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Speaker 2: the Economics into Fixed Income. Iraw Jersey joins us now
Speaker 2: from Bloomberg Intelligence. Is this job to report enough to
Speaker 2: shift the vector of ten year yields? I don't mean
Speaker 2: the nuance up to basis down three base Hira Jersey.
Speaker 2: But can we get a vector change in the ten
Speaker 2: year yield off this report? Well?
Speaker 3: I do suspect, Tom, if we get a pretty strong
Speaker 3: number that the market's going to price out, and you know,
Speaker 3: almost any chance of an early cut, so meaning even
Speaker 3: a June at this point would be early. So you
Speaker 3: know that can that can push ten years yields up
Speaker 3: another ten twelve basis points. In fact, you know, we've
Speaker 3: we've moved. Well, it's not unusual these days to get
Speaker 3: you know, eight to twelve basis point moves on on
Speaker 3: big missus or beats in ten year treasuries. So I
Speaker 3: think people are repricing things very quickly. People are very
Speaker 3: quick to get out of risk today. Whereas you know
Speaker 3: a few years ago everyone was just like happy to
Speaker 3: sit on their ten year yield even at two percent.
Speaker 3: But whereas now it's it's a matter of you know, hey,
Speaker 3: you know, do we want to own this risk going
Speaker 3: into this you know now that we've seen this number,
Speaker 3: or you know, do we want to you know, just
Speaker 3: get out, just wipe our hands of it. And I
Speaker 3: just I think we're in that ladder, at that ladder
Speaker 3: stage where where risk is just very very finicky right now.
Speaker 2: Paul ask a question because I just want to talk
Speaker 2: about Aston Villa, Brentlford, and we can't. Oh that's going
Speaker 2: to be we can't do that. Into the jobs report.
Speaker 4: Tom's looking at the fixture, which I'm not sure that
Speaker 4: football scores and fixture okay, very good, Hey, are we
Speaker 4: look at the ten year treasure here four point three
Speaker 4: one percent. Are we kind of in a trading range here?
Speaker 4: I don't know, four to four and a half percent.
Speaker 4: Is that kind of where we are here? As you
Speaker 4: look at this market?
Speaker 5: Yeah, more or less.
Speaker 3: You know that the high on the technical charts was
Speaker 3: four thirty five, and we broke that earlier this week,
Speaker 3: and and but but that was not a convincing breakout
Speaker 3: to the upside. So so I think that yields probably
Speaker 3: are falling back into that range, call it four oh
Speaker 3: five to four thirty five for now, But keep in mind,
Speaker 3: you know, the data we're going to get in a
Speaker 3: few minutes can completely change that.
Speaker 5: For sure.
Speaker 2: What does the real yield signify here? I had a
Speaker 2: two point zero two ten yure real yield IRA Jersey
Speaker 2: right now one point nine and it's back a little
Speaker 2: bit one point ninety five percent? Is that owners to
Speaker 2: American business? Well?
Speaker 3: I think that this is you know a lot of
Speaker 3: people would say that this is normal. You know, we
Speaker 3: got used to the fifteen years from you know, twenty
Speaker 3: two thousand and seven to twenty twenty two for real
Speaker 3: yields being you know, zero or negative, and now we're
Speaker 3: back at at levels that are more consistent with what
Speaker 3: occurred between the mid nineties and and the financial crisis
Speaker 3: of a little more than a decade ago. So so
Speaker 3: I think that most people would say that this is
Speaker 3: quote unquote normal. Certainly, it's it's more in the range
Speaker 3: I think of what the Federal Reserve would like to see.
Speaker 3: You know, when you look at really yields over time,
Speaker 3: you know, when really yields are here, usually still have
Speaker 3: pretty decent growth, and you're certainly seeing that in some
Speaker 3: of the data.
Speaker 2: I say with us right now, as we go one
Speaker 2: minute away from the American Johns, you've bord Lisa matel
Speaker 2: have some market news, and then we'll go beneath the
Speaker 2: headline data, Paul Streety, what are you looking at within
Speaker 2: the report?
Speaker 4: It's interesting, Tom, obviously, I'm going to be looking at
Speaker 4: the wages here. I think, you know, the average hourly earnings,
Speaker 4: you know, zero point three percent on a month to
Speaker 4: month basis, four point one percent on a yearly basis.
Speaker 4: That would be down from four point three percent last period.
Speaker 4: So yeah, kind of dovetails in with we still have
Speaker 4: decent wage growth, but it is moderating a little bit.
Speaker 2: Can I just go macro. Yeah, three point eight percent
Speaker 2: surveyed unemployment. I don't know what it's going to be, folks,
Speaker 2: But ten years ago, twenty years ago, that was like
Speaker 2: nirvana exactly.
Speaker 5: And we've been here for a long time.
Speaker 2: I mean, I'm sorry, it's it's up four percent unemployment
Speaker 2: rate forty five seconds away. Let me tell you the
Speaker 2: market benchmarks I look at when we go into this.
Speaker 2: We got to talk oil ninety one dollars a barrel
Speaker 2: on Brent crude, eighty seven dollars on West Texas intermedia.
Speaker 2: But far more importantly, futures up nineteen. The ten year
Speaker 2: yield is four point three two percent, pretty much flat
Speaker 2: on the day, four point three two percent. That two year,
Speaker 2: more fed friendly yield four point six five percent, four
Speaker 2: point six five percent for those keeping score at home,
Speaker 2: dollar on d X y one oh four point one eight.
Speaker 2: That's some real obscurity in to a job's report. Always interesting,
Speaker 2: and of course the revision's important as well. There's coming
Speaker 2: out now. It's a terrible number, Paul, I mean America,
Speaker 2: the exceptionalism of America, the defeatism has witnessed in the report. Paul,
Speaker 2: just give me the number here. The non farm payrolls.
Speaker 2: Are you kidding me?
Speaker 4: Three hundred and three thousand, Tom, Just put that in perspective.
Speaker 4: The consensus was two hundred and fourteen thousand, last period
Speaker 4: was two hundred and seventy five thousand. Wages we're talking
Speaker 4: about that up zero point three percent month a month,
Speaker 4: right in line on an annualized basis of four point
Speaker 4: one percent, right in line there, But a big big
Speaker 4: beat on the payroll nine.
Speaker 2: That's what he's pulled back a little bit, a positive
Speaker 2: eighteen down to positive eight Just the first people are
Speaker 2: really going to have to digest this, and I think
Speaker 2: the revision, which we do not see yet, is important
Speaker 2: to there. It is right now, not much of a revision,
Speaker 2: that's key. Two hundred and seventy thousand from two hundred
Speaker 2: and seventy five. So this is a hugely constructive report
Speaker 2: in terms of non farm payrolls, and you can get
Speaker 2: that survey unemployment rate three point eight percent. Markets pull back,
Speaker 2: they now come back a little bit higher, futures up thirteen,
Speaker 2: the VIC sixteen point four to five, and in the
Speaker 2: yield space, as John Ferrell says, a ten year yield
Speaker 2: four point three seven percent, As Ira Jersey said, the
Speaker 2: ten year yield lifting up nicely, already up six basis points.
Speaker 2: Our economic indicators on Jobs Day, bought you by our
Speaker 2: good friends at Commonwealth, supporting more than two thousand independent
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Speaker 2: thriving business. Commonwealth go where you Grow. Visitcommonwealth dot com
Speaker 2: to learn more. Ira Jersey with Bloomberg Intelligence. Does a
Speaker 2: ten year yield in the curve? Does it buttress up
Speaker 2: against resistance or can it break out to new higher yields?
Speaker 3: Well, I think the fact they we're over four thirty five,
Speaker 3: you know, we do target four and a half percent here,
Speaker 3: so not necessarily today, but nonetheless, I think that this
Speaker 3: just shows you the economic resilience of the United States
Speaker 3: right now. And it's going to be hard for the
Speaker 3: Federal Reserve to make the case to cut interest rates
Speaker 3: when the data is running as strong as it is,
Speaker 3: and because of that, you'd probably get the entire curve
Speaker 3: start to move a little bit higher.
Speaker 2: I wouldn't.
Speaker 3: I'm just looking at the market here where you know,
Speaker 3: very slightly bare steepening with with ten year yields underperforming
Speaker 3: two year yields by two basis points. Not huge, but
Speaker 3: I would suspect over time that you get maybe a
Speaker 3: little bit more of a just an upward shift in
Speaker 3: the yield curve as we price out another fed cut.
Speaker 2: Paul Sweeney, the real yield comes nicely back. I was
Speaker 2: one point ninety five and off six basis points goes
Speaker 2: to two point zero one percent, and that's an indication
Speaker 2: the lift in yields.
Speaker 4: Mister Jersey's speaking of I follow top live on the
Speaker 4: Bloomberg terminal because we have the professional journalist from Bloomberg
Speaker 4: News and end a current global economy reporter. He basically
Speaker 4: says another whopper of a data point four that the
Speaker 4: payroll numbers, and I'll stick with that. That seems also
Speaker 4: calling out here, the participation rate has essentially recouped some
Speaker 4: of the losses since last November. Here, so we had
Speaker 4: the participation rate just inch up a little bit, sixty
Speaker 4: two point seven, Tom, the consensus was sixty two point six.
Speaker 4: Last period was sixty two point five, so a little
Speaker 4: bit higher at labor force participation rate have to see.
Speaker 2: Thank you for joining us on Apple, CarPlay, YouTube search,
Speaker 2: Bloomberg Podcast. Thank you for the vigorous live chat this
Speaker 2: morning without commercial interruption. Ira Jersey with us here for
Speaker 2: the next eleven minutes, and we are thrilled to bring
Speaker 2: you right now. My market economist of twenty twenty three,
Speaker 2: Neil Data, is to the renaissance macro. I can't say
Speaker 2: enough about how he nailed the spirit of the consumer
Speaker 2: and the spirit of nominal GDP. Neil Dota does this
Speaker 2: jobs report and just as a generalization, a two fourteen
Speaker 2: look and I'm going up roughly one hundred thousand to
Speaker 2: three h three on NONFIRMT payrolls. Does that signal in
Speaker 2: employed America signals continued resilient consumer activity? Well?
Speaker 6: Sure, I mean if you take the sum product, I mean,
Speaker 6: it wasn't just the growth in jobs, Tom, but the
Speaker 6: work week actually extended. You know, I remember the average
Speaker 6: work week had been a big source of concern, you know,
Speaker 6: towards the end of last year early this year, and
Speaker 6: now that's basically been recovering. So it's not just the
Speaker 6: growth in jobs, it's the work week. So when you
Speaker 6: take the sum product of jobs, hours and hourly earnings,
Speaker 6: you're talking about aggregate incomes growing, you know, an excess
Speaker 6: of six percent with inflation still moderating. That's a push
Speaker 6: for real income growth in the aggregate for the economy,
Speaker 6: So that's you know, I mean, that's fine for consumer spending.
Speaker 2: Neil Dudda Joe out on live chat has a smartest
Speaker 2: I think the guy's a PhD. He's got you know,
Speaker 2: he's got the smartest comment. Neil Dutta and Irid Jersey,
Speaker 2: I've seen meal to you, here's Joe got to wonder,
Speaker 2: how is everyone so consistently wrong? There's the smartest analysis
Speaker 2: I've seen today, Neil Dna. What does a gloom crew
Speaker 2: get wrong as we slide into another dutter like quarter?
Speaker 6: Well, I think, I mean, look, people talk about long
Speaker 6: and variable lags to monetary policy, Tom, there are long
Speaker 6: and variable legs to fiscal policy, and I think that's
Speaker 6: kind of what people have missed. And you know, you
Speaker 6: talk about howshold balance sheets, they're quite strong. You're at
Speaker 6: a point now where you know, global growth is starting
Speaker 6: to pick up against and that's going to support US
Speaker 6: manufacturing activity. So you know, I do think that we
Speaker 6: talked about equal weighted market indexes, right, equal weighted US
Speaker 6: GDP is improving as well. I mean, you're going to
Speaker 6: get more growth from things like business equipments. You're going
Speaker 6: to get more growth from things like inventory investment, residential investment.
Speaker 6: You might get a little bit less on consumer spending
Speaker 6: and government, but generally speaking, the breadth of growth in
Speaker 6: the US is expanding, and I think that's important.
Speaker 2: So in way Lee had that from west Rock, you're
Speaker 2: talking about this broading. I just can't say enough, folks
Speaker 2: about a three hundred thousand non firmperial I don't care
Speaker 2: about any other babble is Jo says, thank you out
Speaker 2: on live chat on YouTube. Paul, We've all got this wrong.
Speaker 2: Even Lisa Matteo got this wrong.
Speaker 5: Exactly right.
Speaker 4: Hey, Neil, Tom and I have been discussing over the
Speaker 4: past few days, and Bloomberg News is doing some very
Speaker 4: good reporting on the impact of immigration into this country,
Speaker 4: you know, over the last several years, legal and illegal,
Speaker 4: and its impact on the labor market. How do you
Speaker 4: factor that in? You know, I think it's.
Speaker 6: Just important to kind of take the data as it
Speaker 6: comes to you and not make, you know, not try
Speaker 6: to explain it away one way or the other. What
Speaker 6: I think matters is that if the FED is leaning
Speaker 6: into this argument that labor supply is the reason why
Speaker 6: jobs growth is strong and immigration might be one part
Speaker 6: of that. It could be also rising participation rates. But
Speaker 6: if labor supply is a reason why jobs growth is strong,
Speaker 6: then that doesn't mean necessarily that strong jobs growth in
Speaker 6: and of itself will push the FED away from cuts
Speaker 6: to Palase point. In other words, a strong number won't
Speaker 6: push them away from cutting as much as a weak
Speaker 6: number will push them to cutting. So I think that's
Speaker 6: the important point about this, is that if labor supplies
Speaker 6: a big driver of the strong jobs growth, that's going
Speaker 6: to have important kind of implications for how the FED
Speaker 6: is thinking about interest rates. And I recognize that obviously
Speaker 6: the curve is shifting higher yields or rising on the
Speaker 6: back of this report. That makes sense, But keep in
Speaker 6: mind that you know, the inflation I I still think
Speaker 6: is in and narrowing in a slowing path. Okay, I mean,
Speaker 6: I think it's very interesting that globally, just go down
Speaker 6: the list, Canada better than expected inflation, Switzerland better than
Speaker 6: expected inflation, most of Europe better than expected inflation.
Speaker 2: So the US was.
Speaker 6: The outlier in the first quarter, at least so far.
Speaker 6: That kind of speaks to this residual seasonality argument that
Speaker 6: the Fed's been leaning into and at the same time, domestically,
Speaker 6: inflation expectations, guys haven't been going up right like, so
Speaker 6: you have to kind of go to first principles. Even
Speaker 6: with this number, productivity probably picked up in the first quarter,
Speaker 6: and that means that unit labor costs are under control
Speaker 6: because wage growth over the last three still running about
Speaker 6: four percent.
Speaker 2: Meel doe it with this renaissance macro here, we're commercial
Speaker 2: free in this job's report across America. Good morning. The
Speaker 2: headline out of Bloomberg News is simple, Paul Sweeney us
Speaker 2: job's roar again again? Is operative word is payrolls jump
Speaker 2: three one hundred and three thousand. Why don't you bring
Speaker 2: an Ira Jersey. He's been looking at what Assenville is
Speaker 2: going to do with Brentford, so let's get them back
Speaker 2: into the game.
Speaker 4: Ira Jersey chfus interest rate strategist for Bloomberg Intelligence, is
Speaker 4: still with us. Hey, I'm looking at a red headline
Speaker 4: across the Bloomberg terminal. Fed swaps shift full pricing of
Speaker 4: Reid cuts to September from July. Boy, that's your market
Speaker 4: reacting pretty quickly. What do you make of that?
Speaker 3: Yeah, so you know the market's obviously moving quite a lot,
Speaker 3: And if you use a WRP function, or if you
Speaker 3: look at our SOFA option sentiment model, which we run
Speaker 3: at the end of each day, you know, we were
Speaker 3: pricing for obviously six twenty five base point interest rate
Speaker 3: cuts just two months ago, and now we're pricing for
Speaker 3: actually a fifteen percent chance of a hike by the
Speaker 3: end of this year. So you know, there's been a
Speaker 3: significant seed change. And I think that this data like
Speaker 3: we are getting today just feeds into that narrative that,
Speaker 3: you know, can the FED actually cut if the data
Speaker 3: remains as good and the answers probably know and you know,
Speaker 3: but clearly they think that they're going to need to cut.
Speaker 3: But if they're data dependent and the data is this good,
Speaker 3: it's going to be hard for them to make that case.
Speaker 3: You know. I agree that that when you look at
Speaker 3: the entire swath of data globally, that there are pockets
Speaker 3: of weakness, but that just hasn't fed into any of
Speaker 3: the US data yet, or at least enough of it
Speaker 3: to make it be able to convincingly make the case
Speaker 3: that the FED needs got imminently.
Speaker 2: And Paul Dunna said this as well. I mean, you
Speaker 2: go nation to nation to inflation reports. You know, I
Speaker 2: get there's like some inflation worries, but at the bottom line,
Speaker 2: there's a resilient disinflation that seems to be in place.
Speaker 2: I look at Switzerland, but you know there's other places
Speaker 2: where you got some real disinflation.
Speaker 4: And Eric just real quickly despite the data here. I
Speaker 4: think the rhetoric, I'm kind of surprised. I think the
Speaker 4: market some time time surprised that the rhetoric FED Chairman J.
Speaker 5: Powell continues to be on the margin dubbish. What do
Speaker 5: you make of that?
Speaker 3: Well, I'm not sure it was dubbsh I mean what
Speaker 3: he said yesterday or even what they said, what a
Speaker 3: preponderance of the speaker said. They said that they're data
Speaker 3: dependent and that they won't cut if the data is resilient,
Speaker 3: that they're going to let the data lead them so
Speaker 3: and I'll take them at face value when they say that.
Speaker 3: So if you see data like this where wages are
Speaker 3: growing recently, you have higher you have the higher participation rate,
Speaker 3: which is good, and at the same time three hundred
Speaker 3: thousand jobs being created. You know that's not an economy
Speaker 3: that's falling out of bed deet.
Speaker 2: Look for the reports Samira Jersey and his team here
Speaker 2: through this Friday here on how this jobs report, there's
Speaker 2: roaring job report folds into your fixed income space. Final
Speaker 2: comments from Neil Dotta. You know, dota worst nominal GDP
Speaker 2: and give us the douta view for Q three and
Speaker 2: Q four of this year.
Speaker 6: Well, I mean, right now, if you look at it,
Speaker 6: a nominal GDP is probably running six percent in the
Speaker 6: current quarter, maybe somewhere between five to six percent, So
Speaker 6: that's a pretty pretty strong number. Yes, but I do
Speaker 6: think that we are moderating. I think GDP growth is
Speaker 6: going to probably be in the two to two and
Speaker 6: a half percent range, and I think inflation will be
Speaker 6: around there too, so we're probably going to be, you know,
Speaker 6: closer to four and a half five percent nomenal growth
Speaker 6: by the end of the year. And you know, again,
Speaker 6: I think for your viewers, what's important is growth in
Speaker 6: and of itself doesn't keep the FED from cutting. I mean,
Speaker 6: this is really neutral is higher, and that means that
Speaker 6: all the FECT can really do is recalibrate policy. It
Speaker 6: doesn't necessarily mean that they can't cut at all. And
Speaker 6: I think that that's an important nuance because we're used
Speaker 6: to very much. The Fed either cutting a lot to
Speaker 6: one percent or zero, going to zerve right or not.
Speaker 2: And you know, that.
Speaker 6: Kind of recalibration of policy is something we haven't really
Speaker 6: been seeing in a while. So I do think that
Speaker 6: if inflation slows, I mean that requires some adjustment of policy. Ultimately,
Speaker 6: the FED believes they control inflation, and if inflation starts
Speaker 6: to come better than expect it over the next few months,
Speaker 6: as I think it will, then you know, all all
Speaker 6: SQL that means that they're running a bit tighter policy.
Speaker 2: Mail doatta, Thank you so much, Neil Dotta with renaissance
Speaker 2: macro optimism on America. Forty four years ago, we didn't
Speaker 2: see the American labor economy like we see it now.
Speaker 2: Who at the margins doing that? You make fun of it,
Speaker 2: but I'm sorry. Places like zip recruiter, YEP are absolutely
Speaker 2: nailing it. You should see a report. We're not going
Speaker 2: to go into this massive victory lab for Julia Pollock,
Speaker 2: but her report on jobs predictions is scary prescient. This morning,
Speaker 2: the optimist Julia Pollock joins us from Zip Recruiter right now. Julia,
Speaker 2: congratulations on a great non farm payrolls call. As we
Speaker 2: pop out to three hundred thousand. What does ZIP recruiters
Speaker 2: see right now, granular in your digital world, what do
Speaker 2: you see in the labor economy?
Speaker 1: So we see very strong participation with applications per posting
Speaker 1: risings over ten percent over the year, So labor availability
Speaker 1: is high, and I think that's one reason companies keep
Speaker 1: adding workers. It's becoming easier to hire them.
Speaker 5: And you see that of the.
Speaker 1: Wage growth data today, which is really sort of a
Speaker 1: great thing to see in this Goldilocks report. It shows
Speaker 1: a strong, strong labor market, but where wages are not overheating,
Speaker 1: this is not necessarily an inflationary report.
Speaker 4: Who's hiring out there, Julia, We're the areas that are
Speaker 4: seeing some strength.
Speaker 1: So that answer to that question has been very boring. Lately,
Speaker 1: we see the same industries leading in month and month growth,
Speaker 1: year of a year growth, again and again and again,
Speaker 1: and it's those asical industries, healthcare, the public sector, and
Speaker 1: leisure hospitality. But recently, in just the last month or two,
Speaker 1: we are starting to see signs of life in these
Speaker 1: sectors that we're struggling before, retail, manufacturing, construction. So the
Speaker 1: rolling recession could be turning into a rolling recovery.
Speaker 4: So, Julia, are you folks at ZipRecruiter, I mean you
Speaker 4: see this data real time here. How's it evolved over
Speaker 4: the past couple of years in terms of people signing
Speaker 4: up the ZipRecruiter? What are they looking for? How long
Speaker 4: are they there? What's the feeling from employers? How's that
Speaker 4: evolved over the past couple of years.
Speaker 1: Well, every US employer at the same time was scrambling
Speaker 1: to hire in a big hurry, and it was more
Speaker 1: competitive than ever before between about mid twenty twenty one
Speaker 1: to late twenty twenty two, and then of course with
Speaker 1: the FEDS supersized rate hikes, everyone became quite cautious and worried.
Speaker 1: Employers were wired there'd be a downturn. They didn't want
Speaker 1: to overhire into a downturn, and so we saw quite
Speaker 1: a change. And for twenty months we've seen it a
Speaker 1: downward slide and online job but that's turned around the
Speaker 1: last two months.
Speaker 2: Julie, you retain your heroing. I mean, I mean Paul
Speaker 2: framed this out. I mean not only your experience at RAND,
Speaker 2: in her public service with the United States Navy, she
Speaker 2: was smart enough. I mean, think of all the fancy
Speaker 2: people we talk about who go to places where it
Speaker 2: rains thirty days a week. She's out of Pepperdine, which
Speaker 2: is like the smartest place to go to college if
Speaker 2: you want, Julia, are you the advantage in your analysis
Speaker 2: of the American labor economy because you're not in three
Speaker 2: ZIP codes of New York or two ZIP codes of
Speaker 2: Washington DC? Are you advantage because you know which pool
Speaker 2: to swim in at Pepperdine?
Speaker 1: I do think it helps to be at a remove
Speaker 1: from Washington, d C, sometimes in Wall Street, and to
Speaker 1: have sort of an outsiders perspective.
Speaker 2: And of course, okay, you.
Speaker 1: Know, the sunny California sunshine does help one to be
Speaker 1: an optimistic.
Speaker 2: Oh really, I didn't know that.
Speaker 1: Okay, against the US economy.
Speaker 2: We've had a biblical eluge here. Very quickly, Julie, this
Speaker 2: is important. The over lake Paul and I are seeing
Speaker 2: is immigration in legal and illegal migration matter. How do
Speaker 2: you fold those in at zip recruiter?
Speaker 1: Well, you know, Ernie Tideski has fantastic research on this recently,
Speaker 1: and he shows that our employment growth in the US
Speaker 1: here would have been much stronger than that in Europe
Speaker 1: even absent immigration. But immigration likely explains about twenty percent
Speaker 1: of it. You know, I saw estimates three point three
Speaker 1: million immigrants came into the United States in twenty twenty three,
Speaker 1: well above the one point one million that had been
Speaker 1: predicted before. So this is a huge source of labor supply.
Speaker 1: But also the immigrants buy services and goods, and so
Speaker 1: they prop up consumer spending and revenues at businesses and hiring.
Speaker 4: So juiya take this labor data that we receive today
Speaker 4: as well some of the other data we've received over
Speaker 4: the past couple of weeks.
Speaker 5: What do you think the Feederal Reserve is going to
Speaker 5: do here?
Speaker 1: What's your view at Zyprecruter, Well, I think the Fed
Speaker 1: worser will be pretty happy to see this data. I mean,
Speaker 1: their dual mandate, after all, is to keep the labor
Speaker 1: market strong and prices under control, and this report seems
Speaker 1: to say we can do both. We can walk in
Speaker 1: chew gum, We can create lots and lots of jobs
Speaker 1: and have a healthy economy without wage growth causing a
Speaker 1: wage price spiral. So I think three cuts are not
Speaker 1: off the table after this report.
Speaker 2: Julia, thank you so much. Congratulations on a shocking depression
Speaker 2: pre labor economy.
Speaker 1: Report she's out of always worried about going to go
Speaker 1: on those stays.
Speaker 2: Yeah, well, I don't make predictions anymore because I've been wrong.
Speaker 2: If you're wrong for twenty years, you just give up.
Speaker 2: Julia Pollock at two hundred and fifty thousand, and we
Speaker 2: clocked in hit a solid three hundred thousand. Here's what happens, folks,
Speaker 2: and the blur that we have. And you know the
Speaker 2: difference is Paul's got a beverage in his hand looking
Speaker 2: at the surf up in New Jersey. I'm at home
Speaker 2: with that bill going, oh, I got another economic report,
Speaker 2: and then there's something that just stops you in your tracks.
Speaker 2: As a research economist, Claudia Islam has done this for years.
Speaker 2: It's not a one off. She's transformed economics with a
Speaker 2: Sam rule. I'm not going to go into it, her
Speaker 2: work at Michigan, her work at the Fed. And then
Speaker 2: the other day she wrote an absolutely definitive essay for
Speaker 2: Bloomberg on part time employment. Doctor Sam joins us on
Speaker 2: this job's day, Claudia, I'm going to cut to the chase.
Speaker 2: Part time employment is second rate employment? Is it.
Speaker 7: Not necessarily? Part time employment gives people flexibility when we
Speaker 7: need to really look hard at in particular, is when
Speaker 7: we find out people are working part time but they'd
Speaker 7: rather be working full time. Economic conditions are bad, they
Speaker 7: got their hours cut, they can't find a job like
Speaker 7: That's when it's really bad. Now, we can always make
Speaker 7: part time jobs better, but they do have flexibility for
Speaker 7: people as they have caregiving other responsibilities they just can't
Speaker 7: do full time. Part time for economic reasons is really low,
Speaker 7: and we needed those part time jobs to come back
Speaker 7: so that people can have that flexibility.
Speaker 2: How does immigration in the new fears of America over
Speaker 2: migration fold into part time America. Somebody coming across the border,
Speaker 2: somebody coming into JFK or LAX. They're going to take
Speaker 2: four jobs and take away my job. Speak to that stereotype.
Speaker 7: Immigrants are one of the heroes in this labor market recovery.
Speaker 7: You don't see the headlines anymore about the labor shortages.
Speaker 7: We got more labor, not fewer customers. That's what the
Speaker 7: FED does. Immigrants are not the only group, but they
Speaker 7: have come in big time and taken jobs that were open.
Speaker 7: We have not seen the unemployment rates for US born
Speaker 7: individuals rising. It's more for the foreign morn because it
Speaker 7: takes a little while to get all the papers or
Speaker 7: find the job. So really they solved a big problem
Speaker 7: and are taking pressure off of employment. So when we
Speaker 7: think about them in the labor market, and they're doing
Speaker 7: some real.
Speaker 4: Good Claudia again, the really strong nonfarm payroll data coming
Speaker 4: out today. I'm going to focus on the average hourly
Speaker 4: earnings here on an annualized basis four point one percent,
Speaker 4: ticking down a little bit from last period four point
Speaker 4: three percent. How do you think about the wage environment
Speaker 4: in the US labor market?
Speaker 7: So, in general, we've seen the labor market really settle
Speaker 7: into a good rhythm. We had a big payroll number today,
Speaker 7: but you look back over several months, it's been pretty
Speaker 7: good little change. If we settle into an expansion, and
Speaker 7: the same goes for wages. We have seen wages be stronger,
Speaker 7: and yet inflation has been coming down. Right, we can
Speaker 7: have a more productive, more workers and that can support
Speaker 7: a more dynamic economy. So wage of growth is probably
Speaker 7: still going to come down some. We are still working
Speaker 7: through getting the workers in and we're not going to
Speaker 7: see the big wage gains again during the labor shortages.
Speaker 7: Probably what we should expect we got to get to
Speaker 7: a sustainable expansion. And yet there's no reason to fear
Speaker 7: those numbers, right, they have not been inflationary in the
Speaker 7: way that some people were worried a year or two ago.
Speaker 4: So, Claudia, just looking at the futures markets and the
Speaker 4: FED swaps here, it looks like the market's pushing out
Speaker 4: a rate cut. Maybe that June isn't even a lock anymore.
Speaker 4: How do you think the Federal Reserve is going to
Speaker 4: react to some of the data?
Speaker 2: Never is a governor of the film. Absolutely, pizza Claudia
Speaker 2: would go nuts. I mean it'd be like your.
Speaker 4: Diet exactly, Claudia, do you think the Fed's going to
Speaker 4: react to some of the data we saw today?
Speaker 5: So the Fed.
Speaker 7: Leaves lives in the real world, right, So they're looking
Speaker 7: at these jobs, but next week is really the main event.
Speaker 3: Right.
Speaker 7: They have said multiple times inflation has got to come down.
Speaker 7: They are not weighing in on, oh, the unemployment rate
Speaker 7: is too high or the economy is growing too strong.
Speaker 7: That's not their job, right, They've got to get inflation
Speaker 7: down to two percent and unemployment low. And if this economy,
Speaker 7: you know, has you know, the legs and can keep running.
Speaker 7: That is not for the FED to step in and stop.
Speaker 7: They don't want to. They just want their dual mandate
Speaker 7: and their job is done. So but I see it, like,
Speaker 7: I'm uncomfortable with the fact that we don't talk about
Speaker 7: the risk of the labor market. And yet I mean, frankly,
Speaker 7: you get these good jobs numbers, you know it likely
Speaker 7: unless something blows up, it'll take time. And this is
Speaker 7: a very like you know, they're they're they're really scared
Speaker 7: of acting too fast. So yeah, I think pushing things out,
Speaker 7: I do not see them not cutting. I think that
Speaker 7: is too pessimistic.
Speaker 2: You know. I look, Claudia, it's your wonderful essay, and
Speaker 2: you've got out of Vanderbilt Rachel Donnelly and Adam Sean
Speaker 2: Blackler talking about the difference of the states. Of all
Speaker 2: of our audience. You got states with high wages, high
Speaker 2: social benefits. They've got a different attitude than states that's say,
Speaker 2: go out and get a job. We're not going to
Speaker 2: give you any benefits. Who has the better labor economy
Speaker 2: out of that?
Speaker 7: What I think to say about this labor market is
Speaker 7: take the win. We have had a massive recovery and
Speaker 7: frankly move past that in terms of working on some
Speaker 7: structural problems we had before, and yet keep pushing right like,
Speaker 7: there are ways and particularly people on the margins. Part
Speaker 7: time jobs fit in that space. Also low paid full
Speaker 7: time jobs. Not every job in this country is good enough.
Speaker 7: A lot of them are, even those have gotten better.
Speaker 7: And yes, these researchers looked at the importance of decoupling
Speaker 7: a lot of the benefits that we need from employment,
Speaker 7: and particularly from full time employment. And it pays dividends
Speaker 7: to people, obviously, and it makes our economy more productive.
Speaker 7: Workers that are really engaged, they can do.
Speaker 2: More if Paul, I think one thing not spoken about
Speaker 2: here is what percentage of a paycheck is consumed spend
Speaker 2: right away. And I think there's a whole bunch of
Speaker 2: people in the Bloomberg world. I'm as guilty as this
Speaker 2: as anyone to go, well, they're maxing out there for one, kay,
Speaker 2: and they're saving for this and they're going to buy
Speaker 2: a rivian belonging. They're spending their money in the economy.
Speaker 5: So Claudia, let's go right there.
Speaker 4: I mean, again, with this backdrop of a strong labor market,
Speaker 4: how do you feel the consumer these days.
Speaker 7: Oh, the American consumer is strong, right, and if you
Speaker 7: get a virtuous cycle going between a strong labor market
Speaker 7: and a strong consumer, that really can keep the US
Speaker 7: economy going. And the reality is a lot of Americans,
Speaker 7: either by need or by choice, spend their paychecks.
Speaker 6: Right.
Speaker 7: But we also saw that when people were getting more money,
Speaker 7: particular at the bottom, they will put some away that
Speaker 7: quote unquote excess savings. That was because we gave people
Speaker 7: the money they needed to be able to save.
Speaker 2: Claudia Ross has a brilliant live chat comment here. Thank
Speaker 2: you Ross for cutting to the chase. And maybe this
Speaker 2: is unfair Claudia, but I'm going to take a shot
Speaker 2: with your list view of our nation. What's the distinction
Speaker 2: between legal and illegal immigrants or migrants? What's the partition
Speaker 2: right now that doctor Somem sees between somebody coming and
Speaker 2: legal doing the paperwork in that they're in Queens, New York, whatever,
Speaker 2: in New Jersey, whatever, and somebody coming over the border illegal. Right.
Speaker 7: So I very specifically cut my lens on the labor
Speaker 7: market and solving labor shortages. And in that sense, I
Speaker 7: mean if people can get a job as immigrants, then
Speaker 7: they're filling a job that was open, right, it's so
Speaker 7: I won't go into I mean, obviously, people coming in
Speaker 7: different paths have different constraints on them. A lot of
Speaker 7: the people coming into the country right now that don't
Speaker 7: have permanent legal status or individuals that were waiting for
Speaker 7: hearing if they can get asylum status or not, and
Speaker 7: for them it takes longer to get the paperwork legally work.
Speaker 7: So yes, there are different groups, but at the end
Speaker 7: of the day, they are contributing to our economy and
Speaker 7: that's in that space, like that's an important lens to.
Speaker 2: Take doctor Sam, thank you so much. Really controversial, like
Speaker 2: can I'll get it out this weekend, folks. Spectacular Bloomberg
Speaker 2: opinion essay from Claudia Sam on this raging debate over
Speaker 2: full time, part time employment, Bloomberg surveillance and our newspapers
Speaker 2: with Lisa Matteo misery and order. I'm surrounded by Yankee
Speaker 2: fans joining us now after the success of Just metten
Speaker 2: the other day on Yankee's opening day, Damien Sasaur, Hi,
Speaker 2: can they really play at the caliber of the Braves
Speaker 2: and the Dodgers?
Speaker 8: Eighty one thirty nine and one all time and home
Speaker 8: openers they've won six and the last seven since twenty seventeen.
Speaker 8: Stron Men facing his former team.
Speaker 5: After two years with the Cobs. I think it's a
Speaker 5: zero point zero zero er.
Speaker 2: Let's straw.
Speaker 5: That is a duke guy Romans.
Speaker 2: But Marcus Stroman, to me, is really a lynchpin here
Speaker 2: for Lonessa Cortez. Isn't you know you need Johnny Padres. Yeah, yeah,
Speaker 2: you got to have a number three. Is Stroman their
Speaker 2: number three? Well?
Speaker 8: I think Stroman can actually, I mean the way he's pitching,
Speaker 8: I mean again, he could be a number two. I mean,
Speaker 8: certainly we need you know, Cortest has not been well.
Speaker 8: But I mean, let's just let's just take a second
Speaker 8: here and enjoy the fact that the Red Sox swept
Speaker 8: the A's in Oakland. That's one of the last Sacramento.
Speaker 8: They're in second place in the East. You know, our
Speaker 8: little brothers there up north, you know, so we're really.
Speaker 2: Happled with that. Really happy Mike from Bedford just emailed
Speaker 2: and it's a time you'll love the Orioles time. Just
Speaker 2: so you know, let's just started Damian Sasar with us here.
Speaker 2: Allow us to talk about Damien. Join us, Yes, in
Speaker 2: the mateo moment, Lisa, what do you have?
Speaker 9: All right? So we're starting with the Wall Street Journal.
Speaker 9: They broke down how far one hundred dollars goes at
Speaker 9: the grocery store after five years of food inflation. So
Speaker 9: they're saying they got the information. They analyzed Niels and
Speaker 9: i Q dat of commonly pers it some items we're
Speaker 9: valued of one hundred dollars in twenty nineteen. Today that
Speaker 9: same grocery list costs thirty six and a half percent more.
Speaker 9: The biggest price surge eggs sports drinks that climbed about
Speaker 9: forty percent. Shoppers would have to remove about thirty seven
Speaker 9: dollars of items to spend that same amount as they
Speaker 9: did in twenty nineteen.
Speaker 2: Puts it in red.
Speaker 8: How much you think a fen dog, the end dog
Speaker 8: by Pesky Paul, You think of fend Dog's going to
Speaker 8: be expensive?
Speaker 2: This?
Speaker 3: Ye?
Speaker 5: A little bit higher, I guess.
Speaker 4: And the problem is, Lisa, those preces they don't come
Speaker 4: down per se, right, So the rate of inflation is lower.
Speaker 5: That's a good story.
Speaker 4: But okay, I'm getting less than my in my bread
Speaker 4: basket f dog.
Speaker 2: Yesterday and for the first time in ages, I ordered
Speaker 2: like expensive beef twenty eight dollars a pound, Paul, what's
Speaker 2: that piece of beef? Go in those fancy steakhouses you
Speaker 2: eat at exactly? You up to eighty bucks.
Speaker 4: We're actually a couple of weeks ago we were at
Speaker 4: the top place locally and it was fifty eight dollars
Speaker 4: for my New York strip.
Speaker 5: No, I take my sixty eight dollars. I take the twelve. Yes,
Speaker 5: I know we have.
Speaker 2: To move on. But as this is the number one
Speaker 2: election thing other than immigration and migration, yeap, people, I'm sorry,
Speaker 2: it's I mean, fancy people like us are pounding. Can you,
Speaker 2: I mean half of America's going, what is this about? Continue?
Speaker 2: We could talk on this all day.
Speaker 9: Okay, So the price of gold, we've been talking about
Speaker 9: that right heading records. Young investors are turning to it,
Speaker 9: and they're getting it at Costco my favorite police Yes, okay,
Speaker 9: so they get the gold bars and a dollar for
Speaker 9: the fifty hot dog at the same time. Imagine that.
Speaker 2: Right.
Speaker 9: You can go online select stores in the jewelry department,
Speaker 9: but they're selling out fast. They limit true bars perperse
Speaker 9: and that's it. But gold Buyer is saying that Costco's
Speaker 9: prices they're lower than they see at other retailers. And
Speaker 9: then the younger generation.
Speaker 2: We digress and we have an expert with US Gold
Speaker 2: twenty three hundred. Is China buying at the margin.
Speaker 8: They are, I mean gold's up ten percent year to date,
Speaker 8: but whichs really interesting. You got Brent up eighteen percent,
Speaker 8: you got copper up nine point two percent, I mean gold,
Speaker 8: copper and gold, we're only up three percent a few
Speaker 8: weeks ago.
Speaker 2: The margin, that's the margin.
Speaker 8: Absolutely, yeah, no, absolutely, It's not just China, it's other
Speaker 8: central banks as well. But reserves are rebuilding and being
Speaker 8: replenished across the emerging marketsphere. We can talk about all
Speaker 8: the smart stuff if you want.
Speaker 2: To, we have to balance it. You know, you made
Speaker 2: an interesting point.
Speaker 5: I just want to highlight this.
Speaker 8: We have payrolls coming up, but the difference between the
Speaker 8: payroll the establishment survey and the household survey, and along
Speaker 8: our chief economists talking about this on the tape this morning,
Speaker 8: JP Morgan's been talking about this. This is why we
Speaker 8: see unemployment ticking up, but these huge payroll numbers. It's
Speaker 8: because not only are we getting more people being hired,
Speaker 8: but the labor forces rising because of immigration and migrant workers.
Speaker 2: As you point out, if you weren't listening in the
Speaker 2: last hour, we discussed this with camera Jennifer.
Speaker 9: Okay, next, all right, four seasons yacht trips are going
Speaker 9: to be the priciest way to cruise. Yes, okay, they're
Speaker 9: debuting their first ninety five Sweet vessel in January twenty
Speaker 9: twenty six. Are you ready for the price? Seven nights
Speaker 9: in the Caribbean costs no less than twenty thousand per suite,
Speaker 9: up to three hundred and thirty thousand for that nearly
Speaker 9: ten thousand square foot glass and closed Sweet if you
Speaker 9: want the fancy one. So that's how much you're spending.
Speaker 9: That doesn't include food, that doesn't include drinks.
Speaker 5: That's separate.
Speaker 9: But what you get is more space. Because they're saying
Speaker 9: it's the same size as other cruise ships that carry
Speaker 9: like seven hundred passengers, they'll only carry two hundred and
Speaker 9: twenty two max. That's a difference.
Speaker 5: That's because you don't like people. I don't like people.
Speaker 8: You don't You were born for Bloomberg surance.
Speaker 5: All right.
Speaker 9: How to take the perfect selfie during Toller solar eclipse?
Speaker 5: Totally, there is a way to do this.
Speaker 9: Okay, So the light can make it tough to take
Speaker 9: the selfie because a lot of people are going to
Speaker 9: be doing this, so you have to take them and
Speaker 9: wear red or green outfits. On the day of the eclipse,
Speaker 9: because the sky grows darker, the colors become a little muted,
Speaker 9: so you have to pop. But it can be dangerous.
Speaker 9: That is the thing that we want to point out.
Speaker 9: Even though you're facing away from the sun, those UV
Speaker 9: rays can bounce off your phone screen.
Speaker 5: Into your eyes. Did you know that? Okay?
Speaker 9: And you have to make sure you're wearing those solar
Speaker 9: eclipse glasses because there are a lot of phony ones
Speaker 9: out there.
Speaker 5: We got our some Walmart.
Speaker 2: You did really really hilarious, folks. Really even and we're
Speaker 2: not in the total eclipse Rochester, New York is sort
Speaker 2: of northwest to here. It's very very dangerous and you've
Speaker 2: got to have legitimate I'm sure Walmart vetted him eye thinks.
Speaker 2: But the thing I want to mention is even if
Speaker 2: it's cloudy and you can't see the sun and the moon,
Speaker 2: the darkness is spectacular. It can be four minutes, five minutes,
Speaker 2: it's the middle of the day. The birds go mental
Speaker 2: Damien Sasa or it goes mental that it.
Speaker 5: Can be very very Monday. Monday just emails in.
Speaker 2: It says time. You look like the assistant to the
Speaker 2: Travelings of New York Yankees pushed.
Speaker 9: Back their time at the starting time for the game
Speaker 9: Monday because of the eclips.
Speaker 5: Yeah, so what it's going to be? I thought it
Speaker 5: was time?
Speaker 3: No.
Speaker 4: No, Well did a certain president, former president just look
Speaker 4: right into the sun.
Speaker 5: He did?
Speaker 4: Fine, he that's not funny.
Speaker 2: This is a Bloomberg Surveillance podcast, bringing you the best
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