1 00:00:03,080 --> 00:00:06,160 Speaker 1: This is Bloomberg surveillance. We need to figure out a 2 00:00:06,200 --> 00:00:08,920 Speaker 1: better way to get people into work. I think, you know, 3 00:00:09,000 --> 00:00:12,959 Speaker 1: more flexible workplaces, childcare, investments in infrastructure. The number of 4 00:00:12,960 --> 00:00:16,560 Speaker 1: people quitting their jobs has skyrocketed, which you know people 5 00:00:16,560 --> 00:00:18,439 Speaker 1: don't do that. Look, you're pretty comfortable that they're gonna 6 00:00:18,480 --> 00:00:20,759 Speaker 1: find another one. If the unemployment rate keeps following in 7 00:00:20,800 --> 00:00:22,800 Speaker 1: the way that I think it will, at some point, 8 00:00:22,800 --> 00:00:25,360 Speaker 1: the set is probably going to have to tighten more 9 00:00:25,400 --> 00:00:29,360 Speaker 1: aggressively than may expect. Bloomberg Surveillance your link to the 10 00:00:29,400 --> 00:00:34,280 Speaker 1: world of economics, finance, and investment on Bloomberg Radio. Good 11 00:00:34,320 --> 00:00:38,040 Speaker 1: morning and Happy Job's Day, Michael McKee along with Tom Keene. 12 00:00:38,120 --> 00:00:41,440 Speaker 1: It's seven am on Law Street eight pm in Shanghai, 13 00:00:41,440 --> 00:00:45,560 Speaker 1: where China intervened to support its stock market today, keeping 14 00:00:45,560 --> 00:00:49,040 Speaker 1: it from a loss just as the National People's Congress 15 00:00:49,120 --> 00:00:53,280 Speaker 1: gets underway. How convenient, as they say, manipulation or not, 16 00:00:53,440 --> 00:00:56,400 Speaker 1: it encouraged investors around the world ahead of what may 17 00:00:56,400 --> 00:00:59,200 Speaker 1: be a slightly less important than usual jobs report here 18 00:00:59,200 --> 00:01:01,480 Speaker 1: in the US. We will, of course have all the 19 00:01:01,560 --> 00:01:03,960 Speaker 1: numbers for you at eight thirty Wall Street time, and 20 00:01:03,960 --> 00:01:05,920 Speaker 1: we have an all star cast to set up the 21 00:01:05,959 --> 00:01:10,399 Speaker 1: report and break it down for you. We will begin 22 00:01:10,480 --> 00:01:12,600 Speaker 1: our conversation with Michael darn It in just a moment. 23 00:01:12,600 --> 00:01:16,240 Speaker 1: Also today, Robert Gordon, Alan Krueger, Mickey Levy and as 24 00:01:16,280 --> 00:01:19,920 Speaker 1: always Bill Grows from Janice Capital, Scott Mather from Pimco, 25 00:01:20,280 --> 00:01:25,000 Speaker 1: Black Rocks, Russ Custrich help us break everything down. Ahead 26 00:01:25,000 --> 00:01:28,080 Speaker 1: of the numbers. Here's where we are. China did finish higher, 27 00:01:28,120 --> 00:01:30,240 Speaker 1: but only by half a percent, and it took the 28 00:01:30,240 --> 00:01:32,840 Speaker 1: government to get them there. But that's still enough to 29 00:01:32,920 --> 00:01:35,600 Speaker 1: encourage buying. In the rest of Asia and in Europe, 30 00:01:35,640 --> 00:01:39,280 Speaker 1: the stocks six up two points right now half a percent. 31 00:01:39,400 --> 00:01:43,800 Speaker 1: The Docks is up ninety eight points right now one percent. 32 00:01:43,920 --> 00:01:46,760 Speaker 1: In London, the Footsie's up sixty points. That's just about 33 00:01:46,760 --> 00:01:49,320 Speaker 1: one percent. As the back and forth schizophrenia and the 34 00:01:49,320 --> 00:01:53,160 Speaker 1: markets over Brexfit continues there uh In the US, a 35 00:01:53,200 --> 00:01:55,840 Speaker 1: more nuanced story. We are up not a lot, but 36 00:01:55,960 --> 00:01:58,400 Speaker 1: ahead of Job's day. There is some green on the screen. 37 00:01:58,520 --> 00:02:01,080 Speaker 1: SMP features three points higher tenth of a percent, two 38 00:02:01,120 --> 00:02:03,880 Speaker 1: tenths for Dow Emning futures, twenty nine points at a 39 00:02:03,920 --> 00:02:06,960 Speaker 1: twelve point game for NATTACK one futures. That's a three 40 00:02:07,000 --> 00:02:11,040 Speaker 1: tenths game ahead of the job's report, bond yields actually lower. 41 00:02:11,720 --> 00:02:14,160 Speaker 1: We'll see how they trade after the numbers come out. 42 00:02:14,160 --> 00:02:16,880 Speaker 1: Ten year one point eight three percent, the five year 43 00:02:17,000 --> 00:02:20,799 Speaker 1: one point three three eighty three basis points for your 44 00:02:20,919 --> 00:02:24,200 Speaker 1: two year yield. Jim Buggle of FTN says anything south 45 00:02:24,240 --> 00:02:25,959 Speaker 1: of a hundred and seventy five thousand or north of 46 00:02:26,000 --> 00:02:30,560 Speaker 1: two hundred thirty thousand top will provoke a market reaction today. Interesting, 47 00:02:31,000 --> 00:02:36,360 Speaker 1: that's nice to hear. We've been so distracted. We've been distracted. Yeah, 48 00:02:36,760 --> 00:02:39,280 Speaker 1: a lot going on, and um, we'll get to all 49 00:02:39,320 --> 00:02:41,160 Speaker 1: the politics and everything else as the show goes on. 50 00:02:41,240 --> 00:02:45,720 Speaker 1: Currency is interesting today, Tom, the dollar lower, Um, if 51 00:02:45,800 --> 00:02:47,519 Speaker 1: we were if we get a strong jobs report, you 52 00:02:47,600 --> 00:02:50,400 Speaker 1: think it would go the other way. Yen one seventy 53 00:02:50,400 --> 00:02:53,680 Speaker 1: two year, O one seven both the stronger against the dollar, 54 00:02:53,760 --> 00:02:58,119 Speaker 1: the pound stronger against dollar one. And look at gold 55 00:02:58,480 --> 00:03:04,280 Speaker 1: twelve seventy getting up to up twelve dollars um. What 56 00:03:04,440 --> 00:03:06,320 Speaker 1: is behind that? I don't know. That may get Michael 57 00:03:06,360 --> 00:03:09,359 Speaker 1: Dart's attention. He's the chief economist and m k M 58 00:03:09,480 --> 00:03:14,560 Speaker 1: Partners Proud Wisconsin Whitehawk, Warhawk, Whitewater Warhawk. I noticed the 59 00:03:14,600 --> 00:03:16,720 Speaker 1: Lady Warhawks in the n c A Tournament this year, 60 00:03:16,720 --> 00:03:21,399 Speaker 1: So congratulations to your team. Uh what do you make 61 00:03:21,440 --> 00:03:25,280 Speaker 1: of the way the markets are setting up for this? Uh? 62 00:03:25,480 --> 00:03:28,799 Speaker 1: It used to be bad news good news. Um, the 63 00:03:29,560 --> 00:03:32,280 Speaker 1: FED was at the center of everything. But it doesn't 64 00:03:32,280 --> 00:03:35,800 Speaker 1: look like we're trading that way going into the number today. Yeah, 65 00:03:35,840 --> 00:03:39,480 Speaker 1: I think, Mike, if you just take a small step back. Um, 66 00:03:39,520 --> 00:03:42,200 Speaker 1: you know, markets have jumped up after a big sell 67 00:03:42,240 --> 00:03:46,600 Speaker 1: off coming into the year, basically because the fear when 68 00:03:46,600 --> 00:03:50,240 Speaker 1: we were down almost from the highs of the cycle 69 00:03:50,280 --> 00:03:52,800 Speaker 1: on the S and P, the fear was that manufacturing 70 00:03:52,880 --> 00:03:55,400 Speaker 1: is in recession, the rest of the economy might follow. 71 00:03:56,080 --> 00:03:59,760 Speaker 1: And Uh, recently we've had some better data, at least 72 00:03:59,800 --> 00:04:04,000 Speaker 1: some data that suggests while manufacturing is weak, it perhaps 73 00:04:04,120 --> 00:04:09,040 Speaker 1: is stabilizing. The consumption figures for January in particular came 74 00:04:09,080 --> 00:04:12,360 Speaker 1: in better than expected. That's a big chunk of GDP obviously, 75 00:04:12,440 --> 00:04:17,159 Speaker 1: and so that is catalyzed a bit of optimism. Whether 76 00:04:17,240 --> 00:04:20,159 Speaker 1: that will sustain itself, you know, is another question. And 77 00:04:20,160 --> 00:04:22,120 Speaker 1: then of course, you know, we'll see what the numbers 78 00:04:22,200 --> 00:04:24,640 Speaker 1: bring it, you know, at a thirty. But I always 79 00:04:25,279 --> 00:04:27,960 Speaker 1: tell listeners to to look at a moving average, and 80 00:04:28,000 --> 00:04:30,680 Speaker 1: not to get too excited about any one number, but 81 00:04:30,920 --> 00:04:33,599 Speaker 1: you know, we end up focusing a lot on a 82 00:04:33,839 --> 00:04:36,200 Speaker 1: one single number every time we get to one of 83 00:04:36,240 --> 00:04:39,120 Speaker 1: these reports. Unfortunately, one of the great themes is wage growth. 84 00:04:39,200 --> 00:04:41,480 Speaker 1: I believe last time we had, you know, a phillip 85 00:04:41,520 --> 00:04:44,520 Speaker 1: of interest there, Michael McKee was, so I'm straight looking 86 00:04:44,520 --> 00:04:49,120 Speaker 1: at the optimism on wage growth. Will that optimism continue? Well, 87 00:04:49,200 --> 00:04:52,679 Speaker 1: important to remember, TOMA, when you're looking at hourly wages, 88 00:04:52,760 --> 00:04:55,120 Speaker 1: it's really the result of not you know, not just 89 00:04:55,279 --> 00:04:59,400 Speaker 1: current nominal GDP, but test past nominal GDP growth and 90 00:04:59,440 --> 00:05:01,720 Speaker 1: how tight the labor market is. So what we're seeing 91 00:05:01,839 --> 00:05:06,640 Speaker 1: is a visible but moderate acceleration in hourly wage growth. 92 00:05:06,680 --> 00:05:09,280 Speaker 1: You know, labor costs have also been growing somewhat faster. 93 00:05:09,760 --> 00:05:15,239 Speaker 1: Now that's caused some optimism that inflation will be rising 94 00:05:15,320 --> 00:05:18,440 Speaker 1: towards the Fed's target. But keep in mind that nominal 95 00:05:18,480 --> 00:05:22,200 Speaker 1: GDP is actually slowing now. We've gone from almost five 96 00:05:22,320 --> 00:05:28,320 Speaker 1: percent in late down to three on nominal GDP uh currently. 97 00:05:28,760 --> 00:05:31,919 Speaker 1: And if top lines are weakening as the cost structure 98 00:05:32,080 --> 00:05:35,360 Speaker 1: is levitating as they set up for a profit squeeze, 99 00:05:36,120 --> 00:05:39,279 Speaker 1: margins look like they peaked for the cycle, GDP profits 100 00:05:39,279 --> 00:05:43,599 Speaker 1: have been weak. I'm a where I am is for 101 00:05:43,800 --> 00:05:49,600 Speaker 1: I would recommend that investors stayed defensively, postured and and cautious. 102 00:05:49,720 --> 00:05:52,200 Speaker 1: If we see this market run up to the highs 103 00:05:52,839 --> 00:05:55,800 Speaker 1: of the cycle, I would recommend taking some chips off 104 00:05:55,839 --> 00:05:59,080 Speaker 1: the table. I think we're probably in the last year, 105 00:05:59,160 --> 00:06:01,000 Speaker 1: year and a half business So I wanted to get 106 00:06:01,000 --> 00:06:03,039 Speaker 1: into that where where we are in the cycle because 107 00:06:03,080 --> 00:06:06,960 Speaker 1: a lot of people looking at the market save recession coming. Yeah, 108 00:06:07,000 --> 00:06:09,080 Speaker 1: well that was the fear coming into the year. The 109 00:06:09,160 --> 00:06:13,159 Speaker 1: data doesn't support that yet. Um, you know, but I 110 00:06:13,160 --> 00:06:16,680 Speaker 1: I do think if we look at weakness in monetary 111 00:06:16,720 --> 00:06:19,760 Speaker 1: indicators and one growth is now down below four percent 112 00:06:19,880 --> 00:06:23,119 Speaker 1: year to year. Obviously the monetary basis flat post quei 113 00:06:23,880 --> 00:06:26,560 Speaker 1: uh in credit markets under a lot of stress. The 114 00:06:26,640 --> 00:06:29,840 Speaker 1: last couple of weeks we've seen some easing, but we 115 00:06:29,920 --> 00:06:32,640 Speaker 1: have a lot of indicators that are suggesting a late 116 00:06:32,720 --> 00:06:35,240 Speaker 1: cycle environment. Not the least of which I mentioned was 117 00:06:35,279 --> 00:06:38,400 Speaker 1: corporate profits from the GDP accounts. Those tend to peak 118 00:06:38,560 --> 00:06:41,480 Speaker 1: relative to the economy and relative to corporate bond rates 119 00:06:41,480 --> 00:06:44,400 Speaker 1: about two years before a downturn. The peak in this 120 00:06:44,520 --> 00:06:49,000 Speaker 1: cycle so far was um which means that we're quite 121 00:06:49,080 --> 00:06:51,520 Speaker 1: late cycle unless there's a new high. Hard to see 122 00:06:51,560 --> 00:06:56,000 Speaker 1: that with top line growth slowing, wages accelerating moderately. In 123 00:06:56,080 --> 00:06:59,880 Speaker 1: the FED, you know out there having already tightened policy 124 00:07:00,040 --> 00:07:03,000 Speaker 1: and probably would tighten it again if there are signs 125 00:07:03,040 --> 00:07:05,880 Speaker 1: that the growth is re accelerating. The FED has hemmed 126 00:07:05,960 --> 00:07:09,080 Speaker 1: us in the dictates of the Phillips curve model are 127 00:07:09,120 --> 00:07:12,600 Speaker 1: simply that this business cycle will not be allowed to accelerate. 128 00:07:13,040 --> 00:07:15,840 Speaker 1: And unfortunately, if there's a misjudgment, that could mean a 129 00:07:15,920 --> 00:07:18,400 Speaker 1: termination in the cycle, if the FED is out there 130 00:07:18,440 --> 00:07:21,800 Speaker 1: too far in front with them. What we all see 131 00:07:21,880 --> 00:07:24,559 Speaker 1: in the equity market, and there's there's a fair number 132 00:07:24,600 --> 00:07:27,440 Speaker 1: of bulls out there even within whatever the kind of 133 00:07:27,480 --> 00:07:32,120 Speaker 1: bear market you want to describe. It is animal spirits. 134 00:07:32,240 --> 00:07:36,280 Speaker 1: That is emine without question, the merger's low nominal GDP. 135 00:07:36,840 --> 00:07:40,720 Speaker 1: Let's combine to find growth. That's we've seen that in history. 136 00:07:40,760 --> 00:07:43,880 Speaker 1: That's not unusual, right. What will be the outcome of 137 00:07:43,880 --> 00:07:48,560 Speaker 1: it as we see a consolidation of American business, Well, 138 00:07:48,600 --> 00:07:51,440 Speaker 1: I mean, I think you know, unfortunately, at this juncture 139 00:07:51,480 --> 00:07:54,000 Speaker 1: of the cycle, the outcome is that, you know, we're 140 00:07:54,040 --> 00:07:56,800 Speaker 1: probably looking at the last year year and a half 141 00:07:57,800 --> 00:08:00,600 Speaker 1: of the expansion. That's just a very rough guest best 142 00:08:00,680 --> 00:08:04,480 Speaker 1: on guests based on business cycle history and how long 143 00:08:04,520 --> 00:08:08,840 Speaker 1: expansions go after you have important peaks in profits. So 144 00:08:09,200 --> 00:08:11,720 Speaker 1: you know, we're probably getting towards the tail end of 145 00:08:11,800 --> 00:08:14,440 Speaker 1: the of the M M and A cycle and of 146 00:08:14,480 --> 00:08:17,680 Speaker 1: the business cycle at large. Unfortunately, at TOM, I'd like 147 00:08:17,720 --> 00:08:20,000 Speaker 1: to be more optimistic, you know, me as somebody who 148 00:08:20,080 --> 00:08:23,280 Speaker 1: is typically runs with the bulls. I was even being 149 00:08:23,480 --> 00:08:26,760 Speaker 1: because you're hanging out with Robert Gordon, I know, good 150 00:08:26,760 --> 00:08:29,360 Speaker 1: timing and having us, you know, come on today because 151 00:08:29,400 --> 00:08:32,640 Speaker 1: we do share uh, you know, more of a pessimistic view, 152 00:08:32,640 --> 00:08:36,800 Speaker 1: maybe for somewhat different reasons, but usually I'm upbeat and optimistic. 153 00:08:36,840 --> 00:08:40,760 Speaker 1: I've even been called a permable um. But we just 154 00:08:40,800 --> 00:08:42,920 Speaker 1: try to call the cycle and an accurate way with 155 00:08:42,960 --> 00:08:46,120 Speaker 1: the right indicators. And you suggest that the ft is 156 00:08:46,160 --> 00:08:50,880 Speaker 1: Hempderson and won't let the expansion go there. They have 157 00:08:51,000 --> 00:08:53,040 Speaker 1: been talking some of the some of the core like 158 00:08:53,080 --> 00:08:55,920 Speaker 1: Bill Dudley, but letting the economy run hot. They've only 159 00:08:56,000 --> 00:08:59,040 Speaker 1: raised twenty five basis points. You could probably go a 160 00:08:59,080 --> 00:09:03,200 Speaker 1: couple more increases in the economy won't notice. So what 161 00:09:03,200 --> 00:09:05,600 Speaker 1: do you mean by that they seem to be willing 162 00:09:05,600 --> 00:09:09,040 Speaker 1: to let things go for a lot. Uh. Well, that's true. 163 00:09:09,120 --> 00:09:12,840 Speaker 1: They've talked about a modest overshoot in terms of unemployment 164 00:09:12,920 --> 00:09:15,200 Speaker 1: falling below the level that you know that they think 165 00:09:15,240 --> 00:09:19,040 Speaker 1: is sustainable, which is essentially where it is now. Uh. 166 00:09:19,040 --> 00:09:22,560 Speaker 1: And their view is that that's a leading indicator of inflation, 167 00:09:22,679 --> 00:09:24,800 Speaker 1: that's the Phillips curve. I think that, you know, there's 168 00:09:24,840 --> 00:09:28,000 Speaker 1: some problems with that. Historically the relationships have been anything 169 00:09:28,040 --> 00:09:31,920 Speaker 1: but tight. Um. And you know, I would also be 170 00:09:32,120 --> 00:09:35,439 Speaker 1: quite concerned about the notion that the economy wouldn't notice 171 00:09:35,480 --> 00:09:37,760 Speaker 1: with a few more rate hikes. Consider the fact that 172 00:09:37,760 --> 00:09:40,800 Speaker 1: the taper, the end of QUEI in the first twenti 173 00:09:40,920 --> 00:09:46,280 Speaker 1: basis point rate rise was associated with severe moves in 174 00:09:46,320 --> 00:09:51,920 Speaker 1: inflation expectations, credit market spreads. Uh. And you know, volatility 175 00:09:51,960 --> 00:09:55,120 Speaker 1: in global equity prices. And so I do think that 176 00:09:55,200 --> 00:09:58,920 Speaker 1: the FED is powerful, very important. Uh. And has you know, 177 00:09:58,960 --> 00:10:01,760 Speaker 1: this has global public asians. So you know, twenty five 178 00:10:01,800 --> 00:10:03,920 Speaker 1: basis points may not sound like a lot, but it 179 00:10:04,000 --> 00:10:06,720 Speaker 1: can matter. Consider the fact that there have been important 180 00:10:06,760 --> 00:10:10,319 Speaker 1: downturns associated only with small amounts of rate hikes. The 181 00:10:10,400 --> 00:10:13,920 Speaker 1: Eurozone twenty eleven, Japan in two thousand and again in 182 00:10:14,280 --> 00:10:17,040 Speaker 1: oh six and oh seven. Michael Darta, thank you so much, 183 00:10:17,080 --> 00:10:19,440 Speaker 1: Really pleased to have you in on this job today. 184 00:10:19,480 --> 00:10:24,040 Speaker 1: Bloomberg surveillance this morning watching by Investco. Factor based strategies 185 00:10:24,200 --> 00:10:27,600 Speaker 1: can help investors focus on a high quality, low volatility 186 00:10:27,600 --> 00:10:32,040 Speaker 1: and more. Learn more and investco dot com slash high conviction. 187 00:10:32,080 --> 00:10:34,600 Speaker 1: Michael Darty gets us start at this hour. Robert Gordon 188 00:10:35,000 --> 00:10:38,880 Speaker 1: of Northwestern University next, and then Bill Gross will follow 189 00:10:38,880 --> 00:10:42,000 Speaker 1: on after the job's report. Alan Krueger with us. Mickey 190 00:10:42,040 --> 00:10:45,720 Speaker 1: Leavey as well. This morning futures up to doubt, futures 191 00:10:45,720 --> 00:10:49,360 Speaker 1: of twenty four gold up ten dollars, twelve sixty nine 192 00:10:49,400 --> 00:10:54,599 Speaker 1: the ounce. Now, let's bring in Michael bar with the 193 00:10:54,679 --> 00:10:57,160 Speaker 1: latest world in national headlines. Michael, Mike, Tom, thank you 194 00:10:57,240 --> 00:11:01,040 Speaker 1: very much. Donald Trump used last night's Republican presidential debate 195 00:11:01,120 --> 00:11:04,800 Speaker 1: to fire back at former Massachusetts government Romney, who called 196 00:11:04,840 --> 00:11:08,320 Speaker 1: Tramp a pony and a conman. Trump called the twelve 197 00:11:08,360 --> 00:11:11,840 Speaker 1: Republican nominee of failed candidate who just wants to be 198 00:11:11,880 --> 00:11:15,000 Speaker 1: relevant of the Republicans from out Speaker Paul Ryan, the 199 00:11:15,080 --> 00:11:19,400 Speaker 1: Senator John McCain also blasted Trump. Yesterday, Japanese Prime Minister 200 00:11:19,480 --> 00:11:23,800 Speaker 1: Shinzo Abe has decided to temporarily suspend work on moving 201 00:11:23,800 --> 00:11:27,240 Speaker 1: a US marine base in Okinawa and will resume talks 202 00:11:27,280 --> 00:11:31,240 Speaker 1: about the plan. The central government and Okinawa's government have 203 00:11:31,400 --> 00:11:33,840 Speaker 1: been locked in a legal bottle over relocating the base, 204 00:11:33,920 --> 00:11:37,680 Speaker 1: which opponents one off the island entirely. A new trade 205 00:11:37,720 --> 00:11:40,880 Speaker 1: deal with Europe promises to put about two hundred thousand 206 00:11:41,000 --> 00:11:44,679 Speaker 1: Syrian refugees to work in Jordan's Global News twenty four 207 00:11:44,720 --> 00:11:47,920 Speaker 1: hours a day, powered by our twenty journalists and more 208 00:11:47,960 --> 00:11:50,120 Speaker 1: than a hundred fifty news bureaus from around the world. 209 00:11:50,360 --> 00:11:53,080 Speaker 1: I'm Michael bar Night, Tom and Michael, thanks so much. 210 00:11:53,520 --> 00:11:56,600 Speaker 1: It is job's day. We will at eight thirty turn 211 00:11:56,800 --> 00:11:59,760 Speaker 1: to Bill Gross for his perspective not only on the report, 212 00:12:00,280 --> 00:12:07,000 Speaker 1: but on the American economy. Bloombergs Avalance brought to by 213 00:12:07,000 --> 00:12:09,400 Speaker 1: the Town of Hempstead Industrial Development Agency. Find out how 214 00:12:09,400 --> 00:12:11,000 Speaker 1: to put the Town of Hempstead I DA to work 215 00:12:11,040 --> 00:12:14,559 Speaker 1: for your business. Call five three seven zero or is 216 00:12:14,600 --> 00:12:22,880 Speaker 1: it t O H I D A dot org. Global 217 00:12:22,920 --> 00:12:26,320 Speaker 1: Business News twenty four hours a day at Bloomberg dot Com. 218 00:12:26,559 --> 00:12:29,280 Speaker 1: The Radio plus mobile act and on your radio. This 219 00:12:29,800 --> 00:12:33,079 Speaker 1: is a Bloomberg business flash, and I'm Karen Moscow. This 220 00:12:33,200 --> 00:12:36,160 Speaker 1: updates brought to you by cbo E VIX Options and Futures. 221 00:12:36,200 --> 00:12:39,600 Speaker 1: Volatility can be harnessed with cbo E VIX Options and Futures. 222 00:12:39,800 --> 00:12:42,440 Speaker 1: See disclosures and learn more at cbo e dot com. 223 00:12:42,480 --> 00:12:46,240 Speaker 1: Slash Powerful Outcomes, vix u S Stock index futures are 224 00:12:46,320 --> 00:12:49,000 Speaker 1: higher as investors await data that may show hiring picked 225 00:12:49,040 --> 00:12:52,320 Speaker 1: up pace last month. SNP EVENI futures are up three 226 00:12:52,320 --> 00:12:55,640 Speaker 1: points and now EVENI futures up thirty five, NASADAC eveny 227 00:12:55,679 --> 00:12:58,360 Speaker 1: futures up fourteen. The docks in Germany's up one per 228 00:12:58,440 --> 00:13:02,360 Speaker 1: set ten. Your treasury that change at one three non 229 00:13:02,400 --> 00:13:04,760 Speaker 1: max screw Ola three ten percent or ten cents to 230 00:13:05,440 --> 00:13:08,000 Speaker 1: sixties seven of arrow comex s goold is up six 231 00:13:08,000 --> 00:13:11,000 Speaker 1: tents percent or seven dollars eighty cents to twelve sixty six. 232 00:13:11,000 --> 00:13:13,520 Speaker 1: And ounce the euro a dollar oh nin eight three 233 00:13:13,600 --> 00:13:16,079 Speaker 1: again one third team points seven nine. And that's a 234 00:13:16,120 --> 00:13:21,800 Speaker 1: Bloomberg business Flash. Tom and Mike, Oh thank you, Karen. 235 00:13:21,920 --> 00:13:24,280 Speaker 1: I thought Tom, you were you all right over there? 236 00:13:24,720 --> 00:13:29,240 Speaker 1: You're you're watching the you're watching the Lula headlines we 237 00:13:29,240 --> 00:13:34,440 Speaker 1: should note the Brazilian police detaining the former president of Brazil, 238 00:13:34,559 --> 00:13:39,320 Speaker 1: Louisia Nasciola da Silva UH, part of their corruption probe, 239 00:13:39,400 --> 00:13:43,080 Speaker 1: and headlines crossing the Bloomberg terminal point out that the 240 00:13:43,160 --> 00:13:46,560 Speaker 1: Brazilian real has rallied sharply. On the news it was 241 00:13:46,960 --> 00:13:49,800 Speaker 1: two point eight percent higher, now two point two percent higher. 242 00:13:49,800 --> 00:13:52,400 Speaker 1: So that is something we will keep an eye on 243 00:13:53,160 --> 00:13:56,880 Speaker 1: throughout the morning. UM, see what the reaction is there. 244 00:13:57,400 --> 00:14:00,280 Speaker 1: Robert Gordon is with us now, nice enough to all 245 00:14:00,320 --> 00:14:03,880 Speaker 1: the way from Chicago Northwestern University to join us. His book, 246 00:14:04,080 --> 00:14:06,880 Speaker 1: The Rise and Fall of American Growth is my book 247 00:14:06,880 --> 00:14:08,679 Speaker 1: of the year so far, and I think it's probably 248 00:14:08,679 --> 00:14:12,079 Speaker 1: gonna last throughout the year as that because it is 249 00:14:12,120 --> 00:14:17,480 Speaker 1: a terrific history of American productivity and progress and how 250 00:14:17,760 --> 00:14:21,240 Speaker 1: the period from about eighteen eighty to nineteen forty was 251 00:14:21,280 --> 00:14:25,400 Speaker 1: the most transformative perhaps in American in human history. We 252 00:14:25,720 --> 00:14:31,920 Speaker 1: went from living in very poorly heated, unweathered dark houses 253 00:14:32,440 --> 00:14:35,920 Speaker 1: UH and using outhouses to in the modern life we 254 00:14:35,960 --> 00:14:41,160 Speaker 1: live today, and how that changed society and economics. Um. 255 00:14:41,200 --> 00:14:44,720 Speaker 1: It is. It is a fascinating book because it really 256 00:14:44,880 --> 00:14:51,000 Speaker 1: lays out what it takes to raise living standards. Well, 257 00:14:51,560 --> 00:14:57,320 Speaker 1: we had a uh enormous scope of human experience changed 258 00:14:57,440 --> 00:15:01,080 Speaker 1: unalterably by the inventions that started in the late nineteenth 259 00:15:01,080 --> 00:15:04,560 Speaker 1: century and continued into the twentieth century. Um And if 260 00:15:04,560 --> 00:15:08,240 Speaker 1: you just think about the house completely isolated in eighteen seventy, 261 00:15:08,240 --> 00:15:11,280 Speaker 1: by nineteen forty connected five different ways to the outside 262 00:15:11,520 --> 00:15:16,440 Speaker 1: with electricity, gas, telephone, running water, and waste disposal. That 263 00:15:16,600 --> 00:15:20,120 Speaker 1: made an unalterable difference in the lives of not just 264 00:15:20,280 --> 00:15:22,080 Speaker 1: the men who went off to go to work, but 265 00:15:22,200 --> 00:15:24,560 Speaker 1: the women who stayed home and took care of things. 266 00:15:25,480 --> 00:15:30,000 Speaker 1: Back in the eighteen eighties, women were carrying literally tons 267 00:15:30,000 --> 00:15:32,560 Speaker 1: of water per year into the house, and all that 268 00:15:32,600 --> 00:15:35,120 Speaker 1: water had to be carried out of the house. Just 269 00:15:35,360 --> 00:15:39,320 Speaker 1: running water itself was an amazing invention. We had electricity, 270 00:15:39,400 --> 00:15:43,480 Speaker 1: the internal combustion engine, the conquest of infectious diseases, the 271 00:15:43,520 --> 00:15:47,480 Speaker 1: conquest of infant mortality. In eighteen ninety, more than twenty 272 00:15:47,560 --> 00:15:50,120 Speaker 1: percent of babies died within the first year of birth, 273 00:15:50,480 --> 00:15:52,720 Speaker 1: and by nineteen fifty that was down to one percent. 274 00:15:53,160 --> 00:15:55,200 Speaker 1: Those are the kinds of changes that can only happen 275 00:15:55,240 --> 00:15:58,560 Speaker 1: once we went from a rural society with only twenty 276 00:15:59,200 --> 00:16:02,760 Speaker 1: urban in the eighteen seventy two. By seventy we were 277 00:16:02,760 --> 00:16:06,800 Speaker 1: sev urban. And we know that people in cities are 278 00:16:06,880 --> 00:16:09,120 Speaker 1: much more productive than they are in the farm. Well, 279 00:16:09,200 --> 00:16:11,080 Speaker 1: we only have a short time with you today, so 280 00:16:11,160 --> 00:16:13,120 Speaker 1: let me jump ahead and ask you what you see 281 00:16:13,280 --> 00:16:18,160 Speaker 1: from here on out. You're more pessimistic about productivity growth. Well, 282 00:16:18,240 --> 00:16:21,520 Speaker 1: what I see is that we had a second big 283 00:16:21,520 --> 00:16:25,800 Speaker 1: wave productivity growth UH, the so called dot com era 284 00:16:25,880 --> 00:16:28,720 Speaker 1: of the late ninety nineties and early two thousand's when 285 00:16:28,800 --> 00:16:32,960 Speaker 1: all of the UH inventions that change the way America 286 00:16:33,040 --> 00:16:38,560 Speaker 1: does business in offices were unalterably change from the world 287 00:16:38,600 --> 00:16:41,680 Speaker 1: of paper and typewriters and file cabinets to the world 288 00:16:41,800 --> 00:16:45,200 Speaker 1: of flat screens, search engines and the world that we 289 00:16:45,280 --> 00:16:47,200 Speaker 1: know now. But that was all pretty much in place 290 00:16:47,240 --> 00:16:50,520 Speaker 1: by two thousand and five. What's the great puzzle is 291 00:16:50,560 --> 00:16:53,160 Speaker 1: why productivity growth has been so slow over the last 292 00:16:53,200 --> 00:16:55,960 Speaker 1: five or six years, less than one percent, only about 293 00:16:55,960 --> 00:16:58,800 Speaker 1: half a percent. And in my view, that's because we're 294 00:16:58,800 --> 00:17:01,400 Speaker 1: pretty much doing things the way we did h ten 295 00:17:01,480 --> 00:17:05,080 Speaker 1: years ago. We have digested the real payoff of the 296 00:17:05,119 --> 00:17:08,760 Speaker 1: computer for business productivity. I want to go back, I 297 00:17:08,760 --> 00:17:10,560 Speaker 1: would I would rip up the script and do what 298 00:17:10,640 --> 00:17:13,879 Speaker 1: Mike's doing, which is go forward. But Professor Gordon, it 299 00:17:13,920 --> 00:17:16,879 Speaker 1: has been such an interesting and some would say distressing 300 00:17:16,920 --> 00:17:20,720 Speaker 1: week for our American politics, whatever anybody's view on it. 301 00:17:21,600 --> 00:17:25,359 Speaker 1: Thank God. On page two eleven, you save the day 302 00:17:25,600 --> 00:17:28,520 Speaker 1: James McGregor, Burns of Williams College and his Vineyard of 303 00:17:28,520 --> 00:17:32,200 Speaker 1: Liberty stopped the world with a discussion of the day 304 00:17:32,280 --> 00:17:37,840 Speaker 1: Adams and Jefferson died together j four of eight. You 305 00:17:38,040 --> 00:17:43,119 Speaker 1: cite that same magisterial day for America. Where do we 306 00:17:43,160 --> 00:17:46,160 Speaker 1: get back to that spirit, whether it was a founding 307 00:17:46,240 --> 00:17:50,520 Speaker 1: fathers or the early industrial age of the eighteen twenties, 308 00:17:50,720 --> 00:17:53,360 Speaker 1: how do we get back to that versus what we've 309 00:17:53,359 --> 00:17:56,600 Speaker 1: witnessed over the last four weeks. Well, I'm not going 310 00:17:56,640 --> 00:18:00,680 Speaker 1: to talk about politics except to say that I've heard 311 00:18:00,760 --> 00:18:06,640 Speaker 1: uh extravagant promises about achieving economic growth through tax cuts 312 00:18:06,680 --> 00:18:09,720 Speaker 1: that are primarily or aimed at reducing the taxes of 313 00:18:09,760 --> 00:18:13,159 Speaker 1: the wealthy. And I think what we should remember is 314 00:18:13,200 --> 00:18:15,520 Speaker 1: that there is the top one percent in the United 315 00:18:15,520 --> 00:18:19,080 Speaker 1: States that have been extremely fortunate to be the beneficiaries 316 00:18:19,160 --> 00:18:22,480 Speaker 1: of the computer age. UH, And what we need is 317 00:18:22,520 --> 00:18:26,280 Speaker 1: to find a way of balancing out our society instead 318 00:18:26,280 --> 00:18:30,120 Speaker 1: of a few winners and a lot of people stagnating 319 00:18:30,680 --> 00:18:34,560 Speaker 1: UH suffering from the slow growth and productivity. We need 320 00:18:34,560 --> 00:18:40,440 Speaker 1: to have a way of UH improving life for the 321 00:18:40,480 --> 00:18:43,560 Speaker 1: middle and the bottom. And I put my primary emphasis 322 00:18:43,560 --> 00:18:47,080 Speaker 1: on preschool education. We have in our country an enormous 323 00:18:47,160 --> 00:18:50,240 Speaker 1: vocabulary gap of people are arriving in kindergarten when you 324 00:18:50,280 --> 00:18:54,600 Speaker 1: compare the poverty population with the middle and the upper 325 00:18:54,720 --> 00:18:59,119 Speaker 1: UH income students UM and we need a concerted effort 326 00:18:59,200 --> 00:19:03,520 Speaker 1: to going together as a country and try to deal 327 00:19:03,600 --> 00:19:06,959 Speaker 1: with the disadvantages that so many of our new children 328 00:19:07,000 --> 00:19:10,000 Speaker 1: are new next generation are growing up with Mike one 329 00:19:10,040 --> 00:19:14,359 Speaker 1: quick question, how much we just have a thirty seconds here, 330 00:19:14,400 --> 00:19:16,400 Speaker 1: But how much does a difference as a president make 331 00:19:16,480 --> 00:19:21,000 Speaker 1: to the economy? I think the the the difference can 332 00:19:21,040 --> 00:19:24,760 Speaker 1: be very substantial if you have the president and the 333 00:19:24,800 --> 00:19:27,960 Speaker 1: Congress in the same party. Therefore, I expect that if 334 00:19:28,000 --> 00:19:31,600 Speaker 1: we have a democratic president elected in ten will continue 335 00:19:31,640 --> 00:19:33,720 Speaker 1: to have a stalemate. I think if we have a 336 00:19:33,760 --> 00:19:37,440 Speaker 1: Republican with control of both houses of Parliament will see 337 00:19:37,480 --> 00:19:39,840 Speaker 1: some major changes. Now for many of us, they may 338 00:19:39,840 --> 00:19:44,040 Speaker 1: be changes moving backwards. The repeal of Obamacare leaving people 339 00:19:44,040 --> 00:19:47,560 Speaker 1: without medical insurance. UH tax cuts for the rich, as 340 00:19:47,680 --> 00:19:53,000 Speaker 1: was practiced by George Bush without any achievement of economic growth. 341 00:19:53,119 --> 00:19:56,359 Speaker 1: By the way, Robert Gordon, Northwestern University, The Rise and 342 00:19:56,400 --> 00:19:59,560 Speaker 1: Fall of American Growth terrific book. I urge everyone to 343 00:19:59,600 --> 00:20:05,199 Speaker 1: read it. Thanks for stopping by today. This is Bloomberg Surveillance. Okay, 344 00:20:05,200 --> 00:20:08,400 Speaker 1: thanks for having Bloomberg Surveillance has brought to you by 345 00:20:08,480 --> 00:20:11,080 Speaker 1: Flushing Bank. Open a complete business checking account with fifteen 346 00:20:11,080 --> 00:20:12,920 Speaker 1: thousand dollars or more and get a free sixteen gig 347 00:20:12,920 --> 00:20:15,560 Speaker 1: WiFi tablet. Visit Flushing Bank dot com for details. Member 348 00:20:15,560 --> 00:20:24,720 Speaker 1: f d I C, Equal Housing, Wind Broadcasting Live to 349 00:20:24,880 --> 00:20:30,440 Speaker 1: New York, Gloomberg eleventh, to Washington d C, Bloomberg to Boston, 350 00:20:30,560 --> 00:20:34,399 Speaker 1: Bloomberg twelve Honors to San Francisco, Bloomberg nine six, to 351 00:20:34,520 --> 00:20:38,600 Speaker 1: the Country Series Exam Channel one ninety and around the globe. 352 00:20:38,680 --> 00:20:42,119 Speaker 1: The Bloomberg Radio Plus happened. Bloomberg dot Com. This is 353 00:20:42,160 --> 00:20:46,840 Speaker 1: Blomberg Surveillance. Good morning Anty on Wall Street. I Michael 354 00:20:46,880 --> 00:20:49,399 Speaker 1: McKee along with Tom Keene. Here's a couple of the 355 00:20:49,440 --> 00:20:52,600 Speaker 1: headlines we're following from companies as we get ready for 356 00:20:52,760 --> 00:20:55,000 Speaker 1: trading on this job. Dave Fox Con and Sharp Aiming 357 00:20:55,040 --> 00:20:58,120 Speaker 1: designed their six billion dollar takeover agreement as early as Monday. 358 00:20:58,480 --> 00:21:01,320 Speaker 1: They've decided their deal doesn't require are major changes. People 359 00:21:01,359 --> 00:21:03,919 Speaker 1: familiar say. Golden Sacks will eliminate more than five percent 360 00:21:03,920 --> 00:21:06,800 Speaker 1: of traders and salespeople in its fixed income business. Bank 361 00:21:06,800 --> 00:21:09,240 Speaker 1: of America going to dismiss about a hundred and fifty 362 00:21:09,240 --> 00:21:14,200 Speaker 1: trading and investment banking employees next week. AMC Entertainment that's 363 00:21:14,200 --> 00:21:16,480 Speaker 1: controlled by China's richest man. By the way, agreeing to 364 00:21:16,520 --> 00:21:19,400 Speaker 1: buy Carmike Cinemas one point one billion dollar all cash 365 00:21:19,480 --> 00:21:24,600 Speaker 1: deal creates the world's largest cinema change. And now Michael 366 00:21:24,600 --> 00:21:28,200 Speaker 1: Barr has the latest world and national headlines. Mike, Tom, 367 00:21:28,240 --> 00:21:31,240 Speaker 1: thank you very much. Insults flew as the four Republican 368 00:21:31,359 --> 00:21:34,679 Speaker 1: presidential candidates took the stage and last night's debate in Detroit, 369 00:21:35,119 --> 00:21:38,840 Speaker 1: Donald Trump kept referring to Florida Senator Marco Rubio as 370 00:21:39,200 --> 00:21:42,760 Speaker 1: Little Marco. In the end, the candidates on Fox News 371 00:21:42,840 --> 00:21:46,000 Speaker 1: pledged to support Trump if he becomes the nominee. I'll 372 00:21:46,000 --> 00:21:49,160 Speaker 1: support the Republican nominee, yes, because I gave my word 373 00:21:49,200 --> 00:21:51,480 Speaker 1: that I would. Sometimes he makes a little bit hard, 374 00:21:51,560 --> 00:21:55,360 Speaker 1: but I will support whoever is the Republican nominee for president. 375 00:21:55,520 --> 00:21:58,680 Speaker 1: The answers, Yes, I will. The White House calls that 376 00:21:58,760 --> 00:22:02,160 Speaker 1: a showdown between heavy weights in the world of computer science. 377 00:22:02,400 --> 00:22:05,240 Speaker 1: Students from m I T and Britain's University of Cambridge 378 00:22:05,240 --> 00:22:08,240 Speaker 1: will spend the weekend hacking into each other's computers. The 379 00:22:08,280 --> 00:22:11,960 Speaker 1: two schools are competing in a hacking contest that President 380 00:22:11,960 --> 00:22:15,440 Speaker 1: Obama and British Prime Minister Cameron announced last year, among 381 00:22:15,480 --> 00:22:19,280 Speaker 1: other joint cyber security projects between the two nations. Hundreds 382 00:22:19,320 --> 00:22:21,960 Speaker 1: of thousands of students will sit down tomorrow to take 383 00:22:22,000 --> 00:22:25,520 Speaker 1: the S A T, which figures into their college admission hopes, 384 00:22:25,840 --> 00:22:29,320 Speaker 1: and they'll find that has been redesigned and streamlined. Early 385 00:22:29,359 --> 00:22:31,640 Speaker 1: reviews from the students who took it this week say 386 00:22:31,720 --> 00:22:35,159 Speaker 1: it is shorter on trick questions. Global News twenty four 387 00:22:35,240 --> 00:22:38,920 Speaker 1: hours a day, powered by our two hundred journalists more 388 00:22:38,920 --> 00:22:41,000 Speaker 1: than a hundred fifty news bureaus from around the world. 389 00:22:41,080 --> 00:22:45,159 Speaker 1: On Michael Barr Night, Tom, thank Michael, time now for 390 00:22:45,160 --> 00:22:48,760 Speaker 1: the Bloomberg NBC Sports update, and that means John Stashour, John, 391 00:22:49,160 --> 00:22:51,400 Speaker 1: Thanks Michael. Three local hockey teams are on the road 392 00:22:51,400 --> 00:22:55,080 Speaker 1: and The Islanders and Devils both won following similar scripts. 393 00:22:55,080 --> 00:22:57,560 Speaker 1: Both were trailing with a minute to play, tied the game, 394 00:22:57,600 --> 00:22:59,880 Speaker 1: and then one and over time the Aisles for three 395 00:23:00,040 --> 00:23:02,840 Speaker 1: Winnipeg Kylac posts of the game winner midway through ot 396 00:23:03,000 --> 00:23:05,600 Speaker 1: after Andrews League got them there with a half minute 397 00:23:05,600 --> 00:23:08,520 Speaker 1: to go in regulation. Islanders five and one on the 398 00:23:08,560 --> 00:23:10,840 Speaker 1: seven game road trip that ends Sunday at the Garden 399 00:23:10,880 --> 00:23:13,400 Speaker 1: against the Rangers, Devils had lost six of seven, never 400 00:23:13,480 --> 00:23:17,000 Speaker 1: led in Nashville until Adam and Reek's game winner at 401 00:23:17,040 --> 00:23:20,280 Speaker 1: one fifty four after he tied it with forty seconds 402 00:23:20,320 --> 00:23:23,000 Speaker 1: left in regulation. Devils won five four Rangers three game 403 00:23:23,040 --> 00:23:26,160 Speaker 1: win Streek ended in Pittsburgh four to one. Penguins scored 404 00:23:26,200 --> 00:23:29,480 Speaker 1: three times in ninety nine seconds late in the second period. 405 00:23:29,480 --> 00:23:31,280 Speaker 1: The Rangers have to come right back tonight and visit 406 00:23:31,400 --> 00:23:34,240 Speaker 1: league leading Washington, and the Blue Shirts have not lost 407 00:23:34,280 --> 00:23:37,439 Speaker 1: back to back games since December. Golden State Warriors won 408 00:23:37,480 --> 00:23:39,520 Speaker 1: again last night, beteing in Oklahoma City. The Warriors are 409 00:23:39,520 --> 00:23:42,240 Speaker 1: fifty five and five. They've won forty four in a 410 00:23:42,320 --> 00:23:44,320 Speaker 1: row at home in the regular season. That ties the 411 00:23:44,440 --> 00:23:47,720 Speaker 1: NBA record. College basketball, the Metro Atlantic Turney Underway and 412 00:23:47,720 --> 00:23:51,160 Speaker 1: all but he with Manhattan advancing. Both Monmouth and Iona, 413 00:23:51,200 --> 00:23:52,919 Speaker 1: who are the top two seeds, will be in action 414 00:23:52,960 --> 00:23:56,280 Speaker 1: tonight with the Bloomberg NBC Sports Update. I'm John Stage, 415 00:23:57,160 --> 00:24:00,160 Speaker 1: Thank you John. Today is, of course jobs Day. We're 416 00:24:00,160 --> 00:24:04,919 Speaker 1: celebrating here at Bloomberg Surveillance. D nine thousand jobs is 417 00:24:05,000 --> 00:24:08,439 Speaker 1: the consensus of economists. Uh we surveyed a hundred and 418 00:24:08,520 --> 00:24:12,600 Speaker 1: ninety thousand of those will be private payrolls manufacturing Perill's 419 00:24:12,640 --> 00:24:17,240 Speaker 1: forecast to decline by a thousand, Unemployment forecast no change 420 00:24:17,240 --> 00:24:20,560 Speaker 1: four point nine percent, and earnings up to tenths, which 421 00:24:20,560 --> 00:24:22,840 Speaker 1: would keep us on a two and a half percent 422 00:24:23,280 --> 00:24:26,560 Speaker 1: average hourly earnings year over year basis. And that's the 423 00:24:26,640 --> 00:24:29,240 Speaker 1: number that a lot of people will be watching very closely, 424 00:24:29,280 --> 00:24:32,640 Speaker 1: all the jobs numbers coming your way. Eight thirty Wall 425 00:24:32,640 --> 00:24:40,440 Speaker 1: Street Time here on Bloomberg Surveillance. Good morning, This is 426 00:24:40,480 --> 00:24:43,800 Speaker 1: Bloomberg Surveillance. I'm Michael McKee along with Tom Keene. We 427 00:24:43,880 --> 00:24:47,639 Speaker 1: are seeing green on the screen. Some optimism perhaps about 428 00:24:47,680 --> 00:24:50,480 Speaker 1: the jobs numbers, although you never can quite tell whether 429 00:24:50,480 --> 00:24:52,760 Speaker 1: Wall Street thinks good news is bad news or vice versa. 430 00:24:53,040 --> 00:24:55,400 Speaker 1: But right now, SMP futures are up by three points, 431 00:24:55,440 --> 00:24:58,080 Speaker 1: about two tenths of a percent, same percentage game for 432 00:24:58,119 --> 00:25:01,119 Speaker 1: now evening futures they are up by thirty one points. 433 00:25:01,119 --> 00:25:04,840 Speaker 1: That it's a fourteen point game. For Nasdaq futures they 434 00:25:04,880 --> 00:25:08,119 Speaker 1: are up three tents. We are excited because, of course, 435 00:25:08,200 --> 00:25:11,320 Speaker 1: we have been speaking with Robert Gordon from Northwestern University, 436 00:25:11,320 --> 00:25:14,440 Speaker 1: author of The Rise and Fall of American Growth, also 437 00:25:14,480 --> 00:25:20,440 Speaker 1: a member of the National Verreau for Economic Research Business 438 00:25:20,440 --> 00:25:22,600 Speaker 1: Cycle Dating Committee, and is he was telling me just 439 00:25:22,600 --> 00:25:24,520 Speaker 1: a few moments ago there's no cycle to date right now, 440 00:25:24,600 --> 00:25:30,720 Speaker 1: So we're not talking about recession at the moment. No 441 00:25:30,760 --> 00:25:33,960 Speaker 1: committees meant less often you say that's right. Uh, and 442 00:25:34,000 --> 00:25:38,280 Speaker 1: Alan Krueger are regular jobs today, guests of course, Princeton economists, 443 00:25:38,359 --> 00:25:42,280 Speaker 1: former Labor Department chief economists, former Treasury Department chief economists. 444 00:25:42,280 --> 00:25:45,879 Speaker 1: The man can't hold a job. Uh, he's with us 445 00:25:45,920 --> 00:25:48,600 Speaker 1: as well today. I want to go back to a question, 446 00:25:48,600 --> 00:25:51,920 Speaker 1: and I asked Professor Gordon Allen just before we took 447 00:25:51,920 --> 00:25:55,920 Speaker 1: a break with all the I don't know what even 448 00:25:55,960 --> 00:25:58,679 Speaker 1: what to call the presidential race this year. It is 449 00:25:58,880 --> 00:26:02,240 Speaker 1: so strange, and obviously there is a candidate who doesn't 450 00:26:02,240 --> 00:26:05,760 Speaker 1: seem to be qualified, doesn't understand economics, So I asked 451 00:26:05,760 --> 00:26:09,480 Speaker 1: the professor, and you have you'll have great perspective because 452 00:26:09,480 --> 00:26:11,400 Speaker 1: you were on the inside. How much difference a president 453 00:26:11,440 --> 00:26:14,800 Speaker 1: can make to the economy. Does the does the massive 454 00:26:14,960 --> 00:26:18,800 Speaker 1: bureaucracy of the United States government levin what a president 455 00:26:18,840 --> 00:26:21,920 Speaker 1: can do? Or can there be real damage done? Thank you. 456 00:26:23,040 --> 00:26:25,720 Speaker 1: I'm of the belief there could be real damage. You know, 457 00:26:25,760 --> 00:26:29,400 Speaker 1: if you talk about starting a trade war with China, 458 00:26:30,840 --> 00:26:38,800 Speaker 1: disrupting relationships with Mexico, um cutting you know, dramatically cutting taxes, 459 00:26:38,840 --> 00:26:45,000 Speaker 1: blowing up to deficit, um the way enforcement works for regulations. 460 00:26:45,240 --> 00:26:49,000 Speaker 1: I think president can cause a lot of damage. I'm 461 00:26:49,000 --> 00:26:52,360 Speaker 1: just wondering though. You can say you want a trade war, 462 00:26:52,440 --> 00:26:55,240 Speaker 1: you can say you want to deport eleven million people, 463 00:26:55,280 --> 00:26:58,480 Speaker 1: But is Congress gonna let you? Is the bureaucracy gonna 464 00:26:58,560 --> 00:27:02,000 Speaker 1: let you? Well, not all of that requires congressional action. 465 00:27:02,119 --> 00:27:06,760 Speaker 1: The president has a lot of authority. So uh I 466 00:27:06,760 --> 00:27:10,000 Speaker 1: I really worried for the future given some of the alternatives. 467 00:27:10,480 --> 00:27:16,640 Speaker 1: But Professor Gordon, how important are the undocumented immigrants here? 468 00:27:17,000 --> 00:27:20,360 Speaker 1: There are something like eight million people who are out 469 00:27:20,359 --> 00:27:23,479 Speaker 1: of work who would like work. If you deport eleven million, 470 00:27:23,800 --> 00:27:26,200 Speaker 1: I guess the calculation is about eight million of those 471 00:27:26,280 --> 00:27:31,200 Speaker 1: are in the labor force. Um, can't citizens replace those? Well, 472 00:27:31,280 --> 00:27:34,960 Speaker 1: let's not exaggerate. Uh. We have a normal amount of 473 00:27:35,040 --> 00:27:38,480 Speaker 1: unemployment that it takes uh teenagers to find new jobs. 474 00:27:38,800 --> 00:27:41,879 Speaker 1: People who are going back and forth to school are 475 00:27:41,880 --> 00:27:45,399 Speaker 1: account it is unemployed when they're doing routine job search. 476 00:27:45,480 --> 00:27:48,159 Speaker 1: So it's not that we have eight million people who 477 00:27:48,240 --> 00:27:53,080 Speaker 1: are uh desperately unable to find jobs. We have a 478 00:27:53,200 --> 00:27:56,200 Speaker 1: very high rate of job hiring now, we have very 479 00:27:56,200 --> 00:27:59,440 Speaker 1: healthy turnover in the labor market. We're getting our unemployment 480 00:27:59,520 --> 00:28:01,639 Speaker 1: right down into the four and a half percent range, 481 00:28:02,400 --> 00:28:04,639 Speaker 1: which is generally thought to be about as low as 482 00:28:04,680 --> 00:28:08,000 Speaker 1: we can get and stay safe on the Fed's inflation target. 483 00:28:08,520 --> 00:28:12,560 Speaker 1: Uh So, Uh, what we've got is a economy that 484 00:28:12,720 --> 00:28:17,679 Speaker 1: is already very dependent on those undocumented uh immigrants who 485 00:28:17,720 --> 00:28:20,280 Speaker 1: are here, and many of whom have been here for years. 486 00:28:21,000 --> 00:28:24,040 Speaker 1: Go into any restaurant, look at who the cooks are, 487 00:28:24,200 --> 00:28:26,480 Speaker 1: look at who the weight staff is, look at the 488 00:28:26,480 --> 00:28:29,800 Speaker 1: people who do the real nuts and bolts work of 489 00:28:29,880 --> 00:28:32,520 Speaker 1: running the American economy, and many of them are among 490 00:28:32,640 --> 00:28:36,720 Speaker 1: those undocumented aliens. We can't do without them, and it 491 00:28:36,760 --> 00:28:39,960 Speaker 1: would be enormously disruptive to try to suddenly come along 492 00:28:40,000 --> 00:28:41,840 Speaker 1: and tell them that they all have to leave. I 493 00:28:41,840 --> 00:28:46,120 Speaker 1: think it's totally infeasible. I think that the bureaucracy would 494 00:28:46,160 --> 00:28:49,760 Speaker 1: simply ignore this. But it can make a difference. Uh 495 00:28:49,800 --> 00:28:55,440 Speaker 1: on the the idea of the manual labor worker. How 496 00:28:55,480 --> 00:28:57,720 Speaker 1: important is that going to be going forward in any 497 00:28:57,720 --> 00:29:00,800 Speaker 1: economy that we keep hearing has become more and more 498 00:29:00,800 --> 00:29:06,200 Speaker 1: technology and robot driven. Well, in the long run, the 499 00:29:06,280 --> 00:29:11,520 Speaker 1: pattern has been for machinery to replace routine work manual labor, 500 00:29:12,240 --> 00:29:14,480 Speaker 1: and I think that will continue. On the other hand, 501 00:29:14,520 --> 00:29:18,080 Speaker 1: in the near term, we're still very dependent on the 502 00:29:18,160 --> 00:29:21,840 Speaker 1: use of muscle in terms of construction, in terms of 503 00:29:22,840 --> 00:29:29,440 Speaker 1: building our roads, houses. Um So I think, you know, 504 00:29:29,880 --> 00:29:33,000 Speaker 1: for the foreseeable future, we're still going to be very 505 00:29:33,040 --> 00:29:37,600 Speaker 1: dependent on manual labor. Does the employment report give us 506 00:29:37,600 --> 00:29:41,000 Speaker 1: any clue as to how many people are in that 507 00:29:41,240 --> 00:29:45,600 Speaker 1: job category and or uh, you know, non citizens or 508 00:29:45,680 --> 00:29:50,520 Speaker 1: the people who would be deported. Uh. The monthly report 509 00:29:50,560 --> 00:29:55,560 Speaker 1: doesn't give too much purchase on the undocumented immigrants, but 510 00:29:55,560 --> 00:29:58,600 Speaker 1: there are pretty good estimates of how many and documented 511 00:29:58,640 --> 00:30:01,000 Speaker 1: workers there are in the US. You know, one of 512 00:30:01,000 --> 00:30:02,640 Speaker 1: the things which has been amazing to me is that 513 00:30:03,080 --> 00:30:06,120 Speaker 1: we're having this debate at a time when net migration 514 00:30:06,160 --> 00:30:09,760 Speaker 1: to Mexico is negative. We're seeing outflows we have for 515 00:30:09,800 --> 00:30:13,080 Speaker 1: the past few years, which just as a sign I 516 00:30:13,120 --> 00:30:15,600 Speaker 1: think of how far off base the discussion has been 517 00:30:15,640 --> 00:30:19,200 Speaker 1: compared to the reality of what's uh driving our economy. 518 00:30:19,880 --> 00:30:22,840 Speaker 1: Professor Gordon, I only have thirty seconds left, But what 519 00:30:22,840 --> 00:30:26,080 Speaker 1: what would you say to the people who are supporting 520 00:30:26,120 --> 00:30:30,480 Speaker 1: Donald Trump, who feel that they don't have a future. Uh? 521 00:30:30,520 --> 00:30:34,320 Speaker 1: I would tell them that, uh, we need to have 522 00:30:34,600 --> 00:30:38,920 Speaker 1: a more equal society, not a less equal society. We 523 00:30:39,000 --> 00:30:41,800 Speaker 1: don't want to run up deficits by cutting taxes on 524 00:30:41,840 --> 00:30:45,360 Speaker 1: the rich, and we need to have programs that support 525 00:30:45,440 --> 00:30:48,760 Speaker 1: people like them. Uh, they're voting for the wrong person. 526 00:30:49,680 --> 00:30:53,040 Speaker 1: Professor Robert Gordon from Northwestern University and of course Alan 527 00:30:53,080 --> 00:30:55,720 Speaker 1: Krueger from Princeton. Alan will be staying around. We thank 528 00:30:55,720 --> 00:30:58,480 Speaker 1: Professor Gordon for coming in today a treat and again 529 00:30:58,960 --> 00:31:01,800 Speaker 1: his book The Rise and Fall of American Growth definitely 530 00:31:01,840 --> 00:31:04,600 Speaker 1: my book of the year and everybody should check that out. 531 00:31:05,240 --> 00:31:07,200 Speaker 1: It will give you a very good read. Good thing. 532 00:31:07,280 --> 00:31:10,160 Speaker 1: It is not it's not summertime because it's a little 533 00:31:10,160 --> 00:31:13,280 Speaker 1: heavy for a beach book. I mean it's eight hundred pages. 534 00:31:14,000 --> 00:31:17,120 Speaker 1: We'll be back here on Bloomberg Surveillance. This is Bloomberg 535 00:31:17,200 --> 00:31:22,880 Speaker 1: Radio worldwide. Okay, thank you. We are counting down at 536 00:31:22,880 --> 00:31:24,800 Speaker 1: the opening bell. Brought to you by the Jeep Grand Cherokee, 537 00:31:24,800 --> 00:31:27,160 Speaker 1: the most awarded suv ever. The Grand Cherokee continues to 538 00:31:27,200 --> 00:31:29,720 Speaker 1: raise the bar with its luxurious interior, the legendary four 539 00:31:29,720 --> 00:31:36,920 Speaker 1: by four capability drive one at your local Jeep deal today. 540 00:31:37,720 --> 00:31:41,160 Speaker 1: Gloombo Business News twenty four hours a day, if Bloomberg 541 00:31:41,200 --> 00:31:44,240 Speaker 1: dot Com the radio plus mobile and on your radio. 542 00:31:44,560 --> 00:31:48,360 Speaker 1: This is a Bloomberg Business Flash and I'm Karin Moscow. 543 00:31:48,400 --> 00:31:50,720 Speaker 1: This updates brought to you by Sector Spider E t 544 00:31:50,960 --> 00:31:53,040 Speaker 1: f I buy a single stock when you can invest 545 00:31:53,080 --> 00:31:56,520 Speaker 1: in the entire sector. Visits sector spd r s dot 546 00:31:56,560 --> 00:31:59,840 Speaker 1: Com are called six Sector E t f U s 547 00:32:00,000 --> 00:32:02,400 Speaker 1: A Index. Futures are higher as investors await data that 548 00:32:02,520 --> 00:32:05,240 Speaker 1: may show hiring picked up pace. Last month. We checked 549 00:32:05,240 --> 00:32:07,760 Speaker 1: the markets every fifteen minutes throughout the trading day on 550 00:32:07,800 --> 00:32:11,200 Speaker 1: Bloomberg SNP E many futures up four points NOWE many 551 00:32:11,280 --> 00:32:13,760 Speaker 1: futures up thirty seven NAS doc you many futures up 552 00:32:13,840 --> 00:32:17,160 Speaker 1: seventeen decks. In Germany's at one point one percent, and 553 00:32:17,280 --> 00:32:19,760 Speaker 1: your treasury little change yield one point eight three percent. 554 00:32:20,120 --> 00:32:22,320 Speaker 1: Nom X Screwed oil up eight ten percent or twenty 555 00:32:22,360 --> 00:32:24,920 Speaker 1: eight cents. Call Max school is up six tenths percent 556 00:32:25,000 --> 00:32:27,640 Speaker 1: or seven dollar seventy cents. The euro An allar oh 557 00:32:27,720 --> 00:32:30,440 Speaker 1: nine seven one, the En one thirteen point seven two. 558 00:32:30,840 --> 00:32:34,160 Speaker 1: That's a Bloomberg business flash, Tom and Mike Okaya Mosco, 559 00:32:34,280 --> 00:32:37,080 Speaker 1: thank you very much. The Bloomberg n j I T 560 00:32:37,600 --> 00:32:41,760 Speaker 1: STEM Report is brought to you by New Jersey Institute 561 00:32:41,800 --> 00:32:44,920 Speaker 1: of Technology. I just lost my place here. I'll be 562 00:32:45,080 --> 00:32:48,400 Speaker 1: right back. We are brought to you by nj IDEA, 563 00:32:48,480 --> 00:32:50,960 Speaker 1: partnering with government and industry to apply the university's world 564 00:32:51,000 --> 00:32:54,040 Speaker 1: class research assets to innovate and spur economic growth. Learn 565 00:32:54,120 --> 00:32:56,640 Speaker 1: more at n j I T dot e d U 566 00:32:56,800 --> 00:32:59,080 Speaker 1: Bob Moon. I need I need an electronic version of 567 00:32:59,080 --> 00:33:02,240 Speaker 1: that billboard so I don't mess up like I just did. Okay, 568 00:33:02,280 --> 00:33:06,080 Speaker 1: good morning, Michael. Here's what's making news in science, technology, engineering, 569 00:33:06,080 --> 00:33:09,640 Speaker 1: and math. Facebook will pay millions more in taxes starting 570 00:33:09,680 --> 00:33:12,520 Speaker 1: next year, all because of where it sends the bills 571 00:33:12,520 --> 00:33:15,880 Speaker 1: out for the advertising it sells in the United Kingdom. 572 00:33:16,160 --> 00:33:19,600 Speaker 1: The social network has decided to stop rooting advertising sales 573 00:33:19,680 --> 00:33:23,640 Speaker 1: of its largest UK clients through Ireland, which effectively increases 574 00:33:23,680 --> 00:33:26,720 Speaker 1: its tax bill by millions of pounds. It's a bid 575 00:33:26,720 --> 00:33:30,160 Speaker 1: by Facebook to improve transparency and fend off criticism over 576 00:33:30,240 --> 00:33:34,040 Speaker 1: tax avoidance. Smaller business sales where advertising his booked online, 577 00:33:34,080 --> 00:33:36,840 Speaker 1: will still be rooted through the company's Ireland offices, which 578 00:33:36,840 --> 00:33:40,480 Speaker 1: will remain the firm's international headquarters. But a Facebook spokesman 579 00:33:40,520 --> 00:33:43,240 Speaker 1: tells Bloomberg and an emailed statement that it's larger UK 580 00:33:43,360 --> 00:33:47,040 Speaker 1: customers will start receiving invoices from Facebook UK instead of 581 00:33:47,040 --> 00:33:49,760 Speaker 1: Facebook Ireland. That means the revenue will be recorded in 582 00:33:49,800 --> 00:33:52,680 Speaker 1: the UK and thus tax there. The British Treasury issued 583 00:33:52,720 --> 00:33:56,440 Speaker 1: a statement welcoming the additional revenue and saying multinationals should 584 00:33:56,440 --> 00:33:59,520 Speaker 1: pay every penny they owe. The UK is famous for 585 00:33:59,560 --> 00:34:02,560 Speaker 1: its today just tax enforcement. Remember when the Beatles were 586 00:34:02,560 --> 00:34:15,759 Speaker 1: compelled to pay a rate? And that's this morning is 587 00:34:15,800 --> 00:34:18,759 Speaker 1: Bloomberg and j I t Stem reports Tom that was 588 00:34:18,800 --> 00:34:26,080 Speaker 1: a revolver moment, a revolver moment. Why clever Mike pick 589 00:34:26,120 --> 00:34:29,280 Speaker 1: it up here with our esteem guests, well, our steam 590 00:34:29,280 --> 00:34:32,360 Speaker 1: guest is our Steam Job's Day co host Alan Krueger 591 00:34:32,719 --> 00:34:36,360 Speaker 1: from Princeton University. We were talking with Robert Gordon of 592 00:34:36,440 --> 00:34:40,480 Speaker 1: Northwestern in the last block about what a difference an 593 00:34:40,480 --> 00:34:44,560 Speaker 1: administration can make in the economy. Let's uh keep it 594 00:34:44,560 --> 00:34:46,800 Speaker 1: in government moved down the street a little bit to 595 00:34:46,880 --> 00:34:51,440 Speaker 1: twenty and C streets in Washington and Aska. At this point, 596 00:34:52,040 --> 00:34:57,400 Speaker 1: is the FED still affecting the economy or has the 597 00:34:57,560 --> 00:35:01,000 Speaker 1: impact of zero interest rates and QUEI and the fens 598 00:35:01,040 --> 00:35:04,120 Speaker 1: balance at this point sort of become a neutral factor. 599 00:35:05,000 --> 00:35:07,839 Speaker 1: I think they're still accommodating the economy. I think it'll 600 00:35:07,880 --> 00:35:10,640 Speaker 1: be a while before monetary policy is that in the 601 00:35:10,760 --> 00:35:15,000 Speaker 1: mutual stance? So, uh, when you say it's a while, 602 00:35:15,120 --> 00:35:17,920 Speaker 1: then what is the what is what the ft is 603 00:35:17,960 --> 00:35:20,879 Speaker 1: considering whether they raise interest rates in the basis points 604 00:35:20,960 --> 00:35:23,200 Speaker 1: or fifty basis points this here, is that going to 605 00:35:23,239 --> 00:35:26,480 Speaker 1: have an impact? Are we going to notice that at 606 00:35:26,520 --> 00:35:31,959 Speaker 1: one point? Do they hinder the economy? Well, I think 607 00:35:32,040 --> 00:35:37,160 Speaker 1: it'll start to slow the economy when they and I 608 00:35:37,200 --> 00:35:39,560 Speaker 1: assume that they'll continue to raise rates because I expect 609 00:35:39,600 --> 00:35:43,640 Speaker 1: the recovery is going to continue. Um, the question is 610 00:35:43,640 --> 00:35:46,000 Speaker 1: at what pays the reason why I say, I think 611 00:35:46,000 --> 00:35:49,440 Speaker 1: it's the commendative, it'll just be less accommodative going forward, 612 00:35:50,520 --> 00:35:53,359 Speaker 1: is real rates are still negative. If you look at 613 00:35:53,360 --> 00:35:56,600 Speaker 1: where we are with inflation, where nominal interest rates are, 614 00:35:57,000 --> 00:36:00,239 Speaker 1: even if they go up fifty basis point basis ITTs 615 00:36:00,280 --> 00:36:02,799 Speaker 1: this year, Uh, that's still going to be below the 616 00:36:02,800 --> 00:36:07,200 Speaker 1: inflation rate, and that still would be supporting investment in 617 00:36:07,239 --> 00:36:11,200 Speaker 1: the U. S economy, supporting consumption. Within this and to 618 00:36:11,360 --> 00:36:14,880 Speaker 1: the debate, and I'm sure you have a strong opinion 619 00:36:14,960 --> 00:36:18,560 Speaker 1: on this, how much of a vector on the unemployment 620 00:36:18,640 --> 00:36:22,239 Speaker 1: rate can be attributed to the White House and to 621 00:36:22,600 --> 00:36:24,640 Speaker 1: what is becoming a lame duck white House. I was 622 00:36:24,719 --> 00:36:27,080 Speaker 1: quite taken insted by the president of the first Lady 623 00:36:27,480 --> 00:36:30,600 Speaker 1: suggesting they will stay in Washington. I guess we all 624 00:36:30,640 --> 00:36:34,719 Speaker 1: knew immediately why their youngest daughter's education is a priority. 625 00:36:34,840 --> 00:36:37,839 Speaker 1: But the vector, now, how much can a White House 626 00:36:37,880 --> 00:36:41,879 Speaker 1: influence that? Well, there's still many things that the administration 627 00:36:42,000 --> 00:36:46,759 Speaker 1: is engaged in that can influence the economy, the trade agreements, 628 00:36:46,960 --> 00:36:52,040 Speaker 1: for example, uh, international policy. UM, I think we made 629 00:36:52,080 --> 00:36:54,879 Speaker 1: some big steps with the budget which will provide more 630 00:36:55,880 --> 00:36:58,520 Speaker 1: certainty going forward, and a little bit of a tailwind 631 00:36:58,760 --> 00:37:01,719 Speaker 1: for the economy. But if you look at over this week, 632 00:37:01,760 --> 00:37:04,000 Speaker 1: but the last seven years, I think there's no question 633 00:37:04,040 --> 00:37:07,440 Speaker 1: that the Obama administration's policies helped to get us out 634 00:37:07,440 --> 00:37:11,480 Speaker 1: of the worst recession since the Great Script. You do 635 00:37:11,640 --> 00:37:14,520 Speaker 1: every time I'm here. Yeah, in fact, I don't believe 636 00:37:14,560 --> 00:37:19,560 Speaker 1: you have. Thank you, Professor Krueger. I'm watching in our 637 00:37:19,680 --> 00:37:23,440 Speaker 1: wonderful coverage from Washington, one of the Republican candidates. I 638 00:37:23,520 --> 00:37:26,360 Speaker 1: want to leave the politics out of this. Go after 639 00:37:26,640 --> 00:37:32,160 Speaker 1: the Affordable Care Act and without any political angle. I'm 640 00:37:32,200 --> 00:37:35,440 Speaker 1: saying to myself, how many people in his Republican audience 641 00:37:35,560 --> 00:37:41,320 Speaker 1: benefited from the Affordable Care Act? How many did? Large numbers? 642 00:37:41,360 --> 00:37:47,160 Speaker 1: I had to say. I watched like half of the audience, 643 00:37:47,360 --> 00:37:50,719 Speaker 1: No question, it was millions. I did full discre full disclosure, 644 00:37:50,880 --> 00:37:53,799 Speaker 1: Rich Truman, full disclosure. One of my kids got a 645 00:37:53,800 --> 00:37:56,680 Speaker 1: two year free ride because of the Affordable Care Act. 646 00:37:57,120 --> 00:37:59,560 Speaker 1: You know, to hear the claims during the debate that 647 00:37:59,640 --> 00:38:02,120 Speaker 1: the it's not doing well because of the Affordable Care 648 00:38:02,160 --> 00:38:05,279 Speaker 1: Act is laughable. That struck me as as a little 649 00:38:05,280 --> 00:38:09,520 Speaker 1: bit odd. But let me ask you, during the debate, 650 00:38:09,680 --> 00:38:14,120 Speaker 1: they argued it was a job killing piece of legislation, 651 00:38:14,160 --> 00:38:16,840 Speaker 1: and that was the argument that was put forth in 652 00:38:17,120 --> 00:38:20,200 Speaker 1: the debate over whether the pacit or not. Can we 653 00:38:20,280 --> 00:38:23,319 Speaker 1: tell what impact has had on jobs? I mean, there 654 00:38:23,320 --> 00:38:25,320 Speaker 1: were a lot there were a lot of stories going 655 00:38:25,360 --> 00:38:29,240 Speaker 1: into this that companies were hiring more part time workers 656 00:38:29,239 --> 00:38:32,279 Speaker 1: so they wouldn't become subject to this and converting full 657 00:38:32,320 --> 00:38:34,640 Speaker 1: time workers to part time workers. Can we tell what 658 00:38:34,680 --> 00:38:37,160 Speaker 1: the impact has been, Well, there's no sign that it 659 00:38:37,239 --> 00:38:40,480 Speaker 1: has had an average effect unemployment. If you look in 660 00:38:40,520 --> 00:38:44,120 Speaker 1: this recovery, and especially since the Affordable Care Act passed, 661 00:38:44,440 --> 00:38:46,439 Speaker 1: virtually all of the job growth has been in full 662 00:38:46,440 --> 00:38:49,120 Speaker 1: time jobs. You know, Like the same thing was said 663 00:38:49,160 --> 00:38:51,200 Speaker 1: at the Social Security Act that it was going to 664 00:38:51,320 --> 00:38:55,480 Speaker 1: destroy the US economy. So I think everybody needs to 665 00:38:55,480 --> 00:38:58,720 Speaker 1: take a deep breath and look at the act in 666 00:38:58,719 --> 00:39:01,759 Speaker 1: and fall. Uh, look at the effect it's had on 667 00:39:01,840 --> 00:39:03,960 Speaker 1: healthcare costs, which is probably gonna slow them down and 668 00:39:04,000 --> 00:39:06,640 Speaker 1: to accelerate some trends that were taking place before the 669 00:39:07,200 --> 00:39:12,320 Speaker 1: pass which, uh, we're contributing to slower growth and healthcare costs. Uh. 670 00:39:12,400 --> 00:39:14,200 Speaker 1: We should all be proud of the fact that twenty 671 00:39:14,239 --> 00:39:17,840 Speaker 1: million more people have gained health insurance coverage UM and 672 00:39:17,960 --> 00:39:20,840 Speaker 1: the effect on the economy. Job growth certainly strong in 673 00:39:20,920 --> 00:39:22,600 Speaker 1: the last two years, and it wasn't the two years 674 00:39:22,680 --> 00:39:25,280 Speaker 1: before that. I just put out a photo on Twitter, folks. 675 00:39:25,360 --> 00:39:28,000 Speaker 1: It's one of the three or four most important photos 676 00:39:28,040 --> 00:39:31,400 Speaker 1: of the history of Bloomberg surveillance and Bloomberg on the economy. 677 00:39:31,440 --> 00:39:34,880 Speaker 1: To have Krueger and Gordon with this is special. What 678 00:39:35,000 --> 00:39:38,160 Speaker 1: have you learned off of Krueger card? Card? Krueger from 679 00:39:38,160 --> 00:39:43,040 Speaker 1: what you were like seventeen years old, I mean, come up? 680 00:39:43,120 --> 00:39:47,160 Speaker 1: Was you know? It's sick. I can remember the dates 681 00:39:47,200 --> 00:39:49,759 Speaker 1: of some of these papers, Krueger Card. What have you 682 00:39:49,880 --> 00:39:53,600 Speaker 1: learned about the minimum wage with the new experiments we're 683 00:39:53,640 --> 00:39:57,279 Speaker 1: having in Seattle and other places in Secretary Clinton, I 684 00:39:57,280 --> 00:40:02,279 Speaker 1: believe surrounding the fifteen dollar statistic? What have you learned recently? Well, 685 00:40:02,320 --> 00:40:04,680 Speaker 1: I think in the last twenty years since our book 686 00:40:05,080 --> 00:40:07,200 Speaker 1: came out. And by the way, I'll give a shameless plug, 687 00:40:07,280 --> 00:40:11,360 Speaker 1: we just published a twenty anniversary edition of myth and 688 00:40:11,400 --> 00:40:20,480 Speaker 1: Measurement half that half that, so it um and uh, 689 00:40:20,600 --> 00:40:23,200 Speaker 1: what's remarkable to me? And I thought this was the 690 00:40:23,200 --> 00:40:26,240 Speaker 1: case when we wrote our research and our our book 691 00:40:26,280 --> 00:40:30,480 Speaker 1: back in the early nineties, that the judgment would be 692 00:40:30,480 --> 00:40:33,920 Speaker 1: based on what happened subsequently, on what the research subsequently shows, 693 00:40:34,280 --> 00:40:37,640 Speaker 1: and overwhelmingly, the research has found that moderate increases in 694 00:40:37,640 --> 00:40:41,440 Speaker 1: the minimum wage do not have a noticeable effect unemployment, 695 00:40:42,520 --> 00:40:45,640 Speaker 1: that moderate increases in the minimum wage tend to boost wages, 696 00:40:47,200 --> 00:40:52,279 Speaker 1: tend to support consumption, yet don't have an adverse effect unemployment, 697 00:40:52,360 --> 00:40:55,239 Speaker 1: in part because the job market is not as competitive 698 00:40:55,600 --> 00:40:57,840 Speaker 1: as we like to think. There are frictions in the 699 00:40:57,920 --> 00:41:02,400 Speaker 1: job market, bargaining power matters, and the minimum wage sets 700 00:41:02,440 --> 00:41:05,920 Speaker 1: a norm for what's acceptable wages. Now, I do have 701 00:41:06,000 --> 00:41:09,440 Speaker 1: some concerns about the minimum way going too high, because 702 00:41:09,520 --> 00:41:13,080 Speaker 1: even in the non competitive labor market, you can set 703 00:41:13,080 --> 00:41:17,160 Speaker 1: the minimum wage above the point where it does more 704 00:41:17,239 --> 00:41:20,799 Speaker 1: good than harm. And fifteen dollars, frankly, is beyond the 705 00:41:20,840 --> 00:41:23,160 Speaker 1: experience that we've had in the US and beyond the 706 00:41:23,200 --> 00:41:26,120 Speaker 1: experience in almost every other country. So I think that 707 00:41:26,120 --> 00:41:29,520 Speaker 1: would take us into unchartered waters. But I'm quite comfortable 708 00:41:29,600 --> 00:41:32,000 Speaker 1: saying that going up to arrange like twelve dollars an 709 00:41:32,000 --> 00:41:36,000 Speaker 1: hour would have more benefits for low wage workers. Professor Krueger, 710 00:41:36,239 --> 00:41:38,480 Speaker 1: thank you so much for being with us today. Are 711 00:41:38,560 --> 00:41:41,320 Speaker 1: people are looking at your people you're entourage of Lane. 712 00:41:41,320 --> 00:41:44,880 Speaker 1: She's screaming, get him out of here. Alan Krueger is gone. 713 00:41:45,560 --> 00:41:48,080 Speaker 1: The former Cruger can always take you know. We'll rub 714 00:41:48,200 --> 00:41:50,399 Speaker 1: up the script sometime and he can. He can come 715 00:41:50,400 --> 00:41:52,919 Speaker 1: back anytime. He was. He's entourage is coming right into 716 00:41:52,960 --> 00:41:55,239 Speaker 1: the studio to drag him out. It's so rude. He's 717 00:41:55,280 --> 00:41:59,000 Speaker 1: the former chairman of the President's Council of Economic Advisors. 718 00:41:59,000 --> 00:42:02,880 Speaker 1: Alan Krueger of Princeton University. Figures up five down, figures 719 00:42:02,920 --> 00:42:06,200 Speaker 1: up forty three. Mickey Leavey to join us, thrilled with that. 720 00:42:06,320 --> 00:42:11,080 Speaker 1: With Barrenburg Capital Markets also joining us today, William Gross 721 00:42:11,320 --> 00:42:14,440 Speaker 1: will speak to him from Janice Capital with an important note. 722 00:42:14,840 --> 00:42:18,120 Speaker 1: A few days ago, he's said banking, he's warning the 723 00:42:18,120 --> 00:42:20,239 Speaker 1: sun is going to burn out its yeah, or or 724 00:42:20,239 --> 00:42:22,120 Speaker 1: something like that. Bill Gross will join us after the 725 00:42:22,200 --> 00:42:25,399 Speaker 1: jobs report help us not soon. Yeah, Well, we'll look 726 00:42:25,440 --> 00:42:27,319 Speaker 1: at that. We begin another hour here and then on 727 00:42:27,360 --> 00:42:31,319 Speaker 1: to the nine o'clock our of Bloomberg surveillance of the course. 728 00:42:31,400 --> 00:42:34,160 Speaker 1: In thirty two minutes, we will do what we do, 729 00:42:34,360 --> 00:42:37,720 Speaker 1: which was willa go beneath the headline data to inform 730 00:42:37,800 --> 00:42:42,000 Speaker 1: you on America's labor economy. Michael mckeeam, Tom Keen coast 731 00:42:42,000 --> 00:42:45,000 Speaker 1: to coast, worldwide Bloomberg surveillance