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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.
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Speaker 1: a dot net u S Stock Index Future is extending
Speaker 1: the clients amid retail sales data that rekindled concern that
Speaker 1: the world's largest economy isn't immune to slowing growth overseas.
Speaker 1: And we checked the markets every fifteen minutes throughout the
Speaker 1: trading day on Bloomberg SNP EVENY futures down eleven points down,
Speaker 1: EVENI futures down eighty four, NAS doc euny futures down
Speaker 1: sixteen and the decks in Germany's down eight tenths per cent.
Speaker 1: Can your treasury up eleven thirty seconds? The yeld one
Speaker 1: point nine two percent yield on the two year point
Speaker 1: nine three percent. Now I'm ex screwed. Oil down two
Speaker 1: point seven percent or dollar one to thirty six sixteen.
Speaker 1: A barrel comaxs goal there is down seven tenths per cent,
Speaker 1: or nine dollars ten cents to twelve thirty six and
Speaker 1: ounce the euro at dollar eleven nineteen. The end one
Speaker 1: twelve point seven one. That report showed US retail sales
Speaker 1: dropped a tenth of upper cent in February, and the
Speaker 1: prior months gain was revised to a decline. Now calls
Speaker 1: into question the narrative that bigger gains and consumer spending
Speaker 1: with propelled economic growth at the start of the year.
Speaker 1: Separated data showed wholesale prices in the US felt you
Speaker 1: tenths per cent in February, held down by lower fuel
Speaker 1: costs that have kept inflation languishing below the Federal Reserve school.
Speaker 1: And that's a Bloomberg Business flash, Tom and Mike Karra Mosco,
Speaker 1: thank you very much. Some other numbers, oh wal Street.
Speaker 1: The following is from Bloomberg View. Opinions and commentary from
Speaker 1: Bloomberg columnists. I'm Justin Fox, a columnist for Bloomberg View.
Speaker 1: The past decade and a half have been tough for
Speaker 1: American workers. The median household brings in less money than
Speaker 1: it did in two thousand, adjusted for inflation. The percentage
Speaker 1: of adults without jobs has risen. Recent economics were urch
Speaker 1: gives trade with China. Some of the blame. Politicians and
Speaker 1: voters have taken notice. Raising trade barriers is a major
Speaker 1: theme of the surprisingly successful presidential campaigns of Donald Trump
Speaker 1: and Bernie Sanders. That got me wondering there are other
Speaker 1: wealthy countries where the average workers seems to have fared
Speaker 1: better since two thousand than in the US. Can that
Speaker 1: be chalked up to higher trade barriers? It doesn't look
Speaker 1: like it. To get a sense of where things might
Speaker 1: be going better for workers, they used the United Nations
Speaker 1: Inequality Adjusted Human Development Index, which combines income measures with
Speaker 1: health and education indicators. Then I looked at the International
Speaker 1: Chamber of Commerce's Open Markets Index, which measures a country's
Speaker 1: openness to trade. Of the twenty six countries that score
Speaker 1: higher than the US on the Human Development Index, all
Speaker 1: but three also score higher on the trade openness ranking.
Speaker 1: Free trade and widely shared prosperity are clearly not incompatible.
Speaker 1: I'm justin Fox, a columnist for Bloomberg View. For more
Speaker 1: bloom our opinion in commentary, please get a Bloomberg View
Speaker 1: dot com or view go on the Bloomberg terminal. This
Speaker 1: has been Bloomberg View. Bloomberg View commentaries can be heard
Speaker 1: hourly weekdays on Bloomberg Radio tagtown. You're in, Yeah, Carl
Speaker 1: tannembob with this as we look at the American economy
Speaker 1: and uh, the backdrop here is a sharp revision negative
Speaker 1: to retail sales markets to move on the news and good.
Speaker 1: Mr tannemb Im. Dr Tannembom pushes against it and says
Speaker 1: there's some glimmers of optimism out there as well. Carl,
Speaker 1: I just made up a chart, which I'm hesitant to
Speaker 1: say in March will be my chart of the year.
Speaker 1: It's a thirty year look at real GDP, which is
Speaker 1: migrated on a regression from under four percent to under
Speaker 1: two percent. How do we turn that around? It's the
Speaker 1: politic politics of the moment, it's the economics of the moment.
Speaker 1: Retail sales consumer is not going to do that. How
Speaker 1: do you turn around real GDP? Wow, that's weighty question
Speaker 1: for early morning. But I think the long term issues
Speaker 1: that we've got are really to to see what we
Speaker 1: can do to improve our potential rate of economic growth. Tom.
Speaker 1: The chart that you may be looking at a similar
Speaker 1: to others that I've seen that take a look at
Speaker 1: a tenure moving average over let's say forty or fifty
Speaker 1: years that show the decline, and of course the economists
Speaker 1: would tell you that you build up to that with
Speaker 1: two quantities. One is the population or labor force growth
Speaker 1: and productivity growth. Obviously, we've got baby boomers retiring and
Speaker 1: deservedly so, but we'll need to renew the labor force
Speaker 1: in numbers and also skills. The discussions really centers on
Speaker 1: in that realm around immigration, which is a huge issue
Speaker 1: so far on the campaign trail, but from a number's perspective,
Speaker 1: typically immigration is very beneficial to those countries that assimilate well.
Speaker 1: And then on the productivity side, we've got a lot
Speaker 1: of thesis out there is to what we might do
Speaker 1: or or or not do, frankly, to to increase that level.
Speaker 1: A lot of the public spending on infrastructure that we
Speaker 1: need in order to remain economically fluid has been stunted
Speaker 1: by the fiscal austerity that's needed. Not even so much
Speaker 1: at the national level, but as you know, a lot
Speaker 1: of this is handled at the state and local level,
Speaker 1: where finances in many places are a lot more tenuous.
Speaker 1: And then also I think that there's an opportunity for
Speaker 1: whomever is sitting at whatever seats next January to find
Speaker 1: those in near term incentives to get a little bit
Speaker 1: more investment in R and D and CAPEX going, so
Speaker 1: that if we can make the investments today, will reap
Speaker 1: the returns tomorrow, and the dire predictions of the economists
Speaker 1: like Bob Gordon or Larry Summers will not come true. Um.
Speaker 1: My name is Carl Tannerbaum and I'm running for president.
Speaker 1: I was a little taken about. I mean, Bob Gordon
Speaker 1: is not really dire making dire predictions. He's just saying
Speaker 1: productivity won't be as high as it was. Well, Mike,
Speaker 1: his last paper where he wrote the book, I think,
Speaker 1: was entitled the End of American Growth. So I don't
Speaker 1: know how much dark are you can get on that front. Well,
Speaker 1: perhaps he stole a page from the tabloid newspapers and
Speaker 1: exaggerate the headlines to copies of the paper. Here's my
Speaker 1: question for you, Carl. We're talking earlier with our political
Speaker 1: and and c J. Done and uh Chuck Todd who
Speaker 1: suggests that given the nature of the campaign we've had,
Speaker 1: it's gonna be very difficult for anybody to govern next year.
Speaker 1: So what happens You're you're suggesting that there are things
Speaker 1: they could do to get productivity going in the economy going.
Speaker 1: What happens if nothing happens, what happens to the economy, Mike,
Speaker 1: would be hard to imagine an environment where governance is
Speaker 1: harder than it is today. I'll just say that at
Speaker 1: the outset it so, I'm not sure that we're going
Speaker 1: to see such a paradigm change as we deal with
Speaker 1: a new administration. I will say though, that there's a
Speaker 1: body of work in economics that finds that that uncertainty
Speaker 1: policy uncertainty is the enemy really of business progress and
Speaker 1: market progress, and we're certainly getting tested on that front today.
Speaker 1: I think redlock the status quo is not good fiscally
Speaker 1: because of the hill of healthcare costs and social security
Speaker 1: costs and pension costs we have at the local level
Speaker 1: that we're facing. We do need to face those as
Speaker 1: soon as as possible, because kicking the can down the
Speaker 1: curb is going to run into a wall in the
Speaker 1: not too distant future. When you look, Carl at the
Speaker 1: makeup here, and this has been the art debate, it
Speaker 1: can go either way, optimist or pessimis do you look
Speaker 1: at the all in economy? Are are things so distorted
Speaker 1: that X out trades and even energy dynamics right now,
Speaker 1: which is it. I think you have to be very careful,
Speaker 1: including the energy dynamics, because it's challenging to understand where
Speaker 1: energy will settle in and what the American component of
Speaker 1: that will look like. Our own view is that over
Speaker 1: the long term, you know, energy demand globally is going
Speaker 1: to be strong, and the supply but that we have
Speaker 1: now will eventually dissipate. That should be good for our
Speaker 1: producers and bring that back to being an important contributor
Speaker 1: to our economy. But the fundamentals that we talked about earlier,
Speaker 1: which are you know, what is our potential for growing,
Speaker 1: are the ones that are going to be much more lasting,
Speaker 1: and I think those need to be the focus of policy.
Speaker 1: Before we let you go here, we have to ask
Speaker 1: about the other numbers out today. Do you pay a
Speaker 1: whole lot of attention to pp I essentially pp I
Speaker 1: file demand flat and then um the New York I
Speaker 1: s M numbers. So the pp I mike. We've had
Speaker 1: kind of a quiet recovery and energy and commodity prices
Speaker 1: over the last several weeks of taking the edge off
Speaker 1: of that on inflation, and that certainly will feed into
Speaker 1: the conversation that begins with the FED today, where I
Speaker 1: think the numbers are better than they thought they'd be
Speaker 1: a month ago. It will be very interesting at the discussions. Carl,
Speaker 1: thank you so much, Carlam Company surveillance correction here I said,
Speaker 1: New York, IM, they're not the I s M. They
Speaker 1: don't come from the purchasing managers. They come from survey
Speaker 1: by the New York Federal Reserve. Empire Manufacturing. It was
Speaker 1: up to positive zero point six to from sixteen point
Speaker 1: six four, So a big change there. Well, I'm glad
Speaker 1: you bring it up and that folks were buried by
Speaker 1: tertiary economic data. And what I find interesting is some
Speaker 1: of it, like the Dallas inflation statistic, has real merit. Mike,
Speaker 1: what do you think of all these you know, sub
Speaker 1: sub sub indusicries like Empire Manufacturing. Well, they don't tell
Speaker 1: you much about what's going on in the in the
Speaker 1: national economy, and there's no relationship between the Empire number
Speaker 1: and the national I s M number. But if you
Speaker 1: put them all together, it gives you sort of a
Speaker 1: region by region picture of how things are going. And uh,
Speaker 1: we have seen a deterioration across the country. And now
Speaker 1: if this one's leading us back up again, that would
Speaker 1: be good news. Yeah, it's just fascinating, folks. All of
Speaker 1: our interviews on radio, out at iTunes, out on podcasts,
Speaker 1: we are thrilled to reoffer that to your team is
Speaker 1: doing a great job of getting those out. Going to iTunes,
Speaker 1: search Bloomberg's Surveillance and you will find any number of
Speaker 1: good interviews, including Richard Hass yesterday with the consul and
Speaker 1: Form Relations and dr In A Bomb and Alan Ruskin
Speaker 1: and others. A futures negative eleven, Dow futures negative eighty three.
Speaker 1: I'm gonna call it a two week churn to the market.
Speaker 1: With a better equity framework, we forgot the doubt closing
Speaker 1: seventeen thousand two nine, the vix not at mass complacency,
Speaker 1: but nevertheless very good sixteen point nine two, way below
Speaker 1: the twenty long term average yields, come into the risk
Speaker 1: off off the retail data they were in earlier, and
Speaker 1: come in more ever more in one but still a
Speaker 1: churn to the market. And you know, the press conference tomorrow,
Speaker 1: what what does she not say at the press conference?
Speaker 1: What does she not say? And she doesn't talk about
Speaker 1: dates were times data dependent. Yeah, actual progress Green Shoots.
Speaker 1: Remember Green Shoots. We were younger. Green Shoots was a
Speaker 1: few years ago. Futures negative eleven death futures Neinka of
Speaker 1: eighty four, Another hour of Bloomberg's surveillance