1 00:00:00,040 --> 00:00:06,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,840 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,919 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,000 --> 00:00:37,320 Speaker 2: Terminal and the Bloomberg Business app. So here's the latest 10 00:00:37,320 --> 00:00:40,640 Speaker 2: this morning. Friday's payrolls report postponed as the government shut 11 00:00:40,680 --> 00:00:43,960 Speaker 2: down trags on Steve Englander, whose standard showdered right in 12 00:00:43,960 --> 00:00:47,120 Speaker 2: the US data quality has become quote more Fall's gold 13 00:00:47,159 --> 00:00:49,960 Speaker 2: than the gold standard. We expect the uncertain quality of 14 00:00:50,000 --> 00:00:53,480 Speaker 2: the data to become the bigger issue than statistical agencies 15 00:00:53,560 --> 00:00:56,960 Speaker 2: and the FED have so far acknowledged. Steve joins us 16 00:00:56,960 --> 00:00:58,920 Speaker 2: now for more. Steve, good morning, Good moran, tell us 17 00:00:58,920 --> 00:01:00,680 Speaker 2: what you ready to think? What's going on here? 18 00:01:01,480 --> 00:01:04,200 Speaker 3: Look, you know it's become so common to say that 19 00:01:04,240 --> 00:01:06,319 Speaker 3: the US data are the gold standard, and they may 20 00:01:06,360 --> 00:01:09,600 Speaker 3: be compared to everything else. But there's so many holes 21 00:01:09,600 --> 00:01:14,200 Speaker 3: in the data that haven't been addressed, and I'd say 22 00:01:14,200 --> 00:01:16,960 Speaker 3: that you know, bls. You know, it's not political in 23 00:01:16,959 --> 00:01:19,560 Speaker 3: the sense that Trump accused them of being, but they've 24 00:01:19,560 --> 00:01:22,360 Speaker 3: been kind of intellectually lazy over. 25 00:01:21,920 --> 00:01:25,520 Speaker 2: The last decades too, making them intellectually lazy. You're suggesting 26 00:01:25,520 --> 00:01:27,440 Speaker 2: it's not just response rates, what is it? 27 00:01:27,640 --> 00:01:30,679 Speaker 3: Well, you look at the birth death adjustment, which is 28 00:01:30,760 --> 00:01:35,360 Speaker 3: basically more than half the employment growth we've been getting, 29 00:01:36,160 --> 00:01:40,560 Speaker 3: and it doesn't reflect anything that's happening in real time. 30 00:01:40,800 --> 00:01:43,640 Speaker 3: It's basically an auto regressive model that says what's going 31 00:01:43,680 --> 00:01:45,880 Speaker 3: to happen January of this year is what happened January 32 00:01:45,920 --> 00:01:49,600 Speaker 3: of last year. Now they're going to try and fix it. 33 00:01:49,640 --> 00:01:52,520 Speaker 3: As a consequence, there will be not just the usual 34 00:01:52,560 --> 00:02:00,440 Speaker 3: benchmark revisions, but big revisions from April through January or 35 00:02:00,480 --> 00:02:02,640 Speaker 3: April through December, as well as a big down you know, 36 00:02:02,760 --> 00:02:04,560 Speaker 3: weak number we think in January. 37 00:02:04,640 --> 00:02:06,760 Speaker 2: So I stay've put the data through in England a filter, 38 00:02:07,080 --> 00:02:08,720 Speaker 2: what do you look at? What would you point to? 39 00:02:08,800 --> 00:02:08,880 Speaker 1: This? 40 00:02:08,919 --> 00:02:10,800 Speaker 2: Says you know, well, I can rely on that. That 41 00:02:10,840 --> 00:02:12,600 Speaker 2: makes sense. That's where the economy. 42 00:02:12,240 --> 00:02:16,160 Speaker 3: Is, you know, I've used the image of being in 43 00:02:16,200 --> 00:02:18,760 Speaker 3: Plato's cave. You sort of see a lot of images 44 00:02:18,800 --> 00:02:20,320 Speaker 3: in the wall, and you try and sort of put 45 00:02:20,320 --> 00:02:24,120 Speaker 3: them together to make, you know, make a coherent story. 46 00:02:24,280 --> 00:02:28,720 Speaker 3: But even the unemployment rate, which everybody lives and dies by, 47 00:02:28,840 --> 00:02:32,040 Speaker 3: if the labor force is constant, it also takes this 48 00:02:32,160 --> 00:02:36,040 Speaker 3: seventy or eighty people reporting that they're unemployed more than 49 00:02:36,120 --> 00:02:37,840 Speaker 3: last month to push it up by a tenth of 50 00:02:37,840 --> 00:02:41,519 Speaker 3: a percent. You know, given how much stress we put 51 00:02:41,520 --> 00:02:43,000 Speaker 3: on that, that's not a big number. 52 00:02:43,160 --> 00:02:45,320 Speaker 4: Okay, So I'll take your Plato's cave analogy, and it 53 00:02:45,360 --> 00:02:47,200 Speaker 4: seems like we've been living there for about six years now. 54 00:02:47,240 --> 00:02:49,079 Speaker 4: At the data being called into question, and frankly a 55 00:02:49,080 --> 00:02:51,480 Speaker 4: lot of fluctuations since the pandemic. I just raise a 56 00:02:51,600 --> 00:02:54,200 Speaker 4: question of what's your sense then, and taking a look 57 00:02:54,240 --> 00:02:55,799 Speaker 4: at all the images on the wall, do you see 58 00:02:55,800 --> 00:02:58,400 Speaker 4: a labor market that's stronger than people think or weaker? 59 00:02:59,160 --> 00:03:03,000 Speaker 3: I see labor market that's pretty mediocre. It's not a disaster. 60 00:03:03,120 --> 00:03:07,000 Speaker 3: There's no sign that's falling apart quickly. On the other hand, 61 00:03:07,280 --> 00:03:09,840 Speaker 3: it really is the case that you're you know, if 62 00:03:09,840 --> 00:03:12,200 Speaker 3: you don't have a job, it's you know, good luck 63 00:03:12,200 --> 00:03:14,880 Speaker 3: and God bless. I mean, it's just not you know, 64 00:03:14,919 --> 00:03:16,640 Speaker 3: the odds that you're going to find the job are 65 00:03:16,680 --> 00:03:19,720 Speaker 3: relatively low. On top of that, you know, the AI 66 00:03:19,840 --> 00:03:22,560 Speaker 3: think the productivity thing, we think could matter in the 67 00:03:22,600 --> 00:03:25,600 Speaker 3: short term, although we're very optimistic in the longer term 68 00:03:25,600 --> 00:03:29,360 Speaker 3: that jobs will be created. I mean, cavemen, the unemployment 69 00:03:29,400 --> 00:03:31,040 Speaker 3: rate is no higher now than it was in the 70 00:03:31,120 --> 00:03:31,840 Speaker 3: day of the caveman. 71 00:03:33,240 --> 00:03:37,080 Speaker 4: We're really going back to caves and hieroglyphics. I'm just 72 00:03:37,120 --> 00:03:40,640 Speaker 4: curious going forward about what you're watching to understand whether 73 00:03:40,760 --> 00:03:44,240 Speaker 4: we're heating up and whether there is a degree of 74 00:03:44,600 --> 00:03:48,080 Speaker 4: undermining the significance of this data on a permanent level 75 00:03:48,520 --> 00:03:51,280 Speaker 4: as a result of the government shutdowns that make some 76 00:03:51,360 --> 00:03:53,560 Speaker 4: of this data optional depending on the week. 77 00:03:54,120 --> 00:03:57,120 Speaker 3: I mean, it can't be optional because the Bond Lessons 78 00:03:57,120 --> 00:04:00,440 Speaker 3: the only organization that has like a real sam that 79 00:04:00,480 --> 00:04:02,960 Speaker 3: they sit down and they try and sample the entire country. 80 00:04:03,320 --> 00:04:06,920 Speaker 3: If everybody else has samples of opportunity, who's posting on LinkedIn, 81 00:04:07,320 --> 00:04:10,600 Speaker 3: whose payroll checks are you processing? And so on and 82 00:04:10,600 --> 00:04:14,360 Speaker 3: so forth, you know, they could combine all of this. 83 00:04:14,520 --> 00:04:17,000 Speaker 3: I mean, there's so much more information out there than 84 00:04:17,040 --> 00:04:19,520 Speaker 3: what the BLS is using and information that's available in 85 00:04:19,520 --> 00:04:21,560 Speaker 3: a real time, they can do a much better job 86 00:04:21,560 --> 00:04:22,280 Speaker 3: than they've been doing. 87 00:04:22,520 --> 00:04:25,000 Speaker 5: Trump has appointed someone new. On Friday reported about it. 88 00:04:25,040 --> 00:04:27,600 Speaker 5: He confirmed it on truth Is is someone that people call 89 00:04:27,640 --> 00:04:30,080 Speaker 5: a data nerd. I got messages from Biden error people 90 00:04:30,120 --> 00:04:32,680 Speaker 5: and Trump people saying this is a great pick for 91 00:04:32,720 --> 00:04:34,800 Speaker 5: the BLS. Do you think a new commissioner could come 92 00:04:34,800 --> 00:04:36,640 Speaker 5: in and maybe take some of this on board. 93 00:04:38,200 --> 00:04:40,680 Speaker 3: I think so, But I mean the question is whether 94 00:04:40,720 --> 00:04:43,560 Speaker 3: he breaks out of the BLS mindset that you know, 95 00:04:43,600 --> 00:04:46,680 Speaker 3: all you do is use inside BLS and you tweak 96 00:04:46,760 --> 00:04:50,560 Speaker 3: this and you tweak that, and everything is fine. You know. 97 00:04:50,960 --> 00:04:53,320 Speaker 3: Look an NFP, I mean, we don't use ride shares, 98 00:04:53,360 --> 00:04:56,320 Speaker 3: we don't use gig workers. They're just as much employe. 99 00:04:56,360 --> 00:05:00,120 Speaker 3: They're not entrepreneurs, they're just as much employees as we are. 100 00:05:00,320 --> 00:05:02,040 Speaker 5: When it comes to report, we're not going to get it. 101 00:05:02,160 --> 00:05:05,000 Speaker 5: But you have a very downbeat suggestion for how many 102 00:05:05,040 --> 00:05:06,480 Speaker 5: jobs are created actually negative. 103 00:05:06,839 --> 00:05:08,760 Speaker 3: Yeah, I mean, I think we're the lowest in the 104 00:05:08,800 --> 00:05:13,039 Speaker 3: street so at least as of yesterday. But look the 105 00:05:13,080 --> 00:05:15,640 Speaker 3: problem is that we've estimated that the bias and the 106 00:05:15,680 --> 00:05:20,400 Speaker 3: birth death adjustment you know, we estimated seventy thousand, power 107 00:05:20,760 --> 00:05:23,800 Speaker 3: estimated sixty thousand. If they come up with a model 108 00:05:23,839 --> 00:05:27,719 Speaker 3: that really takes current conditions into account and it's consistent 109 00:05:27,839 --> 00:05:31,440 Speaker 3: with other data sources we have that are better but lagged. 110 00:05:32,640 --> 00:05:34,560 Speaker 3: You know, all the numbers we've had for the last 111 00:05:34,600 --> 00:05:36,920 Speaker 3: eighteen months. You know, just the birth desk stuff will 112 00:05:36,920 --> 00:05:38,719 Speaker 3: go down by sixty or seventy thousand. 113 00:05:38,839 --> 00:05:41,320 Speaker 2: Stay you're a foreign exchange guy, Yeah, uh huh, what 114 00:05:41,400 --> 00:05:43,520 Speaker 2: do you advocate for the moment? Given everything you've just 115 00:05:43,520 --> 00:05:44,719 Speaker 2: said over the last five minutes. 116 00:05:45,240 --> 00:05:47,960 Speaker 3: Well, you know, I, like I said, labor market is 117 00:05:47,960 --> 00:05:51,760 Speaker 3: soft and software. In fact, you know, what it tells 118 00:05:51,800 --> 00:05:54,159 Speaker 3: you is that productivity growth when we get the numbers 119 00:05:54,200 --> 00:05:56,040 Speaker 3: that are based on the revised data, are likely to 120 00:05:56,040 --> 00:05:59,080 Speaker 3: be even stronger than what's been reported. We believe the 121 00:05:59,080 --> 00:06:04,440 Speaker 3: productivity numbers, you know, we're serving in the wash camp 122 00:06:04,600 --> 00:06:07,160 Speaker 3: where it's sort of you know, we think that there's 123 00:06:07,160 --> 00:06:10,599 Speaker 3: something happening in productivity. Productivity normally does not pick up 124 00:06:11,080 --> 00:06:14,760 Speaker 3: four years into the recovery five years into the recovery, 125 00:06:15,000 --> 00:06:17,680 Speaker 3: and that's usually a signal it's something structural. That's what 126 00:06:17,680 --> 00:06:19,159 Speaker 3: we saw in the late nineties that is what we 127 00:06:19,200 --> 00:06:21,640 Speaker 3: saw in the mid sixties. So we think that's the 128 00:06:21,640 --> 00:06:24,200 Speaker 3: most by far, the most important thing that's happening in 129 00:06:24,240 --> 00:06:27,520 Speaker 3: the economy right now. And you know, arguing about about 130 00:06:27,560 --> 00:06:29,360 Speaker 3: twenty five basis points here or there, it's kind of 131 00:06:29,360 --> 00:06:30,040 Speaker 3: a waste of time. 132 00:06:30,279 --> 00:06:31,760 Speaker 2: What do you think we should be arguing about. 133 00:06:32,040 --> 00:06:34,520 Speaker 3: Oh, we should be trying to estimate productivity growth better 134 00:06:34,680 --> 00:06:37,320 Speaker 3: and understand the dynamics that's going to happen. For example, 135 00:06:37,400 --> 00:06:40,600 Speaker 3: we're dollar bulls because we think the US has the 136 00:06:40,680 --> 00:06:45,680 Speaker 3: labor market flexibility. You don't need a Bloomberg journalist. You 137 00:06:45,760 --> 00:06:49,040 Speaker 3: let them go, but you find some place. Yeah, no, sorry, 138 00:06:49,040 --> 00:06:51,880 Speaker 3: I didn't need that. You don't need a foreign change 139 00:06:51,920 --> 00:06:55,719 Speaker 3: economists to let them go. But you find somebody who's 140 00:06:56,600 --> 00:06:59,520 Speaker 3: going to you find something. You know, but you're making 141 00:06:59,600 --> 00:07:02,240 Speaker 3: money somewhere else, and you look at the profits numbers 142 00:07:02,240 --> 00:07:06,600 Speaker 3: that we're getting. Historically, US firms hire when when they're 143 00:07:06,600 --> 00:07:08,960 Speaker 3: making money, they might not hire the same people they 144 00:07:09,040 --> 00:07:11,480 Speaker 3: hired two years ago, but they'll say, Okay, where are 145 00:07:11,520 --> 00:07:13,640 Speaker 3: we making money. Let's pick up some people and see 146 00:07:13,640 --> 00:07:16,800 Speaker 3: if it works elsewhere in the world. In France, you 147 00:07:16,840 --> 00:07:18,640 Speaker 3: buy a truck, you don't like the truck. You know, 148 00:07:18,680 --> 00:07:20,800 Speaker 3: for business, you sell it in six months, you hire 149 00:07:20,800 --> 00:07:23,520 Speaker 3: a worker. Seven months later, you decide you don't like 150 00:07:23,560 --> 00:07:26,600 Speaker 3: the worker. You know, he's more fixed capital than the truck. 151 00:07:26,640 --> 00:07:28,360 Speaker 2: And this has been a sacred source of the American 152 00:07:28,400 --> 00:07:31,280 Speaker 2: economy for a long time. Deep capital markets, bankruptcy and 153 00:07:31,320 --> 00:07:34,240 Speaker 2: flexible lane markets. Are we losing any dynamism? 154 00:07:35,080 --> 00:07:37,120 Speaker 3: I mean there's a risk that we are. Look, you 155 00:07:37,160 --> 00:07:39,880 Speaker 3: know there's also stuff that you know, Trump is trying 156 00:07:39,880 --> 00:07:41,160 Speaker 3: to do, or is people are trying to do. I 157 00:07:41,160 --> 00:07:43,600 Speaker 3: think that's positive for the economy in terms of deregulation, 158 00:07:44,960 --> 00:07:47,920 Speaker 3: but you know, the sert of willingness to sort of say, yeah, 159 00:07:47,920 --> 00:07:50,360 Speaker 3: I see a problem, I'm going to fix it, you know, 160 00:07:50,440 --> 00:07:52,680 Speaker 3: like some of the things they've talked about the housing market. 161 00:07:52,800 --> 00:07:54,320 Speaker 3: You know, to fix the housing market you have to 162 00:07:54,320 --> 00:07:58,320 Speaker 3: increase housing supply, not housing demand. You'll just get higher 163 00:07:58,360 --> 00:08:00,560 Speaker 3: housing prices, but the same number of price. I think 164 00:08:00,560 --> 00:08:03,960 Speaker 3: they have to be careful about their willingness to interface. 165 00:08:03,960 --> 00:08:06,840 Speaker 2: That's my concern too, that we're not embracing the dynamism 166 00:08:07,200 --> 00:08:10,280 Speaker 2: that traditionally has laid the foundation for the American success story. 167 00:08:10,600 --> 00:08:13,720 Speaker 2: Anything we're questioning you in the last twelve in fact, 168 00:08:13,800 --> 00:08:16,480 Speaker 2: never mind the last twelve months, the last five years, 169 00:08:16,720 --> 00:08:19,679 Speaker 2: and maybe you can go further back than there. Stay 170 00:08:19,720 --> 00:08:32,560 Speaker 2: with us. More Bloomberg surveillance coming up after this. Terry 171 00:08:32,559 --> 00:08:35,560 Speaker 2: Haynes of PAN Geopolicy writing, it's a strong signal that 172 00:08:35,640 --> 00:08:37,800 Speaker 2: Trump is walking and chewing gum at the same time, 173 00:08:38,080 --> 00:08:42,640 Speaker 2: not letting geopolitics distract from US economic attention. Terry joined 174 00:08:42,679 --> 00:08:45,079 Speaker 2: us now for more, Terry, that raises the question, then 175 00:08:45,240 --> 00:08:45,920 Speaker 2: who's next. 176 00:08:47,360 --> 00:08:49,840 Speaker 6: That's a very good question, John, And you know, I'd 177 00:08:49,840 --> 00:08:54,840 Speaker 6: look for, among other things, a strengthening of the US 178 00:08:54,920 --> 00:08:58,560 Speaker 6: EU deal, you know, which has been kind of on 179 00:08:58,800 --> 00:09:04,520 Speaker 6: off on for Davos related reasons. And you know, beyond that, 180 00:09:04,640 --> 00:09:09,240 Speaker 6: I would look for probably we should go out and 181 00:09:09,280 --> 00:09:13,160 Speaker 6: look at Asia a little bit more, where the trade 182 00:09:13,160 --> 00:09:15,600 Speaker 6: deals can be strengthened even further. 183 00:09:16,240 --> 00:09:19,720 Speaker 5: Terry Tyler mentioned it, but Prime Minister Modi was one 184 00:09:19,760 --> 00:09:22,000 Speaker 5: of the first officials to come to the White House. 185 00:09:22,000 --> 00:09:24,720 Speaker 5: It was almost a year ago, February thirteenth of last year. 186 00:09:25,000 --> 00:09:27,640 Speaker 5: Yet basically a year later we were getting a deal. 187 00:09:27,840 --> 00:09:31,600 Speaker 5: Was damage done in pushing India towards say China or 188 00:09:31,679 --> 00:09:34,120 Speaker 5: Russia because this deal took so long. 189 00:09:34,720 --> 00:09:37,160 Speaker 6: There's been a lot of you know, the mode he's 190 00:09:37,160 --> 00:09:39,960 Speaker 6: got his own politics, of course, but the you know, 191 00:09:40,000 --> 00:09:42,160 Speaker 6: there's been a lot of back and forth and a 192 00:09:42,200 --> 00:09:44,960 Speaker 6: lot of kind of raw elbows between the United States 193 00:09:45,000 --> 00:09:48,760 Speaker 6: and India and all kinds of things, ranging from the 194 00:09:48,920 --> 00:09:53,160 Speaker 6: geopolitical scrapes with between India and Pakistan and you know, 195 00:09:53,160 --> 00:09:57,480 Speaker 6: frankly Trump's desire to take credit for the lessening of 196 00:09:57,559 --> 00:10:01,760 Speaker 6: hostilities there, to the Russian oil, all kinds of other things, 197 00:10:01,760 --> 00:10:05,640 Speaker 6: many of which Tyler mentioned, And you know that has 198 00:10:05,760 --> 00:10:10,439 Speaker 6: made things more difficult than they appeared to be last 199 00:10:10,520 --> 00:10:15,280 Speaker 6: year when Mody was talking about Mega plus Mega equals 200 00:10:15,320 --> 00:10:21,680 Speaker 6: mega or mega whatever it was, and the you know, 201 00:10:21,720 --> 00:10:24,320 Speaker 6: but they have had a desire to do a deal 202 00:10:24,360 --> 00:10:27,000 Speaker 6: for quite a while. It's been obvious that things have 203 00:10:27,080 --> 00:10:31,280 Speaker 6: been thawing, and you know, I think there's there's still 204 00:10:31,280 --> 00:10:34,320 Speaker 6: some prickliness there, but you know, there's a desire to 205 00:10:34,320 --> 00:10:37,400 Speaker 6: do a deal. The other thing I'd say is that, 206 00:10:38,000 --> 00:10:40,600 Speaker 6: you know, there's a lot of handwringing in markets always 207 00:10:40,640 --> 00:10:43,320 Speaker 6: for the for the lack of detail of these things, 208 00:10:43,360 --> 00:10:45,880 Speaker 6: and that's entirely fair, but you look at the other 209 00:10:45,920 --> 00:10:49,480 Speaker 6: way that this this has been done in prior years 210 00:10:49,559 --> 00:10:54,280 Speaker 6: where deals have been negotiated, negotiated, negotiated, they're never finalized. 211 00:10:54,320 --> 00:10:58,120 Speaker 6: Finally they're finalized, like the EU with Mercosur, which took 212 00:10:58,120 --> 00:11:00,200 Speaker 6: twenty five years and they're still not done. And so 213 00:11:02,000 --> 00:11:05,160 Speaker 6: markets prefer progress. So that's positive for markets. 214 00:11:05,240 --> 00:11:07,800 Speaker 5: Well, when you talk about the prickliness of this deal, 215 00:11:08,160 --> 00:11:09,679 Speaker 5: the President made it clear they're not going to buy 216 00:11:09,720 --> 00:11:11,960 Speaker 5: any more Russian oil. We didn't hear that from Mody. 217 00:11:13,160 --> 00:11:17,160 Speaker 6: Well, exactly, that's and you know, I made clear when 218 00:11:17,160 --> 00:11:20,160 Speaker 6: I wrote that the details of this met many details 219 00:11:20,200 --> 00:11:24,360 Speaker 6: of this were not final And I imagine, and I 220 00:11:24,400 --> 00:11:28,319 Speaker 6: am this is instinct on my part. I imagine that 221 00:11:28,360 --> 00:11:32,840 Speaker 6: the timing of winding down Russian oil purchases is the 222 00:11:32,840 --> 00:11:36,440 Speaker 6: major reason why Mody isn't talking about that. And I 223 00:11:36,480 --> 00:11:39,080 Speaker 6: also imagine that there are a variety of other details 224 00:11:39,880 --> 00:11:43,400 Speaker 6: that the United States and the India want also relating 225 00:11:43,400 --> 00:11:47,240 Speaker 6: to timing purchases of what, when and how, all those 226 00:11:47,280 --> 00:11:52,000 Speaker 6: sorts of things. And that's about I think that's the 227 00:11:52,040 --> 00:11:56,280 Speaker 6: reason why we have kind of a sliding deal here. 228 00:11:56,600 --> 00:11:58,880 Speaker 4: Is there a telling, miss Harry that perhaps the US 229 00:11:58,920 --> 00:12:01,959 Speaker 4: is taking a harder approach with Russia as a result 230 00:12:02,120 --> 00:12:05,840 Speaker 4: of some of the ongoing negotiations with European allies about 231 00:12:05,840 --> 00:12:07,800 Speaker 4: the war with Ukraine and Russia, and asked this, because 232 00:12:07,960 --> 00:12:11,240 Speaker 4: that's a key component of this deal, Russia, excuse me, 233 00:12:11,280 --> 00:12:13,840 Speaker 4: India agreeing not to buy Russian crude. 234 00:12:14,440 --> 00:12:16,480 Speaker 6: Yeah, I think so. I think it's a I think 235 00:12:16,520 --> 00:12:19,320 Speaker 6: it's a major signal from this deal. You know, the 236 00:12:20,160 --> 00:12:23,600 Speaker 6: you know, Trump, Trump likes to do what he can 237 00:12:23,720 --> 00:12:28,520 Speaker 6: do to butter up major adversaries, and that that gets 238 00:12:28,559 --> 00:12:33,080 Speaker 6: off putting for domestic audiences sometimes. But I think there's 239 00:12:33,120 --> 00:12:36,439 Speaker 6: no doubt that what the United States is doing right 240 00:12:36,480 --> 00:12:39,960 Speaker 6: now is trying to push Russia and squeeze the life 241 00:12:39,960 --> 00:12:43,600 Speaker 6: blood of its war machine. Then European allies are helping. 242 00:12:44,120 --> 00:12:47,320 Speaker 6: You know, a lot of the ghost fleet activity coming 243 00:12:47,360 --> 00:12:53,240 Speaker 6: back into European waters has been harassed and more. And 244 00:12:53,760 --> 00:12:55,480 Speaker 6: you know, so what you're seeing is a kind of 245 00:12:55,520 --> 00:12:59,760 Speaker 6: a ramped up effort based on what not only then, 246 00:13:00,320 --> 00:13:03,000 Speaker 6: but more importantly, the Europeans are willing to do. They 247 00:13:03,040 --> 00:13:08,280 Speaker 6: were not willing to, for example, take frozen Russian assets 248 00:13:08,400 --> 00:13:11,439 Speaker 6: and convert those for Ukrainian use, but they are willing 249 00:13:11,480 --> 00:13:14,320 Speaker 6: to do that. So the policy is shifting to that, 250 00:13:14,520 --> 00:13:18,160 Speaker 6: and that will have the usual effect on Russia's economy, 251 00:13:18,320 --> 00:13:22,280 Speaker 6: but it also makes China's support and pumping up of 252 00:13:22,559 --> 00:13:27,040 Speaker 6: the Russian client state even more obvious. Senators today stay 253 00:13:27,080 --> 00:13:27,439 Speaker 6: with us. 254 00:13:27,720 --> 00:13:40,040 Speaker 2: More Bloomberg surveillance coming up after this, We've got some 255 00:13:40,160 --> 00:13:42,360 Speaker 2: data from Yulanta should say for the conference boards. She 256 00:13:42,360 --> 00:13:45,760 Speaker 2: writes this about consumer confidence. Confidence collapsed in January, hitting 257 00:13:45,760 --> 00:13:48,600 Speaker 2: at the lowest level since May twenty fourteen. Concerns worse 258 00:13:48,600 --> 00:13:52,319 Speaker 2: than across all age groups, income levels, and political affiliations. 259 00:13:52,559 --> 00:13:56,000 Speaker 2: This wasn't a one month fluke Ulana joins us now 260 00:13:56,000 --> 00:13:57,880 Speaker 2: for more. J Lema, good morning, come morning. This one 261 00:13:57,960 --> 00:14:01,520 Speaker 2: is really hard to internalize, the idea that consumer confidence 262 00:14:01,840 --> 00:14:04,839 Speaker 2: is worse now than it wasn't the pandemic. Can you 263 00:14:04,880 --> 00:14:07,079 Speaker 2: make sense to some of this for us? 264 00:14:07,200 --> 00:14:10,080 Speaker 1: And what makes it even worse is that it's a trend. 265 00:14:10,200 --> 00:14:13,319 Speaker 1: It's just not one month's thing, right. We have seen 266 00:14:13,360 --> 00:14:17,440 Speaker 1: it declining for quite some time now, and that what 267 00:14:17,720 --> 00:14:21,800 Speaker 1: makes it very legitimate. Actually, so confidence right now is 268 00:14:21,840 --> 00:14:25,600 Speaker 1: at the worst level since two ten years ago, but 269 00:14:26,040 --> 00:14:29,320 Speaker 1: it was worth before if you go back to the 270 00:14:29,360 --> 00:14:32,800 Speaker 1: Great Recession. Coming out of the Great Recession, that's how 271 00:14:32,840 --> 00:14:37,400 Speaker 1: consumers feel felt at that time, So think about it 272 00:14:37,520 --> 00:14:41,680 Speaker 1: this way. Now, consumers are feeling actually that as bad 273 00:14:41,720 --> 00:14:44,320 Speaker 1: as they were coming out of the Great Recession. So 274 00:14:44,400 --> 00:14:46,480 Speaker 1: that tells you something. So what does it tell. 275 00:14:46,320 --> 00:14:47,720 Speaker 4: You, Because a lot of people come on the show, 276 00:14:47,720 --> 00:14:49,640 Speaker 4: they say ignore it because frankly it has not been 277 00:14:49,720 --> 00:14:52,840 Speaker 4: instructive to how the economy has done. And frankly, how 278 00:14:52,880 --> 00:14:57,320 Speaker 4: you've seen companies and even workers demonstrate their spending capacities. 279 00:14:57,520 --> 00:15:00,880 Speaker 1: Well, every bird likes its own nest, and kind of like, 280 00:15:00,960 --> 00:15:04,320 Speaker 1: I do believe in the data, just again, because it's 281 00:15:04,320 --> 00:15:07,520 Speaker 1: a trend. It's not just a one month thing, So 282 00:15:07,760 --> 00:15:10,960 Speaker 1: I think there's something to it. Consumers are worried about jobs, 283 00:15:11,000 --> 00:15:14,960 Speaker 1: consumers are worried about affordability, and consumers are worried about 284 00:15:15,160 --> 00:15:19,000 Speaker 1: the income levels. So this is very important because that 285 00:15:19,040 --> 00:15:23,480 Speaker 1: actually coincides with what the actual data telling us. If 286 00:15:23,560 --> 00:15:26,760 Speaker 1: everybody was talking about how great GDP numbers were in 287 00:15:26,880 --> 00:15:30,120 Speaker 1: Q three, but I looked at income data in the 288 00:15:30,200 --> 00:15:33,920 Speaker 1: same exact VIA report, and that data is telling me 289 00:15:34,080 --> 00:15:38,760 Speaker 1: that disposable personal income in real terms, which is income 290 00:15:39,040 --> 00:15:43,240 Speaker 1: essentially adjusted for inflation and taxes, that has been flat 291 00:15:43,960 --> 00:15:47,600 Speaker 1: since Q three of this year. So that is weakening 292 00:15:47,920 --> 00:15:51,840 Speaker 1: and that is the fuel for consumers to spend going forward. 293 00:15:52,040 --> 00:15:55,040 Speaker 4: Is this an economic issue or is this a political issue. 294 00:15:54,880 --> 00:15:56,600 Speaker 1: In terms of consumer confidence? 295 00:15:56,720 --> 00:15:58,640 Speaker 4: And I asked this because ultimately, if you look at 296 00:15:58,680 --> 00:16:01,000 Speaker 4: the averages, they're pretty good. But if you look at 297 00:16:01,040 --> 00:16:03,720 Speaker 4: the politics, it's the affordability crisis that you're talking about, 298 00:16:03,760 --> 00:16:06,360 Speaker 4: and certainly a lot of people are feeling every single day. 299 00:16:06,800 --> 00:16:10,120 Speaker 4: So does this get represented in the overall economic data 300 00:16:10,480 --> 00:16:12,320 Speaker 4: or in terms of what policies are going to come 301 00:16:12,320 --> 00:16:15,200 Speaker 4: out of Washington, DC to respond some of these issues. 302 00:16:15,560 --> 00:16:20,480 Speaker 1: I think it's both. It's really about how unaffordable things are, 303 00:16:20,800 --> 00:16:23,360 Speaker 1: and it's all about the economy stupid right, At the 304 00:16:23,480 --> 00:16:26,600 Speaker 1: end of the day, it's about prices, it's about jobs. 305 00:16:26,840 --> 00:16:30,280 Speaker 1: Consumers are not feeling confident about finding a job, so 306 00:16:30,400 --> 00:16:34,040 Speaker 1: it is about the economy. I do think that political 307 00:16:34,640 --> 00:16:38,720 Speaker 1: things and other disruptions are playing a role as well. 308 00:16:38,760 --> 00:16:43,320 Speaker 1: Consumers do hear the news and oftentimes you know, confidence 309 00:16:43,400 --> 00:16:47,560 Speaker 1: and sentiment indicators reflect what is happening in the news. 310 00:16:47,680 --> 00:16:52,120 Speaker 1: And there's like even some special indexes like news heard 311 00:16:52,800 --> 00:16:55,520 Speaker 1: in the Michigan survey, right, so that that is something 312 00:16:56,040 --> 00:16:57,800 Speaker 1: to take into accounty. 313 00:16:57,520 --> 00:16:58,920 Speaker 5: And a lot of guests will come on and they're 314 00:16:58,960 --> 00:17:01,360 Speaker 5: talking about the excitement the tax rebate. Where do you 315 00:17:01,400 --> 00:17:02,320 Speaker 5: see that money going? 316 00:17:02,840 --> 00:17:06,639 Speaker 1: I think, you know, I'm very cautious about that because 317 00:17:06,760 --> 00:17:09,840 Speaker 1: I think that people spend a lot of money during 318 00:17:09,840 --> 00:17:13,800 Speaker 1: the holiday season and they may have to return this money. 319 00:17:14,080 --> 00:17:18,360 Speaker 1: It's spent, it's already spent. You do see a significant 320 00:17:18,359 --> 00:17:22,240 Speaker 1: pickup in credit card balances over the last several months, 321 00:17:22,440 --> 00:17:25,440 Speaker 1: and that is the data coming from the New York Fed. 322 00:17:26,040 --> 00:17:31,240 Speaker 1: And I think that given you know, the constraints in 323 00:17:31,320 --> 00:17:34,080 Speaker 1: terms of income roles, in terms of the labor market, 324 00:17:34,400 --> 00:17:37,800 Speaker 1: people will be cautious and we'll try to get to 325 00:17:37,880 --> 00:17:39,800 Speaker 1: pay back some depth. 326 00:17:40,600 --> 00:17:44,160 Speaker 2: This is the Bloomberg Survandons podcast, bringing you the best 327 00:17:44,200 --> 00:17:47,520 Speaker 2: in markets, economics, anngio politics. You can watch the show 328 00:17:47,560 --> 00:17:50,520 Speaker 2: live on bloombag TV weekday mornings from six am to 329 00:17:50,640 --> 00:17:54,400 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify 330 00:17:54,560 --> 00:17:56,760 Speaker 2: or anywhere else you listen, and as always on the 331 00:17:56,800 --> 00:17:59,240 Speaker 2: Bloomberg Terminal and the Bloomberg Business Amp.