WEBVTT - 0306 Surveillance Radio Podcast Mixdown 1 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.960 --> 0:00:31.400 Joining us now, someone never will have an encore career. 0:00:31.680 --> 0:00:34.800 Claudia sim is the anchor to our job's day. We're 0:00:34.840 --> 0:00:38.280 honored she could be with us in the revisions coming 0:00:38.479 --> 0:00:44.839 up here. Claudia, how aging is our population? So? 0:00:45.159 --> 0:00:47.720 I mean it's an ongoing process. 0:00:47.760 --> 0:00:51.000 I mean baby boomers who have moved into prime retirement. 0:00:51.200 --> 0:00:55.639 And you know, the demographics on the aging side move 0:00:55.760 --> 0:00:58.360 very slowly. The demographics that have been moving very quickly 0:00:58.400 --> 0:01:01.520 have been on the immigration side. That's really what's been pulling, 0:01:02.160 --> 0:01:05.120 say the payroll numbers around. But aging is happening, and 0:01:05.160 --> 0:01:08.080 that that is a that's a reality that's marching along 0:01:08.160 --> 0:01:09.840 right with these every month of data. 0:01:09.600 --> 0:01:13.080 Weekend, you know, Claudia, every time we talk about the 0:01:13.160 --> 0:01:16.520 labor market, what we now also have to incorporate into 0:01:16.560 --> 0:01:20.040 that discussion is AI quite simply as AI and net 0:01:20.120 --> 0:01:23.440 creator of jobs or net destroyer of jobs. 0:01:23.440 --> 0:01:25.600 What's what's your view at this early early stage. 0:01:26.920 --> 0:01:29.600 So we're at a very early stage and with AI, 0:01:29.840 --> 0:01:32.960 what this how this transforms our labor market and it 0:01:33.000 --> 0:01:35.920 will transform our labor market is going to depend on 0:01:36.000 --> 0:01:39.920 the leadership that we have in our businesses, our civic institutions, 0:01:39.920 --> 0:01:42.960 and our government. Right like AI is not in control, 0:01:43.120 --> 0:01:45.640 we are in control. It's a technology. It's a technology 0:01:45.680 --> 0:01:48.160 that has a lot of potential. It could go in 0:01:48.160 --> 0:01:50.960 a lot of different directions. It's not just about automating 0:01:51.000 --> 0:01:53.680 out workers. It can also be about empowering workers and 0:01:53.760 --> 0:01:57.800 making them you know, more valuable, higher paid, new opportunities. 0:01:58.120 --> 0:02:00.960 But it's but we don't know to where it's going. 0:02:01.000 --> 0:02:03.160 And so there's going to be decision makers who really, 0:02:03.240 --> 0:02:05.480 you know, shape the future of AI and the workforce. 0:02:05.760 --> 0:02:09.480 Claud your research not really emphasizes the revisions. So last 0:02:09.480 --> 0:02:13.000 time I got a one thirty pop, what happens to 0:02:13.040 --> 0:02:15.520 the markets if we go back to back plus one 0:02:15.560 --> 0:02:20.480 hundred numbers? I mean, no one's expecting that, are they? No? 0:02:20.919 --> 0:02:23.680 Yeah, And I think what we were looking for as 0:02:23.680 --> 0:02:28.040 we came into this year with signs of stabilization in 0:02:28.120 --> 0:02:30.799 the labor market, right, things had been slipping since midyear 0:02:31.120 --> 0:02:34.280 and we saw job creation really like hit a wall 0:02:34.560 --> 0:02:36.280 in the middle of last year, and so we're just 0:02:36.360 --> 0:02:37.760 looking stabilization. 0:02:38.200 --> 0:02:40.680 Right January was like more than stabilization. 0:02:40.720 --> 0:02:43.760 One hundred and thirty thousand payrolls unemployment rate taking down 0:02:43.760 --> 0:02:45.919 at tent that's not that's like getting better. I mean, 0:02:45.960 --> 0:02:48.520 we'll take that right like, that would be awesome. But 0:02:48.680 --> 0:02:51.960 even if we had some downard revisions to January, and 0:02:52.000 --> 0:02:54.760 we have a February payrolls number that is positive and 0:02:54.840 --> 0:02:56.880 kind of has some lyft to it, it could be 0:02:57.000 --> 0:02:59.960 fifty thousand, forty thousand something in there, and then I'm 0:03:00.080 --> 0:03:02.519 let me rate stay stable. Like that's going to check 0:03:02.560 --> 0:03:05.840 the box on stabilization, even if we get some downward 0:03:05.919 --> 0:03:07.200 revisions in prior months. 0:03:08.200 --> 0:03:12.000 So real quickly, wages, how do you think wage environment 0:03:12.040 --> 0:03:12.600 is right now? 0:03:14.280 --> 0:03:18.280 So we have seen you know, wages, wage growth slow, 0:03:18.320 --> 0:03:20.639 and we've seen a moderation. It's been very gradual, which 0:03:20.680 --> 0:03:23.680 is consistent with some softening of demand for workers. But 0:03:23.760 --> 0:03:26.720 the wage numbers, including last month, have still been you know, 0:03:26.840 --> 0:03:29.520 pretty they've been pretty solid. And even when we think 0:03:29.560 --> 0:03:32.440 about what's happening right now with gas prices and the 0:03:32.600 --> 0:03:36.480 energy shop coming to American consumers. Those wage growth numbers 0:03:36.600 --> 0:03:39.360 and the jobs are so important because this is the 0:03:39.480 --> 0:03:43.040 key buffer that Americans have for these higher costs, is 0:03:43.040 --> 0:03:46.160 to have a paycheck that's getting bigger and being able 0:03:46.200 --> 0:03:47.560 to find work if they want work. 0:03:47.680 --> 0:03:49.520 So that's a really critical backdrop. 0:03:50.360 --> 0:03:52.640 Some with us new central advisors that we're going to 0:03:52.680 --> 0:03:56.840 continue with doctor some here after we see the jobs report. 0:03:56.920 --> 0:03:59.640 Jennifer Lee of BEMO Capital Markets a NAT your level 0:04:00.240 --> 0:04:04.480 ubs will join us as well into the jobs report. 0:04:04.600 --> 0:04:13.200 Futures negative thirty six. Good morning, Wow. 0:04:14.520 --> 0:04:18.440 I'm Alexis Christophers, and these numbers just crossing the bloomberg now. 0:04:18.480 --> 0:04:21.880 The Labor Department says the US economy lost ninety two 0:04:22.040 --> 0:04:26.320 thousand jobs in February. That is worse than expected. We 0:04:26.320 --> 0:04:29.359 were looking at an additional fifty five thousand jobs. And 0:04:29.400 --> 0:04:31.760 of course this is compared to January when we added 0:04:31.800 --> 0:04:35.200 one hundred and thirty thousand jobs. The unemployment rate ticking 0:04:35.279 --> 0:04:37.680 up to four point four percent. The estimate there was 0:04:37.720 --> 0:04:40.159 four point three percent in the prior month was four 0:04:40.200 --> 0:04:43.799 point three percent. Checking wages month over month up slightly 0:04:43.839 --> 0:04:46.240 to four tenths of a percent. Estimates were for three 0:04:46.279 --> 0:04:49.559 tenths and earnings year over year also a bit hotter 0:04:49.600 --> 0:04:52.919 three point eight percent versus the three point seven percent expected. 0:04:52.920 --> 0:04:55.800 But again the headline here the economy lost many more 0:04:55.839 --> 0:04:58.800 jobs and expected ninety two thousand in the month of February. 0:04:59.320 --> 0:05:01.839 Estimates were for fifty five thousand. We also just got 0:05:01.880 --> 0:05:04.760 retail sales numbers out for the month of January and 0:05:04.800 --> 0:05:07.320 they were down two tenths of a percent versus the 0:05:07.480 --> 0:05:11.120 estimate of three tenths of a percent. As for market reaction, 0:05:11.680 --> 0:05:13.840 it is swift. The Dow futures now down more than 0:05:13.839 --> 0:05:16.720 four hundred points s and p futures off sixty four. 0:05:17.000 --> 0:05:20.040 Guys, alexis, thank you so much. Tenure Yield comes in 0:05:20.240 --> 0:05:24.120 with a vengeance. Four point one seven is now handle 0:05:24.240 --> 0:05:27.919 four point one zero. That's price up, yielded down in 0:05:28.000 --> 0:05:33.200 futures negative forty to negative sixty. Here, retail sales pretty 0:05:33.279 --> 0:05:36.560 much on track or the constructive revision. But Paul, I'm 0:05:36.560 --> 0:05:38.280 just going to before we go back to doctor, some 0:05:39.000 --> 0:05:42.720 change in non farm payrolls negative ninety two two months 0:05:42.839 --> 0:05:46.320 revision negative sixty nine. I might ball on it, Paul, 0:05:46.360 --> 0:05:51.240 but I think that's a negative one sixty one yep. 0:05:51.400 --> 0:05:54.880 Combine, Yeah, that is a sharp reversal in the short 0:05:54.960 --> 0:05:58.159 term labor market. Here again minus ninety two thousand. The 0:05:58.200 --> 0:06:00.960 consensus was for positive fifty five five thousand, and that 0:06:01.000 --> 0:06:04.920 two month payroll revision negative sixty. 0:06:04.760 --> 0:06:07.719 Nine thousand toms. So that is the big numbers across 0:06:07.760 --> 0:06:08.119 the tape. 0:06:08.240 --> 0:06:12.280 Claudia sm this as we continue with all of good 0:06:12.320 --> 0:06:15.480 work here. These are the kind of numbers, Claudia where 0:06:15.520 --> 0:06:19.839 amateurs like me go, okay, that means diminished GDP? Is 0:06:19.839 --> 0:06:22.800 that correct that all of the sun's back to a 0:06:22.880 --> 0:06:26.720 lesser real GDP where we're on the sum recession. 0:06:26.240 --> 0:06:31.720 Watch, So not necessarily you know this, so clearly these 0:06:31.800 --> 0:06:34.400 numbers from February are not in like you know, checking 0:06:34.440 --> 0:06:37.160 the box on signs of stabilization in the labor market. 0:06:37.240 --> 0:06:38.240 Right, we're losing jobs. 0:06:38.360 --> 0:06:40.760 Un'mplating rate ticked up. This is not a good sign. 0:06:41.200 --> 0:06:45.000 This actually sits pretty consistently, especially get the last three 0:06:45.040 --> 0:06:47.719 months with what we saw all of last year. The 0:06:47.800 --> 0:06:52.360 US economy last year created almost no jobs on net right, 0:06:52.600 --> 0:06:57.240 and at the same time, consumer spending increased, business investment 0:06:57.279 --> 0:06:58.480 in creed GDP. 0:06:58.279 --> 0:06:59.279 Rose for the year on. 0:07:00.920 --> 0:07:03.520 Right, it may we can talk about concentration. We can 0:07:03.560 --> 0:07:06.719 talk about what sectors it's in, but we have already 0:07:06.760 --> 0:07:10.360 been for a year in a jobless expansion. 0:07:10.880 --> 0:07:13.760 So unfortunately, what the February. 0:07:13.160 --> 0:07:16.840 Data, with this latest labor market data suggests is that's 0:07:16.840 --> 0:07:19.040 still where we're at right And we have been looking 0:07:19.080 --> 0:07:21.280 for signs that hiring was picking up, and you know 0:07:21.320 --> 0:07:24.040 that January gave some the Januor Employment report gave some 0:07:24.080 --> 0:07:26.880 signs of that. January still is a really strong number, 0:07:26.880 --> 0:07:29.680 even with down revisions. It's all you know, it's close 0:07:29.720 --> 0:07:32.400 to one hundred and thirty thousand still, But I mean, clearly, 0:07:32.600 --> 0:07:35.400 to lose ninety thousand jobs on net in February is 0:07:35.400 --> 0:07:36.720 a real problem, Claudia. 0:07:37.160 --> 0:07:40.560 It's a it's a we're not creating jobs. It's that question. 0:07:40.800 --> 0:07:41.680 Is it a problem? 0:07:41.760 --> 0:07:43.760 That's a whole separate And this has been a really 0:07:43.800 --> 0:07:46.560 difficult conversation to have, but we've been in this for 0:07:46.600 --> 0:07:47.720 well over a year now. 0:07:48.640 --> 0:07:52.000 So Claudia, what's just it? What do we know about 0:07:52.640 --> 0:07:53.960 the supply of labor? 0:07:54.000 --> 0:07:57.560 We know that this administration is effectively closed down the border, 0:07:58.200 --> 0:08:00.920 reducing supply of labor to some indust trees, you know, 0:08:00.960 --> 0:08:05.600 whether it be housing, construction, agricultural, hospitality. What do we 0:08:05.680 --> 0:08:07.640 know with a year's worth of data here as to 0:08:07.680 --> 0:08:09.200 the supply of labor. 0:08:11.040 --> 0:08:14.960 Well, the estimates with immigration come in, it takes some time. 0:08:15.120 --> 0:08:18.400 We have you know, updated estimates from the Census Bureau, 0:08:18.400 --> 0:08:21.320 we have updated estimates from Congressional Budget Office. They're pulling 0:08:21.320 --> 0:08:23.360 in a lot of different pieces of data. These are 0:08:23.400 --> 0:08:26.520 still in flux, but it is very clear directionally, and 0:08:26.560 --> 0:08:29.160 it's also very clear in terms of magnitudes. These are 0:08:29.320 --> 0:08:33.160 large down shifts and immigration and immigrants have been kind 0:08:33.200 --> 0:08:37.040 of on the margin additional workers in recent years. So 0:08:37.320 --> 0:08:40.040 it does like directionally this makes sense, and I think 0:08:40.040 --> 0:08:43.120 that is important to keep in context these shifts in 0:08:43.240 --> 0:08:44.679 job creation, going from you. 0:08:44.600 --> 0:08:47.080 Know, hundreds of thousands of jobs created on net. 0:08:46.960 --> 0:08:50.040 Not that long ago, to not creating any and if 0:08:50.080 --> 0:08:53.040 maybe even destroying jobs on net in the US economy, 0:08:53.520 --> 0:08:55.320 Like that is a dramatic shift. 0:08:55.920 --> 0:08:59.079 And the unemployment rate has drifted up I word, four 0:08:59.160 --> 0:08:59.960 point four percent. 0:09:00.120 --> 0:09:03.000 So like we have to keep the like the magnitudes 0:09:03.040 --> 0:09:06.080 and the drama on the payroll side. It's not just 0:09:06.120 --> 0:09:08.280 about we can demand it is this supply and that's 0:09:08.320 --> 0:09:10.840 a policy choice, but keep an eye on like the 0:09:10.880 --> 0:09:13.720 unemployer rate has drifted up, and that is there is 0:09:13.720 --> 0:09:15.880 still a problem. This is not just about supply. We 0:09:15.960 --> 0:09:17.840 don't have enough demand for workers. 0:09:17.920 --> 0:09:20.319 I mean, Claudia, do your point in a flat economy. 0:09:20.400 --> 0:09:22.520 I just did a three month moving average, folks in 0:09:22.559 --> 0:09:24.840 the back of my HP twelve c oh. Yeah. And 0:09:24.880 --> 0:09:29.520 the bottom line here is we've generated five six hundred 0:09:29.520 --> 0:09:33.600 and sixty jobs over the last ninety days per month. 0:09:34.240 --> 0:09:36.280 I mean that is I've never seen that. That's like 0:09:36.640 --> 0:09:40.040 a flat economy. I have, Claudia quickly here. I mean, 0:09:40.040 --> 0:09:44.160 there's a lot of negative statistics. Claudia, what does a 0:09:44.200 --> 0:09:47.640 FED do with this information if labor matters? 0:09:49.480 --> 0:09:52.400 So they're watching They're watching all of this very carefully. 0:09:52.520 --> 0:09:55.280 I think the unemployment really does some a lot of 0:09:55.320 --> 0:09:57.880 this up. The fact that you know, you're the unemployer 0:09:57.920 --> 0:10:00.079 rate did tick up. We're still at low levels. It 0:10:00.200 --> 0:10:03.439 has been drifting up gradually. They're going to keep I mean, 0:10:03.520 --> 0:10:08.760 this returns some attention to the downside risks to employment, right, 0:10:08.800 --> 0:10:11.080 this is all about the employment risks. The inflation risk 0:10:11.400 --> 0:10:13.920 Today brought some of those employment risks back into focus. 0:10:13.960 --> 0:10:15.079 But this is still. 0:10:15.040 --> 0:10:19.480 Largely a labor market that looks like it's working relatively well, 0:10:19.920 --> 0:10:23.600 not a recessionary dynamic, but a very unusual dynamic. 0:10:24.280 --> 0:10:27.400 Okay, it's unusual, but I mean there's a lot of 0:10:27.440 --> 0:10:30.240 people flat on their back in this country. Claudia saying, 0:10:30.559 --> 0:10:35.240 cut interest rates. If Waller in company, goals be in company, 0:10:35.559 --> 0:10:39.680 Hast in company, if they cut interest rates, does that 0:10:39.840 --> 0:10:42.600 help the labor economy or is it now removed? 0:10:46.240 --> 0:10:50.240 Cutting interest rates is a way to stimulate demand, whether 0:10:50.320 --> 0:10:54.120 that's you know, consumer is going out making bigger purchases 0:10:54.120 --> 0:10:56.400 they have to take out, you know, on their credit cards, 0:10:56.520 --> 0:11:01.560 buying a home, businesses making investment equipment. Where like, it's 0:11:01.720 --> 0:11:04.600 a channel that can help. It is not all powerful. 0:11:04.840 --> 0:11:07.480 It's a very blunt tool, but you know that's the 0:11:07.520 --> 0:11:10.079 tool that FEDS got and it is very clear from 0:11:10.080 --> 0:11:12.360 this power fed they will defend the labor market if 0:11:12.360 --> 0:11:12.840 they need to. 0:11:13.360 --> 0:11:16.040 Doctor Sum, thank you so much for supporting us in 0:11:16.080 --> 0:11:19.559 your note and all your work with this, Claudia Sum, 0:11:19.920 --> 0:11:27.440 with this this morning with New Century Advisors. Stay with us. 0:11:27.640 --> 0:11:30.920 More from Bloomberg Surveillance coming up after this. 0:11:38.120 --> 0:11:41.720 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:11:41.800 --> 0:11:44.920 weekday afternoons from seven to ten am. Eastern Listen on 0:11:45.040 --> 0:11:48.680 Applecarplay and Android Otto with the Bloomberg Business app, or 0:11:48.840 --> 0:11:50.320 watch us live on YouTube. 0:11:50.640 --> 0:11:54.520 A wonderful brief here from Eric Vanastron joining us in studio, 0:11:54.640 --> 0:11:59.000 chief investment officer at Lazard. What have you change in 0:11:59.040 --> 0:12:02.560 your call in the last seven days? I mean, you know, 0:12:02.640 --> 0:12:05.640 I'm sitting here, it's like the time Keen Employment Act 0:12:05.760 --> 0:12:08.600 is like the news Solul's crazy. But what are you 0:12:08.840 --> 0:12:11.720 writing differently now than eight days ago? 0:12:11.920 --> 0:12:13.679 Well, let me first say I'm a big supporter of 0:12:13.720 --> 0:12:14.960 the Tom Keen Employment Act. 0:12:15.000 --> 0:12:18.000 So but that's we're working for you. Alexis doesn't agree 0:12:18.000 --> 0:12:18.640 with you, That's. 0:12:19.920 --> 0:12:22.720 I think the sharpest investors are the ones who are 0:12:22.760 --> 0:12:25.400 willing to change their minds when the facts on the 0:12:25.400 --> 0:12:28.120 ground change. And what we've seen over the last seven 0:12:28.200 --> 0:12:31.360 days is a pretty dramatic rethinking of the global supply picture. 0:12:31.440 --> 0:12:33.440 For energy in particular. 0:12:33.280 --> 0:12:35.640 We've seen a staggering surge in the price of oil 0:12:35.679 --> 0:12:37.240 as the traffic in the Strait of War moves has 0:12:37.240 --> 0:12:40.240 slowed down as dramatically as it has. But I still 0:12:40.280 --> 0:12:43.160 think markets are thinking of it like a short term disruption. 0:12:43.200 --> 0:12:45.080 I think there's still a little bit of recency bias 0:12:45.120 --> 0:12:49.280 from the twenty twenty five Iran episode, which is fundamentally 0:12:49.440 --> 0:12:51.520 very different from this one. And I still don't think 0:12:51.520 --> 0:12:55.079 markets have fully appreciated the cost to global growth, to 0:12:55.200 --> 0:12:58.400 global supply chains, and to domestic inflation here in the 0:12:58.480 --> 0:13:01.559 United States from a persistent and disruption of the Straits. 0:13:02.240 --> 0:13:06.560 So the underlying economic data in the US is still 0:13:06.640 --> 0:13:09.560 generally very healthy. Yeah, when you look at GDP growth, 0:13:09.600 --> 0:13:14.320 we'll get the jobs data today, inflation. But this situation 0:13:14.400 --> 0:13:16.920 in Iran, you know, I guess the market is kind 0:13:16.920 --> 0:13:17.680 of telling us. 0:13:17.920 --> 0:13:20.280 We're prepared to look through it to the other side. 0:13:20.640 --> 0:13:23.319 Is that a fair assumption here or what point does 0:13:23.360 --> 0:13:24.480 it become problematic? 0:13:24.559 --> 0:13:25.880 Is it three four or five, six weeks? 0:13:25.920 --> 0:13:26.480 That kind of thing. 0:13:26.679 --> 0:13:28.720 Well, I think you're absolutely right in terms of what 0:13:28.760 --> 0:13:31.880 the market is discounting. The market is trying to look 0:13:31.920 --> 0:13:34.160 through it. Even though you know, these oil price moves 0:13:34.200 --> 0:13:37.000 look big. The stock market moves this week feel painful 0:13:37.400 --> 0:13:39.839 in the grand scheme of things. US equities are just 0:13:39.880 --> 0:13:41.760 at the bottom of the range they've been since October. 0:13:42.200 --> 0:13:45.080 Oil still off its heights from since the since the 0:13:45.160 --> 0:13:50.280 Ukrainian invasion. But I think that that relative sanguinity that 0:13:50.320 --> 0:13:52.880 relative calm is out of line with the level of 0:13:52.880 --> 0:13:55.560 fundamental risks in the backdrop here. And that's why I 0:13:55.600 --> 0:13:58.360 think paying close attention to traffic in the Gulf is 0:13:58.400 --> 0:13:59.320 going to be very important. 0:13:59.440 --> 0:14:02.120 Eric turnin this here we're going to continue. Jane Folio 0:14:02.160 --> 0:14:05.880 over at Rabobank just tweaks hero she goes weaker Euro 0:14:06.160 --> 0:14:09.559 from a one seventeen down to one sixteen is a 0:14:09.880 --> 0:14:13.160 view right now, Euro with a really difficult week one 0:14:13.360 --> 0:14:18.360 fifteen sixty two with dxy pushing up against one hundred. 0:14:18.400 --> 0:14:22.960 I mean that's consensus gets a view here. Oops, it's wrong, 0:14:23.040 --> 0:14:25.840 Like the massive week dollar call doesn't look so good 0:14:25.880 --> 0:14:29.080 right now? Right What does consensus and economics into this 0:14:29.200 --> 0:14:32.840 job's report into retail sales? What's a consensus call in 0:14:32.920 --> 0:14:35.600 economics where the Van Nostri and Radar is up. 0:14:35.920 --> 0:14:38.240 Well, I think you got to separate the structural, the 0:14:38.240 --> 0:14:40.960 structural and the cyclical here. And I think the big 0:14:41.320 --> 0:14:44.880 the structural context coming into the Iranian episode and coming 0:14:44.880 --> 0:14:49.360 into the jobs report today is that the US economy 0:14:49.360 --> 0:14:51.520 has been I like to call it more concentrated, that 0:14:51.600 --> 0:14:54.600 it's been really in living memory. The way consumers spend 0:14:54.640 --> 0:14:56.840 it's really driven by the top of the income distribution, 0:14:57.280 --> 0:15:01.160 the way businesses invest, it's all concentrat in AI data centers, 0:15:01.160 --> 0:15:04.840 we have a very concentrated set of demand factors on 0:15:04.880 --> 0:15:07.840 both the consumption side and the investment side of the US, 0:15:08.200 --> 0:15:10.840 and that's contributed to strong overall growth. But it's also 0:15:10.920 --> 0:15:14.640 more fragile than this level of economic growth normally is. 0:15:14.720 --> 0:15:17.720 And that's why X factors like this energy shock, the 0:15:17.840 --> 0:15:20.120 risk of a slowing labor market, and that's why we'll 0:15:20.160 --> 0:15:24.040 be watching today's report very closely. All threaten to disrupt 0:15:24.160 --> 0:15:26.680 that generally strong growth we've seen here today. 0:15:27.000 --> 0:15:30.960 This shape economy, this case shaped consumer, it's been with 0:15:31.040 --> 0:15:32.240 us for a long time. 0:15:33.160 --> 0:15:34.200 Is it problematic? 0:15:34.240 --> 0:15:36.000 I know it's problematic for the people on the lower 0:15:36.080 --> 0:15:38.800 end of the K, But for sure, overall economy, the 0:15:38.880 --> 0:15:41.240 numbers that we get on our ecoscreen, they seem pretty 0:15:41.240 --> 0:15:41.840 thrown good. 0:15:42.400 --> 0:15:42.680 Is that? 0:15:43.000 --> 0:15:46.400 But structurally can this economy continue with such a disparity? 0:15:46.760 --> 0:15:46.960 Yeah? 0:15:47.000 --> 0:15:49.040 So the reason I think it's problematic for a lot 0:15:49.080 --> 0:15:52.600 of reason is not least because of the large portrait 0:15:52.640 --> 0:15:55.040 of Americans who aren't seeing the income growth that one 0:15:55.040 --> 0:15:59.080 would expect from this level of aggregate economic strength. But 0:15:59.160 --> 0:16:02.720 It's also worry because the most persistent growth, the growth 0:16:02.760 --> 0:16:06.760 we can have the most confidence in his MACROI as macroeconomists, 0:16:07.120 --> 0:16:10.080 is the broadest growth, and when it gets concentrated like this, 0:16:10.880 --> 0:16:14.560 it's more prone to disruption from geopolitical shock, which we've 0:16:14.600 --> 0:16:18.120 had it aful lot of lately, and from supply constraints. 0:16:18.280 --> 0:16:20.720 And I think this particular geopolitical shock is going to 0:16:20.760 --> 0:16:22.080 increase those supply constraints. 0:16:22.080 --> 0:16:25.680 And before the jobs report fifteen sixteen minutes away from 0:16:25.720 --> 0:16:28.760 all that data, Claudiusom will be with us. Let me 0:16:28.800 --> 0:16:31.280 look at the list here. I don't have naughty love. 0:16:31.280 --> 0:16:34.000 It will be with this ubs and the Equity Marcus 0:16:34.040 --> 0:16:38.480 Jennifer Lee from Demo Capital, Marcus, just wonderful. Benjamin Ladler, 0:16:38.520 --> 0:16:40.840 who has the Mother of All calls, a guy named 0:16:40.880 --> 0:16:43.080 Kevin Has's going to stop by, I believe, talking to 0:16:43.160 --> 0:16:45.880 John Ferrell as well. Austin gools me late late in 0:16:45.920 --> 0:16:49.160 the show today. Right now, Eric Faestron with us. Okay, 0:16:49.160 --> 0:16:51.400 I'm gonna get you in trouble. There's a guy, Adam 0:16:51.480 --> 0:16:54.920 Posen at the Peterson Institute who do to co write 0:16:54.960 --> 0:16:58.280 with a guy named or Zegg, and they have basically 0:16:58.320 --> 0:17:02.360 suggested inflation will be more are persistent. Do you agree 0:17:02.400 --> 0:17:06.000 with Lizard's Peter or Zag that we are going to 0:17:06.040 --> 0:17:09.919 see a persistent wage inflation, We are going to see 0:17:09.960 --> 0:17:14.160 a persistent overall inflation which is not in the markets 0:17:14.200 --> 0:17:14.800 at this time. 0:17:15.280 --> 0:17:17.119 I'm happy to give you a list of topics on 0:17:17.160 --> 0:17:19.400 which I disagree with my boss, but on this one, 0:17:19.440 --> 0:17:21.480 Peter and I are in the same place. I think 0:17:21.520 --> 0:17:25.040 the markets are generally far too calm about the inflation picture. 0:17:25.040 --> 0:17:25.639 They've been kind of. 0:17:25.640 --> 0:17:27.679 Well to sleep a bit by the fact that the 0:17:27.680 --> 0:17:32.200 headline CPI has calmed down, and you know, Peter made 0:17:32.240 --> 0:17:35.040 that call before the episode this week. I think the 0:17:35.080 --> 0:17:37.800 oil disruption we're seeing is obviously going to juice the 0:17:37.840 --> 0:17:38.800 inflation numbers. 0:17:38.520 --> 0:17:39.200 In a meaningful way. 0:17:39.200 --> 0:17:42.440 But here's the key point, Tom. It's not just the 0:17:42.480 --> 0:17:46.000 impact of the oil shock that we've already seen. It's 0:17:46.040 --> 0:17:48.560 the fact that the broader supply picture bleeds through to 0:17:48.640 --> 0:17:52.120 a much broader global constellation of goods and services and inflation, 0:17:52.560 --> 0:17:55.440 and to my mind, really increases the risk of upside price. 0:17:55.280 --> 0:17:58.160 Ground and Peter the brilliant supply and analysis here two 0:17:58.200 --> 0:18:01.280 three years ago on COVID as well, So with the 0:18:01.440 --> 0:18:04.919 jobs report last month was oops. Well that was positive. 0:18:05.359 --> 0:18:07.680 Are we going to get another oops report here where 0:18:07.720 --> 0:18:10.480 you got a three month moving average which is oops 0:18:10.840 --> 0:18:12.000 better than the gloom Crew? 0:18:12.280 --> 0:18:14.159 Well, I think I heard Chris Waller. Just tell your 0:18:14.200 --> 0:18:17.199 colleagues he expects January to be revised down meaningfully. I 0:18:17.200 --> 0:18:22.040 do think January looks like a pretty significant upside outlier 0:18:22.200 --> 0:18:25.040 in the pace of job growth we've seen recently. I 0:18:25.040 --> 0:18:27.280 think it's very important here tom to balance the supply 0:18:27.400 --> 0:18:30.199 constraints that have been pulling job growth down to and 0:18:30.320 --> 0:18:32.919 not confuse them with slowing demand, which I think is 0:18:32.920 --> 0:18:35.040 one of the one of the bigger forward looking worries 0:18:35.080 --> 0:18:35.800 we have right now. 0:18:36.240 --> 0:18:38.960 Supreme Court recently struck down the IEPA tariffs, but we 0:18:39.000 --> 0:18:42.560 still have a lot of terriffs out there. But the 0:18:42.600 --> 0:18:45.679 market again seems to have looked through generally after that 0:18:45.760 --> 0:18:48.719 April time frame last you look through these tariffs. What 0:18:48.800 --> 0:18:50.800 is the economic impact of these tariffs. 0:18:50.440 --> 0:18:50.800 Do you think? 0:18:50.960 --> 0:18:53.480 I think the markets have looked through the tariffs because 0:18:53.480 --> 0:18:56.520 the inflation data has given them permission to. Because the 0:18:56.560 --> 0:19:00.920 inflation data so far has been much softer than most economists, 0:19:01.040 --> 0:19:03.639 including me, by the way, would have expected given the 0:19:03.680 --> 0:19:06.560 magnitude of terroiffs we've seen now, that's much more likely 0:19:06.600 --> 0:19:08.919 to be a delay in the tariff impact than a 0:19:09.000 --> 0:19:11.480 miss on the tariff impact. And that's part of the 0:19:11.520 --> 0:19:15.560 reason we expect me you know, we expect an elevated 0:19:15.680 --> 0:19:17.960 risk of hotter inflation over the course of this year. 0:19:18.280 --> 0:19:21.480 You were the Assistant Secretary of the Treasury for Economic 0:19:21.560 --> 0:19:26.280 Policy under President Biden. What did you learn there? I mean, 0:19:26.320 --> 0:19:28.239 a fancy guy like you, with all your work at 0:19:28.240 --> 0:19:31.360 Blackrocket now at Lazard, you wandered by Yelle to get 0:19:31.400 --> 0:19:35.120 pizza in a lot of great, wonderful work out of Pennsylvania. 0:19:35.240 --> 0:19:39.040 What was the biggest lesson learned in your public service 0:19:39.080 --> 0:19:39.680 at Treasury? 0:19:39.880 --> 0:19:42.680 I mean I came away from that job deeply, deeply 0:19:42.760 --> 0:19:49.040 inspired by the manner and the courage with which public servants, 0:19:49.119 --> 0:19:51.720 not just in the Biden administration, but including the career 0:19:51.760 --> 0:19:55.240 officials that worked closely with us throughout, were able to 0:19:55.359 --> 0:20:01.000 balance economic rigor and understanding the intellectual arguments with understanding 0:20:01.040 --> 0:20:03.240 the way they affected human beings. 0:20:03.320 --> 0:20:05.159 So if we pop three months, this is like an 0:20:05.240 --> 0:20:08.680 Orzeg question. If we pop three months moving average sub 0:20:08.720 --> 0:20:12.040 one hundred thousand, non farm payrolls. You're telling me that's 0:20:12.080 --> 0:20:13.440 politically acceptable. 0:20:13.760 --> 0:20:16.520 Absolutely not. I think the slowdown in job growth we've 0:20:16.520 --> 0:20:20.040 seen over the past couple of years is evidence that 0:20:20.840 --> 0:20:23.520 the you know, it's evidence that some of the shifts 0:20:23.520 --> 0:20:25.440 we've seen in the way the labor market's been able 0:20:25.440 --> 0:20:28.800 to grow, some of the tighter constraintsprised on supply by 0:20:28.800 --> 0:20:32.280 immigration policy in particular, are resulting in lower growth in 0:20:32.320 --> 0:20:34.359 the United States would otherwise be able to deliver. 0:20:34.480 --> 0:20:37.160 This is like gossip with Taylor Swift. What's the thing 0:20:37.920 --> 0:20:39.879 I've gotten that one? What is the most? What is 0:20:39.920 --> 0:20:42.080