WEBVTT - US Jobs Roar Again as Payrolls Jump 303,000 0:00:00.080 --> 0:00:07.400 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.120 --> 0:00:47.400 the Bloomberg Terminal, and the Bloomberg Business App. Folding in 0:00:47.400 --> 0:00:50.200 the Economics into Fixed Income. Iraw Jersey joins us now 0:00:50.520 --> 0:00:54.440 from Bloomberg Intelligence. Is this job to report enough to 0:00:54.640 --> 0:00:57.680 shift the vector of ten year yields? I don't mean 0:00:57.720 --> 0:01:01.200 the nuance up to basis down three base Hira Jersey. 0:01:01.240 --> 0:01:03.480 But can we get a vector change in the ten 0:01:03.600 --> 0:01:05.800 year yield off this report? Well? 0:01:06.040 --> 0:01:08.280 I do suspect, Tom, if we get a pretty strong 0:01:08.360 --> 0:01:10.840 number that the market's going to price out, and you know, 0:01:10.880 --> 0:01:13.720 almost any chance of an early cut, so meaning even 0:01:13.720 --> 0:01:16.240 a June at this point would be early. So you 0:01:16.280 --> 0:01:17.880 know that can that can push ten years yields up 0:01:17.880 --> 0:01:22.000 another ten twelve basis points. In fact, you know, we've 0:01:22.160 --> 0:01:25.520 we've moved. Well, it's not unusual these days to get 0:01:25.560 --> 0:01:29.040 you know, eight to twelve basis point moves on on 0:01:29.120 --> 0:01:32.800 big missus or beats in ten year treasuries. So I 0:01:32.800 --> 0:01:35.400 think people are repricing things very quickly. People are very 0:01:35.480 --> 0:01:37.840 quick to get out of risk today. Whereas you know 0:01:37.880 --> 0:01:40.039 a few years ago everyone was just like happy to 0:01:40.080 --> 0:01:42.920 sit on their ten year yield even at two percent. 0:01:43.160 --> 0:01:45.880 But whereas now it's it's a matter of you know, hey, 0:01:46.120 --> 0:01:47.840 you know, do we want to own this risk going 0:01:47.880 --> 0:01:50.040 into this you know now that we've seen this number, 0:01:50.480 --> 0:01:52.960 or you know, do we want to you know, just 0:01:53.000 --> 0:01:55.000 get out, just wipe our hands of it. And I 0:01:55.360 --> 0:01:58.400 just I think we're in that ladder, at that ladder 0:01:58.440 --> 0:02:01.360 stage where where risk is just very very finicky right now. 0:02:01.480 --> 0:02:03.360 Paul ask a question because I just want to talk 0:02:03.400 --> 0:02:05.920 about Aston Villa, Brentlford, and we can't. Oh that's going 0:02:05.960 --> 0:02:07.880 to be we can't do that. Into the jobs report. 0:02:08.360 --> 0:02:10.920 Tom's looking at the fixture, which I'm not sure that 0:02:11.120 --> 0:02:15.120 football scores and fixture okay, very good, Hey, are we 0:02:15.639 --> 0:02:17.440 look at the ten year treasure here four point three 0:02:17.480 --> 0:02:19.519 one percent. Are we kind of in a trading range here? 0:02:19.680 --> 0:02:21.680 I don't know, four to four and a half percent. 0:02:21.760 --> 0:02:24.160 Is that kind of where we are here? As you 0:02:24.200 --> 0:02:24.919 look at this market? 0:02:25.639 --> 0:02:26.760 Yeah, more or less. 0:02:27.520 --> 0:02:29.959 You know that the high on the technical charts was 0:02:30.000 --> 0:02:32.320 four thirty five, and we broke that earlier this week, 0:02:32.360 --> 0:02:35.200 and and but but that was not a convincing breakout 0:02:35.720 --> 0:02:39.120 to the upside. So so I think that yields probably 0:02:39.120 --> 0:02:41.320 are falling back into that range, call it four oh 0:02:41.440 --> 0:02:44.680 five to four thirty five for now, But keep in mind, 0:02:44.919 --> 0:02:46.040 you know, the data we're going to get in a 0:02:46.040 --> 0:02:47.880 few minutes can completely change that. 0:02:48.120 --> 0:02:48.520 For sure. 0:02:48.639 --> 0:02:50.840 What does the real yield signify here? I had a 0:02:50.880 --> 0:02:54.880 two point zero two ten yure real yield IRA Jersey 0:02:54.960 --> 0:02:57.400 right now one point nine and it's back a little 0:02:57.400 --> 0:03:00.440 bit one point ninety five percent? Is that owners to 0:03:00.560 --> 0:03:02.600 American business? Well? 0:03:02.639 --> 0:03:04.200 I think that this is you know a lot of 0:03:04.240 --> 0:03:06.000 people would say that this is normal. You know, we 0:03:06.280 --> 0:03:08.680 got used to the fifteen years from you know, twenty 0:03:08.760 --> 0:03:11.680 two thousand and seven to twenty twenty two for real 0:03:11.760 --> 0:03:14.720 yields being you know, zero or negative, and now we're 0:03:15.160 --> 0:03:17.520 back at at levels that are more consistent with what 0:03:17.600 --> 0:03:20.800 occurred between the mid nineties and and the financial crisis 0:03:20.800 --> 0:03:24.160 of a little more than a decade ago. So so 0:03:24.200 --> 0:03:25.519 I think that most people would say that this is 0:03:25.560 --> 0:03:28.560 quote unquote normal. Certainly, it's it's more in the range 0:03:28.600 --> 0:03:30.519 I think of what the Federal Reserve would like to see. 0:03:31.240 --> 0:03:33.560 You know, when you look at really yields over time, 0:03:33.919 --> 0:03:36.040 you know, when really yields are here, usually still have 0:03:36.120 --> 0:03:38.120 pretty decent growth, and you're certainly seeing that in some 0:03:38.160 --> 0:03:38.600 of the data. 0:03:38.680 --> 0:03:40.520 I say with us right now, as we go one 0:03:40.520 --> 0:03:43.640 minute away from the American Johns, you've bord Lisa matel 0:03:43.800 --> 0:03:46.440 have some market news, and then we'll go beneath the 0:03:46.480 --> 0:03:48.760 headline data, Paul Streety, what are you looking at within 0:03:48.800 --> 0:03:49.280 the report? 0:03:49.440 --> 0:03:51.320 It's interesting, Tom, obviously, I'm going to be looking at 0:03:51.360 --> 0:03:54.080 the wages here. I think, you know, the average hourly earnings, 0:03:54.120 --> 0:03:56.160 you know, zero point three percent on a month to 0:03:56.200 --> 0:03:59.760 month basis, four point one percent on a yearly basis. 0:03:59.800 --> 0:04:02.160 That would be down from four point three percent last period. 0:04:02.200 --> 0:04:04.160 So yeah, kind of dovetails in with we still have 0:04:04.200 --> 0:04:06.040 decent wage growth, but it is moderating a little bit. 0:04:06.040 --> 0:04:08.920 Can I just go macro. Yeah, three point eight percent 0:04:09.120 --> 0:04:12.080 surveyed unemployment. I don't know what it's going to be, folks, 0:04:12.120 --> 0:04:15.840 But ten years ago, twenty years ago, that was like 0:04:16.000 --> 0:04:17.120 nirvana exactly. 0:04:17.120 --> 0:04:18.640 And we've been here for a long time. 0:04:19.080 --> 0:04:22.760 I mean, I'm sorry, it's it's up four percent unemployment 0:04:22.800 --> 0:04:24.719 rate forty five seconds away. Let me tell you the 0:04:24.760 --> 0:04:27.520 market benchmarks I look at when we go into this. 0:04:27.680 --> 0:04:30.159 We got to talk oil ninety one dollars a barrel 0:04:30.200 --> 0:04:33.719 on Brent crude, eighty seven dollars on West Texas intermedia. 0:04:33.760 --> 0:04:38.200 But far more importantly, futures up nineteen. The ten year 0:04:38.560 --> 0:04:42.520 yield is four point three two percent, pretty much flat 0:04:42.560 --> 0:04:45.200 on the day, four point three two percent. That two year, 0:04:45.360 --> 0:04:49.640 more fed friendly yield four point six five percent, four 0:04:49.680 --> 0:04:53.520 point six five percent for those keeping score at home, 0:04:53.800 --> 0:04:57.840 dollar on d X y one oh four point one eight. 0:04:57.920 --> 0:05:02.360 That's some real obscurity in to a job's report. Always interesting, 0:05:02.360 --> 0:05:07.880 and of course the revision's important as well. There's coming 0:05:07.920 --> 0:05:11.560 out now. It's a terrible number, Paul, I mean America, 0:05:11.920 --> 0:05:16.800 the exceptionalism of America, the defeatism has witnessed in the report. Paul, 0:05:17.279 --> 0:05:19.760 just give me the number here. The non farm payrolls. 0:05:19.800 --> 0:05:20.760 Are you kidding me? 0:05:21.080 --> 0:05:23.880 Three hundred and three thousand, Tom, Just put that in perspective. 0:05:23.880 --> 0:05:27.200 The consensus was two hundred and fourteen thousand, last period 0:05:27.279 --> 0:05:30.080 was two hundred and seventy five thousand. Wages we're talking 0:05:30.120 --> 0:05:32.320 about that up zero point three percent month a month, 0:05:32.440 --> 0:05:35.160 right in line on an annualized basis of four point 0:05:35.200 --> 0:05:37.919 one percent, right in line there, But a big big 0:05:38.080 --> 0:05:39.480 beat on the payroll nine. 0:05:39.520 --> 0:05:42.040 That's what he's pulled back a little bit, a positive 0:05:42.040 --> 0:05:44.720 eighteen down to positive eight Just the first people are 0:05:44.760 --> 0:05:46.560 really going to have to digest this, and I think 0:05:46.600 --> 0:05:50.520 the revision, which we do not see yet, is important 0:05:50.640 --> 0:05:53.320 to there. It is right now, not much of a revision, 0:05:53.320 --> 0:05:56.520 that's key. Two hundred and seventy thousand from two hundred 0:05:56.520 --> 0:06:00.680 and seventy five. So this is a hugely constructive report 0:06:00.960 --> 0:06:03.480 in terms of non farm payrolls, and you can get 0:06:03.520 --> 0:06:07.680 that survey unemployment rate three point eight percent. Markets pull back, 0:06:07.720 --> 0:06:11.279 they now come back a little bit higher, futures up thirteen, 0:06:11.320 --> 0:06:13.960 the VIC sixteen point four to five, and in the 0:06:14.040 --> 0:06:16.920 yield space, as John Ferrell says, a ten year yield 0:06:16.960 --> 0:06:20.839 four point three seven percent, As Ira Jersey said, the 0:06:20.920 --> 0:06:25.520 ten year yield lifting up nicely, already up six basis points. 0:06:25.560 --> 0:06:29.200 Our economic indicators on Jobs Day, bought you by our 0:06:29.200 --> 0:06:33.360 good friends at Commonwealth, supporting more than two thousand independent 0:06:33.400 --> 0:06:36.760 financial advisors with the solutions they need to grow a 0:06:36.880 --> 0:06:42.000 thriving business. Commonwealth go where you Grow. Visitcommonwealth dot com 0:06:42.040 --> 0:06:45.839 to learn more. Ira Jersey with Bloomberg Intelligence. Does a 0:06:45.880 --> 0:06:48.720 ten year yield in the curve? Does it buttress up 0:06:48.760 --> 0:06:53.160 against resistance or can it break out to new higher yields? 0:06:53.600 --> 0:06:56.080 Well, I think the fact they we're over four thirty five, 0:06:56.400 --> 0:06:58.400 you know, we do target four and a half percent here, 0:06:58.520 --> 0:07:02.400 so not necessarily today, but nonetheless, I think that this 0:07:02.880 --> 0:07:05.000 just shows you the economic resilience of the United States 0:07:05.080 --> 0:07:07.039 right now. And it's going to be hard for the 0:07:07.080 --> 0:07:09.359 Federal Reserve to make the case to cut interest rates 0:07:09.360 --> 0:07:11.280 when the data is running as strong as it is, 0:07:11.360 --> 0:07:14.239 and because of that, you'd probably get the entire curve 0:07:14.600 --> 0:07:16.000 start to move a little bit higher. 0:07:16.280 --> 0:07:16.760 I wouldn't. 0:07:17.400 --> 0:07:19.360 I'm just looking at the market here where you know, 0:07:19.840 --> 0:07:24.640 very slightly bare steepening with with ten year yields underperforming 0:07:24.720 --> 0:07:27.880 two year yields by two basis points. Not huge, but 0:07:27.920 --> 0:07:30.600 I would suspect over time that you get maybe a 0:07:30.640 --> 0:07:33.360 little bit more of a just an upward shift in 0:07:33.360 --> 0:07:36.080 the yield curve as we price out another fed cut. 0:07:36.120 --> 0:07:38.800 Paul Sweeney, the real yield comes nicely back. I was 0:07:38.840 --> 0:07:42.080 one point ninety five and off six basis points goes 0:07:42.080 --> 0:07:45.520 to two point zero one percent, and that's an indication 0:07:45.720 --> 0:07:46.920 the lift in yields. 0:07:46.920 --> 0:07:50.040 Mister Jersey's speaking of I follow top live on the 0:07:50.080 --> 0:07:52.840 Bloomberg terminal because we have the professional journalist from Bloomberg 0:07:52.840 --> 0:07:56.960 News and end a current global economy reporter. He basically 0:07:57.000 --> 0:08:00.720 says another whopper of a data point four that the 0:08:00.720 --> 0:08:03.160 payroll numbers, and I'll stick with that. That seems also 0:08:03.160 --> 0:08:05.880 calling out here, the participation rate has essentially recouped some 0:08:05.920 --> 0:08:08.880 of the losses since last November. Here, so we had 0:08:08.880 --> 0:08:12.160 the participation rate just inch up a little bit, sixty 0:08:12.200 --> 0:08:14.960 two point seven, Tom, the consensus was sixty two point six. 0:08:15.240 --> 0:08:17.160 Last period was sixty two point five, so a little 0:08:17.160 --> 0:08:19.920 bit higher at labor force participation rate have to see. 0:08:20.000 --> 0:08:22.600 Thank you for joining us on Apple, CarPlay, YouTube search, 0:08:22.680 --> 0:08:26.360 Bloomberg Podcast. Thank you for the vigorous live chat this 0:08:26.520 --> 0:08:29.960 morning without commercial interruption. Ira Jersey with us here for 0:08:30.000 --> 0:08:32.800 the next eleven minutes, and we are thrilled to bring 0:08:32.840 --> 0:08:35.760 you right now. My market economist of twenty twenty three, 0:08:35.840 --> 0:08:39.600 Neil Data, is to the renaissance macro. I can't say 0:08:39.679 --> 0:08:43.920 enough about how he nailed the spirit of the consumer 0:08:44.000 --> 0:08:47.480 and the spirit of nominal GDP. Neil Dota does this 0:08:47.640 --> 0:08:51.040 jobs report and just as a generalization, a two fourteen 0:08:51.120 --> 0:08:54.280 look and I'm going up roughly one hundred thousand to 0:08:54.320 --> 0:08:58.520 three h three on NONFIRMT payrolls. Does that signal in 0:08:58.600 --> 0:09:05.800 employed America signals continued resilient consumer activity? Well? 0:09:05.880 --> 0:09:08.320 Sure, I mean if you take the sum product, I mean, 0:09:08.360 --> 0:09:10.360 it wasn't just the growth in jobs, Tom, but the 0:09:10.400 --> 0:09:13.760 work week actually extended. You know, I remember the average 0:09:13.760 --> 0:09:17.120 work week had been a big source of concern, you know, 0:09:17.240 --> 0:09:19.400 towards the end of last year early this year, and 0:09:19.440 --> 0:09:23.400 now that's basically been recovering. So it's not just the 0:09:23.440 --> 0:09:25.560 growth in jobs, it's the work week. So when you 0:09:25.600 --> 0:09:28.800 take the sum product of jobs, hours and hourly earnings, 0:09:29.520 --> 0:09:34.120 you're talking about aggregate incomes growing, you know, an excess 0:09:34.120 --> 0:09:43.160 of six percent with inflation still moderating. That's a push 0:09:43.240 --> 0:09:46.480 for real income growth in the aggregate for the economy, 0:09:46.760 --> 0:09:50.560 So that's you know, I mean, that's fine for consumer spending. 0:09:50.880 --> 0:09:54.559 Neil Dudda Joe out on live chat has a smartest 0:09:54.600 --> 0:09:56.600 I think the guy's a PhD. He's got you know, 0:09:56.920 --> 0:09:59.600 he's got the smartest comment. Neil Dutta and Irid Jersey, 0:09:59.600 --> 0:10:03.520 I've seen meal to you, here's Joe got to wonder, 0:10:03.960 --> 0:10:08.480 how is everyone so consistently wrong? There's the smartest analysis 0:10:08.600 --> 0:10:11.120 I've seen today, Neil Dna. What does a gloom crew 0:10:11.160 --> 0:10:14.080 get wrong as we slide into another dutter like quarter? 0:10:16.520 --> 0:10:20.440 Well, I think, I mean, look, people talk about long 0:10:20.480 --> 0:10:24.640 and variable lags to monetary policy, Tom, there are long 0:10:24.720 --> 0:10:27.520 and variable legs to fiscal policy, and I think that's 0:10:27.600 --> 0:10:31.480 kind of what people have missed. And you know, you 0:10:31.559 --> 0:10:35.800 talk about howshold balance sheets, they're quite strong. You're at 0:10:35.800 --> 0:10:40.280 a point now where you know, global growth is starting 0:10:40.320 --> 0:10:45.120 to pick up against and that's going to support US 0:10:45.120 --> 0:10:50.520 manufacturing activity. So you know, I do think that we 0:10:50.559 --> 0:10:55.240 talked about equal weighted market indexes, right, equal weighted US 0:10:55.360 --> 0:10:57.520 GDP is improving as well. I mean, you're going to 0:10:57.559 --> 0:11:00.560 get more growth from things like business equipments. You're going 0:11:00.600 --> 0:11:05.119 to get more growth from things like inventory investment, residential investment. 0:11:05.400 --> 0:11:07.720 You might get a little bit less on consumer spending 0:11:08.360 --> 0:11:11.679 and government, but generally speaking, the breadth of growth in 0:11:11.720 --> 0:11:14.280 the US is expanding, and I think that's important. 0:11:15.440 --> 0:11:17.959 So in way Lee had that from west Rock, you're 0:11:18.040 --> 0:11:21.480 talking about this broading. I just can't say enough, folks 0:11:21.600 --> 0:11:26.200 about a three hundred thousand non firmperial I don't care 0:11:26.240 --> 0:11:29.880 about any other babble is Jo says, thank you out 0:11:29.920 --> 0:11:34.080 on live chat on YouTube. Paul, We've all got this wrong. 0:11:34.160 --> 0:11:35.959 Even Lisa Matteo got this wrong. 0:11:36.080 --> 0:11:36.840 Exactly right. 0:11:36.960 --> 0:11:38.839 Hey, Neil, Tom and I have been discussing over the 0:11:38.840 --> 0:11:40.800 past few days, and Bloomberg News is doing some very 0:11:40.800 --> 0:11:44.080 good reporting on the impact of immigration into this country, 0:11:44.160 --> 0:11:46.680 you know, over the last several years, legal and illegal, 0:11:46.800 --> 0:11:49.120 and its impact on the labor market. How do you 0:11:49.200 --> 0:11:53.959 factor that in? You know, I think it's. 0:11:53.840 --> 0:11:55.880 Just important to kind of take the data as it 0:11:55.920 --> 0:11:58.760 comes to you and not make, you know, not try 0:11:58.840 --> 0:12:02.800 to explain it away one way or the other. What 0:12:02.840 --> 0:12:05.680 I think matters is that if the FED is leaning 0:12:05.720 --> 0:12:09.680 into this argument that labor supply is the reason why 0:12:10.840 --> 0:12:14.320 jobs growth is strong and immigration might be one part 0:12:14.320 --> 0:12:17.480 of that. It could be also rising participation rates. But 0:12:17.720 --> 0:12:20.559 if labor supply is a reason why jobs growth is strong, 0:12:21.320 --> 0:12:24.800 then that doesn't mean necessarily that strong jobs growth in 0:12:24.840 --> 0:12:27.480 and of itself will push the FED away from cuts 0:12:27.640 --> 0:12:31.240 to Palase point. In other words, a strong number won't 0:12:31.240 --> 0:12:34.000 push them away from cutting as much as a weak 0:12:34.080 --> 0:12:36.800 number will push them to cutting. So I think that's 0:12:36.840 --> 0:12:40.400 the important point about this, is that if labor supplies 0:12:40.440 --> 0:12:42.560 a big driver of the strong jobs growth, that's going 0:12:42.600 --> 0:12:46.080 to have important kind of implications for how the FED 0:12:46.160 --> 0:12:51.280 is thinking about interest rates. And I recognize that obviously 0:12:51.640 --> 0:12:54.480 the curve is shifting higher yields or rising on the 0:12:54.480 --> 0:12:57.640 back of this report. That makes sense, But keep in 0:12:57.640 --> 0:13:00.880 mind that you know, the inflation I I still think 0:13:01.160 --> 0:13:05.439 is in and narrowing in a slowing path. Okay, I mean, 0:13:05.480 --> 0:13:09.400 I think it's very interesting that globally, just go down 0:13:09.440 --> 0:13:12.440 the list, Canada better than expected inflation, Switzerland better than 0:13:12.480 --> 0:13:15.920 expected inflation, most of Europe better than expected inflation. 0:13:16.080 --> 0:13:16.920 So the US was. 0:13:16.920 --> 0:13:19.240 The outlier in the first quarter, at least so far. 0:13:19.720 --> 0:13:22.440 That kind of speaks to this residual seasonality argument that 0:13:22.440 --> 0:13:25.599 the Fed's been leaning into and at the same time, domestically, 0:13:26.640 --> 0:13:30.600 inflation expectations, guys haven't been going up right like, so 0:13:30.640 --> 0:13:33.400 you have to kind of go to first principles. Even 0:13:33.480 --> 0:13:38.360 with this number, productivity probably picked up in the first quarter, 0:13:39.200 --> 0:13:41.880 and that means that unit labor costs are under control 0:13:42.520 --> 0:13:45.280 because wage growth over the last three still running about 0:13:45.320 --> 0:13:45.840 four percent. 0:13:45.920 --> 0:13:48.360 Meel doe it with this renaissance macro here, we're commercial 0:13:48.360 --> 0:13:51.520 free in this job's report across America. Good morning. The 0:13:51.640 --> 0:13:55.200 headline out of Bloomberg News is simple, Paul Sweeney us 0:13:55.320 --> 0:13:59.680 job's roar again again? Is operative word is payrolls jump 0:13:59.720 --> 0:14:02.040 three one hundred and three thousand. Why don't you bring 0:14:02.080 --> 0:14:04.520 an Ira Jersey. He's been looking at what Assenville is 0:14:04.559 --> 0:14:06.520 going to do with Brentford, so let's get them back 0:14:06.640 --> 0:14:07.160 into the game. 0:14:07.240 --> 0:14:10.280 Ira Jersey chfus interest rate strategist for Bloomberg Intelligence, is 0:14:10.280 --> 0:14:12.240 still with us. Hey, I'm looking at a red headline 0:14:12.240 --> 0:14:16.360 across the Bloomberg terminal. Fed swaps shift full pricing of 0:14:16.440 --> 0:14:19.840 Reid cuts to September from July. Boy, that's your market 0:14:19.880 --> 0:14:21.720 reacting pretty quickly. What do you make of that? 0:14:22.840 --> 0:14:26.480 Yeah, so you know the market's obviously moving quite a lot, 0:14:26.520 --> 0:14:29.120 And if you use a WRP function, or if you 0:14:29.160 --> 0:14:33.040 look at our SOFA option sentiment model, which we run 0:14:33.040 --> 0:14:35.320 at the end of each day, you know, we were 0:14:35.480 --> 0:14:39.640 pricing for obviously six twenty five base point interest rate 0:14:39.680 --> 0:14:43.520 cuts just two months ago, and now we're pricing for 0:14:43.640 --> 0:14:46.160 actually a fifteen percent chance of a hike by the 0:14:46.240 --> 0:14:48.160 end of this year. So you know, there's been a 0:14:48.200 --> 0:14:51.000 significant seed change. And I think that this data like 0:14:51.040 --> 0:14:53.600 we are getting today just feeds into that narrative that, 0:14:54.720 --> 0:14:57.320 you know, can the FED actually cut if the data 0:14:57.400 --> 0:15:01.160 remains as good and the answers probably know and you know, 0:15:01.160 --> 0:15:03.680 but clearly they think that they're going to need to cut. 0:15:03.920 --> 0:15:06.680 But if they're data dependent and the data is this good, 0:15:06.800 --> 0:15:08.720 it's going to be hard for them to make that case. 0:15:09.240 --> 0:15:11.200 You know. I agree that that when you look at 0:15:11.240 --> 0:15:14.680 the entire swath of data globally, that there are pockets 0:15:14.720 --> 0:15:17.400 of weakness, but that just hasn't fed into any of 0:15:17.440 --> 0:15:19.840 the US data yet, or at least enough of it 0:15:19.960 --> 0:15:22.640 to make it be able to convincingly make the case 0:15:22.640 --> 0:15:23.920 that the FED needs got imminently. 0:15:23.960 --> 0:15:26.040 And Paul Dunna said this as well. I mean, you 0:15:26.120 --> 0:15:29.280 go nation to nation to inflation reports. You know, I 0:15:29.320 --> 0:15:32.440 get there's like some inflation worries, but at the bottom line, 0:15:32.920 --> 0:15:36.640 there's a resilient disinflation that seems to be in place. 0:15:36.680 --> 0:15:39.520 I look at Switzerland, but you know there's other places 0:15:39.520 --> 0:15:41.600 where you got some real disinflation. 0:15:41.160 --> 0:15:43.680 And Eric just real quickly despite the data here. I 0:15:43.680 --> 0:15:45.760 think the rhetoric, I'm kind of surprised. I think the 0:15:45.760 --> 0:15:48.640 market some time time surprised that the rhetoric FED Chairman J. 0:15:48.720 --> 0:15:51.160 Powell continues to be on the margin dubbish. What do 0:15:51.160 --> 0:15:51.520 you make of that? 0:15:52.240 --> 0:15:54.200 Well, I'm not sure it was dubbsh I mean what 0:15:54.240 --> 0:15:57.560 he said yesterday or even what they said, what a 0:15:57.600 --> 0:15:59.320 preponderance of the speaker said. They said that they're data 0:15:59.320 --> 0:16:02.600 dependent and that they won't cut if the data is resilient, 0:16:02.600 --> 0:16:04.280 that they're going to let the data lead them so 0:16:05.080 --> 0:16:07.400 and I'll take them at face value when they say that. 0:16:07.480 --> 0:16:09.400 So if you see data like this where wages are 0:16:09.400 --> 0:16:13.720 growing recently, you have higher you have the higher participation rate, 0:16:13.760 --> 0:16:16.040 which is good, and at the same time three hundred 0:16:16.080 --> 0:16:19.720 thousand jobs being created. You know that's not an economy 0:16:19.760 --> 0:16:20.760 that's falling out of bed deet. 0:16:21.000 --> 0:16:23.760 Look for the reports Samira Jersey and his team here 0:16:23.920 --> 0:16:27.360 through this Friday here on how this jobs report, there's 0:16:27.480 --> 0:16:32.000 roaring job report folds into your fixed income space. Final 0:16:32.040 --> 0:16:36.120 comments from Neil Dotta. You know, dota worst nominal GDP 0:16:36.640 --> 0:16:39.200 and give us the douta view for Q three and 0:16:39.320 --> 0:16:40.720 Q four of this year. 0:16:42.560 --> 0:16:44.520 Well, I mean, right now, if you look at it, 0:16:44.560 --> 0:16:47.400 a nominal GDP is probably running six percent in the 0:16:47.440 --> 0:16:50.560 current quarter, maybe somewhere between five to six percent, So 0:16:50.600 --> 0:16:53.640 that's a pretty pretty strong number. Yes, but I do 0:16:53.720 --> 0:16:57.960 think that we are moderating. I think GDP growth is 0:16:58.000 --> 0:16:59.680 going to probably be in the two to two and 0:16:59.720 --> 0:17:01.960 a half percent range, and I think inflation will be 0:17:02.240 --> 0:17:04.840 around there too, so we're probably going to be, you know, 0:17:04.960 --> 0:17:07.320 closer to four and a half five percent nomenal growth 0:17:07.760 --> 0:17:11.040 by the end of the year. And you know, again, 0:17:11.080 --> 0:17:14.119 I think for your viewers, what's important is growth in 0:17:14.160 --> 0:17:17.760 and of itself doesn't keep the FED from cutting. I mean, 0:17:18.320 --> 0:17:21.600 this is really neutral is higher, and that means that 0:17:21.640 --> 0:17:24.520 all the FECT can really do is recalibrate policy. It 0:17:24.560 --> 0:17:27.280 doesn't necessarily mean that they can't cut at all. And 0:17:27.320 --> 0:17:30.000 I think that that's an important nuance because we're used 0:17:30.040 --> 0:17:32.879 to very much. The Fed either cutting a lot to 0:17:32.960 --> 0:17:36.639 one percent or zero, going to zerve right or not. 0:17:37.160 --> 0:17:38.120 And you know, that. 0:17:38.119 --> 0:17:42.080 Kind of recalibration of policy is something we haven't really 0:17:42.080 --> 0:17:45.760 been seeing in a while. So I do think that 0:17:46.000 --> 0:17:49.960 if inflation slows, I mean that requires some adjustment of policy. Ultimately, 0:17:49.960 --> 0:17:53.240 the FED believes they control inflation, and if inflation starts 0:17:53.280 --> 0:17:55.320 to come better than expect it over the next few months, 0:17:55.359 --> 0:17:57.520 as I think it will, then you know, all all 0:17:57.520 --> 0:18:00.480 SQL that means that they're running a bit tighter policy. 0:18:00.800 --> 0:18:03.440 Mail doatta, Thank you so much, Neil Dotta with renaissance 0:18:03.480 --> 0:18:17.719 macro optimism on America. Forty four years ago, we didn't 0:18:17.960 --> 0:18:21.520 see the American labor economy like we see it now. 0:18:21.600 --> 0:18:24.760 Who at the margins doing that? You make fun of it, 0:18:24.920 --> 0:18:30.560 but I'm sorry. Places like zip recruiter, YEP are absolutely 0:18:31.000 --> 0:18:33.760 nailing it. You should see a report. We're not going 0:18:33.840 --> 0:18:36.920 to go into this massive victory lab for Julia Pollock, 0:18:37.280 --> 0:18:42.840 but her report on jobs predictions is scary prescient. This morning, 0:18:43.160 --> 0:18:47.800 the optimist Julia Pollock joins us from Zip Recruiter right now. Julia, 0:18:48.080 --> 0:18:50.800 congratulations on a great non farm payrolls call. As we 0:18:50.840 --> 0:18:54.400 pop out to three hundred thousand. What does ZIP recruiters 0:18:54.440 --> 0:18:58.040 see right now, granular in your digital world, what do 0:18:58.080 --> 0:19:00.520 you see in the labor economy? 0:19:01.040 --> 0:19:05.480 So we see very strong participation with applications per posting 0:19:05.640 --> 0:19:09.440 risings over ten percent over the year, So labor availability 0:19:09.560 --> 0:19:11.960 is high, and I think that's one reason companies keep 0:19:12.000 --> 0:19:14.800 adding workers. It's becoming easier to hire them. 0:19:15.240 --> 0:19:15.960 And you see that of the. 0:19:15.920 --> 0:19:20.320 Wage growth data today, which is really sort of a 0:19:20.440 --> 0:19:23.919 great thing to see in this Goldilocks report. It shows 0:19:23.960 --> 0:19:27.879 a strong, strong labor market, but where wages are not overheating, 0:19:27.920 --> 0:19:29.840 this is not necessarily an inflationary report. 0:19:30.000 --> 0:19:33.040 Who's hiring out there, Julia, We're the areas that are 0:19:33.080 --> 0:19:34.080 seeing some strength. 0:19:35.320 --> 0:19:39.320 So that answer to that question has been very boring. Lately, 0:19:39.840 --> 0:19:44.280 we see the same industries leading in month and month growth, 0:19:44.320 --> 0:19:46.520 year of a year growth, again and again and again, 0:19:46.560 --> 0:19:51.560 and it's those asical industries, healthcare, the public sector, and 0:19:51.640 --> 0:19:56.000 leisure hospitality. But recently, in just the last month or two, 0:19:56.080 --> 0:19:58.440 we are starting to see signs of life in these 0:19:58.440 --> 0:20:06.359 sectors that we're struggling before, retail, manufacturing, construction. So the 0:20:06.440 --> 0:20:09.200 rolling recession could be turning into a rolling recovery. 0:20:09.640 --> 0:20:12.280 So, Julia, are you folks at ZipRecruiter, I mean you 0:20:12.320 --> 0:20:16.880 see this data real time here. How's it evolved over 0:20:16.920 --> 0:20:19.800 the past couple of years in terms of people signing 0:20:19.880 --> 0:20:21.960 up the ZipRecruiter? What are they looking for? How long 0:20:22.000 --> 0:20:25.639 are they there? What's the feeling from employers? How's that 0:20:25.840 --> 0:20:27.640 evolved over the past couple of years. 0:20:28.400 --> 0:20:32.480 Well, every US employer at the same time was scrambling 0:20:32.560 --> 0:20:35.120 to hire in a big hurry, and it was more 0:20:35.119 --> 0:20:38.200 competitive than ever before between about mid twenty twenty one 0:20:39.000 --> 0:20:42.800 to late twenty twenty two, and then of course with 0:20:42.880 --> 0:20:49.240 the FEDS supersized rate hikes, everyone became quite cautious and worried. 0:20:49.600 --> 0:20:52.359 Employers were wired there'd be a downturn. They didn't want 0:20:52.400 --> 0:20:55.480 to overhire into a downturn, and so we saw quite 0:20:55.520 --> 0:20:58.119 a change. And for twenty months we've seen it a 0:20:58.200 --> 0:21:01.680 downward slide and online job but that's turned around the 0:21:01.760 --> 0:21:02.520 last two months. 0:21:02.720 --> 0:21:05.080 Julie, you retain your heroing. I mean, I mean Paul 0:21:05.320 --> 0:21:07.920 framed this out. I mean not only your experience at RAND, 0:21:07.960 --> 0:21:10.720