WEBVTT - US Labor Market Sends Mixed Signals 0:00:00.840 --> 0:00:02.560 Welcome to the Bloomberg Markets Podcast. 0:00:02.720 --> 0:00:05.880 I'm Paul Sweeney alongside my co host Matt Miller. Every 0:00:05.920 --> 0:00:09.600 business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:14.400 and Bloomberg experts, along with essential market moving news. Find 0:00:14.400 --> 0:00:17.439 the Bloomberg Markets podcast called Apple Podcasts or wherever you 0:00:17.520 --> 0:00:21.720 listen to podcasts, and at Bloomberg dot com slash podcast small. 0:00:21.800 --> 0:00:24.919 Let's get back to the macrofront, because this payroll report 0:00:25.040 --> 0:00:27.880 really is It's like, it's good news, right if you're 0:00:27.920 --> 0:00:31.440 an employed American, Right, if you're Chairman Powell, you're probably 0:00:31.480 --> 0:00:34.760 having kind of a breakdown in Washington somewhere. You are 0:00:34.760 --> 0:00:37.640 seeing futures higher off this. I'm surprised we're not seeing 0:00:37.640 --> 0:00:39.360 more of a dent. But just to sum it up, 0:00:39.360 --> 0:00:43.920 three hundred and thirty nine thousand new jobs reported last month. 0:00:43.960 --> 0:00:45.800 The estimate was about one hundred and ninety five thousand 0:00:46.120 --> 0:00:47.640 according to the Bloomberg Terminal. 0:00:47.680 --> 0:00:51.319 But that coupled with an unemployment rate which rose by 0:00:51.360 --> 0:00:55.560 its biggest one month increase since April twenty twenty three 0:00:55.640 --> 0:00:58.480 point seven percent. Now, is that people coming back in 0:00:58.480 --> 0:00:59.240 the job market? 0:00:59.520 --> 0:01:03.160 Where is that? You know? Is that? Does it a 0:01:03.160 --> 0:01:05.039 broader sign of enthusiam people coming back. 0:01:06.520 --> 0:01:09.720 Yeah, but you know, we'll discuss this and plenty more 0:01:10.240 --> 0:01:11.640 with Tom Lacel. 0:01:12.760 --> 0:01:17.240 He joins us. Sorry, Tom Gimbal, excuse me from the network. 0:01:18.240 --> 0:01:19.720 I've been called worse Friday morning. 0:01:19.920 --> 0:01:20.160 Yeah. 0:01:20.200 --> 0:01:21.400 I appreciate your joining us. 0:01:21.440 --> 0:01:23.680 That's good to be with you, guys. I'm a nerd too, 0:01:23.760 --> 0:01:25.399 by the way, if we can get I want to 0:01:25.400 --> 0:01:26.399 be to the nerd party. 0:01:26.760 --> 0:01:27.160 Welcome. 0:01:27.959 --> 0:01:28.160 Yeah. 0:01:28.200 --> 0:01:30.000 So talk me through some of what you were seeing 0:01:30.240 --> 0:01:34.200 from this job report, what you're seeing from trends and 0:01:34.240 --> 0:01:38.039 staffing and recruiting across the country, and does it dovetail 0:01:38.120 --> 0:01:39.880 with this positive numbers that we've seen today. 0:01:39.959 --> 0:01:43.039 I mean, first and foremost, the news today was fantastic, 0:01:43.319 --> 0:01:47.640 and any anybody painting it as anything other than fantastic, 0:01:47.680 --> 0:01:50.480 in my opinion, is crazy. I think what we've got 0:01:50.560 --> 0:01:53.480 now is that people don't talk about is versus two 0:01:53.520 --> 0:01:56.200 thousand and nine or even two thousand and one, is 0:01:56.200 --> 0:02:00.320 that there's more companies that exist to start art up 0:02:00.320 --> 0:02:03.640 space is easier, there's more venture money on the sidelines, 0:02:04.000 --> 0:02:06.200 so there's more companies for people to go work at 0:02:06.200 --> 0:02:08.400 when they get laid off from big tech. So we 0:02:08.440 --> 0:02:10.920 saw and we have these gig economies. I mean my theory, 0:02:10.960 --> 0:02:12.480 which hasn't I haven't had a chance to prove it 0:02:12.520 --> 0:02:16.000 out yet. But is that unemployment rose when we had 0:02:16.120 --> 0:02:21.200 added over three hundred thousand jobs because the gig workers 0:02:21.200 --> 0:02:23.360 were going back to work, right, So you had the 0:02:23.440 --> 0:02:26.800 unemployment rise because more people were filing from being laid 0:02:26.800 --> 0:02:29.000 off from big tech, but you had more people re 0:02:29.160 --> 0:02:32.239 entering the workforce from the gig economy. The dog walkers 0:02:32.240 --> 0:02:33.400 are going back to work, guys. 0:02:33.520 --> 0:02:36.639 So if I had to hypothetically big emphasis and hypothetically 0:02:36.760 --> 0:02:39.960 go find a new job, how hard would would that 0:02:40.000 --> 0:02:41.959 really be? Or would I be kind of scooped up? 0:02:42.840 --> 0:02:45.400 Broadly speaking? When we're looking just how tight this labor 0:02:45.400 --> 0:02:45.799 market is. 0:02:45.880 --> 0:02:46.680 Is this still. 0:02:47.919 --> 0:02:49.440 A job lookers market? 0:02:49.840 --> 0:02:51.880 I think it's I think the playing field has been even. 0:02:52.200 --> 0:02:56.240 I think what would happen eighteen months ago is you 0:02:56.240 --> 0:02:58.919 would have gotten a forty thousand dollars increase, right or 0:02:58.919 --> 0:03:01.560 a thirty percent increase or whatever the numbers were today. 0:03:01.840 --> 0:03:04.600 You'd go and maybe you get a bump if you know, 0:03:04.440 --> 0:03:06.600 you've got a great resume and what have you. But 0:03:07.000 --> 0:03:09.920 there's still a standpoint where companies are hiring people and 0:03:10.000 --> 0:03:11.160 great people are in demand. 0:03:12.320 --> 0:03:15.440 Where are you seeing most of the. 0:03:14.880 --> 0:03:16.919 Strength you know, one of some of the things that 0:03:17.000 --> 0:03:20.720 came through today, big boost and construction, employment, leisure and hospitality. 0:03:20.720 --> 0:03:23.480 Those still significantly below pre pandemic levels. 0:03:24.040 --> 0:03:24.919 Are we going. 0:03:24.720 --> 0:03:28.800 Back to a to a pre pandemic sort of environment 0:03:29.880 --> 0:03:31.760 in terms of the sectors that need people. 0:03:32.040 --> 0:03:36.600 Yeah, My opinion is that the effect of the pandemic 0:03:36.760 --> 0:03:40.160 is really behind us. And I'd love to say that 0:03:40.200 --> 0:03:42.440 a year from now, no one will even talk about it. 0:03:42.720 --> 0:03:45.040 But whenever there's bad news, people want something to blame. 0:03:45.720 --> 0:03:50.320 And where we're at right now is healthcare continues to grow. 0:03:50.360 --> 0:03:53.560 You're right about the service economy and hospitality. We haven't 0:03:53.560 --> 0:03:55.760 seen that yet. I believe in the summer months we'll 0:03:55.760 --> 0:03:58.360 get that bump with summer travel coming out of the 0:03:58.360 --> 0:04:01.800 Memorial Day holiday, which always tends to happen. It continues 0:04:01.840 --> 0:04:04.560 to be I mean, when you have the security breaches 0:04:04.600 --> 0:04:07.680 to continue to have, it is not going anywhere. Accounting 0:04:07.720 --> 0:04:11.440 and finance continues to be extremely hot of hiring, which 0:04:11.480 --> 0:04:14.640 means companies are doing back office work, which means M 0:04:14.680 --> 0:04:16.520 and A is continuing to be there because there's money 0:04:16.520 --> 0:04:18.560 on the sidelines and it might not be IPOs, it 0:04:18.640 --> 0:04:20.400 might be more companies going private, as we're seeing the 0:04:20.600 --> 0:04:23.120 smallest amount of IPOs that we've had in years. 0:04:23.480 --> 0:04:23.760 Right. 0:04:23.839 --> 0:04:25.880 Well, one of the pieces of this report, which kind 0:04:25.920 --> 0:04:27.359 of made it a little bit of a mixed report 0:04:27.400 --> 0:04:31.080 and not just kind of polarized, was that there were 0:04:31.120 --> 0:04:33.320 pieces of the support that suggested maybe not all is 0:04:33.400 --> 0:04:36.200 great in the labor market, like productivity, for example, being 0:04:36.240 --> 0:04:40.320 substantially lower. How do you measure that though, and how 0:04:40.360 --> 0:04:43.359 can you really say, Look, you're starting to see a 0:04:43.400 --> 0:04:46.160 trend here where things like work from home or benefits, 0:04:46.240 --> 0:04:47.799 or the idea that it is a very tight labor 0:04:47.800 --> 0:04:51.400 market isn't perhaps having a bigger read through into the 0:04:51.400 --> 0:04:52.080 broader economy. 0:04:52.160 --> 0:04:54.279 Yeah, I think the productivity measurements, you know, put five 0:04:54.279 --> 0:04:57.000 economists in a room and get five different answers. I 0:04:57.080 --> 0:04:59.080 just think that that's not where we want to go. 0:04:59.279 --> 0:05:01.120 I think what we've seen is is that in the 0:05:01.160 --> 0:05:03.600 second half of twenty twenty and in twenty twenty one, 0:05:03.640 --> 0:05:06.960 productivity from remote work and homework was great because people 0:05:06.960 --> 0:05:09.599 couldn't leave their houses. There was no travel, there was 0:05:09.600 --> 0:05:12.840 no going to restaurants, you couldn't do those things. And 0:05:12.880 --> 0:05:15.919 today you can do whatever you want in productivity drops. 0:05:16.040 --> 0:05:18.440 And now we're seeing that the smartest people in the 0:05:18.480 --> 0:05:21.000 room big tech, they over hired. They didn't know, they 0:05:21.040 --> 0:05:23.839 didn't know what they were doing. And now we're on 0:05:23.880 --> 0:05:27.080 an even playing field and we're seeing that companies are 0:05:27.120 --> 0:05:29.640 laying people off. They're saying get back in the office, 0:05:29.880 --> 0:05:32.480 and and why are they because they're not seeing the 0:05:32.480 --> 0:05:33.600 growth that they want to have. 0:05:33.760 --> 0:05:36.000 Well, let's go back there to the big tech story. 0:05:36.040 --> 0:05:38.520 I feel like in retrospect it's this bay like, oh wow, 0:05:38.680 --> 0:05:41.239 the Apples and the Microsoft, they made this wrong call. 0:05:41.560 --> 0:05:43.360 But here we are talking. 0:05:43.040 --> 0:05:46.360 About them doing this big, massive. 0:05:45.960 --> 0:05:49.040 Investment things like AI and the cloud and in stem 0:05:49.320 --> 0:05:52.159 and not really laying off workers in the way that 0:05:52.360 --> 0:05:54.400 say Gold miss Axis for example, or third round of 0:05:54.480 --> 0:05:57.919 layoffs or some of the industrial names are talk to 0:05:57.960 --> 0:06:01.440 us about the sustainability of war tech right now. 0:06:01.560 --> 0:06:03.400 Yeah, So I think there's a couple of things. Number one, 0:06:03.720 --> 0:06:05.760 and touching on the AI thing that you were talking 0:06:05.800 --> 0:06:08.280 about before I came on, is that AI today is 0:06:08.320 --> 0:06:12.040 what e commerce was twenty years ago. Okay, right, so 0:06:12.279 --> 0:06:13.960 you know that the whole we've all heard the pets 0:06:14.000 --> 0:06:16.960 dot com thing. Eight thousand times, right. But that's what 0:06:16.960 --> 0:06:19.240 we're talking about right now, is that if brick and 0:06:19.279 --> 0:06:22.239 mortar companies would have gotten on the e commerce train 0:06:22.560 --> 0:06:24.919 right off the bat, a lot of e commerce companies 0:06:24.920 --> 0:06:27.280 wouldn't have. If Walmart died e commerce as fast as 0:06:27.279 --> 0:06:31.080 Amazon did, Amazon probably wouldn't be Amazon today, right. And 0:06:31.080 --> 0:06:33.120 that's what's going to happen with AI, except people get 0:06:33.120 --> 0:06:35.320 it now every company is going to be using AI. 0:06:35.440 --> 0:06:37.239 So the playing field is basically going to be even. 0:06:37.680 --> 0:06:37.960 Right. 0:06:38.080 --> 0:06:39.880 Is there even the labor to support that? 0:06:39.920 --> 0:06:40.240 Though? 0:06:40.560 --> 0:06:42.760 Well, there's Now we're going to go into a whole 0:06:42.760 --> 0:06:44.320 nother thing that I know you guys probably don't want 0:06:44.320 --> 0:06:46.080 to talk about with me, But that's the immigration problem 0:06:46.080 --> 0:06:49.200 that we have. Right. The problem with technology hiring is 0:06:49.240 --> 0:06:51.960 we're educating really, really right people and we're sending them 0:06:51.960 --> 0:06:54.120 back to where they're from instead of allowing them to 0:06:54.120 --> 0:06:56.159 stay into the work. And the layman on the street 0:06:56.160 --> 0:06:59.160 things that immigration is people coming from Mexico and Central America, 0:06:59.400 --> 0:07:01.520 and that is one an aspect of the labor problem 0:07:01.520 --> 0:07:03.360 on the blue collar standpoint for the most part. 0:07:03.560 --> 0:07:05.799 Sure, And I guess you know you talk to food 0:07:05.839 --> 0:07:09.240 service companies and they say they're chronically understaffed. 0:07:09.440 --> 0:07:12.400 It's very hard for them to find, you know. So 0:07:12.440 --> 0:07:13.960 one of the things that the FED is looking. 0:07:13.840 --> 0:07:15.800 At is a year and forecast of four and a 0:07:15.840 --> 0:07:19.920 half percent employment. We're up to three point seven percent today, 0:07:19.960 --> 0:07:21.679 but that's still a pretty wide gap. 0:07:21.760 --> 0:07:25.600 We're not going to hit four and a half this year. Okay, really, yeah, 0:07:25.600 --> 0:07:27.360 we won't hit four and a half this year. I 0:07:27.360 --> 0:07:31.200 think that. I just believe that number one, per my 0:07:31.280 --> 0:07:35.440 earlier comment that there's more companies. So if Salesforce or 0:07:35.480 --> 0:07:39.040 Golden Mien or whomever lays off every company, this isn't 0:07:39.160 --> 0:07:42.920 nineteen seventy five, right, where if a company, if General 0:07:42.960 --> 0:07:45.880 Motors lays off, no one's going to hire those people. Right. 0:07:46.240 --> 0:07:51.280 If Salesforce lays people off, General Motors would hire them. Right. 0:07:51.480 --> 0:07:55.240 Everybody goes cross industry now and the world's flat, and 0:07:55.320 --> 0:07:57.720 industries are flat, and now people don't If you're in 0:07:57.760 --> 0:07:59.280 the car business, you don't have to stay in the 0:07:59.280 --> 0:08:01.000 car business. If you're in big tech, you don't have 0:08:01.000 --> 0:08:03.040 to stay in big tech. So there's a lot more 0:08:03.080 --> 0:08:06.840 transferable skills, and companies will start if you've got extra cash, 0:08:07.040 --> 0:08:09.760 you'll start a new division with talent that you have. 0:08:10.080 --> 0:08:12.160 We have more of an entrepreneurial spirit and people to 0:08:12.240 --> 0:08:15.040 do that, So I think that unemployment will come close 0:08:15.080 --> 0:08:15.640 to four and a half. 0:08:15.880 --> 0:08:16.480 Yeah. 0:08:16.520 --> 0:08:19.160 Well, Tom Gimble, CEO at Lasal Network. 0:08:20.280 --> 0:08:24.160 You're listening to the Team Ken's live program Bloomberg Markets 0:08:24.160 --> 0:08:27.240 weekdays at ten am Eastern on Bloomberg dot com, the 0:08:27.360 --> 0:08:30.480 iHeartRadio app and the Bloomberg Business App, or listen on 0:08:30.560 --> 0:08:32.520 demand wherever you get your podcasts. 0:08:34.840 --> 0:08:37.640 Let's talk about the macro though here, because I think 0:08:37.720 --> 0:08:41.720 still the shocker of the day is this perils report 0:08:41.720 --> 0:08:45.000 three hundred and thirty nine thousand, when that's SMATE of 0:08:45.040 --> 0:08:47.960 just one hundred and ninety five thousand, and I think 0:08:48.000 --> 0:08:50.760 it's a surprise to everyone both on Wall Street and 0:08:51.280 --> 0:08:54.280 Main Street as well. We even arguing in Washington, let's 0:08:54.320 --> 0:08:57.560 bring a true expert here. Amy Glazier, Senior VP of 0:08:57.600 --> 0:09:02.480 Business Operations over at a Deco. She boasts two decades 0:09:02.520 --> 0:09:06.560 of experience and things like staffing management, business operations, so 0:09:06.600 --> 0:09:08.319 she really is the expert to kind of talk about 0:09:08.360 --> 0:09:10.320 what is going on. 0:09:09.720 --> 0:09:10.440 On the ground. 0:09:10.679 --> 0:09:14.200 Amy, how does this work exactly? We keep waiting for 0:09:14.240 --> 0:09:17.440 this momentum out of the labor market to kind of slow, 0:09:17.679 --> 0:09:20.160 if not dissipate completely, and it just seems to be 0:09:20.160 --> 0:09:20.960 getting stronger. 0:09:21.120 --> 0:09:22.280 How does that work on the ground. 0:09:23.320 --> 0:09:25.400 Yeah, I think the word of today happens to be 0:09:25.480 --> 0:09:28.120 resiliency as it comes to the labor market. You know, 0:09:28.200 --> 0:09:32.520 this is the fourteenth straight month of job creation really 0:09:32.559 --> 0:09:36.160 beating expectations. And although we see a lot and hear 0:09:36.160 --> 0:09:38.600 a lot about fears of alumining recession and a lot 0:09:38.640 --> 0:09:41.600 of negativity, at the end of the day, there's still 0:09:41.720 --> 0:09:45.560 almost two open jobs for every single job seeker. And 0:09:45.600 --> 0:09:47.520 it's something my team and I see on the ground 0:09:47.720 --> 0:09:51.360 every single day. Emplawyers are still fighting for top talent, 0:09:51.440 --> 0:09:55.400 They're still trying to get creative, they're being more flexible, 0:09:55.720 --> 0:09:59.240 and really the data speaks to what I think a 0:09:59.320 --> 0:10:02.200 lot of hiring managers are seeing in their day to 0:10:02.240 --> 0:10:02.760 day world. 0:10:04.280 --> 0:10:04.559 Amy. 0:10:04.600 --> 0:10:09.000 Where are you seeing the most strength? What sectors are 0:10:09.120 --> 0:10:10.160 leading this charge? 0:10:11.080 --> 0:10:14.319 So it's interesting you have to go almost region by region, 0:10:14.559 --> 0:10:18.520 industry by industry. We continue to see leisure and hospitality 0:10:19.080 --> 0:10:23.200 are hot. We've seen a lot of business services, healthcare 0:10:23.240 --> 0:10:27.680 always in demand. An interesting thing to notice that, you know, 0:10:27.720 --> 0:10:29.760 we just wrapped up the main jobs report. We're heading 0:10:29.800 --> 0:10:33.960 into June, and I'm already talking to our seasonal hires 0:10:34.440 --> 0:10:37.560 about quarter four. So we're used to talking about Christmas 0:10:37.559 --> 0:10:40.720 in July, and we're pretty much talking about Christmas in 0:10:40.800 --> 0:10:44.560 May in June right now. So I think employers are 0:10:44.679 --> 0:10:49.480 forward looking based on the lack of availability of talent 0:10:49.720 --> 0:10:52.800 in the market. So we continue to see those shifts 0:10:52.840 --> 0:10:55.240 based on a lot of different nuances. 0:10:55.480 --> 0:10:57.760 You know, that's interesting because one of the things that 0:10:58.200 --> 0:11:00.800 came out in this jobs report was that leisure and 0:11:00.840 --> 0:11:06.560 hospitality are still significantly below pre pandemic levels. Does the 0:11:06.760 --> 0:11:10.560 enthusiasm you're hearing from executives, from hiring managers at the 0:11:10.600 --> 0:11:13.679 moment suggest that will change anytime soon. 0:11:15.000 --> 0:11:17.520 I think they just have such a faraway to go, 0:11:17.600 --> 0:11:20.640 and the gap was so wide in their def sit 0:11:20.800 --> 0:11:23.600 it's taking them longer to crawl out of it than 0:11:23.600 --> 0:11:26.880 they expected. So we continue to see momentum. We continue 0:11:26.880 --> 0:11:29.960 to see the hospitality and leisure sector try and do 0:11:30.040 --> 0:11:33.640 everything they can to really attract those workers and not 0:11:33.679 --> 0:11:36.920 only attract them, but also retain them. You know, not 0:11:37.040 --> 0:11:40.240 only in hospitality, but specifically in manufacturing and some of 0:11:40.240 --> 0:11:44.280 our other employers. We're seeing this huge trend on bringing 0:11:44.320 --> 0:11:47.320 back retirees. And the great thing about that is we're 0:11:47.320 --> 0:11:50.160 also seeing the appetite from those that have retired to 0:11:50.200 --> 0:11:53.240 return from the workforce. In fact, we're seeing about one 0:11:53.280 --> 0:11:57.319 in every six retirees are looking to return to the workforce. 0:11:57.840 --> 0:12:01.040 Part of that due to a little bit of economic uncertainty, 0:12:01.200 --> 0:12:05.320 so employers are really leveraging and capitalizing on that as 0:12:05.360 --> 0:12:06.840 an opportunity to fill this gap. 0:12:07.679 --> 0:12:08.280 So bring that. 0:12:08.240 --> 0:12:10.960 Down kind of sector wise here in a previous segment, 0:12:10.960 --> 0:12:14.400 we were talking about perhaps some of the sustainability in 0:12:14.440 --> 0:12:17.920 the tech sector. For example, when we're talking about these 0:12:18.120 --> 0:12:23.480 kind of labor market qualities, is it equal among all sectors. 0:12:23.480 --> 0:12:26.760 Definitely not. So when you look at like the manufacturing sector, 0:12:27.040 --> 0:12:31.280 retirees are a perfect opportunity. They've got the skills needed 0:12:31.320 --> 0:12:35.040 to keep production moving and high productivity output less of 0:12:35.040 --> 0:12:37.720 a training time. And that's an industry where we're seeing 0:12:37.720 --> 0:12:42.120 this huge skills gap. So that's a different problem than 0:12:42.120 --> 0:12:44.160 what we see in the tech sector. What we're seeing 0:12:44.160 --> 0:12:47.360 in the tech sector today is that although you know, 0:12:47.520 --> 0:12:50.200 we've heard about layoffs from massive employers and we keep 0:12:50.240 --> 0:12:53.880 continuing to see challenges there, we are seeing that folks 0:12:53.920 --> 0:12:56.960 that have lost their job are finding a new one 0:12:57.679 --> 0:12:59.920 very quickly. So I think there are a lot of 0:13:00.080 --> 0:13:04.120 different factors each industry is having to battle when it 0:13:04.160 --> 0:13:07.160 comes to their talent strategy. 0:13:07.240 --> 0:13:09.440 You know, this is that's interesting that you say that 0:13:09.480 --> 0:13:11.760 because an earlier guest on this program was talking as 0:13:11.840 --> 0:13:14.520 well about how some of these folks laid off from 0:13:14.559 --> 0:13:19.000 tech companies are it gets diverse in their skill sets 0:13:19.040 --> 0:13:21.439 and able to go out there and find Yeah, talk 0:13:21.440 --> 0:13:22.120 to me more about that. 0:13:22.160 --> 0:13:24.120 We have just about a minute left. 0:13:25.040 --> 0:13:27.600 Yeah, So I think there's a big difference between an 0:13:27.720 --> 0:13:31.680 industry and a skill set and occupation. So although the 0:13:31.760 --> 0:13:35.079 tech sector is an industry maybe declining, those skill sets 0:13:35.120 --> 0:13:38.760 are in hot demand across all industries. So the need 0:13:38.920 --> 0:13:42.680 for technology professionals exist in those that are still growing, 0:13:43.000 --> 0:13:46.079 so in the hospitality sector and the healthcare sector, they 0:13:46.200 --> 0:13:49.680 still need those unique skill sets that happen to lie 0:13:49.880 --> 0:13:53.640 over in the technology sector. So they're capitalizing on that 0:13:53.760 --> 0:13:56.920 as well, which is partially what makes it great news 0:13:57.240 --> 0:13:59.320 for those that have faced some you know, some hard 0:13:59.320 --> 0:14:00.720 times with recently. 0:14:01.000 --> 0:14:02.800 Yeah, certainly something we're gonna be keeping an eye on 0:14:03.000 --> 0:14:04.160 very very closely. 0:14:04.280 --> 0:14:07.679 Amy Glacier, Senior VP over at a deco. We thank you. 0:14:07.679 --> 0:14:10.800 You're listening to the tape canser our live program, Bloomberg 0:14:10.840 --> 0:14:14.440 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:14:14.480 --> 0:14:17.720 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:14:17.760 --> 0:14:20.600 You can also listen live on Amazon Alexa from our 0:14:20.600 --> 0:14:25.640 flagship New York station, Just say Alexa play Bloomberg eleven thirty. 0:14:26.840 --> 0:14:28.880 I think everyone's really really psyched for this weekend, at 0:14:28.920 --> 0:14:32.280 least the equity market certainly, certainly is. And a lot 0:14:32.320 --> 0:14:37.000 to digest there, Maddy from the payrolls. As John had mentioned, 0:14:37.040 --> 0:14:40.200 you've got the Chinese stimulus, you've got some good earnings, 0:14:40.400 --> 0:14:43.120 some bad earnings, a little bit of a mixed pot there. 0:14:43.400 --> 0:14:45.800 Yeah, and I'm so glad pretty that you flagged the 0:14:45.920 --> 0:14:48.200 China story to me. I was reading in a little 0:14:48.200 --> 0:14:50.480 bit this morning, and I was confused about why we 0:14:50.480 --> 0:14:52.960 were seeing green on the screen. But to your point, 0:14:52.960 --> 0:14:54.440 the China stimulus, that's a big deal. 0:14:54.520 --> 0:14:55.960 Yeah. I mean, look, I think the stock market and 0:14:55.960 --> 0:14:57.760 the bond market are responding to two different things. Again, 0:14:57.760 --> 0:14:59.480 this is just my theory. We'll ask the experts here 0:14:59.480 --> 0:15:03.680 in in a second. But to me, look, we didn't 0:15:03.720 --> 0:15:06.760 have a ton of pre market action. Even as early 0:15:06.760 --> 0:15:09.560 as five am, we had, you know, stocks only a 0:15:09.600 --> 0:15:12.000 future tire by like two tens of one percent. Certainly 0:15:12.000 --> 0:15:14.160 we're not seeing the rally that you are seeing right now, 0:15:14.320 --> 0:15:15.640 and I think a lot of it does have to 0:15:15.680 --> 0:15:18.760 do with the Chinese stimulu story. Because again I'm gonna 0:15:18.800 --> 0:15:21.280 nerd out. Bear with me, Ben Emmons, he's gonna join 0:15:21.320 --> 0:15:24.280 us in just a second. But you know, fifteen years ago, 0:15:24.320 --> 0:15:26.520 when we were getting out of the global financial crisis, 0:15:26.720 --> 0:15:29.280 infrastructure investment from China was a really big story, and 0:15:29.640 --> 0:15:32.200 Chinese growth has been a big concern when you look 0:15:32.200 --> 0:15:34.600 at kind of the day to day trading outside of 0:15:34.600 --> 0:15:37.160 the debt ceiling saga. So let's get some expertise and 0:15:37.200 --> 0:15:40.000 see if my theory is right here. Ben Emmons joins us. 0:15:40.160 --> 0:15:42.480 He is the head of fixed income over at New 0:15:42.600 --> 0:15:45.800 Edge Wealth. Ben, talk to us a little bit about 0:15:45.880 --> 0:15:48.760 the read through of China. Is the read through of 0:15:48.840 --> 0:15:52.600 twenty twenty three the same as it was fifteen years ago. 0:15:55.080 --> 0:15:58.560 It's it's clearly different, you know, because you do have 0:15:58.640 --> 0:16:01.480 an open and debted properly sector and that is a 0:16:01.560 --> 0:16:04.840 drag on the Chinese economy. So as much as you 0:16:05.320 --> 0:16:08.760 have sawt as a V shaped recovery from the reopening, 0:16:08.880 --> 0:16:11.160 which is similar as we saw here in the US 0:16:11.200 --> 0:16:15.160 and in Europe. The subsequent cooling of that through the 0:16:15.200 --> 0:16:19.880 manufacturing sectors then really dragged down further by this property sector. 0:16:20.000 --> 0:16:22.760 And I think the stimulus measures that you're seeing overnight 0:16:22.840 --> 0:16:26.400 coming out are really addressing the property sector from not 0:16:26.520 --> 0:16:29.480 being too big of a drag on that reopening momentum. 0:16:29.800 --> 0:16:32.320 And so China has that ability right to very quickly 0:16:32.360 --> 0:16:36.000 inject liquidity into the system and in fact the economy 0:16:36.440 --> 0:16:40.920 almost instantly YPMI data in China if it goes blow fifty, 0:16:41.000 --> 0:16:43.280 I think it's not always an alarming thing because China 0:16:43.280 --> 0:16:46.080 could just boosts that in a moment. But at the 0:16:46.080 --> 0:16:48.880 same time, there are structural issues in China that are 0:16:49.160 --> 0:16:52.080 just like we have pose financial crisis, you gent into 0:16:52.120 --> 0:16:54.560 some sort of a new normal idea too in China, 0:16:54.760 --> 0:16:56.880 so it will be with us. But I think this 0:16:57.560 --> 0:17:01.240 stimulus story overnight is at least assigned that China wants 0:17:01.320 --> 0:17:04.760 to have this reopening continue to be having momentum and 0:17:04.920 --> 0:17:06.800 trying to reach their growth target for this year, which 0:17:06.840 --> 0:17:08.119 they said at five and a half percent. 0:17:08.840 --> 0:17:11.920 Ben is it a recognition from China that the reopening 0:17:11.960 --> 0:17:16.080 has not been as bullish, for lack of a better word, 0:17:16.320 --> 0:17:18.600 as we initially anticipated. 0:17:20.280 --> 0:17:23.000 It could be medicined, But I think if you look 0:17:23.040 --> 0:17:27.160 at the granular data of that, you know leisure activity 0:17:27.200 --> 0:17:30.119 in China has moved just as sharply up as as 0:17:30.200 --> 0:17:32.800 we had here in the initial stages of the reopening. 0:17:33.600 --> 0:17:37.240 Lots of mobility is happening. To this data out from 0:17:37.240 --> 0:17:40.160 Goldman Saxon that they're seeing a lot of outbound flights 0:17:40.200 --> 0:17:42.680 coming out of China. So I do think that the 0:17:43.119 --> 0:17:46.040 momentum is there. I think what China deed doesn't want 0:17:46.119 --> 0:17:49.720 is that that starts to falter driven by structural factors. 0:17:49.720 --> 0:17:53.600 So think to that sends, You're right about that China's 0:17:53.640 --> 0:17:57.800 addressing this head on. Now, will we get this resurgence 0:17:57.840 --> 0:18:00.199 and all this demand coming out to people are so 0:18:00.240 --> 0:18:03.120 anticipating this entire yet us to be seen China as 0:18:03.160 --> 0:18:05.879 also to an extent, like I said, the tactical with 0:18:06.000 --> 0:18:08.600 its measures right, it wants to address the economy but 0:18:08.720 --> 0:18:12.040 not potentially overheated. So I think we have to keep 0:18:12.080 --> 0:18:12.560 that in mind. 0:18:13.440 --> 0:18:13.640 Ben. 0:18:13.720 --> 0:18:16.480 Let's come back to the story Stateside here, which is 0:18:16.480 --> 0:18:19.440 this payrolls report three hundred and thirty nine thousand relative 0:18:19.480 --> 0:18:21.960 to a one hundred and ninety five thousand estimate a 0:18:22.160 --> 0:18:25.879 blowout perils report for I think the fourteenth time in 0:18:25.960 --> 0:18:28.880 a row. Ben, let's talk about this bond market. Read 0:18:28.920 --> 0:18:31.560 through the two year yield at four forty let's four 0:18:31.600 --> 0:18:34.520 forty seven, a move of twelve basis points higher. How 0:18:34.640 --> 0:18:36.800 high does a two year yield go? 0:18:38.640 --> 0:18:41.720 It could go a bit higher because my view, you know, 0:18:41.920 --> 0:18:45.800 this report just underscores one the economy obviously is not 0:18:45.840 --> 0:18:49.920 in a recession. And although I second the work by 0:18:49.920 --> 0:18:52.920 Ana Wong and then her team on the state level 0:18:52.960 --> 0:18:55.119 announces that they've done and I was actually talking to 0:18:55.160 --> 0:18:59.200 her right before the program it created as some parts 0:18:59.240 --> 0:19:01.280 of the country that are or sluggish or may have 0:19:01.480 --> 0:19:04.080 for session, the job support doesn't show it, and it 0:19:04.119 --> 0:19:08.520 comes again from similar sources. Our leisure sector continues to expand, 0:19:09.160 --> 0:19:12.880 constructions expanded, which maybe pointing to the Infatial Reduction Act. 0:19:13.280 --> 0:19:16.480 So there is this torque underneath the economy that actually 0:19:16.480 --> 0:19:18.840 should lead you to somewhat higher yields. Again, so the 0:19:18.920 --> 0:19:22.119 two year as the sort of the forward looking yield 0:19:22.160 --> 0:19:25.440 for fat policy should be closer to where the fat 0:19:25.440 --> 0:19:28.960 funds rate actually is. And that's a long way from 0:19:28.960 --> 0:19:32.200 here though, so but that's not entirely impossible. So I say, 0:19:33.080 --> 0:19:36.359 still think of a higher rate environment from here, given 0:19:36.400 --> 0:19:37.440