1 00:00:09,880 --> 00:00:12,960 Speaker 1: Welcome to the Bloomberg Surveillance Podcast, and I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Leie. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,400 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg from 5 00:00:27,400 --> 00:00:29,680 Speaker 1: New York City for our audience worldwide. For the White 6 00:00:29,680 --> 00:00:31,760 Speaker 1: House is gear on the jobs report, I'm very pleased 7 00:00:31,760 --> 00:00:34,320 Speaker 1: to say. On Bloomberg TV and Bloomberg Radio. We're joined 8 00:00:34,360 --> 00:00:38,800 Speaker 1: by Larry Cardlo, National Economic Council Director Larry fantastic to 9 00:00:38,840 --> 00:00:41,120 Speaker 1: catch up with you. Sir. You're looking well, let's get 10 00:00:41,159 --> 00:00:44,240 Speaker 1: straight to it. Payrolls looking good. What does that payrolls 11 00:00:44,280 --> 00:00:47,040 Speaker 1: report mean for the talks that you guys are having 12 00:00:47,080 --> 00:00:51,480 Speaker 1: on Capitol Hill on the next steps of the fiscal policy. Well, look, 13 00:00:51,600 --> 00:00:54,360 Speaker 1: I think the continued rise in payrolls and and bear 14 00:00:54,360 --> 00:00:57,720 Speaker 1: in mind, Jonathan, you know this is a hotspot par 15 00:00:57,800 --> 00:01:01,720 Speaker 1: Row report. This is July twining it to eighteen, and 16 00:01:01,800 --> 00:01:04,480 Speaker 1: the surging hotspots in the South and West and some 17 00:01:04,600 --> 00:01:08,119 Speaker 1: other places began in the back end of June and 18 00:01:08,280 --> 00:01:11,160 Speaker 1: lasted through July. You know, there was some pullback of 19 00:01:11,240 --> 00:01:14,880 Speaker 1: reopenings and so forth, and yet, and yet we still 20 00:01:14,920 --> 00:01:18,080 Speaker 1: got one point eight million with a big decline, almost 21 00:01:18,120 --> 00:01:21,640 Speaker 1: a full percentage point drop in the unemployment rate, which 22 00:01:21,680 --> 00:01:26,000 Speaker 1: will move to single digits easily in the summer and fall. 23 00:01:26,240 --> 00:01:28,960 Speaker 1: So I think that's a very key point just in 24 00:01:29,080 --> 00:01:32,040 Speaker 1: terms of the economy. Now, how that reacts, how that 25 00:01:32,120 --> 00:01:36,959 Speaker 1: reflects on the talks. The talks are rather stalemated right now. 26 00:01:37,240 --> 00:01:40,640 Speaker 1: It was a better tone earlier this week, but through 27 00:01:40,760 --> 00:01:45,120 Speaker 1: last evening there hadn't been any breakthroughs. That's unfortunate. However, 28 00:01:45,160 --> 00:01:48,000 Speaker 1: the President has said several times in the last forty 29 00:01:48,040 --> 00:01:50,280 Speaker 1: eight hours, and I can attest to it because I'm 30 00:01:50,280 --> 00:01:55,320 Speaker 1: working on it. He's going to use executive orders, administrative discretion, 31 00:01:55,680 --> 00:01:58,360 Speaker 1: the full powers of the fellow government in order to 32 00:01:58,400 --> 00:02:02,480 Speaker 1: get certain priorities through, for example, a payroll tax cut, 33 00:02:02,680 --> 00:02:07,280 Speaker 1: which will incentivize work returning to work, uh and also 34 00:02:07,840 --> 00:02:10,840 Speaker 1: give a bonus to those stalwarts who stayed on the job. 35 00:02:11,440 --> 00:02:14,880 Speaker 1: We'd like to reform unemployment. We'd like to put in 36 00:02:15,400 --> 00:02:20,560 Speaker 1: benefits for reemployment or some kind of business retention credits. 37 00:02:21,040 --> 00:02:25,120 Speaker 1: We want to make sure the eviction moratorium continues a pace. 38 00:02:25,680 --> 00:02:29,120 Speaker 1: We think the executive branch can do that. We think 39 00:02:29,160 --> 00:02:32,040 Speaker 1: he has the authority to do that. We are exploring 40 00:02:32,120 --> 00:02:35,280 Speaker 1: and drafting documents as you and I speak this morning, 41 00:02:35,760 --> 00:02:38,800 Speaker 1: and people should take it very, very seriously. If the 42 00:02:38,840 --> 00:02:42,720 Speaker 1: Democrats side don't want to get it done certain essentials, 43 00:02:42,760 --> 00:02:45,880 Speaker 1: we will get it done to make sure that folks 44 00:02:45,960 --> 00:02:49,000 Speaker 1: go back to work, to make sure that kids can 45 00:02:49,040 --> 00:02:51,639 Speaker 1: go back to school, and to make sure that this 46 00:02:51,840 --> 00:02:56,000 Speaker 1: V shaped recovery continues well through this year. Well, Arry, 47 00:02:56,000 --> 00:02:57,919 Speaker 1: I'll stay away from the V shape predictions. Let's stick 48 00:02:57,919 --> 00:02:59,960 Speaker 1: to policy and what you kind suprupt to with the money. 49 00:03:00,240 --> 00:03:02,160 Speaker 1: For a threat to be credible, we have to test 50 00:03:02,200 --> 00:03:05,240 Speaker 1: the credibility of that threat. Now I'm trying to understand 51 00:03:05,240 --> 00:03:07,280 Speaker 1: if you can do this, why haven't you done it? 52 00:03:07,600 --> 00:03:10,000 Speaker 1: If you can do something with executive powers, what are 53 00:03:10,000 --> 00:03:13,639 Speaker 1: you waiting for? Well, stay tuned. I mean, look, we've 54 00:03:13,639 --> 00:03:17,280 Speaker 1: been in a negotiation that has to come first. I'll 55 00:03:17,320 --> 00:03:20,680 Speaker 1: say is stay tuned. The President, I'm sure we'll be 56 00:03:20,720 --> 00:03:23,560 Speaker 1: weighing in with his own views as the day goes on. 57 00:03:23,600 --> 00:03:25,200 Speaker 1: Would you have a deadline, Larry, is at the end 58 00:03:25,240 --> 00:03:27,519 Speaker 1: of the day the talk scheduled for today. If they're 59 00:03:27,520 --> 00:03:29,480 Speaker 1: not successful, I need some color hit do you have 60 00:03:29,560 --> 00:03:33,520 Speaker 1: talk scheduled for today on Capitol Hill. I'm sure there 61 00:03:33,560 --> 00:03:36,840 Speaker 1: will be talks, whether formally or informally. I have no 62 00:03:36,880 --> 00:03:41,320 Speaker 1: doubt about that. Uh, Chief Mark Meadows. So the other day, 63 00:03:41,320 --> 00:03:43,200 Speaker 1: if we didn't get it done by Friday, we may 64 00:03:43,200 --> 00:03:45,800 Speaker 1: not get it done at all. Um, I think he's 65 00:03:45,840 --> 00:03:49,240 Speaker 1: just being realistic about that. Secretary Manuchtion is in their 66 00:03:49,320 --> 00:03:51,960 Speaker 1: pitching away. But you know a lot of the other 67 00:03:52,040 --> 00:03:56,720 Speaker 1: teams asks are just not realistic. They lack common sense 68 00:03:57,200 --> 00:04:00,320 Speaker 1: and um a lot of it. You know, probably as 69 00:04:00,400 --> 00:04:03,920 Speaker 1: much as a trillion dollars was obligated that unspent through 70 00:04:03,960 --> 00:04:07,080 Speaker 1: the March Cares Act. So we've been able to repurpose that. 71 00:04:07,400 --> 00:04:10,600 Speaker 1: So look, we're you know, there's a process here understud 72 00:04:10,640 --> 00:04:13,960 Speaker 1: sesses negotiations. But the President is said with great clarity 73 00:04:14,000 --> 00:04:16,599 Speaker 1: in the last two days, if need be, he is 74 00:04:16,640 --> 00:04:19,680 Speaker 1: more than happy. Indeed, I think he would like to 75 00:04:19,800 --> 00:04:23,520 Speaker 1: use executive authority to get things done. Look, we stand 76 00:04:23,560 --> 00:04:29,080 Speaker 1: for lower taxes and rollback of regulations and fair loves. 77 00:04:29,080 --> 00:04:32,320 Speaker 1: There our principles I'm going to get He is not 78 00:04:32,480 --> 00:04:36,360 Speaker 1: going to give that back because of the Calcagant House 79 00:04:36,400 --> 00:04:41,960 Speaker 1: of Representatives. Executive authority, executive authority. If you don't have 80 00:04:42,000 --> 00:04:44,599 Speaker 1: a successful breakthrough by the end of today, are you 81 00:04:44,640 --> 00:04:46,520 Speaker 1: going to do it or not? Are we're going to 82 00:04:46,600 --> 00:04:51,400 Speaker 1: carry on having this conversation through to next week? Well, Jonathan, 83 00:04:51,480 --> 00:04:53,840 Speaker 1: we might. You know, I'm always willing to talk to 84 00:04:53,880 --> 00:04:55,800 Speaker 1: you if you want to talk next week. I'd love 85 00:04:55,839 --> 00:04:58,799 Speaker 1: to talk next week. I don't want to second guess 86 00:04:58,800 --> 00:05:01,440 Speaker 1: what the President is going to do. Uh, he's a 87 00:05:01,560 --> 00:05:04,719 Speaker 1: very good communicator, and you can be assured he will 88 00:05:04,760 --> 00:05:08,440 Speaker 1: be out and about today and probably tomorrow talking about this. 89 00:05:08,520 --> 00:05:11,560 Speaker 1: It will beyond his time. I'm not here to announce anything. 90 00:05:11,720 --> 00:05:13,400 Speaker 1: It's up to him. Well, it's not in our time, 91 00:05:13,480 --> 00:05:14,560 Speaker 1: is it. And to be fair, it's not on the 92 00:05:14,560 --> 00:05:17,240 Speaker 1: presidency either, Larry, because the real deadline was last week 93 00:05:17,279 --> 00:05:20,520 Speaker 1: when the enhanced unemployment benefits expired. This south impost Friday 94 00:05:20,560 --> 00:05:24,160 Speaker 1: deadline was about politicians too scared to go home and 95 00:05:24,200 --> 00:05:26,359 Speaker 1: face the embarrassment of not getting a deal done on 96 00:05:26,480 --> 00:05:28,560 Speaker 1: Capitol Hill. So we can talk about the scope for 97 00:05:28,600 --> 00:05:31,400 Speaker 1: compromising now. So let's do that. As far as I understand, 98 00:05:31,880 --> 00:05:34,360 Speaker 1: the Republicans in the White House has offered four hundred 99 00:05:34,360 --> 00:05:37,680 Speaker 1: dollars per week. It enhanced unemployment benefits. Democrats are a 100 00:05:37,760 --> 00:05:40,359 Speaker 1: six hundred. They're pushing back. As far as I understand, 101 00:05:40,360 --> 00:05:43,200 Speaker 1: you're offering two hundred billion for state aid. The Democrats 102 00:05:43,240 --> 00:05:45,599 Speaker 1: want a trilliant they're pushing back. The spread right now 103 00:05:45,720 --> 00:05:49,479 Speaker 1: is still two trillion dollars. Where's the scope for compromise? 104 00:05:49,560 --> 00:05:54,520 Speaker 1: Larry Well, Jonathan, much as I might like to, um, 105 00:05:54,600 --> 00:05:57,320 Speaker 1: I'm really not here this morning to negotiate with you. 106 00:05:57,520 --> 00:06:00,919 Speaker 1: All right, I'm gonna let the negotiators fully understood, but 107 00:06:01,000 --> 00:06:04,040 Speaker 1: send a message to the American You guys are going 108 00:06:04,080 --> 00:06:06,680 Speaker 1: to do the right thing. And while you're willing to 109 00:06:06,720 --> 00:06:10,760 Speaker 1: get something done instead of nothing. Uh well, it looks 110 00:06:10,920 --> 00:06:14,640 Speaker 1: that something has to be good. It has to be smart, 111 00:06:15,200 --> 00:06:17,680 Speaker 1: it has to be efficient, and it has to have 112 00:06:18,160 --> 00:06:23,760 Speaker 1: job and economic growth incentives. That's something. And again, the 113 00:06:23,800 --> 00:06:28,919 Speaker 1: President has a clear set of growth principles and he 114 00:06:29,040 --> 00:06:32,920 Speaker 1: is more than willing to help where help is necessary. 115 00:06:33,000 --> 00:06:36,240 Speaker 1: Throughout the economy, there's still hardship. You know, good jobs 116 00:06:36,320 --> 00:06:38,120 Speaker 1: numbers Today we have a lot of numbers. I s 117 00:06:38,279 --> 00:06:42,400 Speaker 1: m s are booming, inventories are falling, car sales are surging. 118 00:06:42,640 --> 00:06:45,600 Speaker 1: That tells you this is a self sustaining recovery. We 119 00:06:45,680 --> 00:06:48,160 Speaker 1: want to keep it that way. His message is gonna 120 00:06:48,240 --> 00:06:54,240 Speaker 1: be lower taxes, smart spending, and uh continued deregulation as 121 00:06:54,240 --> 00:06:57,200 Speaker 1: well as fair trade deals. So that's his principles, and 122 00:06:57,279 --> 00:06:59,760 Speaker 1: we could use a lot of executive authority. As I said, 123 00:07:00,120 --> 00:07:03,000 Speaker 1: it's being drafted right now. I'm not going to negotiate here. 124 00:07:03,120 --> 00:07:09,520 Speaker 1: I'm just saying, if you just want to, that's what 125 00:07:09,640 --> 00:07:12,720 Speaker 1: I want to understand. The balance of risk is is 126 00:07:12,760 --> 00:07:15,800 Speaker 1: one of those amorphous phrases about let me put it 127 00:07:15,840 --> 00:07:17,880 Speaker 1: better way, then what's the biggest risk for you? Now? 128 00:07:18,160 --> 00:07:24,120 Speaker 1: The risk? Please let me finish my sense. I'm just saying, 129 00:07:24,760 --> 00:07:30,080 Speaker 1: if if the Congress does not act, if there's no deal, 130 00:07:30,280 --> 00:07:33,600 Speaker 1: and right now it doesn't look that great, then the 131 00:07:33,640 --> 00:07:37,600 Speaker 1: president will take his own actions. The solution here is 132 00:07:37,640 --> 00:07:42,720 Speaker 1: to come to a pro growth, the common sense, pragmatic compromise. 133 00:07:43,200 --> 00:07:46,560 Speaker 1: Thus far that has been elusive, And in that case, 134 00:07:46,920 --> 00:07:50,200 Speaker 1: the president, who is a great leader and makes good 135 00:07:50,200 --> 00:07:54,080 Speaker 1: on his promises, will exercise his leadership and all of 136 00:07:54,160 --> 00:07:57,440 Speaker 1: his executive federal authorities. You can count on that. You 137 00:07:57,480 --> 00:07:59,600 Speaker 1: can take that to the bank. The one thing you 138 00:07:59,600 --> 00:08:02,200 Speaker 1: didn't though, Larry, was what you guys would do with 139 00:08:02,320 --> 00:08:06,760 Speaker 1: executive powers on state aid. I've spoken to New York State. 140 00:08:06,920 --> 00:08:08,720 Speaker 1: They've told me, if they don't get the aid, the 141 00:08:08,760 --> 00:08:12,720 Speaker 1: austerity begins immediately. Now, you're an economisty, it's got way 142 00:08:12,720 --> 00:08:15,560 Speaker 1: more experience than Night on Wall Street going back decades. 143 00:08:15,680 --> 00:08:18,080 Speaker 1: You know that the federal government is the only one 144 00:08:18,160 --> 00:08:21,120 Speaker 1: right now that cann act countercyclically. States do not have 145 00:08:21,280 --> 00:08:24,120 Speaker 1: that benefit. They do not have that option. And you 146 00:08:24,200 --> 00:08:26,280 Speaker 1: also know if they don't get that aid, the austerity 147 00:08:26,320 --> 00:08:29,720 Speaker 1: starts immediately. So as the administration of the government, we've 148 00:08:29,720 --> 00:08:32,760 Speaker 1: got to understand what's the federal strategy when the state 149 00:08:32,840 --> 00:08:36,040 Speaker 1: level austerity kicks in because we can't find an agreement 150 00:08:36,240 --> 00:08:39,920 Speaker 1: on state aid. You know, it's hard to say, Jonathan, 151 00:08:40,880 --> 00:08:44,640 Speaker 1: that the Cares Bill and other bills in the last 152 00:08:44,679 --> 00:08:47,920 Speaker 1: three or four months is austerity. I mean, we've put 153 00:08:47,960 --> 00:08:51,920 Speaker 1: out right three and a half trillion dollars of fiscal 154 00:08:51,960 --> 00:08:56,200 Speaker 1: assistance in many forms. The Federal Reserve all in has 155 00:08:56,240 --> 00:09:00,600 Speaker 1: put out over seven trillion dollars through the any supply 156 00:09:00,880 --> 00:09:04,079 Speaker 1: and their lending facilities. This is not austerity. I mean, 157 00:09:04,520 --> 00:09:06,959 Speaker 1: that's what from the federal government. Larry, I'm not suggesting 158 00:09:06,960 --> 00:09:10,120 Speaker 1: it will be I'm saying from states, they will have 159 00:09:10,240 --> 00:09:14,440 Speaker 1: to come the states. The states, I will say this 160 00:09:16,040 --> 00:09:21,280 Speaker 1: because of the pandemic contraction. The income statements of state 161 00:09:21,320 --> 00:09:25,560 Speaker 1: and local governments and the federal government have deteriorated absolutely. Now, 162 00:09:26,000 --> 00:09:29,400 Speaker 1: what is the solution. Some of the solution is an aid. 163 00:09:30,000 --> 00:09:33,720 Speaker 1: Some of the solution is economic growth, where the revenues 164 00:09:33,760 --> 00:09:36,560 Speaker 1: will start pouring in and more people go back to 165 00:09:36,640 --> 00:09:40,680 Speaker 1: work and they pay taxes and so do businesses. We 166 00:09:40,800 --> 00:09:45,280 Speaker 1: have given the states, through prior deals, literally hundreds and 167 00:09:45,360 --> 00:09:48,280 Speaker 1: hundreds of billions of dollars. Now I don't want to 168 00:09:48,320 --> 00:09:51,840 Speaker 1: second guess. I'm not here to negotiate. We are looking 169 00:09:51,960 --> 00:09:55,600 Speaker 1: at all of these asks from our friends across the aisle. 170 00:09:56,040 --> 00:10:00,079 Speaker 1: I know the President is especially interested in make be 171 00:10:00,240 --> 00:10:03,640 Speaker 1: sure there are sufficient resources to get the kids back 172 00:10:03,640 --> 00:10:08,240 Speaker 1: to school. If we apply the guidelines of distancing and 173 00:10:08,400 --> 00:10:13,040 Speaker 1: masking and testing and good hygiene, the kids can get 174 00:10:13,040 --> 00:10:15,600 Speaker 1: back to school. If the school need more equipment, if 175 00:10:15,600 --> 00:10:20,480 Speaker 1: there's COVID related expenses, I think there's a chance to 176 00:10:20,600 --> 00:10:23,280 Speaker 1: President would be happy to pitch in. But the bill 177 00:10:23,360 --> 00:10:27,480 Speaker 1: that we have been given from the other team goes way, 178 00:10:27,520 --> 00:10:31,040 Speaker 1: way way beyond that, and there's a lot of Democrat 179 00:10:31,200 --> 00:10:34,800 Speaker 1: asks that simply don't make sense. Uh, certainly not in 180 00:10:34,840 --> 00:10:38,080 Speaker 1: the present context, and so we have to separate that out. 181 00:10:38,280 --> 00:10:41,320 Speaker 1: It's not so simple to just say there's fiscal austerity 182 00:10:41,320 --> 00:10:45,320 Speaker 1: in the states. Hundreds and hundreds of billions trillions of 183 00:10:45,360 --> 00:10:49,280 Speaker 1: dollars have now passed from federal to states. So let's 184 00:10:49,280 --> 00:10:53,480 Speaker 1: try to be smart and efficient, and let's target again. 185 00:10:53,800 --> 00:10:57,000 Speaker 1: I want to target people getting back to work, target 186 00:10:57,080 --> 00:10:59,719 Speaker 1: kids going back to school. I want to target and 187 00:11:00,000 --> 00:11:03,400 Speaker 1: o woymen incentives, not unemploying incentives. I want to target 188 00:11:03,760 --> 00:11:06,880 Speaker 1: reemployment incentives. I want to make sure that people do 189 00:11:06,960 --> 00:11:10,120 Speaker 1: not get evicted from their apartments or their homes. These 190 00:11:10,160 --> 00:11:13,280 Speaker 1: are things we may be able to do through executive 191 00:11:13,320 --> 00:11:16,280 Speaker 1: authority because the Congress can seem to get together for 192 00:11:16,320 --> 00:11:19,080 Speaker 1: a Bible. Let's let's see if it happen to get 193 00:11:19,080 --> 00:11:24,160 Speaker 1: it done, grows, grows, schools, jobs, kids. Let me make 194 00:11:24,200 --> 00:11:27,440 Speaker 1: this real simple, and we will do whatever federal levels 195 00:11:27,480 --> 00:11:30,480 Speaker 1: we have at our disposal. That is the President's pledge, 196 00:11:30,640 --> 00:11:33,360 Speaker 1: and you'll hear plenty from him. Larry coming hours and 197 00:11:33,440 --> 00:11:35,480 Speaker 1: days I've set across from you. I know you're a 198 00:11:35,480 --> 00:11:37,920 Speaker 1: good man. I know that you want the best for 199 00:11:37,960 --> 00:11:40,920 Speaker 1: the American people. I've also watched what it's like to 200 00:11:40,920 --> 00:11:42,719 Speaker 1: watch your dad come home because the business has got 201 00:11:42,720 --> 00:11:45,480 Speaker 1: to close. I've watched what happened when the house has 202 00:11:45,520 --> 00:11:47,760 Speaker 1: to be sold and your family has got to move in, 203 00:11:47,880 --> 00:11:49,960 Speaker 1: and moving with the relevant with a relative. I know 204 00:11:50,040 --> 00:11:53,360 Speaker 1: that feels like the economic pain that people are going 205 00:11:53,440 --> 00:11:56,280 Speaker 1: through in this country at the moment. And Larry, what 206 00:11:56,400 --> 00:12:00,439 Speaker 1: really upsets me, and I think it's borderline embarrassing, is 207 00:12:00,480 --> 00:12:04,280 Speaker 1: that this equity market was lower. I think you and 208 00:12:04,320 --> 00:12:06,920 Speaker 1: i'd have a different conversation, wouldn't we There'd be much 209 00:12:06,960 --> 00:12:10,360 Speaker 1: more urgency. And what I don't understand is the lack 210 00:12:10,400 --> 00:12:13,880 Speaker 1: of urgency right now, Larry, I just don't understand it. 211 00:12:14,280 --> 00:12:17,160 Speaker 1: If you can do these things to make the lives 212 00:12:17,200 --> 00:12:21,840 Speaker 1: of people better, why weren't they done yesterday? Jonathan, let 213 00:12:21,880 --> 00:12:26,760 Speaker 1: me say this. Look, Uh, I'm a bleeding hard to Okay, 214 00:12:26,800 --> 00:12:30,839 Speaker 1: I'm a Jack Kemp bleading hard conservative on the supply side. 215 00:12:31,400 --> 00:12:35,920 Speaker 1: You can't measure these things and just dollars spent. I mean, 216 00:12:36,000 --> 00:12:38,880 Speaker 1: we know this, we know this. You put in three 217 00:12:38,880 --> 00:12:42,000 Speaker 1: and a half trillion dollars already. The other team wants 218 00:12:42,040 --> 00:12:45,360 Speaker 1: another three or four trillion dollars. Is that the answer? 219 00:12:45,840 --> 00:12:49,440 Speaker 1: There are other better targeted ways. I want everybody to 220 00:12:49,480 --> 00:12:52,080 Speaker 1: go back to work. You know, we've created over nine 221 00:12:52,080 --> 00:12:57,000 Speaker 1: million jobs. We're clawed back about of the terrible laws 222 00:12:57,240 --> 00:12:59,200 Speaker 1: from the pandemic to Larry if you wanted to go 223 00:12:59,240 --> 00:13:01,360 Speaker 1: and eat with me, to like we can't even inside 224 00:13:01,400 --> 00:13:04,160 Speaker 1: a restaurant in New York City. Come on, you gotta 225 00:13:04,960 --> 00:13:07,280 Speaker 1: the only ask I have right now? Sure you let 226 00:13:07,280 --> 00:13:10,600 Speaker 1: me finish my car. You had a little you had 227 00:13:10,600 --> 00:13:12,920 Speaker 1: a little sermon at and I enjoyed it very much. 228 00:13:13,120 --> 00:13:16,160 Speaker 1: And I respectfully that wasn't a sermon. That was meeting person. 229 00:13:16,679 --> 00:13:20,080 Speaker 1: And you understand, Please, can are many other ways to 230 00:13:20,280 --> 00:13:23,920 Speaker 1: deal with these problems. Okay, throwing money at them is 231 00:13:23,960 --> 00:13:28,080 Speaker 1: not only the answer. You have to create economic growth incentives. 232 00:13:28,080 --> 00:13:31,280 Speaker 1: But look, we are willing to spend money. I mean, 233 00:13:31,280 --> 00:13:35,240 Speaker 1: that's not the point. The President himself has endorsed another 234 00:13:35,360 --> 00:13:39,600 Speaker 1: round of direct mail checks. He has endorsed that. He 235 00:13:39,679 --> 00:13:45,240 Speaker 1: has also endorsed continued unemployment assistance. The question is what 236 00:13:45,480 --> 00:13:49,480 Speaker 1: is the overall policy to make sure that it makes 237 00:13:49,520 --> 00:13:52,440 Speaker 1: sense that there are incentives to go back to work. 238 00:13:52,920 --> 00:13:55,480 Speaker 1: And we have a very full fledged plan to do 239 00:13:55,559 --> 00:13:59,760 Speaker 1: exactly that. We want to reward people and the businesses 240 00:13:59,840 --> 00:14:03,560 Speaker 1: that work for to go back to work. We will 241 00:14:03,960 --> 00:14:08,200 Speaker 1: extend the p P P. That is part of our package. Again, 242 00:14:08,280 --> 00:14:10,600 Speaker 1: I'm not going to negotiate, but that's in our mix. 243 00:14:10,920 --> 00:14:14,600 Speaker 1: We have retention credits for new jobs, we have benefits 244 00:14:14,640 --> 00:14:18,000 Speaker 1: for reemployment. We want to cut the payroll tax, which 245 00:14:18,000 --> 00:14:21,720 Speaker 1: would give existing workers a tremendous boosting income. I think 246 00:14:21,720 --> 00:14:23,880 Speaker 1: with even in five months it would still be twelve 247 00:14:24,360 --> 00:14:27,280 Speaker 1: dollars a year or more. All Right, people who are 248 00:14:27,280 --> 00:14:30,160 Speaker 1: not working can go back to work and realize they're 249 00:14:30,200 --> 00:14:34,680 Speaker 1: after tax wage is higher than the unemployment. That's a 250 00:14:34,760 --> 00:14:37,440 Speaker 1: good thing. So we gotta be smart. It's not just 251 00:14:37,480 --> 00:14:40,920 Speaker 1: a question. You know, I'm not gonna seed the ground 252 00:14:41,200 --> 00:14:45,320 Speaker 1: of compassion. We are all compassion, We all want everybody. 253 00:14:45,480 --> 00:14:51,560 Speaker 1: We all know people, families, cousins, kids, neighbors who have 254 00:14:51,640 --> 00:14:56,720 Speaker 1: been damaged by this terrible pandemic. Correction, Uh, that's we 255 00:14:56,880 --> 00:14:59,560 Speaker 1: know that. And we've been working on this now for 256 00:14:59,680 --> 00:15:02,880 Speaker 1: five months at warp speed. We are even at the 257 00:15:02,960 --> 00:15:07,360 Speaker 1: point now where six or seven companies aided by federal money, 258 00:15:07,560 --> 00:15:12,280 Speaker 1: large chunks of it, are in phase three of vaccination testing. 259 00:15:12,440 --> 00:15:14,840 Speaker 1: Which is a huge part of the story. And as 260 00:15:14,880 --> 00:15:17,800 Speaker 1: far as getting the kids back to school, in addition 261 00:15:17,840 --> 00:15:20,800 Speaker 1: to the masking and the distancing and the hygiene and 262 00:15:20,840 --> 00:15:23,160 Speaker 1: so forth, we are willing. We have it in our 263 00:15:23,280 --> 00:15:26,640 Speaker 1: negotiating position, a good deal of money, well over a 264 00:15:26,720 --> 00:15:29,240 Speaker 1: hundred billion dollars to happen got to school. So we're 265 00:15:29,280 --> 00:15:32,040 Speaker 1: trying to target things, but we're not going to allow 266 00:15:32,640 --> 00:15:37,960 Speaker 1: a transformation of the economy whereby the government and its 267 00:15:38,040 --> 00:15:43,240 Speaker 1: planners run everything, healthcare, energy, you name. We are not 268 00:15:43,320 --> 00:15:45,840 Speaker 1: going to go down that road. We've tried that in 269 00:15:45,880 --> 00:15:48,360 Speaker 1: the past and it does not work. You have to 270 00:15:48,400 --> 00:15:51,360 Speaker 1: be smart. You have to focus on the incentive model 271 00:15:51,400 --> 00:15:55,160 Speaker 1: of growth, and then we will see the successes. We've 272 00:15:55,160 --> 00:15:59,160 Speaker 1: had plenty of economic comebacks in this country. Throwing money 273 00:15:59,200 --> 00:16:02,720 Speaker 1: at every problem of them is not the best course 274 00:16:02,760 --> 00:16:06,200 Speaker 1: of action. Let's be smart, let's be efficient, and let's 275 00:16:06,200 --> 00:16:09,640 Speaker 1: provide incentives. And again, if we can't get a compromise 276 00:16:09,680 --> 00:16:12,200 Speaker 1: the way we did last March, then the President will 277 00:16:12,240 --> 00:16:15,240 Speaker 1: act with his own executive powers. And let me tell 278 00:16:15,280 --> 00:16:17,760 Speaker 1: you it's not a bluff funny question, because I'm gonna 279 00:16:17,800 --> 00:16:19,160 Speaker 1: get in trouble with the White House for keeping you 280 00:16:19,240 --> 00:16:21,040 Speaker 1: too long, Glarry. What am I going to see first 281 00:16:21,080 --> 00:16:24,320 Speaker 1: executive action on all the things you describe or sanctions 282 00:16:24,360 --> 00:16:30,480 Speaker 1: on Carrie Lamb Jonathan, those are completely disconnected. I'm not 283 00:16:30,560 --> 00:16:33,360 Speaker 1: going to respond to that to expect annotment on that 284 00:16:33,360 --> 00:16:38,040 Speaker 1: a little bit later. Jonathan, I'm not here to talk 285 00:16:38,080 --> 00:16:42,120 Speaker 1: about those. We have already UH done an executive order 286 00:16:42,840 --> 00:16:47,600 Speaker 1: with respect to UM sanctions on Hong Kong and China 287 00:16:48,080 --> 00:16:52,240 Speaker 1: for their many misdeeds, not only taking away the freedom 288 00:16:52,240 --> 00:16:55,160 Speaker 1: of Hong Kong and breaking a fifty year deal. But 289 00:16:55,920 --> 00:16:59,880 Speaker 1: Chinese have to be held accountable on their bad behavior 290 00:17:00,040 --> 00:17:03,680 Speaker 1: during the pandemic. They're bad human rights records, what they're 291 00:17:03,680 --> 00:17:07,240 Speaker 1: doing militarily in the China in the South China Sea. Uh. 292 00:17:07,280 --> 00:17:10,439 Speaker 1: And we are putting out as you probably know, we 293 00:17:10,480 --> 00:17:13,679 Speaker 1: are going to protect American investors with a much tougher 294 00:17:13,720 --> 00:17:17,960 Speaker 1: approach with respect to the auditing of Chinese public companies 295 00:17:18,280 --> 00:17:21,840 Speaker 1: and the Public Accounting Board and the SEC. We had 296 00:17:21,880 --> 00:17:24,840 Speaker 1: a treasury or we're a financial working group. We just 297 00:17:24,920 --> 00:17:28,919 Speaker 1: published this stuff. We're gonna give one year to shape 298 00:17:29,000 --> 00:17:32,840 Speaker 1: up on the audits and on the working papers behind 299 00:17:32,840 --> 00:17:36,359 Speaker 1: the audits to see if they deserve a listing on 300 00:17:36,480 --> 00:17:40,480 Speaker 1: American exchanges. We have to protect our own investors, we 301 00:17:40,560 --> 00:17:45,320 Speaker 1: have to protect our national security. Those are tough, gritty issues, 302 00:17:45,520 --> 00:17:48,920 Speaker 1: and we're making progress. Those are separate issues, however, from 303 00:17:48,960 --> 00:17:52,280 Speaker 1: these fiscal negotiations. Larry, I know you remand with a 304 00:17:52,320 --> 00:17:55,600 Speaker 1: good hop and I appreciate your time every First Friday 305 00:17:55,600 --> 00:17:57,440 Speaker 1: whenever we get the pay rolls report. I'm ready to 306 00:17:57,760 --> 00:17:59,600 Speaker 1: a good sport. Thanks for you wanting us, and I 307 00:17:59,640 --> 00:18:01,240 Speaker 1: hope for the best a little bit like to as well. 308 00:18:01,640 --> 00:18:08,560 Speaker 1: Larry caldlaf nationally Canomy Council's director. Right now linking much 309 00:18:08,600 --> 00:18:11,480 Speaker 1: of this report back into the financial Marcus Jeffrey Rosenberg 310 00:18:11,560 --> 00:18:16,640 Speaker 1: joins US portfolio manager of the Systematic Multi Strategy Fund. Jeff, 311 00:18:16,720 --> 00:18:21,439 Speaker 1: let's get systematic right now. And that I see higher yields. 312 00:18:21,760 --> 00:18:24,679 Speaker 1: Is it a modest adjustment or can you say that 313 00:18:24,720 --> 00:18:27,840 Speaker 1: we will pull back from those lower nominal yields of 314 00:18:27,920 --> 00:18:31,280 Speaker 1: the last number of days. I think it's a really 315 00:18:31,400 --> 00:18:34,560 Speaker 1: modest adjustment, Tom, and I think earlier you really nailed 316 00:18:34,560 --> 00:18:38,400 Speaker 1: it when you linked the report not to the implications 317 00:18:38,440 --> 00:18:42,080 Speaker 1: for monetary policy, but to the implications for fiscal policy. 318 00:18:42,440 --> 00:18:44,359 Speaker 1: So when you're looking at the bond market, and the 319 00:18:44,440 --> 00:18:47,280 Speaker 1: yield reaction. You really got to go out a lot 320 00:18:47,320 --> 00:18:49,920 Speaker 1: of decimal points to see a reaction to this report, 321 00:18:49,960 --> 00:18:54,440 Speaker 1: because this isn't really about influencing monetary policy, because monetary 322 00:18:54,480 --> 00:18:57,320 Speaker 1: policy has been very clear that it is going to 323 00:18:57,359 --> 00:19:01,520 Speaker 1: be highly accommodated, that they're going back to trying to 324 00:19:01,560 --> 00:19:04,239 Speaker 1: get the economy to run hot. So you needed to 325 00:19:04,280 --> 00:19:07,040 Speaker 1: have a very very big number here, and even if 326 00:19:07,040 --> 00:19:08,920 Speaker 1: you had a big number, I'm not sure that would 327 00:19:08,920 --> 00:19:11,560 Speaker 1: have changed the monetary policy outlook. This is much more 328 00:19:11,600 --> 00:19:15,920 Speaker 1: about influencing the market direction is taking its direction from 329 00:19:16,400 --> 00:19:19,800 Speaker 1: fiscal policy and and to what you talked about earlier. 330 00:19:19,840 --> 00:19:21,640 Speaker 1: You know, I think this is a little bit more 331 00:19:21,640 --> 00:19:24,040 Speaker 1: of a positive report that makes it a little bit 332 00:19:24,119 --> 00:19:28,399 Speaker 1: harder to argue for the really big project, the really 333 00:19:28,440 --> 00:19:31,280 Speaker 1: big program, Well we'll see where that plays out, but 334 00:19:31,320 --> 00:19:33,240 Speaker 1: it is much more about fiscal policy. We welcome all 335 00:19:33,280 --> 00:19:37,000 Speaker 1: of you on Bloomberg Radio, Bloomberg Television. It is Bloomberg Surveillance. 336 00:19:37,040 --> 00:19:40,360 Speaker 1: It's about conversation. Jeffrey Rosenberg with us with black Rock. 337 00:19:40,480 --> 00:19:43,440 Speaker 1: David blanche Flower of Dartmouth College will join us here. 338 00:19:43,800 --> 00:19:46,639 Speaker 1: Really looking forward to talking to blanch Flower about the 339 00:19:46,720 --> 00:19:50,000 Speaker 1: quality of these jobs. Lisa, Yeah, I gotta say, Jeff, 340 00:19:50,040 --> 00:19:52,760 Speaker 1: you were talking about the idea of Washington, d C 341 00:19:52,920 --> 00:19:54,840 Speaker 1: And the need for fiscal stimulus and time. We've been 342 00:19:54,840 --> 00:19:57,399 Speaker 1: talking about that all morning. But Jeff, right now, it 343 00:19:57,440 --> 00:19:59,520 Speaker 1: seems like there isn't a ton of urgency based in 344 00:19:59,560 --> 00:20:02,040 Speaker 1: the fact that Republicans are going home and there might 345 00:20:02,040 --> 00:20:04,600 Speaker 1: be some sort of executive order. This report isn't going 346 00:20:04,680 --> 00:20:07,600 Speaker 1: to light of fire. Is the market to sanguine about 347 00:20:07,640 --> 00:20:11,600 Speaker 1: the idea of another round of fiscal support? Well, I 348 00:20:11,880 --> 00:20:14,720 Speaker 1: think there's a lot of uncertainty now, and I think 349 00:20:14,760 --> 00:20:17,159 Speaker 1: if anything, you look at the report and it adds 350 00:20:17,200 --> 00:20:20,400 Speaker 1: to that uncertainty. You know, the market is expecting some 351 00:20:20,520 --> 00:20:23,239 Speaker 1: kind of compromise, some kind of deal. Perhaps they were 352 00:20:23,320 --> 00:20:25,600 Speaker 1: leaning towards the higher end. I think that's going to 353 00:20:25,800 --> 00:20:29,480 Speaker 1: challenge this. I think eventually the market is expecting some 354 00:20:29,560 --> 00:20:32,919 Speaker 1: kind of next round program to come through. And today's 355 00:20:32,960 --> 00:20:36,359 Speaker 1: payroll report, you know, it still gives a bit of ammunition. 356 00:20:36,400 --> 00:20:38,240 Speaker 1: You know, we talked about the ten point to percent 357 00:20:38,320 --> 00:20:41,560 Speaker 1: unemployment rate. You know, we're making progress, but it also 358 00:20:41,680 --> 00:20:45,040 Speaker 1: highlights just the significant amount of damage that has been 359 00:20:45,080 --> 00:20:48,760 Speaker 1: done and continues to impact people. That is the argument 360 00:20:48,760 --> 00:20:51,600 Speaker 1: for another program here, how do you use the economic 361 00:20:51,680 --> 00:20:55,920 Speaker 1: data that we get to decide how to trade? So, 362 00:20:56,119 --> 00:20:59,360 Speaker 1: you know, it's been a big challenge because the economic 363 00:20:59,440 --> 00:21:02,520 Speaker 1: data is just so dramatic. Let's just take the payroll 364 00:21:02,600 --> 00:21:05,760 Speaker 1: report itself here. You know, we came in kind of 365 00:21:06,080 --> 00:21:10,120 Speaker 1: pretty close to the expectations, but the range of those 366 00:21:10,160 --> 00:21:15,040 Speaker 1: expectations is greater than than anything you've seen in any time. 367 00:21:15,160 --> 00:21:19,440 Speaker 1: That the inflows and outflows are orders of magnitude greater, 368 00:21:19,520 --> 00:21:22,919 Speaker 1: and the variability around the expectations ranged from you know, 369 00:21:22,960 --> 00:21:26,600 Speaker 1: minus six over three million. So what it means is 370 00:21:26,680 --> 00:21:29,639 Speaker 1: that when you look at economic data relative you know, 371 00:21:29,680 --> 00:21:32,880 Speaker 1: what we what we emphasize is the surprise. Well, what 372 00:21:32,920 --> 00:21:36,760 Speaker 1: what the uncertainty means is it's much harder to gauge 373 00:21:37,080 --> 00:21:40,639 Speaker 1: what is that surprise level? And so your your impact 374 00:21:40,840 --> 00:21:44,280 Speaker 1: of any economic data relative to expectations because you don't 375 00:21:44,280 --> 00:21:46,720 Speaker 1: know how to anchor those expectations all have to be 376 00:21:46,840 --> 00:21:51,400 Speaker 1: very dampened relative to two kind of more normal periods, Jeff. 377 00:21:51,560 --> 00:21:54,240 Speaker 1: Within the mathematics of all this is a point where 378 00:21:54,280 --> 00:21:57,679 Speaker 1: you shift from a yield study to a price study. 379 00:21:57,680 --> 00:22:00,080 Speaker 1: And certainly in the tension this week, I've seen that 380 00:22:00,640 --> 00:22:02,639 Speaker 1: are we now at a point where people are just 381 00:22:02,720 --> 00:22:05,679 Speaker 1: buying full faith and credit just because they're buying it 382 00:22:05,720 --> 00:22:08,800 Speaker 1: and they'll take it at any price, and price matters up, 383 00:22:08,880 --> 00:22:12,240 Speaker 1: Up we go in the bid well in terms of 384 00:22:12,320 --> 00:22:14,840 Speaker 1: the safe assets. When you talk about you know, full 385 00:22:14,840 --> 00:22:18,120 Speaker 1: faith and credit is really about treasuries and treasury yields, 386 00:22:18,359 --> 00:22:23,159 Speaker 1: you know, it's it's about monetary policy and monetary policy expectations. 387 00:22:23,200 --> 00:22:27,720 Speaker 1: We we've really changed the functioning of fixed income markets. 388 00:22:27,960 --> 00:22:31,600 Speaker 1: How we set prices is a lot less about you know, 389 00:22:31,680 --> 00:22:36,080 Speaker 1: what do these economic numbers mean about expected inflation and 390 00:22:36,400 --> 00:22:39,560 Speaker 1: short term movements. It's much more first about what does 391 00:22:39,600 --> 00:22:42,479 Speaker 1: it mean to the policy response, because the policy today 392 00:22:42,840 --> 00:22:47,920 Speaker 1: is moving towards a contemplation of full outright control called 393 00:22:48,040 --> 00:22:51,680 Speaker 1: yield curve control of the bond market, and so it's 394 00:22:51,760 --> 00:22:54,919 Speaker 1: really much more about our assessment of what does this 395 00:22:55,040 --> 00:22:59,679 Speaker 1: do about the change in policy, less about the economic 396 00:22:59,760 --> 00:23:02,919 Speaker 1: data a directly impacting trading, and so it's it's a 397 00:23:03,040 --> 00:23:06,720 Speaker 1: very different kind of environment for setting of interest rates 398 00:23:07,080 --> 00:23:09,639 Speaker 1: by the bond market. Is that where are you on 399 00:23:09,720 --> 00:23:11,560 Speaker 1: a call on the bonds? I mean you're running a 400 00:23:11,600 --> 00:23:15,080 Speaker 1: systematic portfolio and there's the Carnegie Mellon matthewist to it. 401 00:23:15,160 --> 00:23:18,679 Speaker 1: I get all that, but what is your call on 402 00:23:18,760 --> 00:23:22,680 Speaker 1: the full faith and credit market, Jeff Well, the call 403 00:23:22,960 --> 00:23:26,160 Speaker 1: is that the policy is very clear, and the policy 404 00:23:26,280 --> 00:23:32,320 Speaker 1: is maintain market fund functioning and then pivoting towards accommodation. 405 00:23:32,520 --> 00:23:34,760 Speaker 1: And so what that means is we're going to have 406 00:23:35,000 --> 00:23:37,960 Speaker 1: very low interest rates for a very long time. Zero 407 00:23:38,040 --> 00:23:39,960 Speaker 1: interest rate policy is going to be with us for 408 00:23:39,960 --> 00:23:41,560 Speaker 1: a very long time. I don't think we're going to 409 00:23:41,640 --> 00:23:44,920 Speaker 1: go and see negative interest rates, but the control of 410 00:23:44,960 --> 00:23:48,080 Speaker 1: the long term interest rates is very much part of 411 00:23:48,080 --> 00:23:51,200 Speaker 1: the policy. And so you're looking at a period of 412 00:23:51,680 --> 00:23:55,159 Speaker 1: very low interest rates front and interest rates basically pegged 413 00:23:55,240 --> 00:23:58,280 Speaker 1: and functioning like a surrogate for cash, and long term 414 00:23:58,280 --> 00:24:02,360 Speaker 1: interest rates really under of the thumb of monetary policy 415 00:24:02,600 --> 00:24:06,480 Speaker 1: until we can start to see some real progress on inflation. 416 00:24:06,680 --> 00:24:09,439 Speaker 1: And until then it's it's a it's a low and 417 00:24:09,560 --> 00:24:12,119 Speaker 1: stable interest rate environment. If you just joined us. We're 418 00:24:12,119 --> 00:24:15,000 Speaker 1: speaking with Jeff Rosenberg of black Rock following a better 419 00:24:15,000 --> 00:24:18,600 Speaker 1: than expected jobs report. Initially there was a pop inequity futures. 420 00:24:18,640 --> 00:24:20,680 Speaker 1: There is a roll over at this point as people 421 00:24:20,720 --> 00:24:22,480 Speaker 1: dig a little bit further, a little bit deeper down 422 00:24:22,520 --> 00:24:25,040 Speaker 1: into the negative and tenure yields initially popped up, but 423 00:24:25,080 --> 00:24:29,400 Speaker 1: are little change, just a tiny bit. Jeff, talking about inflation, 424 00:24:29,480 --> 00:24:31,919 Speaker 1: we've been really focused on real rates in the United 425 00:24:31,960 --> 00:24:36,520 Speaker 1: States at negative one point one percent all time lows. Question, 426 00:24:36,720 --> 00:24:40,280 Speaker 1: how low can they go? What's the answer? Well, you know, 427 00:24:40,520 --> 00:24:42,840 Speaker 1: a lot of the movement in the real interest rates 428 00:24:42,880 --> 00:24:47,920 Speaker 1: is pricing in a recovery in inflation and inflation expectations, 429 00:24:48,359 --> 00:24:50,879 Speaker 1: while at the same time, the FED is basically pegging 430 00:24:50,920 --> 00:24:53,640 Speaker 1: nominal interest rates, you know, so we we could see 431 00:24:53,640 --> 00:24:56,320 Speaker 1: that move a little bit more, but it's very unlikely 432 00:24:56,400 --> 00:24:59,880 Speaker 1: that we're going to see significant increases in inflation exp 433 00:25:00,000 --> 00:25:05,520 Speaker 1: dictations absent significant increases in actual or perceived inflation pressures, 434 00:25:05,680 --> 00:25:08,600 Speaker 1: and we're very far away from that. The COVID shock 435 00:25:08,760 --> 00:25:12,320 Speaker 1: is a massive disinflationary shock, and so what we're seeing 436 00:25:12,320 --> 00:25:14,640 Speaker 1: in terms of those negative real interest rates is really 437 00:25:14,640 --> 00:25:18,200 Speaker 1: a recovery off of those extremes and a little bit 438 00:25:18,240 --> 00:25:20,800 Speaker 1: fueled by some of the short term recovery in terms 439 00:25:20,800 --> 00:25:23,360 Speaker 1: of commodity prices. But we are still in a very 440 00:25:23,400 --> 00:25:28,320 Speaker 1: low interest, low inflationary environment, and until we break that environment, 441 00:25:28,359 --> 00:25:30,400 Speaker 1: which I don't think it's happening anytime. In the short run, 442 00:25:30,680 --> 00:25:33,280 Speaker 1: We're not going to see significant changes there. Jeffrey Rosenberg, 443 00:25:33,280 --> 00:25:39,679 Speaker 1: thank you so much. With black Rock. Right now we 444 00:25:39,720 --> 00:25:42,520 Speaker 1: go to Hanover, New Hampshire. David blanch Flower, is it 445 00:25:42,600 --> 00:25:46,480 Speaker 1: with Dartmouth College. David blanch Flower is definitive on wages. 446 00:25:46,840 --> 00:25:50,840 Speaker 1: David blanch Flower is definitive on the nuances of our 447 00:25:51,000 --> 00:25:56,240 Speaker 1: employment and are underemployment as well? Danny blanch Flower. Wonderful 448 00:25:56,280 --> 00:26:02,640 Speaker 1: to have you with us today. How underemployed is America? Well, 449 00:26:02,680 --> 00:26:05,240 Speaker 1: it certainly is, although we've seen a decline in that 450 00:26:05,680 --> 00:26:08,479 Speaker 1: in the data now. I mean, the reality is that 451 00:26:08,560 --> 00:26:12,400 Speaker 1: the unemployment numbers have really come down. Under employment, which 452 00:26:12,440 --> 00:26:15,040 Speaker 1: is reflected in U six has come down a little bit. 453 00:26:15,840 --> 00:26:17,400 Speaker 1: But what we're going to see is we just don't 454 00:26:17,440 --> 00:26:20,879 Speaker 1: have very great measures of that. So the question is 455 00:26:20,880 --> 00:26:23,199 Speaker 1: if people go back to work, are they going to 456 00:26:23,240 --> 00:26:25,479 Speaker 1: get the same hours and the same income as they 457 00:26:25,480 --> 00:26:27,399 Speaker 1: had in the past, or are they going to have 458 00:26:27,520 --> 00:26:30,359 Speaker 1: less hours and less income? And that looks to be 459 00:26:30,480 --> 00:26:32,199 Speaker 1: the thing we're going to need to look at. You know, 460 00:26:32,200 --> 00:26:34,800 Speaker 1: if you're a restaurant work over, the restaurant opens, are 461 00:26:34,800 --> 00:26:36,920 Speaker 1: you going to get the same amount of work as 462 00:26:36,920 --> 00:26:39,359 Speaker 1: you had in the past, So I think the underemployment 463 00:26:39,520 --> 00:26:42,040 Speaker 1: story is something we need to watch. But this is 464 00:26:42,080 --> 00:26:46,200 Speaker 1: definitively a good a good report better than probably I expected, 465 00:26:46,440 --> 00:26:50,440 Speaker 1: on every on every component, so that establishment that data 466 00:26:50,480 --> 00:26:54,719 Speaker 1: is good. The household data is good, employment, population rates up, 467 00:26:55,000 --> 00:26:58,280 Speaker 1: the label force participations up. So so these are good numbers. 468 00:26:58,320 --> 00:27:01,040 Speaker 1: But the question obviously is what and state by state 469 00:27:01,440 --> 00:27:05,119 Speaker 1: and what happens down the road when and if the 470 00:27:05,680 --> 00:27:08,960 Speaker 1: stimulus and payments run out Within your study at the 471 00:27:09,000 --> 00:27:11,800 Speaker 1: Bank of England, and granted the United Kingdom is a 472 00:27:11,800 --> 00:27:15,480 Speaker 1: different economy, what is the risk of a one month 473 00:27:15,640 --> 00:27:19,320 Speaker 1: of a better report? Can you extrapolate it out or 474 00:27:19,320 --> 00:27:22,200 Speaker 1: do you just simply have to wait for the first 475 00:27:22,280 --> 00:27:26,560 Speaker 1: week of September. Well, I think this is this is 476 00:27:26,640 --> 00:27:32,280 Speaker 1: unprecedented territory. We've never seen anything, any dip of the 477 00:27:32,359 --> 00:27:35,520 Speaker 1: kind that we saw, not even so much necessarily the 478 00:27:35,600 --> 00:27:39,080 Speaker 1: scale of the dip, but the speed. So there's really 479 00:27:39,119 --> 00:27:42,520 Speaker 1: no precedent. And Mike was talking about what happens state 480 00:27:42,600 --> 00:27:45,920 Speaker 1: by state, We yet to know that. But I think 481 00:27:46,000 --> 00:27:48,280 Speaker 1: I do think you're right that what we have to 482 00:27:48,440 --> 00:27:52,760 Speaker 1: very carefully do is watch things month by month um 483 00:27:52,800 --> 00:27:54,840 Speaker 1: and see where we go. I mean, I have nothing 484 00:27:54,880 --> 00:27:57,439 Speaker 1: in the past really to help me with this, but 485 00:27:57,600 --> 00:28:00,760 Speaker 1: this is this is encouraging and the government is going 486 00:28:00,760 --> 00:28:04,040 Speaker 1: to be able to say, look, you know, recovery, recovery 487 00:28:04,200 --> 00:28:07,840 Speaker 1: is coming. The question is, you know, are we headed 488 00:28:07,880 --> 00:28:11,159 Speaker 1: towards a cliff? That's the question. We don't know, and 489 00:28:11,200 --> 00:28:13,440 Speaker 1: we're going to have to watch and wait and see 490 00:28:13,480 --> 00:28:15,400 Speaker 1: if there is a second Is there a second round 491 00:28:15,400 --> 00:28:18,080 Speaker 1: of the virus? Is there a second round of layoffs 492 00:28:18,119 --> 00:28:20,760 Speaker 1: from firms? I mean, we're still at the point of 493 00:28:21,000 --> 00:28:24,359 Speaker 1: ten unemployment rate plus, which people haven't talked about. Plus 494 00:28:24,400 --> 00:28:28,760 Speaker 1: another point for that misclassification this month. It's not as 495 00:28:28,760 --> 00:28:30,919 Speaker 1: big as it was, but my reading is that you 496 00:28:30,960 --> 00:28:35,120 Speaker 1: had another percentage point because people wrongly were classified as 497 00:28:35,320 --> 00:28:39,240 Speaker 1: as employed was really they were unemployed. Denny. One idea 498 00:28:39,280 --> 00:28:41,320 Speaker 1: of yours that I absolutely love is this idea of 499 00:28:41,360 --> 00:28:44,320 Speaker 1: walk about economics. This idea that you get away from 500 00:28:44,360 --> 00:28:46,800 Speaker 1: the charts, you get away from the formulas, and you 501 00:28:46,880 --> 00:28:48,719 Speaker 1: walk around and you take a look at how it 502 00:28:48,760 --> 00:28:50,520 Speaker 1: feels and what it looks like. And you said back 503 00:28:50,520 --> 00:28:52,680 Speaker 1: in two thousand and eight, if policymakers have been able 504 00:28:52,720 --> 00:28:54,479 Speaker 1: to do that, they would have come up with a 505 00:28:54,600 --> 00:28:58,040 Speaker 1: very different result. Right now, what is walk about economics 506 00:28:58,040 --> 00:29:02,160 Speaker 1: telling you? The first thing walk about Economics tells you 507 00:29:02,400 --> 00:29:04,360 Speaker 1: is that we're not doing much walking about. I call 508 00:29:04,400 --> 00:29:07,960 Speaker 1: it now the economics are walking about the Internet. Right. 509 00:29:08,200 --> 00:29:11,560 Speaker 1: But I think the answer is that we're hearing I mean, 510 00:29:11,600 --> 00:29:14,640 Speaker 1: it's really important to get too deep within the numbers. 511 00:29:15,040 --> 00:29:20,360 Speaker 1: We are hearing recovery, but actually we're hearing slowing coming 512 00:29:20,640 --> 00:29:24,000 Speaker 1: in big states like Arizona and Texas and Florida. And 513 00:29:24,040 --> 00:29:27,400 Speaker 1: the question is does our sense of what's happening the 514 00:29:27,480 --> 00:29:30,719 Speaker 1: reports the Pulse survey that the census is doing and 515 00:29:30,800 --> 00:29:34,240 Speaker 1: that report was rather more weak if you like them this, 516 00:29:34,360 --> 00:29:36,880 Speaker 1: So I think we have to look and do what 517 00:29:36,920 --> 00:29:39,840 Speaker 1: Blumberg is fantastic at. Talk to people, talk to people 518 00:29:39,920 --> 00:29:42,480 Speaker 1: on the ground, talk to employers, and say to them 519 00:29:42,560 --> 00:29:45,280 Speaker 1: what's going on. I mean, I've heard stories saying big 520 00:29:45,280 --> 00:29:48,080 Speaker 1: firms are doing okay, small firms are doing okay. The 521 00:29:48,280 --> 00:29:51,200 Speaker 1: story is about mid sized firms. How are they doing? 522 00:29:51,440 --> 00:29:54,520 Speaker 1: So I think that that back to back to Tom's question, 523 00:29:54,880 --> 00:29:58,320 Speaker 1: do we know what's going on the answer is we don't. 524 00:29:58,400 --> 00:30:02,760 Speaker 1: But the right thing to do listen Bloomer, because oh 525 00:30:02,800 --> 00:30:05,720 Speaker 1: my goodness, we did not pay him. I promised a 526 00:30:06,240 --> 00:30:08,440 Speaker 1: job advert But but it's really very good at this 527 00:30:08,760 --> 00:30:11,560 Speaker 1: And certainly in two thousand and eight, if people have 528 00:30:11,680 --> 00:30:13,960 Speaker 1: done the economics are walking about, they would have seen 529 00:30:14,040 --> 00:30:17,280 Speaker 1: the recession much more than economists who were playing with 530 00:30:17,320 --> 00:30:19,680 Speaker 1: their silly models are missed it entirely. But it was 531 00:30:19,720 --> 00:30:22,600 Speaker 1: absolutely clear when you talk to employers and you talked 532 00:30:22,640 --> 00:30:25,360 Speaker 1: to people, they saw this thing coming. So I think 533 00:30:25,400 --> 00:30:28,800 Speaker 1: we have to be very mindful of using that market 534 00:30:28,880 --> 00:30:32,160 Speaker 1: intelligence to tell us where we're going. And this report 535 00:30:32,240 --> 00:30:35,600 Speaker 1: I think is a little more positive than the market intelligences. 536 00:30:35,680 --> 00:30:37,600 Speaker 1: But let's see where we go. And there's a question 537 00:30:37,720 --> 00:30:40,640 Speaker 1: also of something Tom keeps talking about rightly so, which 538 00:30:40,680 --> 00:30:43,840 Speaker 1: is the income inequality. And initially during the pandemic, people 539 00:30:43,840 --> 00:30:47,280 Speaker 1: were saying this was going to be exacerbated dramatically by 540 00:30:47,320 --> 00:30:50,520 Speaker 1: the COVID era. Do we still feel that way based 541 00:30:50,520 --> 00:30:52,080 Speaker 1: on the fact that a lot of the lower wage 542 00:30:52,160 --> 00:30:56,520 Speaker 1: jobs are coming back as the economy comes back online. Well, 543 00:30:56,560 --> 00:30:59,640 Speaker 1: we are. I mean, we we're seeing across the board 544 00:30:59,760 --> 00:31:02,000 Speaker 1: change ages and I was just looking at this, but 545 00:31:02,000 --> 00:31:06,240 Speaker 1: but we're certainly still seeing very much higher rates for 546 00:31:06,680 --> 00:31:13,120 Speaker 1: U African Americans, for Hispanics, for less less less educated. 547 00:31:13,600 --> 00:31:16,000 Speaker 1: First two points. First of all those folks are the 548 00:31:16,040 --> 00:31:20,200 Speaker 1: ones who also disproportionately have this error, which means you 549 00:31:20,280 --> 00:31:23,040 Speaker 1: top the numbers up. There are also the people who 550 00:31:23,160 --> 00:31:27,400 Speaker 1: disproportionately are impacted by by under employment, and you see 551 00:31:27,440 --> 00:31:29,880 Speaker 1: this big inequality. But one story I think we all 552 00:31:29,880 --> 00:31:32,600 Speaker 1: have to get to is in a period of lockdown 553 00:31:32,600 --> 00:31:36,280 Speaker 1: where people have been temporarily laid off and furloughed, what 554 00:31:36,440 --> 00:31:39,920 Speaker 1: about young people? What about the youngsters who left school 555 00:31:40,080 --> 00:31:43,920 Speaker 1: in June's going to hire those and they're missing out 556 00:31:43,960 --> 00:31:45,680 Speaker 1: on these numbers. We're going to start to see them 557 00:31:45,720 --> 00:31:49,600 Speaker 1: coming through. But the story about minority unemployment, less skilled 558 00:31:49,640 --> 00:31:52,480 Speaker 1: on what are those kids going to be doing? And general? 559 00:31:52,680 --> 00:31:55,160 Speaker 1: In some sense, I think the social unrest we've seen 560 00:31:55,400 --> 00:31:57,760 Speaker 1: is a function of young people have nothing to do. 561 00:31:58,480 --> 00:32:01,640 Speaker 1: And literally a new history is from Blanchard in summers 562 00:32:01,640 --> 00:32:03,800 Speaker 1: there as well, Danny, I want to take the time 563 00:32:03,840 --> 00:32:06,000 Speaker 1: here and rip up the script and I want to 564 00:32:06,040 --> 00:32:07,960 Speaker 1: talk to you. I I've had the privileged folks of 565 00:32:08,040 --> 00:32:11,040 Speaker 1: standing with Mr Blanche Flower in his lecture halls at 566 00:32:11,120 --> 00:32:14,560 Speaker 1: Dartmouth and Warble and gaily to the assembled Danny does 567 00:32:14,640 --> 00:32:18,360 Speaker 1: virtual learning work not only at the Dartmouth level but 568 00:32:18,480 --> 00:32:22,240 Speaker 1: down to kindergarten. Do you think this nation can actually 569 00:32:23,000 --> 00:32:29,640 Speaker 1: virtually teach art students? Well, I can talk to the 570 00:32:29,680 --> 00:32:32,760 Speaker 1: classes that I taught in the in the spring, and 571 00:32:32,760 --> 00:32:35,280 Speaker 1: I'm about to go and teach again. I think they 572 00:32:35,280 --> 00:32:39,720 Speaker 1: went extremely well. We put a lot of resources into it. Um. 573 00:32:39,760 --> 00:32:42,960 Speaker 1: I think it was very really pretty successful. I'm not 574 00:32:43,320 --> 00:32:46,600 Speaker 1: so sure about how you're going to deal with eight 575 00:32:46,680 --> 00:32:49,720 Speaker 1: year olds and ten year olds, UM, But I think 576 00:32:49,720 --> 00:32:54,320 Speaker 1: on the model for the university student, I think has 577 00:32:54,400 --> 00:32:58,920 Speaker 1: changed the world. It's changed the campus experience. I mean, 578 00:32:58,960 --> 00:33:01,600 Speaker 1: it was very active. And I've got a class of 579 00:33:01,640 --> 00:33:05,040 Speaker 1: fifty fifty students who are coming to in the in 580 00:33:05,080 --> 00:33:07,360 Speaker 1: the full and I'm going to teach them about you 581 00:33:07,360 --> 00:33:10,280 Speaker 1: know what, what Bloomberg does the economics is walking about 582 00:33:10,680 --> 00:33:12,920 Speaker 1: and we can do it pretty well. And there's there's 583 00:33:12,920 --> 00:33:16,160 Speaker 1: people in China, there's people in Argentina. So I think 584 00:33:16,200 --> 00:33:19,240 Speaker 1: that it's pretty good. But it's it goes because it's 585 00:33:19,280 --> 00:33:23,320 Speaker 1: been successful. It's going to challenge this higher education model. 586 00:33:23,760 --> 00:33:25,920 Speaker 1: The question is down down the line, what are you 587 00:33:25,920 --> 00:33:27,960 Speaker 1: gonna do for for the young ones, and I think 588 00:33:28,000 --> 00:33:31,160 Speaker 1: that's a greater challenge. David was they need more hand holding. 589 00:33:31,320 --> 00:33:33,760 Speaker 1: But I think our students, certainly at the Darmoud level, 590 00:33:33,920 --> 00:33:36,280 Speaker 1: we've done pretty down well, I think, and it's gone well. 591 00:33:36,480 --> 00:33:38,440 Speaker 1: Now we've got to leave it there. David Blanchwards, thank 592 00:33:38,480 --> 00:33:40,600 Speaker 1: you so much for Darmouth's perspective, and of course on 593 00:33:40,720 --> 00:33:47,840 Speaker 1: this historic job stake, Tiffany wildly demands that you only 594 00:33:47,880 --> 00:33:51,040 Speaker 1: come on at so she is a full hour to 595 00:33:51,200 --> 00:33:54,080 Speaker 1: digest what has been row Tifficty. In the hour that 596 00:33:54,120 --> 00:33:57,480 Speaker 1: you've had since the jobs report out at PIMCO, what 597 00:33:57,600 --> 00:34:00,160 Speaker 1: could you slice? What can you dice here? What is 598 00:34:00,200 --> 00:34:04,760 Speaker 1: the observation you have? Well, thanks for having me on, Tom. 599 00:34:04,760 --> 00:34:07,000 Speaker 1: I'm not sure. I'm not sure about the demands, but um, 600 00:34:07,040 --> 00:34:09,520 Speaker 1: you know, I think in terms of the report today, 601 00:34:09,600 --> 00:34:12,000 Speaker 1: I mean, clearly it was a it was a stronger 602 00:34:12,040 --> 00:34:14,640 Speaker 1: than expected report. Um, but I think we have to 603 00:34:14,719 --> 00:34:17,520 Speaker 1: keep in mind here that the state is lagging in 604 00:34:17,640 --> 00:34:20,560 Speaker 1: terms of when it says that July report, it really 605 00:34:20,560 --> 00:34:23,520 Speaker 1: means halfway through July because that's when the survey has taken. 606 00:34:23,880 --> 00:34:26,680 Speaker 1: So it's really capturing halfway through June to halfway through July. 607 00:34:26,760 --> 00:34:30,200 Speaker 1: And there was still some momentum in the labor market 608 00:34:30,320 --> 00:34:32,520 Speaker 1: at that time. But what we've seen, you know, we 609 00:34:32,560 --> 00:34:34,680 Speaker 1: look at a lot of what we call higher frequency 610 00:34:34,760 --> 00:34:38,120 Speaker 1: data now because this virus crisis has been so fast moving, 611 00:34:38,200 --> 00:34:40,320 Speaker 1: and what we see across a range of that data 612 00:34:40,480 --> 00:34:44,560 Speaker 1: is that momentum has slowed, you know, quite dramatically flattened out, 613 00:34:45,040 --> 00:34:48,319 Speaker 1: quite dramatically. Um. You know, in July as the whole month. 614 00:34:48,400 --> 00:34:50,359 Speaker 1: So I think in August you're gonna see, um, you're 615 00:34:50,360 --> 00:34:54,640 Speaker 1: gonna see even more slowly you know, report for for 616 00:34:54,760 --> 00:34:58,880 Speaker 1: jobs most sort of inside baseball, but I'll go there. 617 00:34:58,920 --> 00:35:01,839 Speaker 1: The next report obviously will be what it will be. 618 00:35:02,239 --> 00:35:06,640 Speaker 1: But are you suggesting we could see substantial revisions to 619 00:35:06,880 --> 00:35:12,839 Speaker 1: this good report? Um? I mean, certainly revisions are are possible. Um. 620 00:35:13,040 --> 00:35:14,520 Speaker 1: You know, I think I think it's you know, we 621 00:35:14,560 --> 00:35:16,480 Speaker 1: did see in the high frequency data though there was 622 00:35:16,520 --> 00:35:20,879 Speaker 1: still some momentum in jobs at the end of June. Um. 623 00:35:20,920 --> 00:35:22,480 Speaker 1: You know, maybe we could have seen a little bit 624 00:35:22,520 --> 00:35:26,719 Speaker 1: of noise as a result of of the uh the 625 00:35:26,800 --> 00:35:30,000 Speaker 1: July fourth holiday. Um. But I think in August what's 626 00:35:30,040 --> 00:35:33,120 Speaker 1: clear is that labor market momentum has has has very 627 00:35:33,160 --> 00:35:34,759 Speaker 1: much slowed. I mean, we could see a you know, 628 00:35:34,800 --> 00:35:37,759 Speaker 1: kind of net zero job gains there, you know. But 629 00:35:37,800 --> 00:35:41,040 Speaker 1: I think maybe what's more important about this report, unfortunately, 630 00:35:41,120 --> 00:35:44,200 Speaker 1: is about how it impacts negotiations for the ongo you know, 631 00:35:44,239 --> 00:35:45,840 Speaker 1: for the stimulus bill that we could see at a 632 00:35:45,880 --> 00:35:49,000 Speaker 1: Washington you know. And although you know, we currently expect 633 00:35:49,000 --> 00:35:51,279 Speaker 1: you know, around one and a half to two trillion bill, 634 00:35:51,840 --> 00:35:55,400 Speaker 1: I certainly think that this report was stronger probably at 635 00:35:55,440 --> 00:35:58,160 Speaker 1: a minimum, gives those thirty or so Republicans who kind 636 00:35:58,160 --> 00:36:00,680 Speaker 1: of opposed any deal it to them sort of a 637 00:36:00,719 --> 00:36:04,480 Speaker 1: stronger position to stand on, you know. But again, it's 638 00:36:04,600 --> 00:36:06,400 Speaker 1: we have to revert as a lagging report, so it 639 00:36:06,440 --> 00:36:09,120 Speaker 1: doesn't change the fact that things have slowed down even 640 00:36:09,160 --> 00:36:12,640 Speaker 1: since uh this data was captured. So given that it's 641 00:36:12,640 --> 00:36:15,000 Speaker 1: a lagging report, Tiffany, and given that we have a 642 00:36:15,040 --> 00:36:17,000 Speaker 1: pretty good feel when we look at the high frequency 643 00:36:17,080 --> 00:36:20,640 Speaker 1: data that the momentum is slowing across the economy, including 644 00:36:20,680 --> 00:36:23,960 Speaker 1: the jobs market. Um, what do you think this fiscal 645 00:36:24,000 --> 00:36:26,840 Speaker 1: stimulus bill needs to include? Does it need to include 646 00:36:27,280 --> 00:36:32,600 Speaker 1: you know, state and look, municipal support. Um? I mean 647 00:36:32,640 --> 00:36:36,080 Speaker 1: so yeah, certainly, um so many state and you know, 648 00:36:36,560 --> 00:36:40,000 Speaker 1: virtually all states require uh you know, balanced budgets, so 649 00:36:40,040 --> 00:36:42,040 Speaker 1: they're not like the federal government where they can issue 650 00:36:42,040 --> 00:36:45,240 Speaker 1: debt to fund to deficit. So all of that means 651 00:36:45,280 --> 00:36:48,000 Speaker 1: that the massive hole that's been blown in state budgets 652 00:36:48,000 --> 00:36:51,200 Speaker 1: as a result of lower revenues because businesses are closed, 653 00:36:51,560 --> 00:36:53,560 Speaker 1: you know, that just means that they have to reduce spending. 654 00:36:53,600 --> 00:36:56,440 Speaker 1: And what do states reduce spending on. It's things like services, 655 00:36:56,440 --> 00:36:59,800 Speaker 1: so education, um, you know, a garbage pickup, fire and 656 00:37:00,080 --> 00:37:03,279 Speaker 1: leaves and things like that. So ultimately, unless uh, you know, 657 00:37:03,320 --> 00:37:05,800 Speaker 1: the government, the federal government steps in with some funding 658 00:37:05,840 --> 00:37:08,040 Speaker 1: for states, you know, there they are going to have 659 00:37:08,080 --> 00:37:10,360 Speaker 1: to slash those budgets. That's going to be a drag 660 00:37:10,400 --> 00:37:12,960 Speaker 1: on the broader economy, uh you know, and so of 661 00:37:12,960 --> 00:37:14,600 Speaker 1: course we want to see that. I think the other 662 00:37:14,640 --> 00:37:16,680 Speaker 1: thing that's really important about you know, getting in this 663 00:37:16,760 --> 00:37:19,680 Speaker 1: bill is a continuation of the unemployment that the kind 664 00:37:19,680 --> 00:37:23,080 Speaker 1: of booster, if you will, emergency unemployment insurance benefits which 665 00:37:23,120 --> 00:37:25,600 Speaker 1: were six hundred dollars a week. You know, they probably 666 00:37:25,640 --> 00:37:27,879 Speaker 1: do go down a little bit, but I think it's 667 00:37:27,960 --> 00:37:30,359 Speaker 1: really important that we see those that we're already seeing 668 00:37:30,360 --> 00:37:33,040 Speaker 1: a lapse in coverage of that six D six hundred 669 00:37:33,040 --> 00:37:35,360 Speaker 1: dollars a week because it expired at the end of July. 670 00:37:36,000 --> 00:37:38,960 Speaker 1: So it'll be really interesting to see how consumers, you know, 671 00:37:39,000 --> 00:37:41,279 Speaker 1: start to react with their spending not getting that extra 672 00:37:41,360 --> 00:37:45,040 Speaker 1: six dollars a week. What what would be the jump 673 00:37:45,160 --> 00:37:49,880 Speaker 1: if August colors like you're saying, what would be the 674 00:37:50,000 --> 00:37:53,360 Speaker 1: jump of the unemployment rate? Are we talking about, you know, 675 00:37:53,600 --> 00:37:58,040 Speaker 1: nuancing tenths of a percentage point? Are you talking, antiffany 676 00:37:58,080 --> 00:38:02,279 Speaker 1: about a real reversal to a more grim unemployment rate? 677 00:38:03,239 --> 00:38:05,160 Speaker 1: You know now that the high frequency of data that 678 00:38:05,200 --> 00:38:08,080 Speaker 1: we look at is again a slowing of momentum. So 679 00:38:08,200 --> 00:38:12,000 Speaker 1: it's not that it's employment is outright falling yet at 680 00:38:12,080 --> 00:38:14,160 Speaker 1: least we're not seeing that. We're basically seeing kind of 681 00:38:14,239 --> 00:38:17,640 Speaker 1: flat I think. Yeah, So if you if you think 682 00:38:17,640 --> 00:38:19,600 Speaker 1: about just the change of employment, I think it very 683 00:38:19,640 --> 00:38:22,759 Speaker 1: well could be something closer to flat um. And then 684 00:38:22,800 --> 00:38:25,759 Speaker 1: that would suggest, you know, nuances in the participation rate 685 00:38:25,840 --> 00:38:30,680 Speaker 1: or whatever the unemployment. This is well said, brilliant, maybe 686 00:38:30,680 --> 00:38:32,279 Speaker 1: the smartest thing I've heard all the morning from a 687 00:38:32,280 --> 00:38:38,400 Speaker 1: lot of smart people. Flat isn't acceptable, right, Yeah, I 688 00:38:38,440 --> 00:38:41,120 Speaker 1: mean we need to see continued improvement. I mean, even 689 00:38:41,160 --> 00:38:43,400 Speaker 1: with this report it was better than many expected, but 690 00:38:43,480 --> 00:38:47,960 Speaker 1: we've only seen of the jobs lost in August and 691 00:38:48,080 --> 00:38:51,960 Speaker 1: April recouped, and that's not you know, and we're the 692 00:38:52,280 --> 00:38:55,440 Speaker 1: unemployment rate right now is still above where you know 693 00:38:55,560 --> 00:38:57,880 Speaker 1: where kind of the highest that it got after the 694 00:38:57,920 --> 00:39:01,080 Speaker 1: two thousand eight financial crisis. So ultimately, we want to 695 00:39:01,160 --> 00:39:03,600 Speaker 1: road to recovery here and we're we're not We're still 696 00:39:03,640 --> 00:39:06,560 Speaker 1: not close to being fully recovered. Um, you know, so 697 00:39:06,640 --> 00:39:10,960 Speaker 1: at this point, flat is not acceptable. All right, So Tiffany, 698 00:39:11,000 --> 00:39:14,400 Speaker 1: as you put all this into your Pimpco economic model, 699 00:39:14,480 --> 00:39:16,800 Speaker 1: give us a sense of how you think the economy 700 00:39:16,840 --> 00:39:20,200 Speaker 1: is gonna kind of, you know, kind of recover in 701 00:39:20,320 --> 00:39:24,840 Speaker 1: terms of you know, the remainder this year going into well, 702 00:39:24,880 --> 00:39:27,719 Speaker 1: I mean, ultimately, we had always expected, you know, kind 703 00:39:27,719 --> 00:39:30,680 Speaker 1: of a boost of activity right as the economy reopened, 704 00:39:30,719 --> 00:39:32,600 Speaker 1: and we got that, and that was actually stronger than 705 00:39:32,600 --> 00:39:35,799 Speaker 1: we had hoped because of the fiscal stimulus measures that 706 00:39:35,840 --> 00:39:38,040 Speaker 1: really amped that up. And after that we thought, you know, 707 00:39:38,120 --> 00:39:40,480 Speaker 1: things will flatten off, but we still will get growth. 708 00:39:40,800 --> 00:39:43,440 Speaker 1: It will be a longer recovery. Um. You know, I 709 00:39:43,440 --> 00:39:47,359 Speaker 1: think that broad baseline is still intact. I think one 710 00:39:47,400 --> 00:39:50,360 Speaker 1: thing that is good news though, is because we've you know, 711 00:39:50,400 --> 00:39:53,080 Speaker 1: seen some flattening out or um, you know, even a 712 00:39:53,080 --> 00:39:55,640 Speaker 1: little bit more weakness and the high frequency data, you know, 713 00:39:55,680 --> 00:39:58,560 Speaker 1: I think that has moved our congressional leaders to provide 714 00:39:58,680 --> 00:40:01,840 Speaker 1: more stimulus for I'm Washington and from the federal government. 715 00:40:01,880 --> 00:40:04,160 Speaker 1: The question is the timing on that, so that will 716 00:40:04,239 --> 00:40:07,279 Speaker 1: help growth in the fourth quarter, I think, um, you know, 717 00:40:07,320 --> 00:40:09,200 Speaker 1: but we continue to expect it to see a long 718 00:40:09,320 --> 00:40:11,480 Speaker 1: road from here with you know, the unemployment rate not 719 00:40:11,520 --> 00:40:13,719 Speaker 1: getting back to kind of where we pre crisis levels, 720 00:40:13,719 --> 00:40:16,359 Speaker 1: to where we were, you know, until I think at 721 00:40:16,360 --> 00:40:19,640 Speaker 1: the early use at the earliest, maybe even a little 722 00:40:19,640 --> 00:40:23,240 Speaker 1: bit after that. So it's still a long road unfortunately. Tiffany, 723 00:40:23,280 --> 00:40:25,319 Speaker 1: thank you so much. Tiffany welding with us week him. 724 00:40:25,960 --> 00:40:30,040 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 725 00:40:30,239 --> 00:40:35,480 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 726 00:40:35,600 --> 00:40:39,800 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene before 727 00:40:39,840 --> 00:40:44,040 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.