WEBVTT - BiUS Jobs Top Forecasts Creating Mixed Picture for Fed 0:00:01.840 --> 0:00:04.480 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.519 --> 0:00:07.320 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.360 --> 0:00:09.880 you the latest news from the world's of business and finance, 0:00:09.880 --> 0:00:13.680 plus technology, politics, economics, all purtnising the power of Business 0:00:13.720 --> 0:00:17.200 Week reporters and editors, not to mention our journalists and 0:00:17.200 --> 0:00:20.040 analyst in more than one twenty countries. You can download 0:00:20.040 --> 0:00:23.279 Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.440 --> 0:00:25.239 You can also listen to our radio show at two 0:00:25.239 --> 0:00:28.400 pm Eastern Time on Bloomberg Radio, or watch us on YouTube. 0:00:28.440 --> 0:00:31.720 Search Bloomberg glovel News with us right now in the 0:00:31.720 --> 0:00:35.199 Bloomberg Interactive Brooker Studio. We got Credy Gupta, anchor and 0:00:35.240 --> 0:00:38.160 markets correspondent for Bloomberg also joining us. We got read Picker. 0:00:38.280 --> 0:00:41.800 She's US economy reporter for Bloomberg News. She's joining us 0:00:41.880 --> 0:00:44.080 via zoom from Washington, d C. So if you are 0:00:44.200 --> 0:00:46.920 watching us right now on YouTube or on Bloomberg dot com, 0:00:47.240 --> 0:00:50.360 you can see all of us this afternoon. Credy, I 0:00:50.400 --> 0:00:52.280 want to start with you because kind of a pustling 0:00:52.320 --> 0:00:55.800 trade going on at first stuck for higher and now 0:00:55.960 --> 0:00:58.760 they have moved lower. You know, it's interesting they I 0:00:58.800 --> 0:01:02.280 feel like the narrative shifted midday. Um, and you would 0:01:02.280 --> 0:01:04.720 have thought it would have shifted about eight thirty am 0:01:04.760 --> 0:01:06.600 this morning with the jobs report of course coming in 0:01:06.640 --> 0:01:10.080 hotter to sixty one thousand relative to I believe in 0:01:11.959 --> 0:01:14.160 exactly flat. Sorry, I just wanted to. I know, it's 0:01:14.200 --> 0:01:16.759 like why even why even bother showing up to work, 0:01:18.440 --> 0:01:21.600 But this is like there was a narrative shift. Could 0:01:21.640 --> 0:01:26.280 just let me. Uh. We started off with this idea 0:01:26.440 --> 0:01:30.040 of what kind of pricing in a higher terminal rate. 0:01:30.040 --> 0:01:32.920 Remember we have had that narrative going in post Powell 0:01:32.959 --> 0:01:35.360 on Wednesdays Thursday as well. But we actually look at 0:01:35.360 --> 0:01:38.959 some of the pricing here, nothing has really changed that much. 0:01:39.040 --> 0:01:41.160 We're talking about a five percent terminal rate. The highest 0:01:41.480 --> 0:01:43.520 that you saw on FED swaps pricing was five point 0:01:43.520 --> 0:01:46.720 one or five and a quarter percent. That's not a 0:01:46.720 --> 0:01:49.520 massive change enough to change the dynamic that's in the 0:01:49.520 --> 0:01:51.400 stock market. And one of the bull cases for the 0:01:51.400 --> 0:01:53.720 stock market is that the terminal rate is going to 0:01:53.760 --> 0:01:55.480 stall out and that is as high as if FED 0:01:55.600 --> 0:01:58.040 is going to go. Once that's priced in, there's no 0:01:58.120 --> 0:02:00.760 reason for the stock market to continue selling off because 0:02:00.800 --> 0:02:03.520 once again it's been priced in. Then you have this 0:02:03.600 --> 0:02:05.640 dollar move, which I think is the real catalyst of 0:02:05.640 --> 0:02:08.160 the turnaround that you saw. I want to say out 0:02:08.160 --> 0:02:10.760 around eleven a m where you had the SMP five 0:02:11.080 --> 0:02:14.480 and make a complete flip, because the Bloomberg Dollar Index, 0:02:14.520 --> 0:02:16.760 if you look, is actually having its weakest day going 0:02:16.760 --> 0:02:19.359 all the way back to March. And it's something that's 0:02:19.400 --> 0:02:22.480 been powering the commodities market from the beginning of the 0:02:22.520 --> 0:02:26.399 trading session overnight. What it wasn't doing is uh necessarily 0:02:26.400 --> 0:02:29.320 showing up in the dollar. Now you're seeing the SMP 0:02:29.400 --> 0:02:31.480 five hundred, it feels like getting more of its que 0:02:31.840 --> 0:02:34.119 from the Fed swaps pricing, whereas the dollar still moving 0:02:34.160 --> 0:02:36.560 the commodity market. That's a lot of information to say 0:02:36.840 --> 0:02:39.440 the market doesn't quite have one single narrative. There's so 0:02:39.480 --> 0:02:41.800 many factors that play right now. Um, but I would 0:02:41.800 --> 0:02:44.160 say the biggest move to be conscious of is this 0:02:44.240 --> 0:02:47.560 dollar move. Okay, let's rewind though we're looking at the 0:02:47.639 --> 0:02:50.040 SMP five hundred that's exactly flat. But let's go back 0:02:50.040 --> 0:02:53.119 to eight thirty am this morning. Read when I look 0:02:53.160 --> 0:02:56.600 at the Bloomberg news story describing the numbers we got 0:02:56.639 --> 0:03:00.720 for October payrolls. Uh, the lead sentences that tiny cracks 0:03:00.720 --> 0:03:03.800 are beginning to emerge in the US labor markets resilience read. 0:03:03.880 --> 0:03:08.040 I thought this was a super hot print. It is 0:03:08.120 --> 0:03:10.040 that when we think about the jobs report, you have 0:03:10.080 --> 0:03:13.360 to remember that there's two surveys beneath it, and today 0:03:13.480 --> 0:03:16.560 was a good reminder that sometimes those surveys don't point 0:03:16.560 --> 0:03:19.560 in the same direction. So on one side, you had 0:03:19.639 --> 0:03:22.840 the Survey of Businesses, which what is what informs that 0:03:22.960 --> 0:03:27.440 payroll's print, and you saw that really stronger, strong, you know, 0:03:27.440 --> 0:03:30.560 two hundred and sixty thousand print come in on that side, 0:03:30.639 --> 0:03:33.160 and that was broad faced. It was stronger than books 0:03:33.160 --> 0:03:35.880 were expecting. Um. And then on the flip side you 0:03:35.960 --> 0:03:39.120 had the household survey, which is what informs things such 0:03:39.160 --> 0:03:43.560 as the unemployment rate, the participation rate, and those wage numbers. 0:03:43.920 --> 0:03:46.600 And from that survey you saw a bit more weakness 0:03:46.720 --> 0:03:49.400 in terms of seeing the unemployment rate rise more than 0:03:49.440 --> 0:03:53.400 folks were expecting, and then seeing wages continue to keep rising. 0:03:53.840 --> 0:03:56.200 And like a lot of things, the truth is probably 0:03:56.200 --> 0:03:58.400 somewhere in the middle. But I think when you put 0:03:58.440 --> 0:04:01.800 the whole thing together, it paints this picture of an 0:04:01.800 --> 0:04:05.040 economy in a labor market, well, a labor market that's 0:04:05.120 --> 0:04:08.680 just proven to be resilient. It's still really strong, and 0:04:08.880 --> 0:04:12.720 though it's showing some hints of softening um, it certainly 0:04:12.760 --> 0:04:15.840 has a long way to go before the type of 0:04:16.040 --> 0:04:19.080 you know, coming into balance that federals or officials are 0:04:19.080 --> 0:04:21.640 hoping to see. If you're J. Powell read picker and 0:04:21.680 --> 0:04:24.719 you see a print like this, what are you thinking. 0:04:26.480 --> 0:04:28.680 I think they're still thinking that the labor market is 0:04:29.040 --> 0:04:31.320 is too hot. I mean when you see a wage 0:04:31.400 --> 0:04:33.680 number come in so on a year or year basis, 0:04:33.920 --> 0:04:36.360 wages decelerated a little bit, but on a month over 0:04:36.480 --> 0:04:40.000 month basis, that wage print came in strong yet again. 0:04:40.200 --> 0:04:43.360 And that adds to several other prints that we've gotten 0:04:43.480 --> 0:04:47.479 in recent weeks where it shows that wage wage growth, 0:04:47.680 --> 0:04:51.200 while showing some signs of deceleration in some pockets, is 0:04:51.279 --> 0:04:55.440 still really strong. And you know, from the Fed's perspective, 0:04:55.720 --> 0:04:58.200 that means that you still have you know, something like 0:04:58.240 --> 0:05:01.640 that putting upward pressure on lation. I love the question 0:05:01.680 --> 0:05:04.040 to like, if you were JR. Own pal, what would 0:05:04.040 --> 0:05:06.320 you do? If I was your own pal? I would retire, 0:05:06.480 --> 0:05:09.480 you know, seen off to the sunset. But I'm already 0:05:09.560 --> 0:05:12.800 thinking about next week. There is a lot going on 0:05:12.800 --> 0:05:16.559 this week, there's somehow arguably as much happening next week. 0:05:17.120 --> 0:05:20.200 What is the biggest catalyst when you boil it all down? Well, 0:05:20.240 --> 0:05:23.640 you're just gonna make me say that next economic table point. 0:05:23.920 --> 0:05:26.960 Him has already shamed me for Well, let's come on 0:05:27.080 --> 0:05:29.040 like as the CPI report. No surprise there, But I 0:05:29.120 --> 0:05:31.000 think it's more of going to be a question of 0:05:31.240 --> 0:05:33.880 do we continue to see the marginal deceleration we need 0:05:33.960 --> 0:05:35.960 to the problem with the last couple of CPI reports 0:05:36.240 --> 0:05:39.560 is that they've actually missed the economist estimates, which we're 0:05:40.120 --> 0:05:42.240 getting lower and lower to begin with, So the bar 0:05:42.360 --> 0:05:44.839 kept getting lower, and even then the data was missing 0:05:44.880 --> 0:05:46.599 the bar, and I think that's something that certainly hurt 0:05:46.600 --> 0:05:49.600 the markets quite a bit. There's also already some commentaries 0:05:49.600 --> 0:05:51.680 and FED speak and here I'm just looking at some 0:05:51.720 --> 0:05:54.680 comments made earlier this morning. I could perhaps be responsible 0:05:54.720 --> 0:05:57.400 for the equity turnaround coming from Boston FED presidents Susan 0:05:57.400 --> 0:05:59.960 Collins saying that it might just make a lot of 0:06:00.000 --> 0:06:02.320 sense to shift to smaller rate hikes. I wonder how 0:06:02.320 --> 0:06:04.880 many of people in that camp kind of eat their 0:06:04.880 --> 0:06:08.360 words if they see a CPI number that just isn't 0:06:08.720 --> 0:06:12.160 coming down fast enough. All right, well that's the question. 0:06:12.200 --> 0:06:14.800 I mean, we're going to get that inflation data and 0:06:14.880 --> 0:06:17.760 the Fed has its work cut out a mid terms, 0:06:17.760 --> 0:06:21.680 oh those things. Yeah. I'm going to Arizona, not for 0:06:21.800 --> 0:06:23.160 mid terms, but it would be a good place if 0:06:23.160 --> 0:06:25.640 I were not going on vacation and going at some 0:06:25.720 --> 0:06:28.120 rocks or something that's I'm going to touch some grass 0:06:28.160 --> 0:06:30.440 and yeah, yeah, I do some hiking. Big thank you 0:06:30.480 --> 0:06:32.840 to read Picker U s. Economy reporter for Bloomberg News, 0:06:32.920 --> 0:06:35.480 joining U S. V A Zum from Washington. Also Creedy Gupta, 0:06:35.560 --> 0:06:38.200 anchor and markets correspondent for Bloomberg. She's with us in 0:06:38.240 --> 0:06:42.240 the Bloomberg Interactive at Broker's Studio. This is Bloomberg Business 0:06:42.320 --> 0:06:46.200 Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic 0:06:46.600 --> 0:06:49.599 on Bloomberg Radio. Well, we've been talking about it all day. 0:06:49.600 --> 0:06:53.359 Payrolls increasing by higher than expected two sixty one thousand 0:06:53.600 --> 0:06:56.400 last month. That beat almost every estimate in the Bloomberg 0:06:56.480 --> 0:06:59.520 survey of economists. The figure compares with an upwardly revised 0:06:59.520 --> 0:07:02.760 two hundreds of teen thousand, four September. So it turns 0:07:02.760 --> 0:07:05.080 out the FED still has quite a bit of work 0:07:05.160 --> 0:07:08.000 to do. Let's not turn to Amy Glazer, senior vice 0:07:08.040 --> 0:07:10.520 president at the staffing firm A Deco. It's one of 0:07:10.560 --> 0:07:13.800 the biggest staffing firms in the entire world. So Amy 0:07:13.840 --> 0:07:15.360 and the crew at A Deco have a great idea 0:07:15.360 --> 0:07:17.200 of what's happening, not just here in the US, but 0:07:17.320 --> 0:07:20.600 globally too. She joins us this afternoon on the on 0:07:20.760 --> 0:07:23.040 via zoom from Florida. So if you are watching us 0:07:23.080 --> 0:07:25.640 on YouTube or streaming us on Bloomberg dot com, you 0:07:25.680 --> 0:07:28.000 can see the interview there. Amy, good to have you 0:07:28.160 --> 0:07:31.960 with us this afternoon. This number surprised a lot of 0:07:32.000 --> 0:07:35.840 people on the upside. Did it surprise you, Hi, great 0:07:35.880 --> 0:07:37.840 to be here to him, Thanks so much. Frankly, it 0:07:37.880 --> 0:07:40.680 didn't surprise me, and mirrors what we're seeing on the 0:07:40.720 --> 0:07:43.920 field and on the ground. Demand is still hot, it's 0:07:43.960 --> 0:07:47.200 still a candidate driven market, and there's still almost two 0:07:47.280 --> 0:07:51.840 jobs for every job seeker. And so Amy, it's interesting 0:07:51.880 --> 0:07:53.520 to hear you say that and to square that with 0:07:53.680 --> 0:07:55.800 sort of the corporate news that we've gotten this week. 0:07:55.840 --> 0:07:58.960 When you think about Amazon, for example, news that they're 0:07:58.960 --> 0:08:02.760 going to pause at new corporate workers. We heard some 0:08:02.800 --> 0:08:06.280 similar things from Apple. Twitter is its own special story, 0:08:06.360 --> 0:08:10.239 but laying off half of its workforce. I believe Twitter 0:08:10.360 --> 0:08:13.360 laying off half exactly. So when do we start to 0:08:13.520 --> 0:08:16.880 see that come into these big headline figures and when 0:08:17.000 --> 0:08:19.840 have you seen any indication of that in your work 0:08:19.840 --> 0:08:24.200 at a deco. Yeah, that's a really good question. Right now, 0:08:24.280 --> 0:08:26.440 although there are a lot of announcements with a lot 0:08:26.520 --> 0:08:30.119 of big names, we're really not seeing that demand ship. 0:08:30.480 --> 0:08:33.000 Whether it's being picked up by some small and medium 0:08:33.040 --> 0:08:37.040 sized companies from some different sectors. Um, we're seeing puts 0:08:37.040 --> 0:08:39.840 and takes right now in the market. So I think 0:08:39.840 --> 0:08:42.880 we'll continue to watch. I don't have a crystal ball, 0:08:43.320 --> 0:08:46.040 but frankly, I don't anticipate a great deal of change 0:08:46.120 --> 0:08:50.640 throughout the remainder of the year. This is really remarkable, Amy, 0:08:50.679 --> 0:08:52.720 because and I want to follow up on Katie's great 0:08:52.800 --> 0:08:55.800 question about about Twitter, because I've actually before the jobs 0:08:55.840 --> 0:08:58.280 report came out, I was had this like really nerdy 0:08:58.320 --> 0:09:00.319 group of friends and we we text about this type 0:09:00.360 --> 0:09:03.800 of stuff, and we were talking about the layoffs of Twitter, 0:09:04.200 --> 0:09:06.079 and he was saying that he feels bad for all 0:09:06.080 --> 0:09:08.439 the people who've been laid off from Twitter because it's 0:09:08.440 --> 0:09:10.319 a really tough job market right now. And I pushed back, 0:09:10.320 --> 0:09:13.199 and I said, look, everybody we talked to say says 0:09:13.320 --> 0:09:17.520 that for tech workers specifically, because every company is pretty 0:09:17.600 --> 0:09:19.640 much a tech company right now, it is not that 0:09:19.720 --> 0:09:23.120 difficult for people with those engineering backgrounds to go out 0:09:23.120 --> 0:09:27.760 and find another job. Is that true. That's absolutely the 0:09:27.800 --> 0:09:31.880 case right now, Tim, we're seeing the opportunities still exist 0:09:32.000 --> 0:09:35.520 and and really it's actually creating a cool opportunity where 0:09:35.960 --> 0:09:38.600 folks in the driver's seat can really drive their own 0:09:38.600 --> 0:09:42.000 destiny and decide what their future work looks like, whether 0:09:42.040 --> 0:09:45.360 it be the company, the flexibility of hours they're looking for. 0:09:45.800 --> 0:09:48.560 So I still continue to see those candidates, you know, 0:09:49.120 --> 0:09:52.160 driving what's going to happen in the future. Let me 0:09:52.240 --> 0:09:56.400 just say that my group chats don't look like Tim's. Uh, 0:09:56.559 --> 0:09:59.920 we were not discussing, sorry, the labor market. But that's 0:10:00.000 --> 0:10:04.240 really cool, Tim. But Amy, a narrative that I hear 0:10:04.280 --> 0:10:07.520 specifically when we talk about these tech sector layoffs is that, oh, well, 0:10:07.559 --> 0:10:09.880 these companies way overstaffed over the past two and a 0:10:09.920 --> 0:10:13.320 half years during the pandemic. Is that a theory that 0:10:13.400 --> 0:10:16.440 holds water with you. Yeah, I think that's part of it. 0:10:16.480 --> 0:10:19.040 I think, you know, it's really more of a right 0:10:19.120 --> 0:10:21.760 sizing and a market that has been so white hot 0:10:22.160 --> 0:10:28.680 over the last two years. Interesting. Okay, So here's the thing, 0:10:28.920 --> 0:10:31.760 and I kind of pose this question to read Picker 0:10:31.760 --> 0:10:34.559 it a little earlier about J. Powell. This just means 0:10:34.600 --> 0:10:37.880 the FED has so much more work to do because 0:10:38.480 --> 0:10:40.600 for the months the FED share has been talking about 0:10:40.600 --> 0:10:44.000 an overheated labor market and we're still continuing to see that. 0:10:44.200 --> 0:10:46.480 So I know you're don't You're not focused on the FED. 0:10:46.480 --> 0:10:50.000 You're focused on employment. But does it show you that 0:10:50.280 --> 0:10:52.120 the FED has a long way to go in order to, 0:10:52.760 --> 0:10:54.920 I don't know, try to attempt this soft landing to 0:10:54.920 --> 0:10:58.000 bring inflation under control, because if people can get jobs 0:10:58.000 --> 0:11:00.760 so easily at this point, then could lead to higher 0:11:00.760 --> 0:11:04.560 wages and that could lead to higher inflation. Right. You know, 0:11:04.880 --> 0:11:08.280 it's interesting. We just released our Global Workforce of the 0:11:08.320 --> 0:11:12.400 Future report. We surveyed US workers global workers, and we 0:11:12.520 --> 0:11:17.240 found that wages, although they're increasing, are still concerned to candidates. 0:11:17.640 --> 0:11:19.839 And in fact, our data showed us the two thirds 0:11:19.880 --> 0:11:22.280 of the U S workers don't feel like any wage 0:11:22.280 --> 0:11:25.600 gains have been enough to heat and eat this winner. 0:11:26.120 --> 0:11:29.520 So as a result of us, workers right now are 0:11:29.559 --> 0:11:33.040 actually saying they're open to a second job. So I 0:11:33.440 --> 0:11:36.680 think we'll continue to see some interesting trends and and 0:11:36.760 --> 0:11:39.640 some folks looking to pick up additional work to kind 0:11:39.640 --> 0:11:41.280 of offset it. So I think we do our ways 0:11:41.320 --> 0:11:44.160 to go there looking to pick up additional work. I 0:11:44.160 --> 0:11:47.360 think that leads nicely into a question about what could 0:11:47.360 --> 0:11:50.360 we expect to see this holiday season. You know, when 0:11:50.360 --> 0:11:54.120 a lot of especially retailers, try to staff up for 0:11:54.240 --> 0:11:57.719 some temporary roles, do you expect the same sort of 0:11:57.880 --> 0:12:01.800 seasonal swing there? Absolutely, and we're in the throes of 0:12:01.800 --> 0:12:04.120 it right now. In fact, we've got a national road 0:12:04.200 --> 0:12:06.960 show with a lot of job mobiles out on the 0:12:07.000 --> 0:12:10.800 streets in these communities. They're hiring seasonally, really going to 0:12:10.840 --> 0:12:13.440 where the candidates reside to make it easy for them 0:12:13.520 --> 0:12:17.920 to apply. We're still seeing considerable demand. On one unique 0:12:17.960 --> 0:12:20.080 aspect we're seeing a little bit is the shift in 0:12:20.200 --> 0:12:23.360 retail from the e commerce world to the brick and 0:12:23.400 --> 0:12:27.000 mortar stores and pop up shops. So seasonal hiring, although 0:12:27.080 --> 0:12:29.560 still strong, looks a little bit different this year. It 0:12:29.600 --> 0:12:32.400 may not be quite as heavy in the warehouse sector 0:12:32.559 --> 0:12:36.040 as it is in some of those in person shopping experiences. 0:12:36.120 --> 0:12:38.160 I mean that comes as no surprise, Amy, given what 0:12:38.200 --> 0:12:41.120 Amazon said about the holiday quarter being its slowest growth, 0:12:41.480 --> 0:12:44.040 uh that it's ever that it's ever seen at this point. 0:12:44.480 --> 0:12:47.600 So yeah, Hey, Amy, it's always good to check in 0:12:47.600 --> 0:12:49.520 with you. Really appreciate you taking the time and joining 0:12:49.600 --> 0:12:52.679 us on a Bloomberg Business Week, especially on Job's Day. 0:12:52.679 --> 0:12:56.160 Amy Glazier, senior vice president at the staffing firm A Deco. 0:12:56.200 --> 0:12:58.520 It's a worldwide staffing from among the biggest in the world. 0:12:58.840 --> 0:13:03.640 She joined us this afternoon via zoom from ponte Vedra Beach, Florida. 0:13:03.720 --> 0:13:05.920 Check him out at a Deco USA. On Twitter, you're 0:13:05.920 --> 0:13:08.559 listening to Bloomberg Business Week Tim Stanovik and Katie Graeifeld 0:13:08.600 --> 0:13:14.240 and we're just getting started. You're listening to Bloomberg Business 0:13:14.280 --> 0:13:18.120 Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic 0:13:18.559 --> 0:13:23.000 on Bloomberg Radio. Well in the new issue of Bloomberg 0:13:23.040 --> 0:13:26.320 Business Week. It's the new Economy issue of Business Week magazine. 0:13:26.360 --> 0:13:28.720 It's available now on news stands, on the Bloomberg Terminal 0:13:28.760 --> 0:13:32.640 and at Bloomberg Dot com there's a piece by Tom Orlick, 0:13:32.720 --> 0:13:36.000 He's chief economists for Bloomberg Economics. It's all about how 0:13:36.080 --> 0:13:39.360 national security hawks are muscling aside economists when it comes 0:13:39.400 --> 0:13:42.560 to set policy direction. We got Tom with us on 0:13:42.600 --> 0:13:44.719 the line right now. He joins us from Washington, d C. 0:13:44.840 --> 0:13:47.079 Also joining us as Joel Weber. He is the editor 0:13:47.120 --> 0:13:49.840 of Bloomberg Business Week. He joins us this afternoon on 0:13:49.920 --> 0:13:53.439 the access line. Joel, I want to start with you because, 0:13:53.920 --> 0:13:57.080 as Tom writes in this piece, there are two different 0:13:57.080 --> 0:13:58.920 types of policymakers in the world. That's what we have 0:13:58.960 --> 0:14:01.920 to imagine. Essentially, those who are looking to increase the 0:14:01.960 --> 0:14:04.840 size of the pie and then those who are looking 0:14:04.920 --> 0:14:07.240 for their own share of it. How are we now 0:14:07.240 --> 0:14:09.720 in this world where it's sort of a zero sum 0:14:09.760 --> 0:14:12.600 game rather than a rising tide lifting all boats. At 0:14:12.600 --> 0:14:16.800 the risk of mixing metaphors, here a few things going 0:14:16.800 --> 0:14:19.520 on there. But UM, I like the pie part um, 0:14:19.800 --> 0:14:22.360 So so what we um what we kind of talked 0:14:22.360 --> 0:14:25.120 about with Tom here was something that um we wanted 0:14:25.160 --> 0:14:28.840 to be on the other side of China's recent Communist 0:14:28.840 --> 0:14:31.800 Party congress and talk about because ultimately the story is 0:14:31.800 --> 0:14:35.680 a US China one here, UM, and those being sort 0:14:35.680 --> 0:14:39.360 of the global superpowers that are vying for superior superiority. 0:14:39.840 --> 0:14:44.440 And obviously that dynamic is changing and has changed dramatically 0:14:44.440 --> 0:14:48.160 over the past UM, even within the past decade. UM. 0:14:48.240 --> 0:14:51.040 And what Tom Um I thought, did a really interesting 0:14:51.160 --> 0:14:54.880 job pointing out here was the new leadership in China 0:14:54.920 --> 0:14:59.840 looks dramatically different and whereas the prevailing UM you know, 0:15:00.040 --> 0:15:04.520 for decades, the prevailing UH kind of priority on both 0:15:04.560 --> 0:15:06.800 sides was to expand that pie and that is just 0:15:06.960 --> 0:15:11.120 no longer the case. So so Tom is a great 0:15:11.240 --> 0:15:14.000 China watcher, had been UM. When I first met him, 0:15:14.040 --> 0:15:17.080 he was actually in Beijing, UM, and so I'm really 0:15:17.120 --> 0:15:20.040 I was really curious to get his perspective on on 0:15:20.080 --> 0:15:23.640 what the recent moves within China look like. And of 0:15:23.680 --> 0:15:27.080 course he didn't even bigger step backstory connecting all those doubts. 0:15:26.920 --> 0:15:29.280 So Tom talked to us about what what stuck out 0:15:29.360 --> 0:15:34.440 to you Um in this leadership change in China? Thanks 0:15:34.520 --> 0:15:37.880 Joel UM. So if we focus on the China piece 0:15:37.920 --> 0:15:41.800 of it for a moment, the focus has been on 0:15:42.160 --> 0:15:47.240 Hijin Ping securing a third term as the General Secretary 0:15:47.240 --> 0:15:51.360 of the Communist Party, and so also China's great leader, China, 0:15:51.480 --> 0:15:55.360 China's top leader. Um lost in the sort of lost 0:15:55.360 --> 0:15:58.760 in the kind of headlines, there was something else really 0:15:58.760 --> 0:16:01.880 important which was going on, which is the retirement of 0:16:01.920 --> 0:16:08.040 a whole generation of pro reform economic policy officials. Leka Chang, 0:16:08.120 --> 0:16:11.680 the Premier, E Gang and gorse Hu Ching at the 0:16:11.680 --> 0:16:17.440 Central Bank, leoher Shi Jimping's top economic advisor, all heading 0:16:17.480 --> 0:16:20.680 for retirement and no one really with the same pro 0:16:20.840 --> 0:16:25.560 reform credentials to replace them. So within China you've got 0:16:25.600 --> 0:16:30.400 this transition where policy is being set by economists focus 0:16:30.440 --> 0:16:35.320 on development, to policy being set by really communist party 0:16:35.360 --> 0:16:39.520 appara chicks without that pro market vision. Now at the 0:16:39.560 --> 0:16:41.800 same time, and this is where the kind of step 0:16:41.840 --> 0:16:45.320 back US China perspective that Joel was mentioning comes in. 0:16:45.680 --> 0:16:48.280 We've seen a changing of the guard in the United States. 0:16:48.920 --> 0:16:51.720 Back in the ES, it was the economists at the 0:16:51.720 --> 0:16:55.600 Treasury who were calling the shots on US China policy, saying, yeah, 0:16:55.680 --> 0:16:58.880 let's be friends, let's expand global markets, let's grow the 0:16:58.880 --> 0:17:02.960 pie together. Now Here in Washington, d C. There's a 0:17:03.000 --> 0:17:05.879 strong sense that that was a mistake, that the US 0:17:06.000 --> 0:17:08.640 was kind of hoodwinked. They were tricked by the Chinese. 0:17:09.160 --> 0:17:11.480 And so it's no longer the economists who are calling 0:17:11.520 --> 0:17:15.480 the shots here, it's the national security hawks. And that 0:17:15.520 --> 0:17:20.360 means within China and on US China policy, the focus 0:17:20.359 --> 0:17:24.240 has really shifted away from growing the pie and sharing 0:17:24.280 --> 0:17:29.360 the pie and towards securing whatever is ours. And that's 0:17:29.400 --> 0:17:32.080 a very different world. Well, tom, if we are further 0:17:32.160 --> 0:17:35.880 that metaphor about pies and now we're fighting over slices, 0:17:35.960 --> 0:17:39.040 or the U S and China are if you take 0:17:39.160 --> 0:17:43.160 score right now, who do you think is winning. So look, 0:17:43.240 --> 0:17:46.840 this is a very very challenging moment for China. They 0:17:46.840 --> 0:17:52.720 continue to wrestle with COVID zero. Some hopeful signs um 0:17:53.240 --> 0:17:55.280 on social media and in the press in the last 0:17:55.320 --> 0:17:58.560 few days that maybe the exit from COVID zero might 0:17:58.600 --> 0:18:01.760 come a little bit ler than expected, but still a 0:18:01.840 --> 0:18:05.000 huge challenge for China there, and of course they've got 0:18:05.000 --> 0:18:08.159 all of the problems that come from the massive slump 0:18:08.280 --> 0:18:11.959 in their real estate sector, once the biggest driver of growth, 0:18:12.320 --> 0:18:16.040 now a huge drag. So China right now this is 0:18:16.040 --> 0:18:19.360 a very stressed position, and that makes the US look 0:18:19.480 --> 0:18:22.920 relatively strong. But I think if we throw the calendar 0:18:23.000 --> 0:18:26.359 forward a few years, or maybe even just a few months. 0:18:26.760 --> 0:18:29.600 I think the I think the relative position might look 0:18:29.680 --> 0:18:34.160 very different. China that's exited from COVID zero, a China 0:18:34.200 --> 0:18:38.080 that's found a bit more stability after its property slump. 0:18:38.560 --> 0:18:40.280 I think that's going to be a China which looks 0:18:40.320 --> 0:18:43.119 more formidable again. And we're going to be looking in 0:18:43.200 --> 0:18:46.520 another assessment of the sort of relative balance of power 0:18:46.600 --> 0:18:51.919 between Beijing and d c Um Tom, So, what about 0:18:52.040 --> 0:18:55.320 the new leadership that's surrounding g What what can we 0:18:55.359 --> 0:18:58.919 expect from from them in regards to policy? So I 0:18:58.960 --> 0:19:02.760 think there's been a change on a couple of dimensions, right, um. 0:19:02.880 --> 0:19:05.480 So the first dimension, which we already discussed, is the 0:19:05.560 --> 0:19:09.720 kind of the exit of the pro reform economists from 0:19:09.720 --> 0:19:12.880 the leadership. I think that's important. We'll have to see 0:19:12.920 --> 0:19:17.679 what impact that has. The second is the sort of 0:19:17.880 --> 0:19:22.479 shift away from a leadership based on collective responsibility and 0:19:22.560 --> 0:19:26.720 different factions having a voice in the standing committee, to 0:19:26.800 --> 0:19:29.320 a leadership where she Jim Paying is very much the 0:19:29.359 --> 0:19:34.080 paramount leader and he's surrounded by well, if we're unkind, 0:19:34.119 --> 0:19:37.720 we'd say his cronies. If we're being kind, we'd say 0:19:37.760 --> 0:19:42.040 his friends, his allies, and his supporters. M Now, the 0:19:42.119 --> 0:19:45.399 hope there is, well, if you've got someone in charge 0:19:45.400 --> 0:19:48.960 who's surrounded by people they trust and who makes good decisions, 0:19:49.000 --> 0:19:51.879 you can get a lot of good stuff done. The risk, 0:19:51.960 --> 0:19:54.200 of course, is that if there's no one there who 0:19:54.240 --> 0:19:56.720 can say no to the top leader, if there's no 0:19:56.760 --> 0:20:00.679 one they're offering a divergent point of view, then the 0:20:00.800 --> 0:20:06.119 risk of significant policy missteps increases. Hey, Tom, before we 0:20:06.200 --> 0:20:08.879 let you go, Um, we just have about forty seconds 0:20:08.960 --> 0:20:11.640 left here. What does all of this mean for US 0:20:11.800 --> 0:20:14.080 companies that are trying to do business in China? I 0:20:14.119 --> 0:20:17.560 mean Starbucks, Nike, Disney, an organization like the NBA. The 0:20:17.600 --> 0:20:20.360 list goes on. So I was actually hoping if we're 0:20:20.359 --> 0:20:23.280 going to conclude by identifying our favorite types of pie 0:20:24.080 --> 0:20:29.679 minus minus cherry, I'll go with Apple. But for US businesses, UM, 0:20:29.720 --> 0:20:33.360 I think the challenge remains. Right. Um, You've got COVID zero, 0:20:33.480 --> 0:20:35.480 which just makes it very hard to operate, tough to 0:20:35.520 --> 0:20:38.480 get executives in and out of the country. You've got 0:20:38.520 --> 0:20:42.760 mounting hostility between China and the United States, which means 0:20:42.800 --> 0:20:46.480 the risk of embargoes, the risk of tariffs, other kind 0:20:46.520 --> 0:20:50.280 of political risks which could upset the kind of corporate dynamic. 0:20:50.760 --> 0:20:54.360 Um So hopefully there's better times for China ahead. Hopefully 0:20:54.359 --> 0:20:56.800 they exit COVID zero, Hopefully get they get through their 0:20:56.800 --> 0:21:02.119 property slump. Operating them, Tom Morelick, we unfortunately have to 0:21:02.200 --> 0:21:04.560 leave it there, Tom Moorelick, Chief economist for Bloomberg Economics. 0:21:04.600 --> 0:21:07.440 Joel Webber also joining us, the editor of Bloomberg Business Week. 0:21:07.640 --> 0:21:11.240 You're listening to Bloomberg Business Week with Carol Messer and 0:21:11.359 --> 0:21:16.000 Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. Let's talk 0:21:16.040 --> 0:21:18.440 about crypto right now. You know it's been about in 0:21:18.520 --> 0:21:20.280 our and twenty minutes of the show. We haven't talked 0:21:20.280 --> 0:21:22.320 about crypto once. I did say Crypto I r l 0:21:22.400 --> 0:21:25.200 our new episode. That's true, it's on tonight. So we 0:21:25.280 --> 0:21:27.600 got to mention we didn't get a discussion. We're going 0:21:27.640 --> 0:21:29.960 to do that now with Mike Bell. She He is 0:21:30.040 --> 0:21:34.040 chief executive officer of Bickgo. He joins us on Zoom 0:21:34.080 --> 0:21:36.919 from Palo Alto Mike, it's great to have you with 0:21:37.040 --> 0:21:40.560 us for our audience who might not be familiar with Biko. 0:21:41.080 --> 0:21:43.760