WEBVTT - Dunkelberg: It's been a sub-normal recovery

0:00:02.320 --> 0:00:05.680
<v Speaker 1>Global business news twenty four hours a day. If Bloomberg

0:00:05.760 --> 0:00:08.840
<v Speaker 1>dot Com the radio plus mobile lapp and on your radio,

0:00:09.119 --> 0:00:13.720
<v Speaker 1>this is a Bloomberg Business Flash and I'm Karin Moscow Us,

0:00:13.760 --> 0:00:15.640
<v Speaker 1>I'll get next. Future is rising. Let's go to the

0:00:15.680 --> 0:00:18.320
<v Speaker 1>First Word Breaking news desk for today's morning call. Here's

0:00:18.360 --> 0:00:22.240
<v Speaker 1>Bill Maloney. Good morning Bill, Good morning Karen. US futures

0:00:22.239 --> 0:00:24.439
<v Speaker 1>are highed, but have paired some of their games since

0:00:24.440 --> 0:00:27.080
<v Speaker 1>the last time we spoke. Deaf Futures currently hired by

0:00:27.080 --> 0:00:29.640
<v Speaker 1>sixty nine points, says if he's game eight and as

0:00:29.640 --> 0:00:32.640
<v Speaker 1>the futures rise by twelve, video's ten yield at one

0:00:32.680 --> 0:00:36.280
<v Speaker 1>point seven six per cent after the bellis Night gap.

0:00:36.360 --> 0:00:39.720
<v Speaker 1>April comp sales missed estimates, shares it down twelve percent

0:00:39.760 --> 0:00:43.320
<v Speaker 1>pre market, and rack Space Q when SPS toped highest

0:00:43.560 --> 0:00:46.519
<v Speaker 1>estimates regarding earning. Stay at lumber Liquid there's Q and

0:00:46.600 --> 0:00:50.240
<v Speaker 1>sales missed estimates, shares it down thirteen percent pre market,

0:00:50.560 --> 0:00:54.640
<v Speaker 1>Allergen EPSP revenue missed, and Norwegian crews He's Q tw

0:00:54.680 --> 0:00:58.560
<v Speaker 1>EPs below estimates. In other news, Persian Square set itself

0:00:58.600 --> 0:01:01.000
<v Speaker 1>part of its stake in Zoe. It's an our going

0:01:01.040 --> 0:01:03.960
<v Speaker 1>to buy back up to ten billion in stock. Finally

0:01:03.960 --> 0:01:07.000
<v Speaker 1>some of your wallsheet upgrades and downgrades. Solar City cut

0:01:07.040 --> 0:01:09.600
<v Speaker 1>to neutral at Bank of America. Amazon Price start at

0:01:09.640 --> 0:01:12.280
<v Speaker 1>raised to a street high a thousand from seven seventy

0:01:12.360 --> 0:01:15.600
<v Speaker 1>over at Bernstein Wayfair cuts neutral at City Group, Rack

0:01:15.640 --> 0:01:18.399
<v Speaker 1>Space cut out before him versus Strong by It Raymond

0:01:18.480 --> 0:01:22.280
<v Speaker 1>James and h CP raised to hold over at Jefferies

0:01:22.640 --> 0:01:25.960
<v Speaker 1>Live on the Fraser Breaking News Tascombo. Maloney Karen thanks

0:01:26.000 --> 0:01:28.080
<v Speaker 1>Bill to hear live breaking news. However, you're a Bloomberg

0:01:28.120 --> 0:01:30.200
<v Speaker 1>type squawk go and your terminal that s squ you

0:01:30.319 --> 0:01:33.000
<v Speaker 1>a w k go and that's a Bloomberg business flash.

0:01:33.040 --> 0:01:37.360
<v Speaker 1>Tom and Mike Karen thank you so much, greatly appreciate it.

0:01:37.440 --> 0:01:41.120
<v Speaker 1>With him within the uh, the jumble of it all,

0:01:41.640 --> 0:01:45.080
<v Speaker 1>we need to look at small business. We'll do that

0:01:45.200 --> 0:01:48.720
<v Speaker 1>here in a moment. Bloomberg Surveillance is always brought you

0:01:48.760 --> 0:01:51.680
<v Speaker 1>by Investco. Invesco believes is time to bench the benchmarks

0:01:51.680 --> 0:01:55.760
<v Speaker 1>to consider active management and factor based strategies. Find out

0:01:55.760 --> 0:02:00.640
<v Speaker 1>more at investco dot com. Slash high Conviction Mike's small

0:02:00.680 --> 0:02:04.960
<v Speaker 1>business Remember them, I remember them. They get they get ignored,

0:02:05.640 --> 0:02:07.440
<v Speaker 1>which means it's a good time to speak with William

0:02:07.480 --> 0:02:11.120
<v Speaker 1>Dunkelberg as you look at the small business economy and

0:02:11.160 --> 0:02:14.080
<v Speaker 1>what he learns from you. Claimed n f IB survey

0:02:14.240 --> 0:02:18.640
<v Speaker 1>is the survey giving you good information Bill Dunkelberg, Well

0:02:18.720 --> 0:02:22.360
<v Speaker 1>we think so. Good morning, gentlemen. Uh you know, n

0:02:22.400 --> 0:02:24.280
<v Speaker 1>f IB has a membership of about three hundred and

0:02:24.320 --> 0:02:27.919
<v Speaker 1>fifty thousand firms, and we have about two thousand respondents

0:02:28.000 --> 0:02:32.080
<v Speaker 1>in the April survey. Uh So, even if it's not

0:02:32.160 --> 0:02:36.200
<v Speaker 1>a perfect representation of the small business sector out there,

0:02:36.560 --> 0:02:38.880
<v Speaker 1>it represents an awful lot of firms. And of course

0:02:39.240 --> 0:02:41.760
<v Speaker 1>those three fifty thousand members we have are hit by

0:02:41.800 --> 0:02:43.639
<v Speaker 1>the same force as the the rest of them are.

0:02:43.680 --> 0:02:46.160
<v Speaker 1>So I think we're in good shape there. Well, you're

0:02:46.160 --> 0:02:48.240
<v Speaker 1>in good shape. There's a recovery, I get that, but

0:02:48.320 --> 0:02:53.800
<v Speaker 1>it's nowhere near the average of night five to about

0:02:54.000 --> 0:02:57.519
<v Speaker 1>two thousand four. With a new idea of a lower

0:02:57.639 --> 0:03:01.440
<v Speaker 1>terminal value, a lower potential g d P, is small

0:03:01.520 --> 0:03:04.600
<v Speaker 1>business hit harder? Are they part of the mix with

0:03:04.680 --> 0:03:08.560
<v Speaker 1>big business? They actually do better? Which isn't well, it

0:03:09.040 --> 0:03:12.040
<v Speaker 1>varies historically. Of course, we produce half of the private

0:03:12.080 --> 0:03:15.960
<v Speaker 1>g d P H in the small business sector. Right now.

0:03:16.080 --> 0:03:19.040
<v Speaker 1>You know, remember most houses in America are built by

0:03:19.120 --> 0:03:21.800
<v Speaker 1>small businesses, not not the big famous names that are

0:03:21.840 --> 0:03:25.560
<v Speaker 1>on the board. Uh, And that market is doing pretty well.

0:03:25.720 --> 0:03:29.600
<v Speaker 1>It's pretty clearly running short of labor. That is, there

0:03:29.639 --> 0:03:33.520
<v Speaker 1>a lot of problems in the construction sector finding qualified

0:03:33.560 --> 0:03:36.040
<v Speaker 1>workers to get the job done. So, you know, so

0:03:36.120 --> 0:03:39.040
<v Speaker 1>we're doing, you know, pretty well, but you're right, it's

0:03:39.080 --> 0:03:44.040
<v Speaker 1>a it's been a sub normal recovery. Uh. The index

0:03:44.120 --> 0:03:46.600
<v Speaker 1>at a high of a hundred in December of fourteen.

0:03:46.640 --> 0:03:49.480
<v Speaker 1>It's now at ninety three point six, and the average

0:03:49.520 --> 0:03:53.520
<v Speaker 1>over forty years is eight, so below average recovery. It

0:03:53.560 --> 0:03:57.640
<v Speaker 1>has been. Does the does does what you're finding in

0:03:57.720 --> 0:03:59.840
<v Speaker 1>your survey mirror what's happened with the rest of the

0:04:00.000 --> 0:04:03.640
<v Speaker 1>economy that the bigger boys out there, that we were

0:04:03.720 --> 0:04:05.840
<v Speaker 1>getting better than all of a sudden hit a pothole

0:04:05.880 --> 0:04:08.800
<v Speaker 1>in the first of the year. The first quarter was terrible,

0:04:08.800 --> 0:04:11.840
<v Speaker 1>and now we're coming out of it. Well, that's basically right.

0:04:11.880 --> 0:04:15.440
<v Speaker 1>We've had the index declining just by fractions of a

0:04:15.520 --> 0:04:18.560
<v Speaker 1>point for the last three months, so this increase of

0:04:18.600 --> 0:04:22.719
<v Speaker 1>a full point uh certainly ends that, but still leaves

0:04:22.839 --> 0:04:25.600
<v Speaker 1>us well below the average. So there's a lot of

0:04:25.720 --> 0:04:29.599
<v Speaker 1>wanting The real problem is expectations for the future. The

0:04:29.680 --> 0:04:31.840
<v Speaker 1>net percent of firms who think their real sales are

0:04:31.839 --> 0:04:34.160
<v Speaker 1>gonna go up is sitting on the zero line, not

0:04:34.279 --> 0:04:37.240
<v Speaker 1>percent playing that the inventory sitting on the zero line

0:04:37.920 --> 0:04:40.960
<v Speaker 1>of about twenty percentage points. More of the owners think

0:04:41.000 --> 0:04:43.480
<v Speaker 1>that the economy will be worse than six months than

0:04:43.600 --> 0:04:45.640
<v Speaker 1>think it will be better. So that's kind of the

0:04:45.640 --> 0:04:48.120
<v Speaker 1>outlook that they have for where the economy is going

0:04:48.160 --> 0:04:50.679
<v Speaker 1>to go. I thought the wage dynamics are very interesting.

0:04:50.760 --> 0:04:52.720
<v Speaker 1>What's the backstory their bill? I mean, when I look

0:04:52.760 --> 0:04:55.680
<v Speaker 1>at wages, benefits, et cetera. Is this a group that's

0:04:55.680 --> 0:04:59.760
<v Speaker 1>going to get closed by premium increases? Affordable Care Act?

0:04:59.839 --> 0:05:02.159
<v Speaker 1>Is it? Is? That not really part of the issue,

0:05:02.160 --> 0:05:05.560
<v Speaker 1>And part is say increasing minimum wage? What's the backstory

0:05:05.640 --> 0:05:09.960
<v Speaker 1>dynamic of wages in small business? Right? Well, you pointed

0:05:10.000 --> 0:05:12.160
<v Speaker 1>up two important things. One is that we do have

0:05:12.320 --> 0:05:16.400
<v Speaker 1>a rising minimum wage in various states and cities to

0:05:16.480 --> 0:05:19.760
<v Speaker 1>comply with. So that's one. And the other is, you know,

0:05:20.680 --> 0:05:23.839
<v Speaker 1>is the rising cost of the benefits. So we we

0:05:23.960 --> 0:05:27.599
<v Speaker 1>find a historically very strong percentage of our owners around

0:05:28.720 --> 0:05:31.240
<v Speaker 1>say they're raising worker comp But you know, I could

0:05:31.279 --> 0:05:33.000
<v Speaker 1>call you and and say Hey, tomm, you've got a

0:05:33.040 --> 0:05:36.880
<v Speaker 1>two thousand dollar raise, but uh, no increase in your

0:05:36.880 --> 0:05:39.640
<v Speaker 1>take home pay because that's covering the cost of your

0:05:40.080 --> 0:05:44.160
<v Speaker 1>your health care insurance policy. What's the outlook for hiring?

0:05:44.200 --> 0:05:47.599
<v Speaker 1>That's the bottom line question for everybody, particularly with small

0:05:47.600 --> 0:05:51.599
<v Speaker 1>business which creates so many jobs. Yeah, the the hiring numbers,

0:05:51.839 --> 0:05:54.760
<v Speaker 1>uh really held up pretty well. They accounted for half

0:05:54.800 --> 0:05:58.440
<v Speaker 1>of the gain in the index. Um, you know every

0:05:58.560 --> 0:06:00.479
<v Speaker 1>you know, every year we get three million were people,

0:06:00.520 --> 0:06:03.720
<v Speaker 1>so that's barbershops and than all kinds of things like

0:06:04.120 --> 0:06:06.320
<v Speaker 1>like that. So we always are kind of looking for

0:06:06.480 --> 0:06:10.240
<v Speaker 1>workers and hiring. The question is how many. So the

0:06:10.720 --> 0:06:14.359
<v Speaker 1>job openings number told us that that was so they

0:06:14.400 --> 0:06:16.400
<v Speaker 1>had a hard to fill opening. Said the labor market

0:06:16.480 --> 0:06:20.480
<v Speaker 1>site complaints about finding qualified workers are very high, about

0:06:20.800 --> 0:06:24.680
<v Speaker 1>twelve or fiftcent so they can't find a qualified employee

0:06:25.080 --> 0:06:29.120
<v Speaker 1>even though we're hiring or trying to hire, so that

0:06:29.240 --> 0:06:31.960
<v Speaker 1>they can't find any workers out there. And the and

0:06:32.040 --> 0:06:35.039
<v Speaker 1>the net percent who planned to create jobs is sitting

0:06:35.080 --> 0:06:37.159
<v Speaker 1>around at eleven, So that's a good that's a pretty

0:06:37.160 --> 0:06:40.120
<v Speaker 1>good number. Be nice to see it around fifteen to

0:06:40.600 --> 0:06:43.919
<v Speaker 1>twenty range. But in this expansion, that's certainly a good number.

0:06:44.000 --> 0:06:47.160
<v Speaker 1>Bill Dunkelberg, thank you so much, greatly appreciated. The chief economist.

0:06:47.240 --> 0:06:51.040
<v Speaker 1>National Federation of Independent Business also holds down a fort

0:06:51.600 --> 0:06:55.360
<v Speaker 1>at the University of Michigan as well. Michael, it's amazing

0:06:55.360 --> 0:06:57.440
<v Speaker 1>to your Bill there. There's been a real sea change

0:06:58.240 --> 0:07:03.279
<v Speaker 1>from the almost shock of non recovery to a legitimate recovery.

0:07:03.360 --> 0:07:08.400
<v Speaker 1>And going back too from the jobs report, the overarching

0:07:08.480 --> 0:07:15.600
<v Speaker 1>optimistic issue people can get people to work well basically yeah, no, please, no.

0:07:15.680 --> 0:07:17.600
<v Speaker 1>I was just gonna say it's it's very much like

0:07:18.240 --> 0:07:22.720
<v Speaker 1>what we're seeing all over the economy with things were terrible.

0:07:23.120 --> 0:07:26.040
<v Speaker 1>Now things are better, but they're not great. You know,

0:07:26.120 --> 0:07:30.240
<v Speaker 1>they're they're they're muddling along. But as you're saying, jobs

0:07:30.320 --> 0:07:34.600
<v Speaker 1>the one area where they have the same problem finding fascinating.

0:07:34.640 --> 0:07:38.760
<v Speaker 1>Bill Dunkerberg with a National Federation of the Independent Business

0:07:39.400 --> 0:07:46.440
<v Speaker 1>futures up eight stay with the Sploomberg Surveillance. Now that

0:07:46.480 --> 0:07:48.760
<v Speaker 1>with all due respect, highlight and brought to you by

0:07:49.000 --> 0:07:51.160
<v Speaker 1>land Rover. If it's in your nature to cast off

0:07:51.200 --> 0:07:53.000
<v Speaker 1>the every day and seek adventure, the Discovery Sport was

0:07:53.000 --> 0:07:55.040
<v Speaker 1>built to help your shorts. Visit Landrover tri State dot

0:07:55.080 --> 0:07:58.360
<v Speaker 1>Com or called f w D for details, Land above

0:07:58.400 --> 0:07:58.840
<v Speaker 1>and beyond,