WEBVTT - July Jobs Report 0:00:00.040 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.800 --> 0:00:17.880 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.960 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.320 --> 0:00:25.640 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.160 us live on YouTube. 0:00:27.560 --> 0:00:31.120 People were like, who is Claudius Sam? Like who is she? 0:00:31.520 --> 0:00:35.280 Who is that one? Dennison University was some time in 0:00:35.360 --> 0:00:39.360 Dresden and then the clouds parted? What was it like 0:00:39.440 --> 0:00:42.880 Claudia Sam in two thousand and one to walk into 0:00:42.920 --> 0:00:48.400 the inflation and nalysh Combine at Michigan of Shapiro and Kimball. 0:00:48.680 --> 0:00:50.800 They were at the top of their game at that time, 0:00:50.880 --> 0:00:53.159 weren't they. 0:00:53.280 --> 0:00:55.440 It was really great to be a student at Michigan. 0:00:55.480 --> 0:00:57.960 It was great to have Matthews my advisor. Miles was 0:00:58.000 --> 0:01:01.040 on my committee. That really was a great education in 0:01:01.520 --> 0:01:04.960 macro and for academics. They're really interested in the real 0:01:05.000 --> 0:01:07.840 world exactly, micro policies exactly. 0:01:07.840 --> 0:01:09.600 You knew right where I wanted to go. These were 0:01:09.720 --> 0:01:14.880 real world academics trying to study real world people off 0:01:14.880 --> 0:01:19.400 this jobs report. You say, the newly minted chairman way 0:01:19.480 --> 0:01:24.840 different than Claudia Sam needs to listen to normal people discuss. 0:01:25.840 --> 0:01:26.200 Right well. 0:01:26.240 --> 0:01:29.200 Also part of my education at Michigan, even doing macro, 0:01:29.480 --> 0:01:31.000 was you know, if the data aren't there, you need 0:01:31.200 --> 0:01:34.360 go collect some data, run surveys, design survey. I mean 0:01:34.400 --> 0:01:36.399 that's a big part of my education and my research. 0:01:36.680 --> 0:01:38.720 And I think one thing that the FED has is 0:01:38.760 --> 0:01:43.480 just a wealth of qualitative data talking to business leaders, 0:01:43.560 --> 0:01:47.680 talking to people workers, and putting together in terms of analysis. 0:01:47.720 --> 0:01:49.360 We spend a lot of times on the arrogant numbers. 0:01:49.360 --> 0:01:50.880 We're going to do that here in just a few minutes, 0:01:50.920 --> 0:01:54.400 and it is super important, but those kind of more qualitative, 0:01:54.520 --> 0:01:57.240 the structured interviews, it can help you get a sense 0:01:57.400 --> 0:01:59.920 of the mechanisms, a sense of what's you know how 0:02:00.000 --> 0:02:03.400 happening beneath the numbers, and you know these that voice 0:02:03.400 --> 0:02:05.720 that those voices are missing on the task forces. There's 0:02:05.760 --> 0:02:09.760 no FED lessons like less framework reviews, and but the 0:02:10.200 --> 0:02:12.679 information is there. So my Bloomberg opinion piece this week 0:02:12.760 --> 0:02:14.799 kind of showcased a lot of that kind of data 0:02:14.840 --> 0:02:16.640 the FED does collect and also showed how it can 0:02:16.680 --> 0:02:19.720 really help inform what are we thinking about the economy. 0:02:20.280 --> 0:02:22.440 Claudia, we have perils In three minutes from now. But 0:02:22.480 --> 0:02:23.919 you know, I just have to bring this up. You 0:02:24.240 --> 0:02:27.840 highlighted the Fed's worker Perspective report, as you know, workers 0:02:27.840 --> 0:02:31.040 describing their work lives at survival rather than stable. You know, 0:02:31.120 --> 0:02:33.680 So does that mean that today's report is a nothing 0:02:33.680 --> 0:02:35.320 burger and we should be looking through the next week's 0:02:35.320 --> 0:02:36.000 inflation plant? 0:02:36.080 --> 0:02:37.840 I mean, is that kind of what matters most? 0:02:37.840 --> 0:02:38.040 Here? 0:02:39.360 --> 0:02:42.320 To the data we get today are important. Whatever they 0:02:42.360 --> 0:02:44.040 tell us, there's going to be some lessons for us. 0:02:44.080 --> 0:02:45.520 The thing that I was really trying to draw out 0:02:45.560 --> 0:02:47.440 with the worker perspective is we're going to talk a 0:02:47.440 --> 0:02:50.200 lot about you know, the labor market looks pretty stable 0:02:50.320 --> 0:02:52.359 or it's balanced, and I think with the aggregate data 0:02:52.360 --> 0:02:54.400 we might get some surprises. But in general that's been 0:02:54.440 --> 0:02:58.320 a good description of it. But stable doesn't always feel 0:02:58.360 --> 0:03:01.040 good in a lived experience because stable can mean yeah, 0:03:01.080 --> 0:03:03.440 you got a job, you're thankful for that, but you 0:03:03.480 --> 0:03:05.359 need a better job out there right now. 0:03:05.360 --> 0:03:07.720 So what Damien brought up in what you're mentioning right now, 0:03:07.800 --> 0:03:12.440 I can't emphasize enough, folks. That's what my touch with 0:03:12.560 --> 0:03:17.160 people is, emails, anecdotes, people in restaurants. There's a whole 0:03:17.240 --> 0:03:21.680 part of America out there struggling Claudia paycheck to paycheck? 0:03:22.080 --> 0:03:23.120 Does the FED know that? 0:03:25.320 --> 0:03:27.440 I think the reserve bank presidents are a lot more 0:03:27.480 --> 0:03:29.960 in touch with this very much. A part of their 0:03:30.080 --> 0:03:33.679 day job is out in their districts, and the community 0:03:33.720 --> 0:03:36.600 development function out in the reserve banks is really strong. 0:03:36.600 --> 0:03:38.400 They're the ones that collect the Beige Book. They do 0:03:38.480 --> 0:03:41.120 a lot. Now network is being done at the board too, 0:03:41.200 --> 0:03:43.040 and I don't want to discount what they're doing, but 0:03:43.080 --> 0:03:46.400 it's so in the fiber of what the reserve banks 0:03:46.440 --> 0:03:48.280 are doing, and so then I think it makes a 0:03:48.280 --> 0:03:51.200 lot of sense. It's not surprising that we're hearing some 0:03:52.080 --> 0:03:54.440 of the descents, some of the distinctive voices coming out 0:03:54.480 --> 0:03:57.600 of the reserve banks because they really are at the 0:03:57.640 --> 0:03:58.760 pulse of what's going on. 0:03:58.840 --> 0:04:01.480 We're going to pick up this theme here with Claudia Sam. 0:04:01.560 --> 0:04:04.080 We are just so honored that she attends to us 0:04:04.120 --> 0:04:08.160 at eight thirty each and every jobs Day, Dot sm 0:04:08.240 --> 0:04:10.840 with us, and then Constant Hunter will join us in Christina. 0:04:11.240 --> 0:04:14.960 Campmeny as well will be with us here. We're commercial 0:04:14.960 --> 0:04:20.200 free across America for this next half hour. On the 0:04:20.320 --> 0:04:22.960 data front, it is a continued lift to the equity 0:04:23.040 --> 0:04:26.440 markets and the vix's I said finally broke down yesterday 0:04:26.640 --> 0:04:31.200 sixteen seventeen. For days closing up to fifteen level. We 0:04:31.279 --> 0:04:33.880 may get to a fourteen year with any kind of 0:04:33.880 --> 0:04:37.080 green on the screen. That's a bullmarket. Fifteen point one 0:04:37.080 --> 0:04:40.720 point three right now on the VICS, I really need 0:04:40.760 --> 0:04:44.520 to mention Brand eighty two twenty nine full circle in 0:04:44.560 --> 0:04:49.120 the quiet of the Eastern Mediterranean. For America, it is 0:04:49.279 --> 0:05:02.480 Job's Day. 0:04:56.240 --> 0:04:59.400 And the July jobs report crossing the Bloomberg terminal right now, 0:04:59.440 --> 0:05:02.480 and it shows is that the US economy actually lost 0:05:02.640 --> 0:05:06.880 twenty three thousand jobs in the month of July. This 0:05:07.040 --> 0:05:09.560 is a lot less than the eighty thousand we were 0:05:09.600 --> 0:05:13.039 expecting to be added. We added fifty seven thousand in 0:05:13.120 --> 0:05:15.359 the month of June. Moving to the unemployment rate, it 0:05:15.400 --> 0:05:18.359 dipped to four point one percent versus the prior month's 0:05:18.360 --> 0:05:21.600 four point two percent. The expectation was for four point 0:05:21.640 --> 0:05:24.800 two percent. Labor force participation rate coming in at sixty 0:05:24.800 --> 0:05:28.080 one point four percent the month before it was sixty 0:05:28.080 --> 0:05:30.320 one and a half percent, and that's a bit lower 0:05:30.560 --> 0:05:33.520 than the expectation. Want to move over to the wage 0:05:33.560 --> 0:05:37.480 component here, which provides more clues on inflation. Average hourly 0:05:37.520 --> 0:05:40.280 earnings a month over month up just a tenth of 0:05:40.320 --> 0:05:43.280 a percent, a scant tenth of a percent. Average hourly 0:05:43.320 --> 0:05:46.479 earnings year over year up three point two percent. The 0:05:46.560 --> 0:05:49.160 expectation was for three and a half percent, So again 0:05:49.200 --> 0:05:53.440 a big surprise to the downside, the economy losing twenty 0:05:53.480 --> 0:05:56.080 three thousand jobs of the month of July. The expectation 0:05:56.240 --> 0:05:59.480 was for an addition of eighty thousand. Want to take 0:05:59.480 --> 0:06:01.560 a quick look at how the market is reacting here 0:06:01.839 --> 0:06:04.680 looks like futures, guys, at least for the moment, hanging 0:06:04.720 --> 0:06:06.120 on to those earlier games. 0:06:06.240 --> 0:06:09.120 Back over to you, a alexis, thank you so much. 0:06:09.160 --> 0:06:12.239 The markets movie as you can imagine, equities lift here, 0:06:12.720 --> 0:06:15.200 thinking free money will be out there in a lower 0:06:15.279 --> 0:06:19.039 rate environment. The yield space is the most elastic, and 0:06:19.080 --> 0:06:21.480 you see it in the two year yield in a 0:06:21.600 --> 0:06:25.560 solid nine basis points four point one six percent, basically 0:06:25.600 --> 0:06:29.320 halfway back to that coveted three point ninety nine thirty 0:06:29.400 --> 0:06:31.520 year bond. Doesn't come in as much as you'd expect, 0:06:31.600 --> 0:06:35.239 but nevertheless from a five point twenty two into five 0:06:35.320 --> 0:06:37.960 point one to nine percent. Damien your thoughts on the 0:06:38.000 --> 0:06:40.919 set of numbers here, the revisions. 0:06:40.440 --> 0:06:43.039 Extraordinary, Yeah, yeah, no, I mean exactly. We have a 0:06:43.080 --> 0:06:46.000 revised down for the last print of twenty thousand from 0:06:46.000 --> 0:06:48.440 fifty seven, and this negative twenty three print. You would 0:06:48.440 --> 0:06:51.520 think we'll get some people's attention. But to let's see 0:06:51.560 --> 0:06:53.080 this point, it looks like equities are kind of looking 0:06:53.080 --> 0:06:54.880 through it for the minute. And I don't want to 0:06:54.920 --> 0:06:57.280 call this a nothing burger by any stretch. I mean, Klaudia, 0:06:57.600 --> 0:06:59.200 I mean you know that this this I wonder if 0:06:59.240 --> 0:07:00.000 it's going to move markets. 0:07:00.320 --> 0:07:03.000 We'll have to see her, Claudia Summer, letting her digest 0:07:03.000 --> 0:07:05.480 the data here a little bit. I do want to 0:07:06.160 --> 0:07:09.320 with the ECO screen that we have at Bloomberg. The 0:07:09.440 --> 0:07:13.880 change in non firm payrolls was negative twenty three versus 0:07:13.880 --> 0:07:17.600 a survey of eighty some people were there, but the 0:07:17.720 --> 0:07:21.240 two month payroll adjustment and negative one to OZHO three, 0:07:21.280 --> 0:07:25.840 that's combined negative one hundred twenty six. I think we've 0:07:25.840 --> 0:07:30.000 given her enough time. Claudia sum joins us here to 0:07:30.120 --> 0:07:35.119 provide perspective. Claudia, this must change the debate at the FED. 0:07:36.680 --> 0:07:39.960 So first, does this remind you of anything? I mean 0:07:40.520 --> 0:07:43.960 a year ago, exactly, this employment report was when we 0:07:44.040 --> 0:07:47.440 had the very large downward revision, the downside surprise, the 0:07:47.440 --> 0:07:51.920 downward revisions, and the BLS commissioner lost her job. Right, 0:07:52.000 --> 0:07:54.280 So now just looking quickly and I can't, you know, 0:07:54.360 --> 0:07:57.800 do all the details of this government education. Government education 0:07:57.960 --> 0:08:00.160 was a big decline and one of the things that 0:08:00.200 --> 0:08:02.320 happens in the summer. It can be really tough with 0:08:02.360 --> 0:08:05.600 like the school calendars, and if things slip a little 0:08:05.640 --> 0:08:08.360 bit with the seasonal adjustment, you can get some kind 0:08:08.360 --> 0:08:12.360 of squirrely numbers in terms of the education. That certainly 0:08:12.400 --> 0:08:15.040 is at play for the downside miss today. That was 0:08:15.080 --> 0:08:17.880 something that was very clear in last year's numbers as well, 0:08:18.200 --> 0:08:20.560 So I don't want to, you know, dismiss this. And 0:08:20.600 --> 0:08:22.960 of course that was a shift from we'd had a 0:08:23.000 --> 0:08:25.680 strong labor market to like, whoa, maybe it's not so strong. 0:08:25.960 --> 0:08:28.160 So I do think there is signal here. There's probably 0:08:28.240 --> 0:08:30.560 a fair bit of noise and some seasonal issues that'll 0:08:30.560 --> 0:08:33.559 look through. The unemployment rate did tick down, right. I 0:08:33.640 --> 0:08:35.800 think the one thing that for the FED that maybe 0:08:35.840 --> 0:08:38.040 of most interest is wages coming in soft. 0:08:38.720 --> 0:08:42.800 I'm getting out my HP twelve C calculator because Constance Hunter, 0:08:42.840 --> 0:08:46.199 I wouldn't do this for Claudia. The constance hunter jumped in, 0:08:46.240 --> 0:08:48.520 here's we can we do this in the control? Can 0:08:48.559 --> 0:08:52.360 we rip up the script and have Claudia and constants together? 0:08:53.120 --> 0:08:54.600 Is that? Did you check with their people? 0:08:54.880 --> 0:08:56.640 Yes, and they say it's okay. 0:08:56.800 --> 0:08:59.600 Concerts under getting wired up right now, getting folks futures 0:08:59.640 --> 0:09:03.560 up there too. The advanced Nasdaq lifts double up eight 0:09:03.640 --> 0:09:06.200 tenths of a percent here, and the yield again, the 0:09:06.240 --> 0:09:08.400 two year yield is the most elastic in it of 0:09:08.520 --> 0:09:12.400 four point one six percent. Damian ask a smart question 0:09:12.520 --> 0:09:15.200 to doctor some Well, I figure out the three months 0:09:15.320 --> 0:09:18.199 moving average on my HP twelve C. 0:09:18.520 --> 0:09:20.880 Well, doctor Salm, I mean average hourly earning is down 0:09:21.040 --> 0:09:23.360 zero point one percent month over month. I mean, you 0:09:23.360 --> 0:09:25.520 know you mentioned the Beige Book before the break, right, 0:09:25.640 --> 0:09:27.480 and you know what did the Beige Book show us? 0:09:27.480 --> 0:09:30.360 The consumers are adjusting by taking on more debt, buying less, 0:09:30.360 --> 0:09:33.960 but shopping more frequently, trading down to cheaper alternatives. Is 0:09:34.000 --> 0:09:35.800 this really wearing on them now? I mean, what does 0:09:35.840 --> 0:09:36.920 this all mean for the consumer? 0:09:38.400 --> 0:09:40.920 So certainly on the consumer side, this this is not 0:09:41.080 --> 0:09:43.199 good news. I mean, paychecks are such a key driver 0:09:43.480 --> 0:09:45.800 of consumers, but I'm not the only driver, but this 0:09:45.800 --> 0:09:48.800 this is a soft, soft reading. I think the one 0:09:48.880 --> 0:09:51.600 where you know, the implications maybe come out the strongest. 0:09:51.600 --> 0:09:54.080 For this is on the FED side, you know, the 0:09:54.120 --> 0:09:56.520 thing that would get the Fed moving towards rate hikes 0:09:56.600 --> 0:09:59.920 the fastest. Where if there was any sign of overheated 0:10:00.679 --> 0:10:04.840 in the labor market, this is exactly the opposite of overheating. 0:10:04.880 --> 0:10:07.640 We hadn't seen wage growth really picking up, but we 0:10:07.720 --> 0:10:09.800 really hadn't seen it slowing down much. And so this 0:10:10.000 --> 0:10:14.600 really takes like the labor market isn't pushing up inflation, 0:10:14.720 --> 0:10:17.880 and frankly, if it softens it it might help hold 0:10:17.920 --> 0:10:18.960 down some of that inflation. 0:10:19.200 --> 0:10:22.360 We are so advantaged. Claudia Somnu's Century Advisors and joining 0:10:22.440 --> 0:10:25.800 us now Constance Hunter chief Economists EIU. The two of 0:10:25.880 --> 0:10:29.200 them together commercial free across America in this half hour 0:10:29.520 --> 0:10:33.200 on yield. Christina cat Menu of Investco will join us 0:10:33.240 --> 0:10:36.240 here and a Constants Hunter. You're over there working on 0:10:36.280 --> 0:10:39.040 the terminal looking at the numbers. I got a ninety 0:10:39.160 --> 0:10:42.720 day average, a three months moving average subject to revision 0:10:43.160 --> 0:10:47.200 of twenty thousand per month on jobs. You can give 0:10:47.200 --> 0:10:51.720 me all your academics, Claudia samac I don't care politically 0:10:51.840 --> 0:10:55.840 in America in defense of the president. That's an unacceptable 0:10:55.840 --> 0:10:59.760 statistic for America to see it three months moving average 0:10:59.800 --> 0:11:03.320 of twenty thousand jobs per month. It doesn't get it done. 0:11:04.240 --> 0:11:06.840 Well, we don't think it gets it done. I'm gonna 0:11:06.840 --> 0:11:07.680 take off my headphones. 0:11:08.040 --> 0:11:10.040 Please please take it. 0:11:10.080 --> 0:11:14.000 I'm echoing in there. Put them back on to here, Claudia. 0:11:14.400 --> 0:11:17.840 But in any case, you know last year when we 0:11:18.520 --> 0:11:21.080 had changes to immigration, when we were deporting a number 0:11:21.080 --> 0:11:25.520 of people, there was widespread spread speculation that actually the 0:11:25.559 --> 0:11:30.800 monthly requirement had fallen. This year, what we saw with jobs, 0:11:30.920 --> 0:11:34.600 with payroll numbers increasing monthly, but the unemployment really not 0:11:34.720 --> 0:11:35.880 coming down significantly. 0:11:36.000 --> 0:11:38.040 Is that well, maybe it's higher this year. 0:11:38.559 --> 0:11:41.719 This twenty thousand over the last three months, and then 0:11:41.800 --> 0:11:45.000 that fall in the the unemployment rate that is not 0:11:45.440 --> 0:11:47.920 That is not a good look for the president. You're right, 0:11:48.240 --> 0:11:51.200 and it bolsters his case to cut rates. He's going 0:11:51.240 --> 0:11:53.880 to keep beating that drum. I think this bolster is 0:11:53.920 --> 0:11:57.160 our call for a hold. This is this is definitely 0:11:57.720 --> 0:11:58.760 a warrants a hold. 0:11:59.040 --> 0:12:02.400 Claudia, does does this study that we're seeing right now, 0:12:02.880 --> 0:12:06.439 can government officials in the fed get out front, or 0:12:06.440 --> 0:12:10.600 are they colossally ex post where they just have to 0:12:10.679 --> 0:12:14.960 wait for the data before they go flat or cut rates. 0:12:17.400 --> 0:12:20.080 So, I mean policymakers never have a full picture of 0:12:20.120 --> 0:12:22.199 the economy when they make a decision. It just it 0:12:22.520 --> 0:12:24.520 takes too long. And there's always always want one more 0:12:24.520 --> 0:12:27.000 piece of data, one more piece of information. But when 0:12:27.040 --> 0:12:29.319 you have enough questions or you have enough tension, that 0:12:29.320 --> 0:12:31.720 can that certainly can be you know, a reason to 0:12:32.080 --> 0:12:35.079 move a little more slowly until you get a decisive signal. 0:12:35.440 --> 0:12:37.400 I mean, I don't I don't think today's data are 0:12:37.480 --> 0:12:40.360 decisive and in reshaping that we've had a largely balanced 0:12:40.400 --> 0:12:42.640 labor market so far this year, but they raise some 0:12:42.760 --> 0:12:45.520 concerns and we'll, you know, get more on inflation. We'll 0:12:45.559 --> 0:12:48.920 see if the dissiplation is sticking or not. So you 0:12:48.960 --> 0:12:50.720 get what you have and you have to make a decision. 0:12:51.600 --> 0:12:54.720 Did that she did? She's such a problem. Today's data 0:12:54.920 --> 0:12:58.520 wasn't decisive. Is there ever an economist who's ever said 0:12:58.760 --> 0:13:02.680 that today's data is the Damien Sasauwer with constants Hunter 0:13:02.920 --> 0:13:04.360 and Claudius Constants. 0:13:04.360 --> 0:13:06.040 I mean, I'm just looking at so for futures here, 0:13:06.120 --> 0:13:07.719 I mean, I see whites up a tick to a 0:13:07.760 --> 0:13:09.240 tick and a half, Reds are up two and a half, 0:13:09.320 --> 0:13:11.719 three ticks. I mean, so you know, obviously what we're 0:13:11.720 --> 0:13:14.200 seeing here yields down, price up? And is that the 0:13:14.280 --> 0:13:16.920 right you know? Is that the right reaction to this? 0:13:17.000 --> 0:13:19.200 And just how much do you think the market's going 0:13:19.240 --> 0:13:21.760 to rush to price September out of the equation? Is 0:13:21.760 --> 0:13:22.800 that what we're looking at here? 0:13:23.080 --> 0:13:25.760 I think the market will begin to price September out 0:13:25.760 --> 0:13:27.720 of the equation. I think Claudia is right time. I 0:13:27.760 --> 0:13:29.480 was almost going to say, you never look at just 0:13:29.520 --> 0:13:32.080 one number, and of course you don't, but you preface 0:13:32.120 --> 0:13:34.280 your question on the three month moving average, right, And 0:13:34.320 --> 0:13:37.959 I think that's what we're talking about here. One piece 0:13:38.000 --> 0:13:41.720 of concern, right is you saw the unemployment rate fall on. 0:13:41.760 --> 0:13:43.840 For bad reasons, not good reasons. 0:13:44.280 --> 0:13:47.079 Participation felt, people funk exams. 0:13:47.160 --> 0:13:50.000 Who would that be, folks? Because of that? Where the 0:13:50.120 --> 0:13:54.079 unemployment rates goes down for bad reasons discuss doctor Hunter. 0:13:54.600 --> 0:13:57.880 Well, certainly, if you see that participation rate decline, it's 0:13:57.920 --> 0:14:01.160 only one tenth, but it's an off that we saw 0:14:01.240 --> 0:14:04.599 this load growth of jobs and we saw the unemployment 0:14:04.640 --> 0:14:05.080 rate fall. 0:14:05.360 --> 0:14:08.560 It suggests to you that either there's low supply. 0:14:09.840 --> 0:14:13.600 Along with load demand that is not a robust labor 0:14:13.640 --> 0:14:17.120 market situation. And you know, I was looking before I 0:14:17.160 --> 0:14:20.040 came on last night. I was I got buried in 0:14:20.480 --> 0:14:23.760 data as I as I sometimes do. And if you 0:14:23.800 --> 0:14:28.320 look at the FEDS Financial Conditions Index, it suggests it 0:14:28.440 --> 0:14:31.040 suggests that we have tailwinds. Now those tailwinds are diminishing, 0:14:31.040 --> 0:14:35.040 but it suggests that monetary policy is loose here. And 0:14:35.120 --> 0:14:37.640 if we have loose monetary policy and a budget deficit 0:14:37.680 --> 0:14:39.880 of six percent and this is the best we can do, 0:14:40.320 --> 0:14:44.440 I think it begs asking some questions about the underlying economy. 0:14:44.560 --> 0:14:47.440 Yeah, I mean, look, Constance, and the equity market agrees 0:14:47.480 --> 0:14:49.480 with you. I mean it is rallying here. I mean 0:14:49.520 --> 0:14:51.520 they see exactly what you see. This is an excuse 0:14:51.560 --> 0:14:54.160 for them to price out rate hikes, to basically get dubvish. 0:14:54.160 --> 0:14:57.320 And that is great for high for for risky assets. 0:14:57.320 --> 0:14:59.400 And so you know, shifting to you, I mean, Klaudia 0:14:59.520 --> 0:15:02.000 just talked to us a little bit more about what's 0:15:02.000 --> 0:15:04.240 the thought. I mean, does this take some of the 0:15:04.240 --> 0:15:06.920 balance out of what next week's inflation print is going 0:15:07.000 --> 0:15:08.520 to look like? I mean, what are you looking for 0:15:08.600 --> 0:15:10.560 next what's the next big figure that you're going to 0:15:10.640 --> 0:15:11.680 lean into data wise? 0:15:13.320 --> 0:15:17.320 Well, absolutely, the inflation data are front and center, right, 0:15:17.600 --> 0:15:19.360 and you want to see we got a very soft 0:15:19.400 --> 0:15:22.720 inflation read for June. We don't expect that to show 0:15:22.800 --> 0:15:25.400 up again in July exactly that way, but you want 0:15:25.400 --> 0:15:28.520 to see some softness or at least getting back to 0:15:28.600 --> 0:15:31.800 something that's consistent with target, right, and so there'll be 0:15:31.840 --> 0:15:33.960 a lot of attention to the CPI, the PPI, the 0:15:34.000 --> 0:15:36.240 import prices. I mean, inflation is still front and center 0:15:36.240 --> 0:15:39.240 because inflation is still very far from the Fed's target, 0:15:39.600 --> 0:15:41.640 and you need and if nothing else, you want to 0:15:41.680 --> 0:15:44.160 see it moving in the right direction. Today we're seeing 0:15:44.200 --> 0:15:46.720 employment move and not the right direction. Maybe next week 0:15:46.720 --> 0:15:50.000 we'll get some better news on inflation, but I don't 0:15:50.000 --> 0:15:52.520 think this takes any pressure off of the CPI. And 0:15:52.560 --> 0:15:54.320 before the Fed meets again, we're gonna get one more 0:15:54.360 --> 0:15:57.040 payroll and we've got next week's CPI and another one, 0:15:57.160 --> 0:15:58.280 so there's a lot of data. 0:15:58.080 --> 0:16:03.560 To come across America together. Claudia Sam with us today 0:16:03.560 --> 0:16:07.160 from New Century Advisors and Constance Hunter of EIU. Off 0:16:07.160 --> 0:16:10.960 the Shock report, we're up futures up thirty nine. Now 0:16:11.080 --> 0:16:14.400 Nasdaq is up a solid stick one percent on the 0:16:14.480 --> 0:16:19.240 Nasdick futures. So even Bitcoin vaults up seven hundred dollars 0:16:19.280 --> 0:16:23.920 constance demand that I quote Pelly winners there and over 0:16:24.080 --> 0:16:27.080 one fifty seven on Brench crude right now in the 0:16:27.200 --> 0:16:29.520 most elastic yield a two year of four point one 0:16:30.440 --> 0:16:33.520 five percent in a solid nine basis points. I'm going 0:16:33.600 --> 0:16:35.960 to call that a ginormous movement. Even the ten uere 0:16:36.560 --> 0:16:39.080 in seven basis points. I want to go to your 0:16:39.080 --> 0:16:42.440 two wheelhouses, Claudia, let me begin with you, with all 0:16:42.480 --> 0:16:46.360 of your deserved acclaim over recession. We've had a pop 0:16:46.400 --> 0:16:51.440 phenomenal GDP. John writing over Breen notes consumption and investment 0:16:51.840 --> 0:16:55.880 eighth percent like a banana republic. Do you just assume 0:16:56.480 --> 0:16:59.400 that if we have a tepa job economy and we 0:16:59.480 --> 0:17:03.480 don't cut rates fast enough, that nominal the animal spirit 0:17:03.680 --> 0:17:07.240 comes down to a more lower normal rate. 0:17:09.920 --> 0:17:14.040 So I am concerned if the labor market isn't firing 0:17:14.080 --> 0:17:17.400 on all cylinders, and certainly if it weakens, that would 0:17:17.440 --> 0:17:19.880 be an issue. And we've seen we've got recent data again, 0:17:19.920 --> 0:17:23.080 I mean the labor share continues to drop like the 0:17:23.119 --> 0:17:25.680 share of the income and the economy going to workers. 0:17:25.960 --> 0:17:29.040 That does not feel like a good situation. And I 0:17:29.080 --> 0:17:32.439 think to Constance's point, I worry more right now about 0:17:32.480 --> 0:17:36.679 the structure underpinning the economy than maybe the cyclical the 0:17:36.720 --> 0:17:39.440 boom bus the research. It's like things are moving under 0:17:39.480 --> 0:17:42.000 the hood of the labor market, and I think that's 0:17:42.119 --> 0:17:45.840 the labor force growth, population, aging, what's happening with AI. 0:17:45.920 --> 0:17:49.080 So there's some really big themes that I think we 0:17:49.080 --> 0:17:52.560 should pay attention to, and maybe less to the boom 0:17:52.560 --> 0:17:55.040 bus cycle, right, because I'm not sure that's the biggest 0:17:55.080 --> 0:17:56.200 thing happening right now. 0:17:56.680 --> 0:18:01.240 I Constance, the EIU remit is a wonder full global remit. 0:18:01.400 --> 0:18:05.240 What does this job report signal to other central banks? 0:18:05.320 --> 0:18:08.879 I mean, it simply takes away the effervescence, doesn't it. 0:18:09.680 --> 0:18:09.919 You know? 0:18:09.960 --> 0:18:11.920 I would say other central banks are going to look 0:18:12.000 --> 0:18:15.160 much more closely at CPI data next week than they 0:18:15.160 --> 0:18:18.920 are the jobs to data. But of course it does 0:18:20.040 --> 0:18:22.080 to Claudia's point, right, it's what's going on under the 0:18:22.080 --> 0:18:26.480 hood here, and we have an aging labor market, or 0:18:26.640 --> 0:18:29.359 we have an aging population. We're seeing people age out 0:18:29.400 --> 0:18:31.320 of the labor market. That is not a unique problem. 0:18:31.359 --> 0:18:34.119 To the United States. Right, we see this around the world. 0:18:34.119 --> 0:18:36.240 This is a challenge for central banks. And what could 0:18:36.320 --> 0:18:38.919 argue that is the biggest challenge for Japan and one 0:18:38.960 --> 0:18:42.480 of the reasons why we have the situation in Japan 0:18:42.520 --> 0:18:45.920 where they have a very high budget deficit or debt 0:18:45.920 --> 0:18:49.320 to GDP ratio, right, and there's concern about that fiscal 0:18:49.359 --> 0:18:52.520 situation and it was getting expressed in the currency, and 0:18:52.640 --> 0:18:54.880 we had the intervention that we had last week. 0:18:54.920 --> 0:18:56.800 So this theme of. 0:18:57.040 --> 0:18:59.480 You know what, how do you grow an economy with 0:18:59.560 --> 0:19:03.960 an age population? Does AI help or hinder that These 0:19:04.000 --> 0:19:08.320 are as existential questions. I think that all economists, central 0:19:08.359 --> 0:19:10.560 bankers are not are looking at when they're looking at 0:19:10.600 --> 0:19:11.480 economies right now. 0:19:11.560 --> 0:19:14.120 And yet there's a diet, a desire to keep financial 0:19:14.119 --> 0:19:16.440 conditions loose here in the US, like you rightly point out, 0:19:16.480 --> 0:19:17.800 I mean, talk to us about what you learned from 0:19:17.840 --> 0:19:20.320 yesterday's refunding announcement. I mean they just in my mind, 0:19:20.520 --> 0:19:22.720 kick the can down the road, again, right, I mean, like, so, 0:19:23.040 --> 0:19:25.880 you know, your right to focus on fundamentals like debt 0:19:25.920 --> 0:19:28.040 to GDP or in the US, but the market has 0:19:28.040 --> 0:19:30.239 not paid attention to that for so long. You know, 0:19:30.320 --> 0:19:33.280 at what time, you know, the things at least start 0:19:33.280 --> 0:19:34.879 to flash amber to you constantly. 0:19:35.000 --> 0:19:38.040 So worsh has his task forces, we have our task forces. 0:19:38.040 --> 0:19:40.159 So there's a few things we're looking at that we 0:19:40.240 --> 0:19:42.960 felt we had to really do deep dive. And to 0:19:43.040 --> 0:19:47.240 your point, Tom, across country comparison right up there is 0:19:47.240 --> 0:19:51.160 is what is fiscal space? What constitutes fiscal space? When 0:19:51.160 --> 0:19:52.000 does it get tricky? 0:19:52.359 --> 0:19:52.920 Who who? 0:19:53.040 --> 0:19:53.240 You know? 0:19:53.320 --> 0:19:57.520 Obviously we see it's not uniform across countries, and so 0:19:58.760 --> 0:20:00.199 I think one of the things we have to think 0:20:00.240 --> 0:20:03.480 about here is what are what is expected in fression 0:20:03.920 --> 0:20:06.800 and how does that feed into term premia and then 0:20:06.960 --> 0:20:09.720 what's that back loop to funding the government. 0:20:09.840 --> 0:20:12.720 Christina Campmenian does her people are quite upset, you know, 0:20:12.960 --> 0:20:15.800 I mean she needs more air time, Claudia, some last 0:20:15.880 --> 0:20:19.800