over the twelve months, that's up two point nine percent. 431 00:21:26,400 --> 00:21:29,200 Speaker 1: That's a little that's no nominal. We have to adjust 432 00:21:29,200 --> 00:21:32,320 Speaker 1: that for inflation. And what we saw last month was 433 00:21:32,640 --> 00:21:36,920 Speaker 1: no real wage games. So just last month, the increase 434 00:21:36,960 --> 00:21:40,400 Speaker 1: in wages was completely offset by the increase of prices. 435 00:21:40,440 --> 00:21:43,359 Speaker 1: So I wouldn't say, you know, look at this report 436 00:21:43,400 --> 00:21:46,679 Speaker 1: and say, hooray, um, you know the wage games are coming, 437 00:21:47,040 --> 00:21:49,560 Speaker 1: because we have one month of data following a month 438 00:21:49,560 --> 00:21:52,919 Speaker 1: in which we had zero real wage games. So I 439 00:21:52,960 --> 00:21:55,360 Speaker 1: think there's still an underlying puzzle, which is, why does 440 00:21:55,400 --> 00:22:00,439 Speaker 1: this tight labor market not lead employers to hire more people? 441 00:22:00,680 --> 00:22:05,080 Speaker 1: You know, why are um employers not saying the way 442 00:22:05,080 --> 00:22:06,920 Speaker 1: for me to recruit, The way for me to get 443 00:22:06,920 --> 00:22:09,679 Speaker 1: people in this tight laber market is to offer a 444 00:22:09,760 --> 00:22:12,600 Speaker 1: somewhat tweeter package. You know, it's really interesting, is I 445 00:22:12,600 --> 00:22:15,480 Speaker 1: hear you talk, Betsy. It seems like the report that 446 00:22:15,520 --> 00:22:19,119 Speaker 1: I saw looked very positive, And what you're saying is 447 00:22:19,160 --> 00:22:22,119 Speaker 1: if you look at a lot of different data, it 448 00:22:22,240 --> 00:22:25,639 Speaker 1: can be misleading. Just how rosie of a picture it is. 449 00:22:26,200 --> 00:22:29,919 Speaker 1: Do you think that the market has currently overestimated the 450 00:22:29,960 --> 00:22:35,399 Speaker 1: strength of this market? So, you know, I think every 451 00:22:35,440 --> 00:22:38,119 Speaker 1: month the market overreacts a little bit to the data 452 00:22:38,160 --> 00:22:40,879 Speaker 1: that comes out. And that's because the you know, the 453 00:22:41,000 --> 00:22:43,720 Speaker 1: data we get, it's painting a picture that's really dependent 454 00:22:43,800 --> 00:22:46,159 Speaker 1: on what's the data we've seen over the last you know, 455 00:22:46,200 --> 00:22:50,919 Speaker 1: twelve months, and UM, you know what I see the 456 00:22:51,000 --> 00:22:55,639 Speaker 1: broad picture and this report is we've had record job 457 00:22:55,680 --> 00:22:59,480 Speaker 1: gains for you know, more the longest spell of job 458 00:22:59,520 --> 00:23:03,439 Speaker 1: growth in history. Um, that's continuing. We see that in 459 00:23:03,480 --> 00:23:06,399 Speaker 1: this report. But when I look at a headline number 460 00:23:06,680 --> 00:23:10,159 Speaker 1: that's two hundred thousand, and then I see, um, you know, 461 00:23:10,240 --> 00:23:12,520 Speaker 1: I look at the household number which shows four hundred 462 00:23:12,560 --> 00:23:15,919 Speaker 1: thousand jobs. Lolossed, I'm like, whoa is this? Is this 463 00:23:16,000 --> 00:23:19,680 Speaker 1: labor market potentially starting to slow? I don't know. We'll 464 00:23:19,680 --> 00:23:23,000 Speaker 1: need to take a look at what next month numbers are. UM, 465 00:23:23,280 --> 00:23:26,040 Speaker 1: but I do think that if you dig into this report, 466 00:23:26,080 --> 00:23:28,720 Speaker 1: you see some things that are a little bit disturbing. Um. 467 00:23:28,840 --> 00:23:32,880 Speaker 1: We saw the unemployment rate for the lowest skilled workers, 468 00:23:33,280 --> 00:23:38,840 Speaker 1: those with only a high school degree, chickup. Um. We saw, um, 469 00:23:39,080 --> 00:23:43,600 Speaker 1: the unemployment rate of people with only some college also, 470 00:23:43,920 --> 00:23:48,440 Speaker 1: uh go also increase. So there were you know, some 471 00:23:48,520 --> 00:23:51,240 Speaker 1: people in this report who aren't doing quite as well 472 00:23:51,800 --> 00:23:55,800 Speaker 1: UM as others. So there's this is not the strong 473 00:23:56,000 --> 00:23:59,400 Speaker 1: you know, this is not the strongest report I've seen. UM. 474 00:23:59,440 --> 00:24:02,800 Speaker 1: We also saw some revision downwards. That's also a little 475 00:24:02,840 --> 00:24:07,679 Speaker 1: bit disturbing. So last month was revised down by forty 476 00:24:07,720 --> 00:24:11,560 Speaker 1: tho jobs. Forty jobs we lost. July or sorry, June 477 00:24:11,560 --> 00:24:14,560 Speaker 1: was revised down by forty jobs. July was revised down 478 00:24:14,560 --> 00:24:17,720 Speaker 1: by ten thousand jobs. You know, Taking it all together, 479 00:24:17,880 --> 00:24:20,280 Speaker 1: this is a slightly weaker report than I was expecting. 480 00:24:20,560 --> 00:24:24,240 Speaker 1: But again, I don't want to overestimate, um the fact 481 00:24:24,240 --> 00:24:27,920 Speaker 1: that we are really, you know, in a consistent, long 482 00:24:28,040 --> 00:24:31,760 Speaker 1: period of expansion and jobs. Betty Stevenson, wonderful to get 483 00:24:31,800 --> 00:24:34,879 Speaker 1: your perspective. Thank you so much, Betty Stevenson, University of 484 00:24:34,880 --> 00:24:39,359 Speaker 1: Michigan Professor and former chief economist of the US Department 485 00:24:39,520 --> 00:24:57,479 Speaker 1: of Labor. We are on Tesla watch, of course, as 486 00:24:57,520 --> 00:25:01,280 Speaker 1: we are as this drama unfold and the crazy gets 487 00:25:01,280 --> 00:25:05,040 Speaker 1: even more crazy. But we're also on Emerging markets watch 488 00:25:05,160 --> 00:25:08,840 Speaker 1: because there's a big debate raging beneath the surface. Are 489 00:25:08,880 --> 00:25:12,080 Speaker 1: we just seeing a pause in what has been otherwise 490 00:25:12,359 --> 00:25:15,199 Speaker 1: a pretty good stretch of years for emerging markets? Or 491 00:25:15,240 --> 00:25:18,240 Speaker 1: is this the beginning of a larger denuement that will 492 00:25:18,280 --> 00:25:21,680 Speaker 1: take place, and that stems from the raising interest rates 493 00:25:22,040 --> 00:25:26,119 Speaker 1: in UH in the United States. Joining US now is 494 00:25:26,160 --> 00:25:29,800 Speaker 1: the person who knows everything about emerging markets credit, in particular, 495 00:25:29,880 --> 00:25:33,639 Speaker 1: Damian Sassaur, who heads all things emerging markets and credit 496 00:25:33,640 --> 00:25:36,480 Speaker 1: related for US at Bloomberg Intelligence. Damien, thank you so 497 00:25:36,520 --> 00:25:38,440 Speaker 1: much for being with us. Thank you. Yeah. No, I mean, 498 00:25:38,440 --> 00:25:40,159 Speaker 1: in terms of where we are in emerging markets and 499 00:25:40,160 --> 00:25:42,000 Speaker 1: whether or not there's more pain ahead, I think you 500 00:25:42,119 --> 00:25:43,600 Speaker 1: just have to kind of look at history and and 501 00:25:44,040 --> 00:25:47,040 Speaker 1: look em always overshoots, overshoots to the upside and downside. 502 00:25:47,040 --> 00:25:48,600 Speaker 1: We've been saying that all week. But I think where 503 00:25:48,640 --> 00:25:50,960 Speaker 1: we are is if you just look, we're pretty much 504 00:25:51,000 --> 00:25:53,880 Speaker 1: back to you know, ten fifteen year averages in terms 505 00:25:53,880 --> 00:25:55,760 Speaker 1: of yields and performance and what have you. And so 506 00:25:56,359 --> 00:25:58,919 Speaker 1: if if E M is indeed going to overshoot to 507 00:25:58,960 --> 00:26:01,359 Speaker 1: the downside here, we've still got some pain left ahead 508 00:26:01,400 --> 00:26:03,040 Speaker 1: of us, I think. And so that's what we're looking at. 509 00:26:03,040 --> 00:26:05,680 Speaker 1: And we're looking at a lot of different technical measures. 510 00:26:05,680 --> 00:26:07,320 Speaker 1: PIM and I had kind of gone through them yesterday, 511 00:26:07,320 --> 00:26:13,280 Speaker 1: like CROSSOVERSKEW, refinancing, the maturity wall, bid offer spreads. Well, 512 00:26:13,359 --> 00:26:18,200 Speaker 1: I'm sorry, crossover ski on radio. Hold on, let's let's 513 00:26:18,240 --> 00:26:20,760 Speaker 1: just dissect this just a little bit. Let's start. I 514 00:26:20,800 --> 00:26:23,920 Speaker 1: want to start if you don't mind with you explaining 515 00:26:24,240 --> 00:26:27,000 Speaker 1: how much or give us an idea of how much 516 00:26:27,119 --> 00:26:32,160 Speaker 1: corporate debt, particularly in Turkey and in Turkish banks comes 517 00:26:32,359 --> 00:26:35,680 Speaker 1: due in the next eighteen to twenty four months. Because 518 00:26:35,680 --> 00:26:38,320 Speaker 1: this is this I understand that is not object to 519 00:26:38,359 --> 00:26:41,560 Speaker 1: whether you're buying or selling, you know, Turkish lereau or 520 00:26:41,680 --> 00:26:45,120 Speaker 1: US dollars. This is something that these banks have to face. Yeah, 521 00:26:46,800 --> 00:26:49,679 Speaker 1: we're looking for where the most acute refinancing pretches are 522 00:26:49,680 --> 00:26:51,959 Speaker 1: and e M corporate credit. And so if you do 523 00:26:52,040 --> 00:26:55,560 Speaker 1: look at Turkey, nineteen point four billion U s dollars 524 00:26:55,560 --> 00:26:58,639 Speaker 1: in debt maturities will mature over the next eighteen months alone, 525 00:26:58,680 --> 00:27:03,280 Speaker 1: eighteen months alone, that's all coming coming to exactly now. 526 00:27:03,320 --> 00:27:06,600 Speaker 1: If you think about, um, you know where that economy 527 00:27:06,760 --> 00:27:08,880 Speaker 1: is and where that financial sector is, and you look 528 00:27:08,920 --> 00:27:12,479 Speaker 1: at what makes up all of those maturities, more than 529 00:27:12,520 --> 00:27:14,119 Speaker 1: half of it are the banks, right, So it's Hawk 530 00:27:14,160 --> 00:27:18,440 Speaker 1: bank is bunk guarantee, YAPPI, credi, and the financial sector 531 00:27:18,440 --> 00:27:20,360 Speaker 1: as goes the financial sector in many of these emerging 532 00:27:20,400 --> 00:27:23,679 Speaker 1: market economies. So goes, so goes the country. And so 533 00:27:23,760 --> 00:27:25,439 Speaker 1: if financial where they're going to get the money to 534 00:27:25,480 --> 00:27:30,040 Speaker 1: either roll the debt over or pay the debt back, 535 00:27:30,280 --> 00:27:33,800 Speaker 1: which doesn't seem likely, But they've got to do one 536 00:27:33,880 --> 00:27:35,919 Speaker 1: or two things right, or maybe three things. Maybe they 537 00:27:35,920 --> 00:27:39,200 Speaker 1: can restructure. But then don't those loans, those debts on 538 00:27:39,240 --> 00:27:43,800 Speaker 1: someone else's books turn into really impels, like non performing loans. Well, 539 00:27:43,800 --> 00:27:46,200 Speaker 1: they've already pivoted to the East. So so one would 540 00:27:46,240 --> 00:27:49,719 Speaker 1: assume that they might look to Russia or perhaps China 541 00:27:50,040 --> 00:27:51,960 Speaker 1: as a perhaps a new source of funding to help 542 00:27:52,080 --> 00:27:54,480 Speaker 1: roll over some of that debt. But you know, I 543 00:27:54,520 --> 00:27:56,520 Speaker 1: don't think that's gonna I think I don't think that's 544 00:27:56,520 --> 00:27:58,440 Speaker 1: gonna go over well with a lot of their Western creditors. 545 00:27:58,440 --> 00:28:02,239 Speaker 1: And look, I mean if if if one finds you know, 546 00:28:02,359 --> 00:28:04,239 Speaker 1: religion I guess, or whatever you want to call it, 547 00:28:04,280 --> 00:28:06,239 Speaker 1: and comes to terms with the fact that he has 548 00:28:06,240 --> 00:28:08,400 Speaker 1: a lot of Western creditors that he needs to appease 549 00:28:08,440 --> 00:28:11,119 Speaker 1: because they have a lot of dollar dead outstanding, and 550 00:28:11,160 --> 00:28:13,360 Speaker 1: he tries to make nice with them, well, then look, 551 00:28:13,400 --> 00:28:15,399 Speaker 1: I mean, you're absolutely right they can and they have 552 00:28:15,520 --> 00:28:17,600 Speaker 1: the banks have started to buy back their dead at 553 00:28:17,600 --> 00:28:20,080 Speaker 1: fifty sixty cents on the dollar. Already you are seeing that, 554 00:28:20,160 --> 00:28:22,240 Speaker 1: but you can see a lot more of that, especially 555 00:28:22,640 --> 00:28:24,720 Speaker 1: if they get some of the larger fund managers who 556 00:28:24,720 --> 00:28:28,360 Speaker 1: are positioned their back on side, like that black Rock, Fidelity, Ashmore, 557 00:28:28,440 --> 00:28:31,000 Speaker 1: you name it. So yeah, well there there's also another 558 00:28:31,040 --> 00:28:33,800 Speaker 1: big question here at going beyond just Turkey and beyond 559 00:28:33,800 --> 00:28:37,520 Speaker 1: the fundamentals which some people are saying aren't necessarily reflected 560 00:28:37,520 --> 00:28:38,840 Speaker 1: in the sell off. I mean, this is sort of 561 00:28:38,880 --> 00:28:41,840 Speaker 1: beyond just what people are looking at and extrapolating from 562 00:28:41,840 --> 00:28:44,960 Speaker 1: this seems to be more covering losses and a little 563 00:28:45,000 --> 00:28:47,440 Speaker 1: bit of just fear of the unknown. A big question 564 00:28:47,440 --> 00:28:49,920 Speaker 1: mark has been China and just the strength of it, 565 00:28:50,040 --> 00:28:53,640 Speaker 1: especially in light of some of the UH rising trade 566 00:28:53,680 --> 00:28:58,360 Speaker 1: tensions with the US potentially imposing tariffs and in additional 567 00:28:58,360 --> 00:29:02,240 Speaker 1: two billion dollars of goods from How important is China 568 00:29:02,280 --> 00:29:04,680 Speaker 1: in this equation because we have not seen that shoe 569 00:29:04,760 --> 00:29:08,080 Speaker 1: drop yet. It's absolutely important. And you know, I'm I'm 570 00:29:08,080 --> 00:29:11,120 Speaker 1: more of a Hank mcveig Blackstone guy when it comes 571 00:29:11,160 --> 00:29:13,320 Speaker 1: to China. I think China's had its hard landing already. 572 00:29:13,320 --> 00:29:15,360 Speaker 1: I mean, you gotta think China was growing the size 573 00:29:15,400 --> 00:29:18,240 Speaker 1: of its economy. It was growing at you know, upwards 574 00:29:18,240 --> 00:29:21,800 Speaker 1: of high teens per year GDP for some time. It's 575 00:29:21,840 --> 00:29:24,760 Speaker 1: now down to six pc and declining. So they've really 576 00:29:24,800 --> 00:29:27,360 Speaker 1: come off a long way, if you adhere to that. Well, 577 00:29:27,360 --> 00:29:29,080 Speaker 1: but hold on a second, But would you call this 578 00:29:29,160 --> 00:29:31,200 Speaker 1: a hard landing because I would say that this if 579 00:29:31,200 --> 00:29:34,640 Speaker 1: they've already had their big drop, it's been the softest 580 00:29:34,640 --> 00:29:37,640 Speaker 1: big drop ever. Well look, I mean what what I 581 00:29:37,640 --> 00:29:40,960 Speaker 1: guess I'm arguing is that with all of the tariff 582 00:29:41,000 --> 00:29:43,760 Speaker 1: talk and all of the stuff that's coming through specifically, now, 583 00:29:44,200 --> 00:29:47,160 Speaker 1: um yeah, we're gonna see GDP decline in China, we all. 584 00:29:47,720 --> 00:29:51,360 Speaker 1: But at the same breath they've paused their de leveraging campaign, 585 00:29:51,440 --> 00:29:56,320 Speaker 1: so they are now trying to foster liquidity domestically, which 586 00:29:56,440 --> 00:29:58,320 Speaker 1: by the way, has been tightening quite considerably. I mean, 587 00:29:58,320 --> 00:30:00,560 Speaker 1: that's why e M is really off, because Asian financial 588 00:30:00,600 --> 00:30:03,560 Speaker 1: conditions have tightened like crazy, and where here in the US, 589 00:30:03,640 --> 00:30:07,520 Speaker 1: even though the FED is tightening, financial conditions are very loose, 590 00:30:07,560 --> 00:30:09,360 Speaker 1: if not looser than they were just a year ago. 591 00:30:09,760 --> 00:30:12,680 Speaker 1: So you know, that's the divide, and that's the disconnect 592 00:30:12,720 --> 00:30:15,560 Speaker 1: and I think that's what's driving performance in bonds and 593 00:30:15,600 --> 00:30:17,600 Speaker 1: equities and the divergence between the US and the rest 594 00:30:17,640 --> 00:30:19,600 Speaker 1: of the world. You know, I gotta say him, what 595 00:30:19,720 --> 00:30:22,840 Speaker 1: Damian just said is really big because it goes against 596 00:30:22,880 --> 00:30:25,280 Speaker 1: a lot of the conventional wisdom here that is tightening 597 00:30:25,280 --> 00:30:28,560 Speaker 1: FED policy that's driving to sell off. Damian points out 598 00:30:28,600 --> 00:30:31,320 Speaker 1: something way more interesting to me, which is that this 599 00:30:31,360 --> 00:30:35,040 Speaker 1: really has to do with China tightening and the banks. 600 00:30:35,120 --> 00:30:37,200 Speaker 1: That makes sense. I think it does. I mean, look 601 00:30:37,520 --> 00:30:40,200 Speaker 1: as they China is the biggest trade partner for emerging 602 00:30:40,240 --> 00:30:42,200 Speaker 1: market economies globally. It used to be the U S 603 00:30:42,240 --> 00:30:46,160 Speaker 1: sometime ago, but that's changed. And so when China catches cold, 604 00:30:46,240 --> 00:30:48,320 Speaker 1: the rest of them sneezes or maybe have that backwards. 605 00:30:48,400 --> 00:30:50,160 Speaker 1: But you know what I'm trying to say, I mean, 606 00:30:50,400 --> 00:30:52,560 Speaker 1: e M has definitely got one. I mean, they are 607 00:30:52,600 --> 00:30:55,560 Speaker 1: definitely beholden to China. Look at commodities, right, I mean 608 00:30:55,880 --> 00:30:57,800 Speaker 1: back in the rally last year or the last two 609 00:30:57,920 --> 00:31:00,400 Speaker 1: or three years, commodities were ripping to the US side, 610 00:31:00,400 --> 00:31:03,800 Speaker 1: specifically industrial metals like copper and nicol and what have you. 611 00:31:04,120 --> 00:31:06,239 Speaker 1: Now you know, the red metals in the dumpster, right, 612 00:31:06,280 --> 00:31:08,120 Speaker 1: I mean you had Mike mcloughnan here not long ago. 613 00:31:08,160 --> 00:31:09,880 Speaker 1: He's the first one to tell you he's been calling for, 614 00:31:10,200 --> 00:31:12,320 Speaker 1: you know, a turning copper for some time, but it's 615 00:31:12,320 --> 00:31:15,960 Speaker 1: not coming. And it's the same thing with emerging markets, Damien. 616 00:31:16,080 --> 00:31:22,959 Speaker 1: We've all had to become instant experts in Turkey, South Africa, Argentina, 617 00:31:23,080 --> 00:31:27,200 Speaker 1: and I confess I feel a little bit, uh, you know, uneasy, 618 00:31:27,200 --> 00:31:29,240 Speaker 1: pretending that I know, you know, it's like an inch 619 00:31:29,320 --> 00:31:31,920 Speaker 1: deep and a mile wide. But are we going to 620 00:31:32,000 --> 00:31:37,080 Speaker 1: have to become experts in Indonesia, in Malaysia, in Czech 621 00:31:37,080 --> 00:31:42,080 Speaker 1: Republic because it seems as though those countries and others 622 00:31:42,880 --> 00:31:48,000 Speaker 1: are raising their interest rates in order to forcestall a 623 00:31:49,960 --> 00:31:54,880 Speaker 1: exit of foreign investment money, and as a result, they 624 00:31:54,960 --> 00:31:58,040 Speaker 1: raise interest rates in their own economies, which is not 625 00:31:58,200 --> 00:32:01,760 Speaker 1: a good thing for an economy that's slowing or not 626 00:32:01,880 --> 00:32:05,800 Speaker 1: growing very round. The big theme that that foreign investors 627 00:32:05,840 --> 00:32:08,720 Speaker 1: that drew them to emerging markets originally was the scope 628 00:32:08,760 --> 00:32:11,560 Speaker 1: to which these local central banks could ease rates to 629 00:32:11,640 --> 00:32:15,800 Speaker 1: facilitate GDP growth because there wasn't a acceleration and inflation 630 00:32:15,920 --> 00:32:18,440 Speaker 1: correct because the US, but we had interest rates globally 631 00:32:18,480 --> 00:32:20,240 Speaker 1: at all time, loads I mean that gative interest rates 632 00:32:20,240 --> 00:32:23,120 Speaker 1: in most markets and so so now that that's moving 633 00:32:23,160 --> 00:32:26,600 Speaker 1: in the other direction, obviously emerging markets that that they 634 00:32:26,760 --> 00:32:30,360 Speaker 1: no longer resonates. Right, emerging markets, central banks are tightening rates. 635 00:32:30,400 --> 00:32:32,160 Speaker 1: They have to, they have to compete for They don't 636 00:32:32,160 --> 00:32:35,000 Speaker 1: have anything else to do. Really, they don't have any 637 00:32:35,040 --> 00:32:38,640 Speaker 1: other tools, right, They don't have monetary trans policy transmission 638 00:32:38,640 --> 00:32:41,160 Speaker 1: mechanisms like we do, or or for that matter, they 639 00:32:41,200 --> 00:32:44,920 Speaker 1: do have tools, but the tools, unfortunately are crude, and 640 00:32:45,320 --> 00:32:48,000 Speaker 1: you know, the transmission mechanism is not as clean. So 641 00:32:48,080 --> 00:32:50,719 Speaker 1: let me give you an example. In Indonesia, they are 642 00:32:50,760 --> 00:32:53,760 Speaker 1: now instead of having raised rates twenty five basis points 643 00:32:53,760 --> 00:32:57,959 Speaker 1: since May, they are taxing imports. You know, they are 644 00:32:58,000 --> 00:33:01,160 Speaker 1: taking you know, other sort of you know, steps to 645 00:33:01,280 --> 00:33:04,440 Speaker 1: sort of prevent capital from fleeing the economy. And when 646 00:33:04,440 --> 00:33:06,480 Speaker 1: you do that, things get muddled in a hurry. And 647 00:33:06,560 --> 00:33:09,520 Speaker 1: so that's kind of where we are. So just looking 648 00:33:09,560 --> 00:33:13,360 Speaker 1: out into your crystal ball, do you expect some forced 649 00:33:13,400 --> 00:33:17,160 Speaker 1: selling after active funds have underperformed well seasonally? We are 650 00:33:17,240 --> 00:33:20,280 Speaker 1: in the midst of the worst season for emerging markets. 651 00:33:20,320 --> 00:33:23,240 Speaker 1: I mean we're in October here getting to be We're 652 00:33:23,240 --> 00:33:28,000 Speaker 1: in September, but it's gonna be in September. There's a 653 00:33:28,040 --> 00:33:30,720 Speaker 1: seasonality to this that that is divorced from all of 654 00:33:30,760 --> 00:33:33,760 Speaker 1: what's going on. Right. Yeah, the August October three month 655 00:33:33,760 --> 00:33:36,840 Speaker 1: period has historically been the worst for emerging market assets, 656 00:33:36,880 --> 00:33:40,640 Speaker 1: become November. In November, the January period is the most 657 00:33:40,680 --> 00:33:43,160 Speaker 1: bullish so and it has been the best so And 658 00:33:43,240 --> 00:33:45,000 Speaker 1: my advice would be to take a pause, to wait 659 00:33:45,040 --> 00:33:47,200 Speaker 1: and see and prepare for November. Let's see where the 660 00:33:47,200 --> 00:33:49,800 Speaker 1: markets are then, certainly, but you know, I wouldn't want 661 00:33:49,800 --> 00:33:52,040 Speaker 1: to I wouldn't want to be long and wrong into October. 662 00:33:52,080 --> 00:33:57,000 Speaker 1: I mean, history has proved to be a killer. Wow. Okay, 663 00:33:57,760 --> 00:34:00,600 Speaker 1: And I was going to say and and the bad 664 00:34:00,680 --> 00:34:03,760 Speaker 1: news is, thanks very much. The bad news is a 665 00:34:03,800 --> 00:34:05,560 Speaker 1: lot of people have been long and wrong and for 666 00:34:05,640 --> 00:34:07,320 Speaker 1: them to reload at these levels is going to be 667 00:34:07,480 --> 00:34:12,200 Speaker 1: very difficult. Indeed, thanks very much. Damian sas our Bloomberg intelligence, 668 00:34:12,480 --> 00:34:15,920 Speaker 1: he's our emerging markets credit analysts, and he knows all 669 00:34:15,960 --> 00:34:26,239 Speaker 1: about this stuff. Thanks for listening to the Bloomberg Surveillance podcast. 670 00:34:26,600 --> 00:34:31,600 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 671 00:34:31,680 --> 00:34:36,400 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom Keane. 672 00:34:36,920 --> 00:34:40,600 Speaker 1: Before the podcast, you can always catch us worldwide. I'm 673 00:34:40,640 --> 00:34:41,520 Speaker 1: Bloomberg Radio