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Speaker 1: This is Bloomberg surveillance. I think the best measure of

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Speaker 1: how the economy is performing, you know, gives us the

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Speaker 1: best sense of what's going is just jobs, because we

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Speaker 1: can measure jobs. If wage growth continues to pick up,

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Speaker 1: as I expect it will, the FEN is going to

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Speaker 1: be increasingly uncomfortable having rates close to zero. From this

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Speaker 1: point forward, all the economics can tell you that once

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Speaker 1: the unemployment rate dips down below five that wages should

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Speaker 1: pick up. Bloomberg Surveillance your link to the world of economics, finance,

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Speaker 1: and investment on Bloomberg Radio. Good morning everyone, Michael McKee

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Speaker 1: and Tom Keane A job to day from New York City.

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Speaker 1: Welcome all of you, coast to coast, Bloomberg twelve hundred,

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Speaker 1: Boston FM, Washington and Baltimore. Bloomberg elevens were going New

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Speaker 1: York in early morning. San Francisco nine six, the Bay

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Speaker 1: Area a serious The next seme Channel one as well.

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Speaker 1: The Warriors. They did it. They walked out Lebron and company.

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Speaker 1: Um even though Steph Curry didn't have a great game,

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Speaker 1: but it was certainly a big step. Now it's time,

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Speaker 1: yes Saturday, we'll see what they do in saying, Jose, anyways,

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Speaker 1: jobs coverage here in the next thirty nine minutes, let's

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Speaker 1: make it. And uh, we have a wonderful schedule. We

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Speaker 1: just had Alan Krueger on from Princeton with a broader perspective.

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Speaker 1: Bill Gross will join us, not only on his concerns

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Speaker 1: about Washington the Fed, and of course Bill Gross on

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Speaker 1: what fixed income instruments will do, and sandwiched Michael mckeeon

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Speaker 1: between Jim Glassman JP, well we would do that. Bloomberg

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Speaker 1: Surveillance this morning brought of by cone Resnick Accounting, Tax Advisory,

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Speaker 1: look Ahead, Gain Insight, Imagine More. The professionals at Cone

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Speaker 1: Resnick can help your business breakthrough, find out more and

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Speaker 1: cone Resnick dot Com Jim Blastman with us to get

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Speaker 1: us started. What is the single thing you will observe

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Speaker 1: at eight thirty? What I find it's great about your work, Jim,

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Speaker 1: is every month it's something different. Yeah, But you know, now,

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Speaker 1: the interesting things in the job market, reporter, the signals

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Speaker 1: that people are coming back into the job market. That's

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Speaker 1: a harder thing to see right up front. But you

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Speaker 1: know the twenty year rolls, the thirty year rolls, the

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Speaker 1: forty year rols, we're seeing as the job market improves,

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Speaker 1: the people who uh gave up during the recession, they're

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Speaker 1: slowly coming back in. So now the signs of improvement

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Speaker 1: are beginning to be a little more a little less visits.

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Speaker 1: So do we see that in the labor participation rate

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Speaker 1: which went up one, two, three, four or five six

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Speaker 1: months and then a pause last month. Yeah. The problem

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Speaker 1: is I'm really I think you need to focus more

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Speaker 1: about on the people who are prime working age because

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Speaker 1: there is a demographic thing going on and it confuses.

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Speaker 1: So if people are dropping out and retiring, you'll have

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Speaker 1: the labor for participation rate held down. But when you

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Speaker 1: have younger people who were cut out coming back in,

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Speaker 1: that's helping to boost it. So that's part of it.

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Speaker 1: But you know, you need a little more granularity. You

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Speaker 1: need to look more closely at what's going on with

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Speaker 1: each of the population groups. So that's but you know,

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Speaker 1: we've seen enough on the job situation between jolts, a

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Speaker 1: DP and jobless claims. The picture looks pretty steady, so

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Speaker 1: I don't think and we do have a strike, the

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Speaker 1: Verizon strike that's going to pollute this particular report, it'll

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Speaker 1: be hard to see through some of it. So it

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Speaker 1: may be it may be a little noisy this report,

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Speaker 1: but I think the truth is what we're getting is

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Speaker 1: an economy that's getting closer to full employment than it was.

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Speaker 1: It's not there yet, but closer than it was, which

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Speaker 1: means everything's gonna start slowing down a little bit in

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Speaker 1: the labor market and you'll see a little better trends

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Speaker 1: And what are you just starting to pick up over time?

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Speaker 1: Nothing is nothing's really dramatic here. Everything in the establishment

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Speaker 1: survey is is going to be polluted, as you put it,

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Speaker 1: by the Verizon strike um, the change in payrolls, hours, wars,

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Speaker 1: work and wages. Is there a ten second tutorial and

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Speaker 1: what people on a trading desk should do when the

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Speaker 1: number comes out to you know, in their heads adjust well.

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Speaker 1: I think people are gonna say if it's hundred and

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Speaker 1: fifty or more, good enough that it keeps the possibility

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Speaker 1: of a FED move in June on the table. It's

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Speaker 1: probably less about these data than it is about the

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Speaker 1: uncertainty with the British referendum vote and other things that

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Speaker 1: bother them. But to me, I think the cases been

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Speaker 1: pretty good that the economy is on track. The Feds

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Speaker 1: started this normalization process in December. They held off in March.

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Speaker 1: But the economy is doing well enough that it makes

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Speaker 1: sense to continue. And I think the more the Fed

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Speaker 1: can do in baby steps, the more content you may

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Speaker 1: come down the road. Then one thing Jim lass with

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Speaker 1: that Mike McKee learned me is the quick rate. Mike's

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Speaker 1: big on the Jolts survey and the quick rate Mike,

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Speaker 1: it's it's essentially in the vicinity of where it wasn't

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Speaker 1: two thousand and six. Yeah, when people feel good about

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Speaker 1: their jobs and confident they can find something, they will

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Speaker 1: be inclined to quit more frequently. And you know, Um,

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Speaker 1: you hearing all kinds of surveys and stories about people

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Speaker 1: getting frustrated with the job they got a while ago.

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Speaker 1: That's sort of a natural. That's a that's a good

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Speaker 1: sound to economists because that means the people are feeling

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Speaker 1: more confident in the jobs. There are more opportunities opening up. Um.

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Speaker 1: The first step is to get into the job market.

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Speaker 1: The next step is to look at your options and

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Speaker 1: try to migrate into something better. Raising a question though, um,

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Speaker 1: and again it's gonna be hard because of the Verizon strike,

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Speaker 1: But what would be a reasonable level of job growth.

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Speaker 1: And the reason I asked that is because for what

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Speaker 1: we understand, it's getting harder and harder to find employees.

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Speaker 1: And there's two hundred thousand plus rate that we've had

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Speaker 1: for so long. It's just not sustainable. Yeah, you know,

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Speaker 1: we don't really know for sure. People throw out numbers

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Speaker 1: like seventy two hundred thousand because when you look at

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Speaker 1: our labor force growth, the labor force has slowed down

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Speaker 1: because of demographics. The problem is we still have a

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Speaker 1: lot of young people, uh coming back into the job market.

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Speaker 1: We're still probably still a million shy of where we

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Speaker 1: were back in two thousand seven. So it's hard to

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Speaker 1: know what is a normal labor force growth just yet

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Speaker 1: because you still have the cyclical unwind going on. But

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Speaker 1: my guess is it's not more of an hundred thousand

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Speaker 1: jobs a month. Well does that? I mean, because this

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Speaker 1: is the headlines. Last month we got a hundred and

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Speaker 1: sixty thousand jobs and everybody said, terrible job. That's a mistake. Uh.

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Speaker 1: This is we should expect the job growth to slow

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Speaker 1: down gradually towards that hundred thousand or so as as

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Speaker 1: we keep making progress. I mean I'm I'm amazed that

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Speaker 1: we still see two hundred month with all that, you know,

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Speaker 1: it's it's kind of I hear people saying it's harder

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Speaker 1: to find people with the right skills, but instead of

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Speaker 1: a reminder that there still is a are still a

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Speaker 1: lot of people out there who gave up earlier, who

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Speaker 1: are available. Okay, I gotta I gotta read this headline,

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Speaker 1: Michael McKee, this is the headline of the day. This

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Speaker 1: is a maye that's from the Economic Policy Institute, which

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Speaker 1: everybody reads. It's a I'm gonna call it a more progressive,

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Speaker 1: a liberal labor website that worried about the have nots

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Speaker 1: far more than the elites in the house. Mike, this

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Speaker 1: is great, Ross Isenbrake. Universities opposed paying their post ducts

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Speaker 1: over time, but we'll pay football coaches millions of dollars.

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Speaker 1: That's like an onion headline of the e p I,

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Speaker 1: except that's an actual EPI headline. But but Jim Glass,

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Speaker 1: when the reason I bring it up, it goes to

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Speaker 1: the social tension that you have covered a lot. There's

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Speaker 1: a lot of that going on, and which is why

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Speaker 1: the the politics of this season are different than anyone expected.

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Speaker 1: We're tapping into that that Bernie Sanders and Donald Trump

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Speaker 1: are tapping. Let me bring it back to eight thirty

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Speaker 1: this morning. In twenty two minutes, we're gonna do two hundred.

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Speaker 1: Just Mike, you had the killer chart this morning showing

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Speaker 1: every months the same. All our audience wants to know,

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Speaker 1: Dr Glassman, are they good jobs? Yeah? And you know

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Speaker 1: it's no longer about the recovery. The recovery has happened

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Speaker 1: and we're doing a bigger job. The issue has been

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Speaker 1: something that's been festering for a couple of decades. Is

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Speaker 1: all the innovation that's been going on very disruptive. There's

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Speaker 1: all kinds of disruptive things going on in many different industries,

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Speaker 1: and it's um a lot of people have lost jobs

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Speaker 1: to the robots and other things that get done. And

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Speaker 1: all this technology is sort of making life more competitive.

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Speaker 1: Do a robot isn't taking over for football coaches making

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Speaker 1: millions of But the core issue, the mail that Michael

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Speaker 1: and I get is are these good jobs? The vast

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Speaker 1: majority of our listeners they know they're not. No, And

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Speaker 1: you know that the thing is, when you're into recovery,

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Speaker 1: the first jobs you're getting are never the best job.

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Speaker 1: The first things. First things first, get a job, and

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Speaker 1: then what you find out if the economy continues to

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Speaker 1: chug along, no problems, no downturn. These first start jobs

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Speaker 1: turned into better jobs, I'm not sure they turned into

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Speaker 1: better pay. If you had a job in the auto

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Speaker 1: plant ten years ago, it's you're probably not getting the

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Speaker 1: same pay that you were then, and that's the issue

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Speaker 1: I think. I think, I think the first thing, though,

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Speaker 1: you get the economy back on its feet, we have

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Speaker 1: a better shot at helping the people who have been

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Speaker 1: cut out that you get, you get some of the

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Speaker 1: things that are going on that are disruptive do create

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Speaker 1: new opportunities, but it takes time. And I think when

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Speaker 1: you pile a recession on type of a really difficult

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Speaker 1: innovation disruptions, it makes it much worse for everybody. Tom

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Speaker 1: loves them a lad of fed. Uh wage tracker and

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Speaker 1: a lot of people. I mean, it's it's different. The

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Speaker 1: wage tracker looks at people who had a job twelve

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Speaker 1: months before and what they're making now, and uh, but

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Speaker 1: what the interesting piece they had out today, uh suggesting

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Speaker 1: that um, if you have a job and have quit

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Speaker 1: and gone to a new job, your pay is going

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Speaker 1: up faster than people who are just in the same job,

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Speaker 1: because I mean it makes they're more mobile. That does

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Speaker 1: make sense. They're probably more mobile. They're people who are

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Speaker 1: willing to take the risk jumping into some new and

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Speaker 1: companies are willing to pay up to lure people away

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Speaker 1: from other jobs, which we haven't seen in a while.

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Speaker 1: You know, I heard a lot of this. I was

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Speaker 1: in Western Michigan yesterday and people there are complaining and

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Speaker 1: they're having to work, they're having to pay is going

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Speaker 1: up because they're having a hard time keeping people in

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Speaker 1: the area and some of these jobs, so do you

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Speaker 1: hear pockets of that. Technology has certainly been one of them.

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Speaker 1: The thing, Well, we're gonna come back. Jim Blastman with

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Speaker 1: us at JP Morgan. He'll be with us moving through

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Speaker 1: this half hour. He'll stay after the job's report to

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Speaker 1: give you immediate perspective on For those that don't know this,

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Speaker 1: it's not just about three numbers or two numbers. There's

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Speaker 1: like four pages of minute detail. We try to get

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Speaker 1: through it as soon as we can, and of course

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Speaker 1: we'll give you the market reaction. The number one statistic

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Speaker 1: I look at off any jobs report is a two

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Speaker 1: year yield point eight eight to nine. I write the

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Speaker 1: numbers down right here in our World headquarters, four or

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Speaker 1: five key numbers like yen and golden that and we'll

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Speaker 1: do that at eight thirty this morning. Let's chack it

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Speaker 1: with Michael Barr now and get the latest world and

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Speaker 1: national headlines. Michael, Mike, Tom, thank you very much. Five

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Speaker 1: soldiers were killed and four are missing after an Army

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Speaker 1: trooper carrier overturned in the rain swollen creek at ford Hood, Texas.

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Speaker 1: Parts of Texas have been inundated with rain in the

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Speaker 1: last week. More than half of the state is under

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Speaker 1: flood watches or warnings, including the counties near ford Hood.

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Speaker 1: The swollen Sine River is still rising, setting off a

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Speaker 1: scramble by curators at the Louver to protect a huge

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Speaker 1: trove of art from the museum's priceless collection from the

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Speaker 1: flooding in France, saying, which officials said was at his

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Speaker 1: highest level in about thirty five years, is forecast a

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Speaker 1: peak today. Refugees continue to lose their lives attempting sea

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Speaker 1: crossings to get to Europe. Lebia's navy spokesman says more

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Speaker 1: than a hundred bodies of migrants have been retrieved after

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Speaker 1: a boat capsized off Debas Shoes. Global News twenty four

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Speaker 1: hours a day, powered by our twenty four hundred journalists,

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Speaker 1: more than news bureaus around the world. Michael Bartime, Michael,

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Speaker 1: thanks so much us. Wander across the screen and look

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Speaker 1: at key data two year point eight eight to nine.

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Speaker 1: Futures are flat the Yen oneh eight Nichael McKee and

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Speaker 1: I'm King with Bill Gross and Jim Glassman's Bloomberg Surveillance.

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Speaker 1: The news update brought to you by your Mercedes Benz

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Speaker 1: a day. If Bloomberg dot Com the Radio plus mobile

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Speaker 1: lapp and on your radio. This is a Bloomberg Business

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Speaker 1: Flash And I'm Karen Moscow. Futures are a little change

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Speaker 1: with the jobs are port just about thirteen minutes away

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Speaker 1: from now. Let's go to the First Word Breaking news

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Speaker 1: desk for today's morning call. Here's Bill muloney, Good morning Deal,

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Speaker 1: Good morning Karen. US futures remain quiet ahead of the data,

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Speaker 1: with doubt futures currently hired by nineteen points. Sesamees gain

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Speaker 1: a point and as a futures are lower by one.

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Speaker 1: The US tenniel at one point seven nine percent, and

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Speaker 1: Asian markets rose overnight, while up of markets are also

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Speaker 1: trading higher this morning. The UK gains one per cent.

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Speaker 1: On the economic front. Those job numbers non farm Payroll's

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Speaker 1: estimate a hundred and sixty thousand, unemploye rate estimate four

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Speaker 1: point nine percent. Market use services p M I and

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Speaker 1: at ten o'clock, factory orders and I s M non

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Speaker 1: manufacturing composite. After the bell last night, Brock comment, Ambarrella

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Speaker 1: beat Cooper Companies boosted your at just EPs and revenue forecasts,

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Speaker 1: and the gap May comp sales beat estimates. In Dealing news,

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Speaker 1: Delta and United Continental are said to be weighing bids

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Speaker 1: for a Latin American airline, Avianca Holdings Abanca shares up

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Speaker 1: twenty nine percent pre market. H C two said it's

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Speaker 1: willing to raise it's Anderson's offer, and Talent Energy to

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Speaker 1: be acquired by Riverstone for fourteen dollars to share an

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Speaker 1: other news Vali gets added notice of default undelayed ten

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Speaker 1: que filing, finding some of your wall sheet upgrades and downgrades.

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Speaker 1: Deer race to buy from neutral over at Colman Sachs, Union,

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Speaker 1: Pacific Race to avoid at Morgan, Stanley and Weatherford raised

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Speaker 1: to overweight versus neutral over at Piper Live from the

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Speaker 1: first breaking is ask on Boo Meloney car all right,

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Speaker 1: thanks bail to hear live breaking news over your Bloomberg

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Speaker 1: type squawk A go on your terminal. That's as qu

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Speaker 1: a w k go. That's a Bloomberg business flash, Tom

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Speaker 1: and my Karen, thanks so much. Bloomberg Surveillance is job today.

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Speaker 1: Brought you by Investco. Investco believes it's time to say

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Speaker 1: word investco dot com slash alto Mike, I think there's

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Speaker 1: some important backdrops. Mexican Paso has had a horrific week

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Speaker 1: eight point seven one. It breaks out the new weakness

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Speaker 1: this week, not through the February record weakness, but um

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Speaker 1: I would look at Mexican Paso into the week as well.

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Speaker 1: In German yields flat out grind lower through the week.

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Speaker 1: We had a point zero nine handle on the tenure yield.

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Speaker 1: That's a big deal to break below point one zero.

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Speaker 1: Right now we are at point one zero one percent

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Speaker 1: on the germ in ten year yield. A couple of people, Uh,

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Speaker 1: you mentioned the pace. So this morning I looked at

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Speaker 1: a couple of people who said us, UH, analyst reports

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Speaker 1: and what's going on with the pay? So I read

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Speaker 1: through one from the folks at BNP Perry Bah. It's

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Speaker 1: like ten or eleven pages and their bottom line conclusions

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Speaker 1: they don't know. Um, it seems to be a combination

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Speaker 1: of factors, but there's no good reason for their Their

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Speaker 1: conclusion was it's over So we're not gonna send anybody

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Speaker 1: the report. Don't don't ask us but um, but they

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Speaker 1: thought it was oversold and it might turn around. Uh.

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Speaker 1: You just go to show. This gets to as something

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Speaker 1: that Jim and I were just talking about, Jim Glassman

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Speaker 1: with us from JP Morgan Chase about UM, how confusing

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Speaker 1: data can be. And you noted that a friend of

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Speaker 1: yours at the Council of Economic Advisors, what's the data

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Speaker 1: don't have to make sense? And they don't and and

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Speaker 1: uh and actually, you know, for for a situation like

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Speaker 1: we're in now, with the jobs report being distorted, the

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Speaker 1: numbers of trying to be added up by the fend

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Speaker 1: and everything, you're sitting there smiling. This is fun, you said,

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Speaker 1: this is a guilty pleasure of most economists. We we

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Speaker 1: love confusion because then you can sit and try to

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Speaker 1: figure out what, why does things do things not not

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Speaker 1: make sense? Very often you find that it's because we're

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Speaker 1: not measuring things properly, or they're just normal seasonal distortions

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Speaker 1: going on there, like first quarter growth. Yeah, yeah, like everybody.

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Speaker 1: Everyone talks about the economy through the lens of GDP,

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Speaker 1: but GDP itself is extremely volatile and and and the

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Speaker 1: government's analysts are now acknowledging that there's this very big

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Speaker 1: seasonal problem that's been going on for ten years. So

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Speaker 1: you know, that's why, that's why the job market trends

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Speaker 1: are so valuable. It's not just anyone number, but it's

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Speaker 1: the whole package of different job trends. That's what's really

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Speaker 1: going on in the economy. The other stuff that we

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Speaker 1: have is just trying to guess what's going on. How

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Speaker 1: do you respond, and you know, we're talking about job shortages,

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Speaker 1: and if I talk to people in skilled service sector areas,

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Speaker 1: they're screaming about the difficulty of keeping people. Yeah, and

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Speaker 1: and all that. I get that, But the do you

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Speaker 1: respond to the vast majority of our listeners who say

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Speaker 1: economists and blueblazers with a blue shirt are nuts that

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Speaker 1: would that would be away. Here's the problem. If you

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Speaker 1: look at who has really suffered the biggest changes over

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Speaker 1: the last couple of decades, look at job grow job,

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Speaker 1: the share of the economy that's in different jobs by pay,

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Speaker 1: what you realize is it's it's it's the folks in

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Speaker 1: the middle in the manufacturing business in particular, who've really

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Speaker 1: gotten squeezed out. And know a lot of those guys

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Speaker 1: are in their fifties. Um, if you lose a job

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Speaker 1: because of things that are going on in the world

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Speaker 1: and projects are being shifted somewhere else or innovation, it's

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Speaker 1: very difficult when you're in your fifties to retrain for

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Speaker 1: something else. So you're gonna have a tough time finding

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Speaker 1: a job that pays you as well as what you had.

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Speaker 1: I think those are a lot of the folks that

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Speaker 1: we're hearing from they're the ones that complain. So, yeah,

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Speaker 1: where the new where the new opportunities are the technology area,

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Speaker 1: some of the higher skilled service jobs. You if you

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Speaker 1: were lucky and you have the skills and you were

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Speaker 1: able to develop in your twenties, you're probably in good shape.

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Speaker 1: But it's very tough for people to learn the new

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Speaker 1: technology if you've lost the job that you had then

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Speaker 1: you thought you were gonna have for the rest of

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Speaker 1: your life. So it's really that middle, and you see

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Speaker 1: all kinds of hints of this the skills gap. The

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Speaker 1: folks in the middle are the ones that have really

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Speaker 1: been cut out. Before we get to the number, which

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Speaker 1: comes up in about six minutes or so, Verizon included

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Speaker 1: what are you expecting today? Uh, and what would be

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Speaker 1: a good report from your point of view? Well, I

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Speaker 1: think anything over D thirty five, maybe over a hundred

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Speaker 1: fifty or better would have to be viewed. I think

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Speaker 1: people would tend to view it as pretty decent or

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Speaker 1: pretty much the same because you got you have, you

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Speaker 1: have to add thirty five thousand to whatever you see,

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Speaker 1: and then there's normal volatility and it it was pretty

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Speaker 1: weak in the month of April. Some people think that's

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Speaker 1: a signal that the job markets losing momentum. I doubt it. Yet.

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Speaker 1: It's probably coming, but I doubt it. So I think

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Speaker 1: anything hudift over is gonna be viewed as pretty decent.

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Speaker 1: H you'd say, well, that's sort of more like the

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Speaker 1: April but me, you know, but but so bad either seconds.

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Speaker 1: Does Janet Yellen care about this job's report, I mean

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Speaker 1: she will not. I think she cares about all job reports.

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Speaker 1: But I don't think this is the issue for her

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Speaker 1: right now. I think what is I think the issue

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Speaker 1: is the uncertainty surrounding this British referendum vote, and the

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Speaker 1: and the and the uncertainty it is creating in the

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Speaker 1: European community. Not that she can do anything about it,

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Speaker 1: but I think if there's no rush it, you know,

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Speaker 1: the uncertainty about that might make you want to hold

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Speaker 1: off until you get past all this my answer, and

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Speaker 1: I think you're entirely correct, Dr Glassman, as I look

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Speaker 1: at my Bloomberg screen and it tells me the uncertainties

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Speaker 1: out there for the Chair of the Fed, Jim Glassman,

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Speaker 1: w us Bill gross will join us here, but we'll

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Speaker 1: have Dr Glassman immediately following the job's report for your

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Speaker 1: futures are flat coming up with them with all due respect.

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