WEBVTT - Jobs Day: U.S. Hiring Slows Amid Delta Concerns 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.000 at Bloomberg dot com slash podcast. Phil Orlando joins US 0:00:23.160 --> 0:00:26.680 chief Equity Market Strategies, also head of Client Portfolio Management 0:00:26.680 --> 0:00:29.880 that federated Hermi's Phil, what's your take on this job's miss? 0:00:30.600 --> 0:00:34.479 It was a huge miss. Uh, you know at uh 0:00:34.840 --> 0:00:39.120 two thirty five thousand versus the seven thirty three consensus. 0:00:39.280 --> 0:00:42.080 But I gotta tell you our number at Federated, we 0:00:42.080 --> 0:00:45.839 were forecasting four hundred and ninety thousand, so the number 0:00:46.240 --> 0:00:48.480 we thought was going to be a huge miss. Okay. 0:00:48.479 --> 0:00:50.159 Your follow up question is, well, how do we need 0:00:50.200 --> 0:00:52.680 got to be closest? Without going over Phil, that's the rule. 0:00:53.120 --> 0:00:58.200 There are there are three key model inputs in our 0:00:58.320 --> 0:01:01.520 labor model. Two of them are weak. The ADP report 0:01:01.600 --> 0:01:05.160 for August missed by two hundred and fifty thousand jobs. 0:01:05.520 --> 0:01:09.160 The Philly said was very soft. It missed by four points. 0:01:09.520 --> 0:01:11.959 The third model input is the claims dad and frankly 0:01:12.080 --> 0:01:14.399 that's been pretty good. But when you when you and 0:01:14.440 --> 0:01:18.160 there was also a seasonal adjustment that was negative by 0:01:18.200 --> 0:01:21.800 seventy seven thousand in this report. So when you work 0:01:21.920 --> 0:01:27.080 back the seasonal adjustment plus the upside revisions in June 0:01:27.080 --> 0:01:31.560 and July, that comes to UH and UH sort of 0:01:31.560 --> 0:01:33.560 a clean number, if you will, A four hundred and 0:01:33.600 --> 0:01:38.360 forty six thousand. We're forecasting four nine, So basically we 0:01:38.360 --> 0:01:41.480 were there. UM. I think that the myths that we 0:01:41.560 --> 0:01:46.040 saw today will be reversed in September. That number is 0:01:46.080 --> 0:01:50.480 going to be reported on Friday, October eight, and and 0:01:50.520 --> 0:01:55.320 the key factor there is the roll off of the 0:01:55.360 --> 0:01:59.640 three federal unemployment bonus. Folks are going to be coming 0:01:59.640 --> 0:02:03.040 back to work in our view, uh, and particularly in 0:02:03.080 --> 0:02:07.440 that leisure and hospitality category that showed bagel in the 0:02:07.480 --> 0:02:11.440 month of August, which was very surprising that well. And 0:02:11.480 --> 0:02:13.480 we know, of course that those benefits, that extra three 0:02:13.520 --> 0:02:17.160 hundred dollar week expire September six. I believe that that 0:02:17.280 --> 0:02:20.160 is Monday, Phil. What this means for the markets, though, 0:02:20.160 --> 0:02:24.320 I'm wondering, is this September taper by the federal reserve 0:02:24.560 --> 0:02:28.000 off the table. Well, in our view, it was always 0:02:28.000 --> 0:02:31.120 off the table because we were expecting this number to miss. 0:02:31.520 --> 0:02:34.320 We think the September number to be reported in early 0:02:34.880 --> 0:02:38.400 October will be very strong, north of a million jobs. 0:02:38.720 --> 0:02:41.639 So we expect the Fed to announce that taper at 0:02:41.680 --> 0:02:44.679 their f O m C meeting on November three. That's 0:02:44.720 --> 0:02:48.080 been our forecast. We're we're holding to that right now. 0:02:50.240 --> 0:02:54.720 What when we see text docs sort of holding us 0:02:54.760 --> 0:02:58.680 back from bigger losses and a sell off in bonds, 0:02:58.720 --> 0:03:04.400 what does that say to you? Well, is probably strong 0:03:04.440 --> 0:03:08.080 word bonds in our view tells us that the market 0:03:08.160 --> 0:03:12.200 is reading through the hiccup on this number and that 0:03:12.280 --> 0:03:15.160 we're going to get the labor market back on pace 0:03:15.440 --> 0:03:18.240 later in the year. The Fed will announced the taper 0:03:18.320 --> 0:03:21.120 later in the year, we think in November, not in September, 0:03:21.400 --> 0:03:23.680 and so the bond market I think is looking ahead 0:03:23.720 --> 0:03:27.679 and sort of pricing that end. But clearly you've you've 0:03:27.680 --> 0:03:30.720 had to slow down in in growth here, uh in 0:03:30.800 --> 0:03:34.079 the fact that technology stocks are doing well tells us 0:03:34.120 --> 0:03:36.360 that the market is saying, Okay, I've got to look 0:03:36.440 --> 0:03:39.080 for a place where I'm going to get growth, regardless 0:03:39.120 --> 0:03:41.920 of how good or how bad the underlying economy is, 0:03:42.200 --> 0:03:44.640 and and and tech has been a place where that's 0:03:44.680 --> 0:03:47.960 been reliable over the last eighteen months. Phil or is 0:03:48.000 --> 0:03:51.720 it rates are going to be somewhat anchored because they're 0:03:51.960 --> 0:03:55.960 the Fed has made a point in a distinction between 0:03:55.960 --> 0:04:00.240 a taper and a rate hike. Correct is out what 0:04:00.360 --> 0:04:03.920 you also see moving tech. We we absolutely see that, 0:04:03.960 --> 0:04:08.360 but we we eventually the FED. If if we're right 0:04:08.440 --> 0:04:11.360 that the FED starts the paper before the end of 0:04:11.400 --> 0:04:13.760 this year, let's say they started in November. We think 0:04:13.760 --> 0:04:16.560 it's gonna be a relatively short taper that by the 0:04:16.600 --> 0:04:20.320 middle of calendar two, the hundred and forty billion dollars 0:04:21.200 --> 0:04:24.400 QUEI will have been tapered down to zero. That sets 0:04:24.440 --> 0:04:27.599 the FED up to begin to increase interest rates. In 0:04:27.720 --> 0:04:31.679 calendar three. We're looking for two quarter point rate hikes 0:04:32.040 --> 0:04:34.760 take the funds right up by fifty basis points. So 0:04:35.200 --> 0:04:37.240 you've got to be able to sort of read the cycle. 0:04:37.560 --> 0:04:39.880 That's the way we think this is playing out. And 0:04:39.920 --> 0:04:43.359 I think the technology sector is saying, Okay, if for 0:04:43.400 --> 0:04:48.240 whatever reason, delta variant economic policy, FED policy, whatever, the 0:04:48.279 --> 0:04:51.400 economy takes a tick down here, um, we're still going 0:04:51.480 --> 0:04:53.960 to get some good growth out of the technology names. 0:04:54.760 --> 0:04:56.480 How far can we get off the ground? I mean, 0:04:56.520 --> 0:04:59.800 what do you see as a terminal rate film in 0:05:00.080 --> 0:05:05.040 terms of interest rates? How I mean to two hikes 0:05:05.080 --> 0:05:08.560 bringing us to fifty basis points. That's still basically you know, 0:05:08.720 --> 0:05:13.160 zerp right, So when when can we see real rises? Well, 0:05:13.240 --> 0:05:16.880 so our our forecast on on benchmark Ken's we think 0:05:16.920 --> 0:05:19.720 we get maybe back to one seventy five this year, 0:05:20.240 --> 0:05:22.920 two percent next year, maybe two and a half percent 0:05:23.320 --> 0:05:27.040 in calendar three. You know, that seems like a big number, 0:05:27.120 --> 0:05:29.839 knowing we're at fifty basis points a year ago, But 0:05:29.920 --> 0:05:32.479 in the overall scheme of life, two and a half 0:05:32.600 --> 0:05:36.000 percent on benchmark ten year treasury yields two years from 0:05:36.040 --> 0:05:39.120 now is not death. That ought to continue to support 0:05:39.400 --> 0:05:42.640 a strong equity market, And in fact, our s and 0:05:42.680 --> 0:05:46.080 P five hundred forecast by the end of next year 0:05:46.600 --> 0:05:49.240 is still up at the fifty three hundred level, and 0:05:49.520 --> 0:05:52.479 we're sitting here at you know, let's call it. So 0:05:52.520 --> 0:05:55.160 you've still got some good growth in stocks, not the 0:05:55.279 --> 0:05:58.400 hundred and seven percent we've seen over the last eighteen months, 0:05:58.680 --> 0:06:01.719 but the equity market to continue to do well, certainly 0:06:01.720 --> 0:06:06.359 outpacing the bond market. Phil You've talked about cycles a 0:06:06.400 --> 0:06:08.200 little bit, and I want to hit on this point. 0:06:08.200 --> 0:06:11.240 I'm trying to nail down some of our market participants 0:06:11.320 --> 0:06:14.480 on where we are in the cycle. If it's early phase, 0:06:14.520 --> 0:06:17.039 are you thinking that there's more room to run in 0:06:17.080 --> 0:06:21.320 the smaller caps? When is the transition to mid too late? 0:06:21.400 --> 0:06:26.279 And are we there yet? So so small caps, value 0:06:26.360 --> 0:06:29.680 stocks and international stocks are still the three areas that 0:06:29.880 --> 0:06:32.640 we're focused on here because we think there's still some 0:06:32.720 --> 0:06:35.640 outsize games coming. But when you when you take a 0:06:35.640 --> 0:06:38.520 step back and look at the bigger cycle, the economic 0:06:38.560 --> 0:06:41.840 growth that we're going to enjoy this year, we think 0:06:41.880 --> 0:06:45.239 will slow into calendar twenty two, and we'll slow again 0:06:45.279 --> 0:06:49.120 into calendar twenty three, not to recessionary levels, but we 0:06:49.200 --> 0:06:53.320 think more to sort of more trend line levels. Our 0:06:53.440 --> 0:06:56.839 early guests on calendar twenty three is GDP growth, you 0:06:56.880 --> 0:06:59.240 know in that sort of two to three percent neighborhood 0:06:59.440 --> 0:07:02.360 now all under twenty four and beyond is going to 0:07:02.440 --> 0:07:06.159 be a function of how draconian it's fed policy over 0:07:06.200 --> 0:07:09.720 the next year or two. Fiscal policy with with Congress 0:07:09.760 --> 0:07:12.280 and the Biden administration, and might know those are question 0:07:12.320 --> 0:07:14.960 marks we don't know what's going to happen there um, 0:07:15.000 --> 0:07:17.920 but based upon what we think we know right now, 0:07:18.320 --> 0:07:21.280 the economy does decelerate back to trend line over the 0:07:21.360 --> 0:07:24.880 next couple of years, but not into recession. So that's 0:07:24.920 --> 0:07:27.040 not so bad. Let me take this in a slightly 0:07:27.040 --> 0:07:30.280 different direction. We had an op ed by Joe Mansion. 0:07:30.720 --> 0:07:32.440 Was it just last night? It feels like days ago, 0:07:32.480 --> 0:07:35.720 but just yesterday, I think, um saying, you know, twenty 0:07:35.800 --> 0:07:39.480 eight trillion dollars is too much and we can't be 0:07:39.520 --> 0:07:43.840 adding to that deficit. He's concerned about all kinds of issues, 0:07:44.400 --> 0:07:48.679 are you We're we're we're absolutely on board with Senator 0:07:48.720 --> 0:07:51.480 Mansion that that if I could fill in some of 0:07:51.480 --> 0:07:55.120 the blanks, we now know definitively, based upon the n 0:07:55.200 --> 0:07:58.080 b e R the National Bureau of Economic Research, that 0:07:58.120 --> 0:08:01.480 the law the shortest and deep this recession in history 0:08:02.000 --> 0:08:05.680 ended April a year ago. We had this powerful v 0:08:05.800 --> 0:08:10.040 bottom economic recovery that started last summer. We we know 0:08:10.400 --> 0:08:13.680 definitively that we have closed the output gap in g 0:08:13.880 --> 0:08:17.240 d P with the second quarter g P report this year, 0:08:17.440 --> 0:08:20.080 So we don't need another five and a half trillion 0:08:20.120 --> 0:08:23.600 dollars of stimulus to sort of prop up the economy. 0:08:23.800 --> 0:08:26.680 We're back to where we need to be. Now, what 0:08:26.760 --> 0:08:30.560 I think Senator Mansion said is the question here is 0:08:30.600 --> 0:08:34.200 not propping up the economy. It's it's sort of reordering 0:08:34.280 --> 0:08:38.320 the social contract between the federal government and the American people. 0:08:38.480 --> 0:08:41.880 That's a completely different argument, and it's one that I 0:08:41.920 --> 0:08:44.440 guess the Biden administration Congress is going to have to 0:08:44.520 --> 0:08:47.640 make that argument to the American people. But but from 0:08:47.679 --> 0:08:50.600 an economic standpoint, we don't need five and a half 0:08:50.640 --> 0:08:54.400 trillion dollars of additional debt, higher taxes, et cetera to 0:08:54.440 --> 0:08:58.520 resuscitate the economy because the economy is doing five. Are 0:08:58.559 --> 0:09:01.400 your clients asking you though about higher taxes and the 0:09:01.440 --> 0:09:05.480 impact on the markets? Yes? Absolutely. I just did two 0:09:05.480 --> 0:09:09.480 client meetings question Connecticut earlier this week, and that was 0:09:09.640 --> 0:09:13.520 that was those are the questions, higher debt levels, higher taxes, 0:09:13.640 --> 0:09:16.560 higher servicing of the debt, What does that mean to 0:09:16.720 --> 0:09:19.160 us as investors? And what should we be doing to 0:09:19.240 --> 0:09:24.920 protect ourselves buying bitcoin, water and building and building yourself 0:09:24.920 --> 0:09:28.200 a fallout shelter. That was not my answer, but one 0:09:28.240 --> 0:09:31.359 client did jump out and talked about, you know, ammunition 0:09:31.400 --> 0:09:34.000 and can goods in the basement. You know, I'm not 0:09:34.080 --> 0:09:37.720 going there either, but but I almost went there, but 0:09:37.840 --> 0:09:41.040 I didn't say it out loud. It is it is 0:09:41.080 --> 0:09:44.680 an uncertain time for for clients and investors who are 0:09:44.679 --> 0:09:47.160 out there trying to figure out what all of this means. Yeah, 0:09:47.280 --> 0:09:49.240 especially since you can't be in the basement if you 0:09:49.280 --> 0:09:53.040 live in the northeast, right, it's completely flooded too soon, 0:09:53.160 --> 0:09:55.520 mad And you also missed n f T s in there. 0:09:55.679 --> 0:09:58.040 N f T s are also this new thing after 0:09:58.160 --> 0:09:59.959 f n f T s are a little crazy. I'm 0:10:00.120 --> 0:10:02.960 I'm just talking about what you need in case armageddon comes. 0:10:03.400 --> 0:10:07.040 You could throw gold in there for bitcoin, but you 0:10:07.040 --> 0:10:10.199 you have to have more and more people. Even though 0:10:10.240 --> 0:10:13.920 we don't see it Phil getting bearished, right at least 0:10:13.960 --> 0:10:16.520 at least hedging hedging bearish. Do you have a lot 0:10:16.559 --> 0:10:20.520 of people hedging well, I'll put myself in that category 0:10:20.720 --> 0:10:23.880 that that yes, we've got a forty eight hundred target 0:10:23.920 --> 0:10:26.400 on the SMP five this year at the end of 0:10:26.440 --> 0:10:29.680 this year, but we're also acknowledging the fact that that 0:10:29.760 --> 0:10:31.840 we're sitting here at record highs now. I think we 0:10:31.960 --> 0:10:35.200 hit our fifty four record high the other day and 0:10:35.240 --> 0:10:38.840 We've got all of these fiscal and monetary policy head 0:10:38.840 --> 0:10:42.760 winds ahead of us, the depth ceiling, questions about the 0:10:42.840 --> 0:10:46.199 jobs report, economic growth, the delta area, et cetera. Could 0:10:46.240 --> 0:10:49.160 we see a five or ten percent air pocket over 0:10:49.200 --> 0:10:52.120 the next couple of months, you know, back to let's 0:10:52.160 --> 0:10:54.600 call it a two hundred day moving average. I mean, 0:10:54.640 --> 0:10:57.520 that's very possible. Now, we would look at that as 0:10:57.600 --> 0:11:00.719 a as a potential buying opportunity if we can get 0:11:00.760 --> 0:11:03.560 some of these issues resolved. But but I'm not going 0:11:03.600 --> 0:11:05.800 to suggest that the market is going to go straight up, 0:11:06.040 --> 0:11:09.760 you know, to fifty next year without any consolidation in 0:11:09.800 --> 0:11:12.360 between now and that. How do you compete with a 0:11:12.480 --> 0:11:15.240 wall of cash that's flooding anytime you get a little 0:11:15.240 --> 0:11:16.760 bit of a dip, And we could fold this over 0:11:16.800 --> 0:11:19.480 into high yield spreads. The minute it goes above three 0:11:19.520 --> 0:11:22.000 hundred basis points of where treasuries a wall of cash 0:11:22.040 --> 0:11:24.280 comes in. You wake up, you have a million emails 0:11:24.320 --> 0:11:27.079 from Japan. They can't wait to buy bonds that aren't 0:11:27.200 --> 0:11:31.040 negative interest rates. How do you compete with that? Well, 0:11:31.360 --> 0:11:34.040 it's very hard to compete with and and that's not 0:11:34.120 --> 0:11:38.000 to suggest that we're on the precipe of a bear market. 0:11:38.080 --> 0:11:40.640 We're not. But when I talk about an air pocket, 0:11:40.760 --> 0:11:44.720 these things are relatively short lived. And and maybe it's because, 0:11:45.480 --> 0:11:48.640 for example, the debt ceiling issue becomes a near term 0:11:48.679 --> 0:11:52.560 hot potato or uh, suddenly it seems that this five 0:11:52.600 --> 0:11:56.840 and a half trillion dollar package in Congress is going 0:11:56.920 --> 0:11:59.360 to get the votes and we're gonna double capital gains 0:11:59.400 --> 0:12:03.280 tax rates something like that. Um. So when you're talking 0:12:03.280 --> 0:12:06.040 about an air pocket, you're talking about the market moving 0:12:06.080 --> 0:12:08.400 lower for you know, a couple of days, a couple 0:12:08.400 --> 0:12:10.880 of weeks. But I think by the time we get 0:12:10.960 --> 0:12:14.120 back into the end of October beginning of November sort 0:12:14.160 --> 0:12:16.439 of work through. You know, the Fed is going to 0:12:16.520 --> 0:12:20.200 make that announcement. We think on November three, Uh, Speaker 0:12:20.280 --> 0:12:24.600 Pelosi has established a September seven vote date for a 0:12:24.600 --> 0:12:27.360 couple of these pieces of legislation. By the time we 0:12:27.400 --> 0:12:30.600 get into early November, we're hoping that we'll have some 0:12:30.679 --> 0:12:33.920 answers to some of these questions. Remember when TARP seemed 0:12:33.960 --> 0:12:37.120 like an insanely large amount of money, like just unbelievable 0:12:37.120 --> 0:12:40.760 that they could spend eight hundred billion dollars, And now 0:12:41.280 --> 0:12:44.000 he said drop in the bucket. I want to ask 0:12:44.040 --> 0:12:46.280 you about a point that Crety Goopta made earlier, said 0:12:46.320 --> 0:12:48.199 she doesn't talk to a lot of investors who are 0:12:48.600 --> 0:12:52.320 really long term putting money down long term, you know, uh, 0:12:52.640 --> 0:12:54.560 for more like five to ten years or ten to 0:12:54.640 --> 0:12:57.840 twenty years. It's more of a near term to medium 0:12:58.000 --> 0:13:02.160 term UM investment horizon. Do you see that as well? No, 0:13:02.400 --> 0:13:06.199 I don't. I there are certainly investors who are nervous 0:13:06.240 --> 0:13:10.960 about navigating the near term uh, you know, challenges. But 0:13:11.040 --> 0:13:12.840 I think if you're going to invest in the market 0:13:13.000 --> 0:13:16.640 for for college savings, retirement savings, whatever, you've got to 0:13:16.640 --> 0:13:20.080 be thinking longer term. And and the reality is that 0:13:20.080 --> 0:13:23.280 that America is the greatest nation in the world and 0:13:23.320 --> 0:13:27.679 the greatest financial markets in the world. We're investing throughout 0:13:27.880 --> 0:13:33.480 the entire world. Companies produce positive earning. Stock prices follow 0:13:33.559 --> 0:13:39.080 those earnings. Eventually we're gonna stabilize with with better fiscal 0:13:39.160 --> 0:13:43.040 and monetary policies that will be able to project out 0:13:43.040 --> 0:13:46.280 into the future. And and as you're looking out, you know, 0:13:46.400 --> 0:13:49.680 over the decades um, you know, at eight to twelve 0:13:50.600 --> 0:13:54.000 normalize positive return out of stocks on a total return 0:13:54.080 --> 0:13:57.800 basis is a reasonable assumption, UM, and and so again 0:13:57.880 --> 0:14:02.000 as you're thinking retirement, college savings, those sort of good 0:14:02.559 --> 0:14:05.800 longer term goals. Um. The equity market is the place 0:14:05.800 --> 0:14:08.560 where you need to be alright, great to get some 0:14:08.640 --> 0:14:11.319 insight with you, Phil. Always love hearing from you, Phil Orlando, 0:14:11.400 --> 0:14:15.040 Chief equity market strategists and head of Client portfolio Management 0:14:15.040 --> 0:14:18.760 that Federated Hermes. They've got a total of I think 0:14:18.760 --> 0:14:22.400 about six d fifty billion under management, but hundred and 0:14:23.080 --> 0:14:26.280 a hundred billion and change in equities alone. So great 0:14:26.320 --> 0:14:32.360 to hear from Federate Hermes and Phil Orlando. Let's get 0:14:32.360 --> 0:14:36.920 over right now to talk about the aftermath of I 0:14:36.960 --> 0:14:40.480 saw described as ex Hurricane Ida. You know, hurricane or 0:14:40.520 --> 0:14:43.960 storm um, doesn't really matter because it did so much 0:14:44.400 --> 0:14:49.560 damage traveling up from New Orleans and hitting the New York, 0:14:50.000 --> 0:14:53.640 New Jersey connectic, the tri state area really hard. Um. 0:14:53.640 --> 0:14:56.960 What what are we seeing in terms of damage? What 0:14:57.000 --> 0:14:59.200 are we seeing in terms of the aftermath here? For that, 0:14:59.480 --> 0:15:02.800 I want to bring in a Bloomberg reporter on this 0:15:02.880 --> 0:15:06.720 to give us late to Skylar Woodhouse joins us Um 0:15:06.840 --> 0:15:10.320 and Skylar. I heard a factoid today, not sure if 0:15:10.360 --> 0:15:13.400 it's true. I heard that more rain was dropped in 0:15:13.440 --> 0:15:16.920 an hour than ever had been recorded in that area before. 0:15:16.920 --> 0:15:20.120 Is that the case, Yeah, No, that is the case, definitely. 0:15:20.200 --> 0:15:22.640 I mean, you know, I was in my apartment and 0:15:22.680 --> 0:15:25.240 I could hear the rain outside, and I'm thinking to myself, 0:15:25.320 --> 0:15:27.960 my goodness, it's really coming down. But no, the rain 0:15:28.040 --> 0:15:30.080 it came through and it really ran back the city, 0:15:30.080 --> 0:15:32.800 and it left a lot of people confused and just 0:15:33.120 --> 0:15:36.760 an utter shock really to what has happened and really 0:15:36.920 --> 0:15:39.160 such a short amount of time, and it was something 0:15:39.200 --> 0:15:43.120 that you know, no one could have expected to really 0:15:43.240 --> 0:15:48.760 cause such such great damage and to see the but 0:15:49.080 --> 0:15:52.600 what the storm did to the city, it just left 0:15:52.720 --> 0:15:56.520 so many people in complete shock and confusion as well. 0:15:56.520 --> 0:15:59.360 People are just really confused as to what just happened. Skyler. 0:15:59.440 --> 0:16:02.520 That is of hints it my next question. This isn't 0:16:02.560 --> 0:16:06.520 our first rodeo with aftermaths of hurricanes. Why were we 0:16:06.600 --> 0:16:11.160 so caught off guard? Yeah, you know, I think after 0:16:11.600 --> 0:16:13.680 you know, I think the city did a lot of 0:16:13.720 --> 0:16:17.480 repairs after Hurricane Sandy years ago. But I think you know, 0:16:18.440 --> 0:16:21.800 time is moving, thinks they're quickly changing. You know, climate 0:16:21.880 --> 0:16:24.640 change is presenting a whole set of new challenges, and 0:16:24.680 --> 0:16:28.640 I think this this range just came completely out of 0:16:28.640 --> 0:16:34.000 nowhere and just left everyone just so at loss as 0:16:34.040 --> 0:16:36.800 to why weren't we prepared and you know, what could 0:16:36.800 --> 0:16:40.120 have been done different to prevent such a catastrophe that 0:16:40.160 --> 0:16:43.040 we really saw. And it just raised a lot of 0:16:43.120 --> 0:16:46.600 questions as to what will the city and Albany do 0:16:47.160 --> 0:16:51.400 to prevent something like this from happening again. Now, the 0:16:51.400 --> 0:16:55.800 Tri State area is not exactly a red Tri State area, 0:16:55.960 --> 0:17:00.600 so I don't know if it swings any voters, but um, 0:17:00.840 --> 0:17:04.440 how do you think people feel about the the Infrastructure 0:17:04.440 --> 0:17:09.200 Bill now considering what we just saw happen. I mean, 0:17:09.400 --> 0:17:13.400 I think people's eyes have I think people have definitely 0:17:13.520 --> 0:17:15.679 you know, maybe perked up a bit and or you know, 0:17:15.800 --> 0:17:18.439 maybe paying a little bit more attention now after what 0:17:18.520 --> 0:17:22.040 we saw in the Tri State area. I mean you 0:17:22.040 --> 0:17:24.359 could say up here, you know it's it definitely leans, 0:17:24.720 --> 0:17:29.040 you know, it's definitely more blue. But you know, so 0:17:29.520 --> 0:17:32.200 I think it's leaving people that just definitely pay way 0:17:32.280 --> 0:17:36.160 more attention to um, you know, climate change in how 0:17:36.200 --> 0:17:40.840 the Infrastructure Bill could possibly um improve some of the 0:17:40.880 --> 0:17:44.280 downfalls that we saw were impacted from the hurricane through 0:17:44.320 --> 0:17:47.119 this bill and It's definitely made people realize that this 0:17:47.200 --> 0:17:51.040 is something that needs to be taken seriously. All Right, Skyler, 0:17:51.080 --> 0:17:53.960 thanks so much for joining us. Skylar Woodhouse, Bloomberg News 0:17:53.960 --> 0:17:57.800 reporter on the aftermath of Hurricane Ida and New York 0:17:57.840 --> 0:18:03.880 City is worsening weather patterns. Let's uh, let's get back 0:18:03.920 --> 0:18:06.520 to the corporate world right now. We've got a great 0:18:06.520 --> 0:18:09.119 guest for you, Tom Bone, as the president CEO of 0:18:09.200 --> 0:18:12.440 the Association for Corporate Growth. They have a huge network 0:18:13.440 --> 0:18:18.480 d mid market corporate executives all um running companies that 0:18:18.520 --> 0:18:22.000 are between ten million in market cap and a billion 0:18:22.200 --> 0:18:24.120 or ten million and I guess revenue per year and 0:18:24.119 --> 0:18:27.560 and a billion in revenue uh per year. And it's 0:18:27.600 --> 0:18:31.680 just a great place to get a picture of what's 0:18:31.720 --> 0:18:34.720 happening in the return to work. They have about thirty 0:18:34.760 --> 0:18:39.080 million jobs that they control, Tom, what do you think 0:18:39.080 --> 0:18:42.399 here as we as we round out what are we 0:18:42.480 --> 0:18:48.720 now nineteen months, twenty months through the pandemic? Um? Are 0:18:48.840 --> 0:18:51.520 we getting back to work or is there going to 0:18:51.600 --> 0:18:54.760 be something new ahead of us? A great to talk 0:18:54.800 --> 0:18:57.080 to you both, Thanks for having me. We get a 0:18:57.080 --> 0:19:01.160 survey of about a middle market companies on what they 0:19:01.200 --> 0:19:03.960 thought the future would look like. And what's interesting about 0:19:03.960 --> 0:19:07.320 this survey is it happened it coincided just before we 0:19:07.359 --> 0:19:09.680 started to get to the peak of what delta was 0:19:09.760 --> 0:19:13.240 looking like. So probably I think that if there was 0:19:13.240 --> 0:19:15.000 all to happened a little bit later, they'd even be 0:19:15.119 --> 0:19:18.280 more significant. But what we heard back loud and clear 0:19:18.880 --> 0:19:21.919 was that seventy percent of the respondent said that they 0:19:21.960 --> 0:19:24.439 were going to come back to a work environment that 0:19:24.520 --> 0:19:27.320 was very different, and they said it would probably be hybrid. 0:19:27.400 --> 0:19:29.560 Which hybrid model looks at, you know, coming into the 0:19:29.560 --> 0:19:31.359 office two or three days a week and then having 0:19:31.680 --> 0:19:35.600 much more flexible opportunities to work from home or god 0:19:35.640 --> 0:19:38.280 knows where where people are working from today. But it 0:19:38.359 --> 0:19:41.159 was interesting though because this was prior to the to 0:19:41.240 --> 0:19:45.120 the very insurgeon, we had at least, you know, two 0:19:45.200 --> 0:19:47.480 thirds things it's going to be different. We're not going 0:19:47.480 --> 0:19:50.680 back to the way things used to be. Interesting, if 0:19:50.720 --> 0:19:53.840 you go back, at least in some portion to the office, 0:19:53.960 --> 0:19:56.399 what does that look like. Are you hearing that more 0:19:56.440 --> 0:19:59.919 of these companies are either doing testing or asking for 0:20:00.119 --> 0:20:04.160 vaccination status. Well, it's a great question. And what we're 0:20:04.200 --> 0:20:08.199 finding in our data is that they're the vaccine mandates 0:20:08.240 --> 0:20:12.760 are actually very much aligned with kind of the political 0:20:12.800 --> 0:20:15.520 geography of the country. So in the southeast we're not 0:20:15.560 --> 0:20:18.840 seeing very many political mandates. In the northeast and out 0:20:18.880 --> 0:20:21.520 towards parts of the Midwest, and certainly on the on 0:20:21.560 --> 0:20:24.160 the far west coast, we're seeing a much more willingness 0:20:24.200 --> 0:20:29.199 and likelihood to have vaccine mandates in place. And barring that, 0:20:29.920 --> 0:20:32.400 UM the flexibility comes in and they have to be tested, 0:20:32.760 --> 0:20:35.960 you know, a minimum of one, sometimes multiple times a week, 0:20:36.000 --> 0:20:40.639 which can become very very onerous. But it's definitely different 0:20:40.760 --> 0:20:46.399 than it was prior to all this happening. Beyond UM 0:20:46.440 --> 0:20:52.240 the virus, beyond the pandemic, what are your member executives 0:20:52.320 --> 0:20:55.560 most concerned about? What are the biggest challenges that they're facing. 0:20:57.160 --> 0:21:00.679 Number One right now is labor. Labor lay. We're getting 0:21:00.680 --> 0:21:04.560 the right employees and getting them on time, you know, 0:21:05.040 --> 0:21:07.480 to to build the positions that they need. I keep 0:21:07.480 --> 0:21:09.879 hearing from everyone they just simply cannot hire. We just 0:21:09.880 --> 0:21:12.479 saw the jobs report come out today and I think 0:21:12.520 --> 0:21:16.440 it was two thousand new jobs when they were expecting 0:21:16.520 --> 0:21:19.840 seven hundreds something thousand. In the delta. UH they're talking 0:21:19.880 --> 0:21:22.680 about is simply the lack of people entering or re 0:21:22.840 --> 0:21:25.960 entering the labor force, and you know, we're seeing it, 0:21:26.080 --> 0:21:30.199 certainly from our organization. Our members are saying over and 0:21:30.280 --> 0:21:34.840 over is that trying to get quality people in every 0:21:34.880 --> 0:21:39.520 type of position right now is incredibly difficult. And but 0:21:39.680 --> 0:21:41.440 the hope is, and I think you know, if you 0:21:41.480 --> 0:21:43.199 look at the survey that we put out there, is 0:21:43.200 --> 0:21:47.240 that employees want the flexibility to work from home. They're 0:21:47.280 --> 0:21:49.520 saying loud and clear, we cannot go back to the 0:21:49.560 --> 0:21:51.600 way things used to be, right, that is their strong hope. 0:21:51.600 --> 0:21:53.440 So the hope is that with some of this cultural 0:21:53.560 --> 0:21:56.119 change now, with this hybrid and the selectible environment, that 0:21:56.119 --> 0:21:58.919 they're able to attract more employees. Well, I look at 0:21:58.920 --> 0:22:03.240 a CG. We have our completely distributed organization over fifty 0:22:03.359 --> 0:22:06.840 six employees. But what's amazing is that we are all 0:22:06.840 --> 0:22:09.440 over the US, so we can hire in any community 0:22:09.480 --> 0:22:12.280 across the country, and that's given us a significant advantage. 0:22:12.440 --> 0:22:16.600 Just about thirty seconds here, is there a skills mismatch? 0:22:19.280 --> 0:22:21.320 I you know, I don't know that it's much of 0:22:21.320 --> 0:22:24.800 a as a skill mitch mismatches. It is a simply 0:22:24.960 --> 0:22:30.560 a lack of willing and able bodies to jump into 0:22:30.640 --> 0:22:33.480 the to the fray. I mean, it's it's a lot 0:22:33.520 --> 0:22:35.720 of the jobs before we used to have a problem 0:22:35.800 --> 0:22:39.320 hiring when the tech sector or technical type skills either 0:22:39.440 --> 0:22:42.840 generally across the board, middle management and other types of 0:22:42.880 --> 0:22:46.720 managerial jobs that people simply marketing jobs, social media jobs 0:22:46.800 --> 0:22:50.399 having a really tough time finding uh, finding the folks 0:22:50.400 --> 0:22:53.119 to take those positions. All right. Interesting. I wish we 0:22:53.160 --> 0:22:54.520 had more time with you, Tom. I hope we can 0:22:54.560 --> 0:22:58.320 get you back on the program because your network. I 0:22:58.359 --> 0:23:00.720 just love to tap you for more insight. Uh, there's 0:23:00.760 --> 0:23:02.479