WEBVTT - 8am-9am ET: Hoffman, Rattner & Stanley 0:00:03.720 --> 0:00:07.400 This is Bloomberg Surveillance. We don't know where the next 0:00:07.400 --> 0:00:10.320 procession is. All we know is that the expansion is 0:00:10.320 --> 0:00:12.480 about six and a half years old, and that's longer 0:00:12.520 --> 0:00:17.000 than the average expansion. We're getting signals which are the 0:00:17.079 --> 0:00:19.960 started cause interest transfer too long. It would be a 0:00:20.040 --> 0:00:23.040 terrible commentary and the terrible thing in reality if it 0:00:23.079 --> 0:00:25.840 takes an overt crisis to get agreement or get progressive, 0:00:25.840 --> 0:00:29.640 then you're risking things going crazy. Bloomberg Surveillance your link 0:00:29.720 --> 0:00:34.080 to the world of economics, finance, and investment on Bloomberg Radio. 0:00:34.120 --> 0:00:37.080 Good morning everyone, Michael McKee and Tom Keene this Thursday 0:00:37.120 --> 0:00:40.560 before Jobsday, coming up Stewart Offman of p n C. 0:00:40.760 --> 0:00:43.440 We'll look at a fair, using balanced view of the 0:00:43.440 --> 0:00:48.080 American economy from Dr Hoffman. Really looking forward to talking 0:00:48.400 --> 0:00:52.000 to Stewart Hoffman. Bloomberg Surveillance this morning brought to by 0:00:52.080 --> 0:00:57.920 Cone Resnick Accounting, tax advisory, regulatory changes can impact your business. 0:00:58.240 --> 0:01:00.800 See how the experts at Cone Resneck can help you 0:01:00.960 --> 0:01:05.000 navigate these complexities. Find out more at cone Resnik dot com. 0:01:05.080 --> 0:01:07.640 C O h n R e z n I c 0:01:07.920 --> 0:01:13.679 K cone Resnik dot com. Jobs Today Tomorrow started catching up. 0:01:13.720 --> 0:01:16.200 I mean, we've got Governor Romney speaking today. There'll be 0:01:16.240 --> 0:01:18.560 a lot of political news out of that. With all 0:01:18.640 --> 0:01:23.040 due respect with perspective this evening, Mark Halperin and John Heilman, 0:01:23.280 --> 0:01:26.520 we're trying to get back into economics, finance, investment, the 0:01:26.640 --> 0:01:30.360 linkages into our international relations. And I guess you do 0:01:30.400 --> 0:01:33.360 that at eight thirty tomorrow morning, Alan Krueger, Bill Gross 0:01:33.440 --> 0:01:37.640 joining us among other worthies right now, Michael McKee, Stewart 0:01:37.800 --> 0:01:42.880 Hoffman joining us, which is wonderful because what I've never 0:01:42.959 --> 0:01:50.240 seen anything plunge, crater, surge, dominate whatever in the research 0:01:50.280 --> 0:01:53.920 work of Stewart Hoffman. It is a careful, measured look 0:01:54.560 --> 0:01:56.600 it where we are. That's a good thing. Stewart off 0:01:56.680 --> 0:02:00.920 wands been too long, good morning very much. Try to 0:02:00.960 --> 0:02:04.960 be measured, but never afraid to take a stand within 0:02:05.040 --> 0:02:08.520 to take the stand. What is the linkage of this 0:02:08.760 --> 0:02:12.040 job's report to what share Yelling and other worthies will 0:02:12.080 --> 0:02:16.040 do at the March sixte meeting. Are they linked? Of 0:02:16.080 --> 0:02:18.720 course they're linked, But I think it's a very high 0:02:18.760 --> 0:02:22.440 bar to get the Fed to move, you know, in 0:02:22.440 --> 0:02:25.040 in in their meeting in two weeks. You know, I 0:02:25.080 --> 0:02:28.399 suppose if this number, we're just off the charts. Three 0:02:28.480 --> 0:02:33.120 or four hundred thousand jobs. Another five tenths increase in 0:02:33.200 --> 0:02:38.200 the average ary earnings, maybe that could change the dynamics. 0:02:38.240 --> 0:02:41.960 But I think the number is important. But given what 0:02:42.000 --> 0:02:44.639 the Fed has said that they're monitoring and they need 0:02:44.720 --> 0:02:48.919 some more time to figure out what these international events 0:02:48.960 --> 0:02:53.800 and start market events and tighter or wider spreads, I 0:02:53.840 --> 0:02:56.280 think they just say let's buy some time no matter 0:02:56.320 --> 0:03:03.280 what this job's report shows us tomorrow. Interesting because if 0:03:04.120 --> 0:03:09.760 the the markets had not cratered in January, would the 0:03:09.840 --> 0:03:13.840 Fed be on track to raise rates in March given 0:03:13.880 --> 0:03:19.040 the data that we have. The hypothetical, given that the 0:03:19.080 --> 0:03:24.640 inflation data, not the expectation numbers, but the actual inflation data, 0:03:24.760 --> 0:03:29.640 the PC deflator, the cores was cruising along one point 0:03:29.680 --> 0:03:32.440 three percent in the first three quarters of last year 0:03:33.160 --> 0:03:35.880 with some upward revisions, and now turns out to eat 0:03:35.960 --> 0:03:39.000 up a little to one four in the fourth quarter. 0:03:39.120 --> 0:03:41.760 And then that January number, although it's still one month, 0:03:41.840 --> 0:03:44.800 you know, it was a biggest increase we've seen in years. 0:03:45.480 --> 0:03:49.640 Shall I suppose if the Judge report tomorrow was super 0:03:49.720 --> 0:03:53.560 strong and the stock market was higher than it was 0:03:53.600 --> 0:03:56.200 at the beginning of the year and spreads were narrower, 0:03:57.480 --> 0:04:00.560 maybe the Fed would be on track. But you know, 0:04:00.600 --> 0:04:03.920 they're going to deal with the reality that the markets 0:04:04.400 --> 0:04:09.000 are telling them, at least biblettle time go a little slower. 0:04:09.360 --> 0:04:11.520 They probably don't want to see the dollar go up 0:04:11.560 --> 0:04:13.760 a lot, especially if next week the e c B 0:04:14.040 --> 0:04:16.960 is they're highly likely to do, are going to expand 0:04:17.080 --> 0:04:21.280 their monetary policy, go deeper on negative rates, extend and 0:04:21.640 --> 0:04:26.440 probably in large QUEWI so, yes, how many heads, how 0:04:26.440 --> 0:04:28.800 many pin? How many angels can you fit on the 0:04:28.839 --> 0:04:31.120 head of the pin? But right now is the data 0:04:31.160 --> 0:04:32.960 they have? You know, you know, I look, I look 0:04:33.040 --> 0:04:36.279 stewarted it. Why will C plus I plus G plet's 0:04:36.400 --> 0:04:38.480 n X. Let's start with the basic idea Mike and 0:04:38.520 --> 0:04:41.119 I address us in our trip to Washington the last 0:04:41.160 --> 0:04:43.599 few days. I think we have a handle of the 0:04:43.720 --> 0:04:47.039 state of austerity in the United Kingdom. What is the 0:04:47.160 --> 0:04:51.240 state of austerity within the G part of g d P. 0:04:53.240 --> 0:04:55.920 I wouldn't call it austerity. I mean it's pretty neutral. 0:04:56.400 --> 0:04:59.680 It certainly was austere in the sense that for the 0:04:59.760 --> 0:05:05.400 last three years federal spending was pretty flat, which maybe 0:05:05.560 --> 0:05:08.240 in the short run, is a little austere, but you 0:05:08.279 --> 0:05:11.400 know precisely what we need for the intermediate or longer run. 0:05:11.960 --> 0:05:15.320 Of course, the tax hikes of thirteen of you know, 0:05:15.440 --> 0:05:19.360 been absorbed. Last year. We did get a budget, uh, 0:05:19.400 --> 0:05:22.279 and federal spending is going to go up a bit 0:05:22.320 --> 0:05:26.080 this year defense and non defense. We didn't get any 0:05:26.080 --> 0:05:29.960 additional tax hikes. So at the federal level, I would 0:05:30.000 --> 0:05:34.640 say it is not austere neutral. At the state and 0:05:34.680 --> 0:05:38.080 local level, I think it's actually positive. We're seeing you know, 0:05:39.640 --> 0:05:44.479 we're seeing jobs growing. Uh. In the construction report that 0:05:44.560 --> 0:05:47.719 came out on public instruction, and you know, those numbers 0:05:47.720 --> 0:05:50.719 are very jumpy. That's why I don't use words like plunge, 0:05:50.880 --> 0:05:53.640 because I'd like to use three month moving average, which 0:05:53.640 --> 0:05:56.520 often smooth out a lot of the plunges and the 0:05:57.320 --> 0:05:59.560 and the spikes. But if you look now over the 0:05:59.600 --> 0:06:05.400 last or four months, construction at the public level, highways, roads, bridges, 0:06:05.440 --> 0:06:08.440 its desk but we needed is definitely doing better. And 0:06:08.480 --> 0:06:11.840 certainly you see construction jobs going up, so they're not 0:06:11.960 --> 0:06:15.320 hiring those people to do to sit around and do nothing, 0:06:15.440 --> 0:06:18.400 both on the public side and on the private side. 0:06:18.880 --> 0:06:22.960 So yes, I think I would say government, state, local, 0:06:23.279 --> 0:06:28.719 and federal is a positive for the US economy this year. Well, 0:06:28.760 --> 0:06:31.240 we have the jobs report tomorrow and everybody we're looking 0:06:31.240 --> 0:06:34.000 at wage growth when we get a little more of 0:06:34.040 --> 0:06:36.680 a hint from the unit labor costs number that comes 0:06:36.680 --> 0:06:39.680 out today. But what are you expecting are is the 0:06:39.720 --> 0:06:42.599 trend going to continue? Yeah? I think the trend of 0:06:42.680 --> 0:06:45.599 going up slowly is going to continue, you know. We 0:06:46.520 --> 0:06:49.440 you know, you can use the employment cost index or 0:06:49.480 --> 0:06:51.680 the number that of course comes out is the average 0:06:51.760 --> 0:06:55.400 hourly earnings index comes out monthly with the employment report. 0:06:56.000 --> 0:06:59.080 I mean that measure. Really both measures were stuck at 0:06:59.080 --> 0:07:03.800 two percent or little under thirteen fourteen. I'm sure that's 0:07:03.800 --> 0:07:06.719 where some of this angst, not only that short run 0:07:06.760 --> 0:07:09.240 but longer run uh we see in the in the 0:07:09.279 --> 0:07:13.120 political environment. But last year, finally, particularly in the second 0:07:13.120 --> 0:07:16.360 half of the year, we started to see some acceleration 0:07:16.400 --> 0:07:18.120 in that. I tend to like to look at it 0:07:18.160 --> 0:07:21.440 as a two quarter moving average or year over year. 0:07:21.440 --> 0:07:23.600 In the year over year number in January was two 0:07:23.600 --> 0:07:26.720 point five. I think the MARS number particip for a 0:07:26.760 --> 0:07:30.280 month of February will back off maybe a tenth or two, 0:07:30.720 --> 0:07:33.480 but still be up two and a half percent from uh, 0:07:33.760 --> 0:07:36.400 this time last year. So I think ways are accelerat. 0:07:36.600 --> 0:07:39.880 Let me recast what I asked Scott Wren earlier, who's 0:07:39.880 --> 0:07:44.720 an investment equity strategist, same question, folks, For an economist 0:07:45.440 --> 0:07:49.080 like Stewart, often the basic idea of a single digit 0:07:49.120 --> 0:07:52.960 world in your language, Stewart, a new lower damn phenomenal 0:07:53.040 --> 0:07:56.440 g d P, a new terminal rate or potential g 0:07:56.560 --> 0:08:01.960 d P. Are we prepared for that? By we do 0:08:02.000 --> 0:08:07.840 you mean or the nation? I don't think the nation, 0:08:08.960 --> 0:08:11.400 whether they're prepared or not, they're not taking it well. 0:08:12.000 --> 0:08:15.160 And you know, we look back at this recovery. It 0:08:15.280 --> 0:08:18.560 has fortunately continued this long, and I still think we're 0:08:18.560 --> 0:08:21.320 maybe in the seventh inning. I don't think I've never 0:08:21.400 --> 0:08:23.360 been in the recession camp. You know, a month or 0:08:23.400 --> 0:08:26.520 two ago, it kind of felt like the markets were 0:08:26.560 --> 0:08:28.960 saying the economies in the ninth inning, there's two out 0:08:28.960 --> 0:08:31.520 and the pictures of bat and the home team is 0:08:31.520 --> 0:08:34.440 about to go down. Well, I never thought that that 0:08:34.600 --> 0:08:38.000 that view anyway. But if you look at the as 0:08:38.000 --> 0:08:41.000 I said, slow wade growth of the last five years, 0:08:41.000 --> 0:08:44.800 over the last fifteen years, uh, I think the country 0:08:44.920 --> 0:08:47.960 wants to grow faster. It needs to grow faster. And 0:08:48.000 --> 0:08:50.280 I think that's where, you know, some of this frustration 0:08:50.320 --> 0:08:53.080 we're seeing both on the coach i'll call it left 0:08:53.120 --> 0:08:57.720 and right is coming from that we got to do better, 0:08:57.840 --> 0:09:01.440 and it's productivity. It's in the prescriptions I had to do. 0:09:01.480 --> 0:09:06.400 It are quite different between less government regulations or you know, 0:09:06.480 --> 0:09:10.760 on the left, a big tax site. But there's a 0:09:10.800 --> 0:09:13.800 feeling that the US economy is not living up to 0:09:13.840 --> 0:09:17.720 its potential and that if that's the best our potential is, 0:09:17.760 --> 0:09:19.320 we've got to figure out a way to get it. 0:09:20.160 --> 0:09:23.120 Let's drive that for Our conversation continues with Stewart often 0:09:23.520 --> 0:09:25.880 of P and C. Mike Herbal Life has a bid 0:09:26.280 --> 0:09:29.520 UH to review fifty six down to a printed bid 0:09:29.559 --> 0:09:31.360 of forty eight. And I'm not sure the pre market 0:09:31.400 --> 0:09:34.280 stock price got there, but that forty eight is lifted 0:09:34.360 --> 0:09:37.600 up to fifty one thirty. There's a i'm gonna call it, 0:09:37.720 --> 0:09:40.160 you know, an eight percent mover. So fifty six down 0:09:40.200 --> 0:09:48.280 to fifty one, yeah, um, and and that's better than 0:09:48.280 --> 0:09:53.880 where we were earlier. Again, some real challenges all in all, 0:09:54.520 --> 0:10:00.400 UH with their unit accounting, UH complex and convoluted set 0:10:00.520 --> 0:10:03.920 of headlines. You wonder where this story will move drive 0:10:03.960 --> 0:10:09.840 forward Price Waterhouse Coopers, is there um there auditors? According 0:10:09.880 --> 0:10:13.600 to Bloomberg Herbal Life right now fifty one, I'm gonna 0:10:13.600 --> 0:10:17.960 center tendency fifty one on Herban Life. Futures of negative one, 0:10:18.040 --> 0:10:22.920 doubt futures negative ten. We look at equities, bonds, currencies, commodities, 0:10:22.960 --> 0:10:27.199 oil thirty four sixty two Flat Brant Your thirty seven, 0:10:27.280 --> 0:10:31.800 thirty six seventy nine. Michael McKee manchiny Gold earlier elevated 0:10:31.840 --> 0:10:35.040 twelve forty four. Good morning to not the goldbugs, but 0:10:35.080 --> 0:10:38.640 people that have rationally talked about a stronger gold market 0:10:39.440 --> 0:10:42.200 off of an extended two and three year bearer market, 0:10:42.200 --> 0:10:45.760 people like James Steele at HSBC the Yen one thirteen 0:10:46.600 --> 0:10:53.559 ninety weaker yen this morning. But let's check out with 0:10:53.640 --> 0:10:56.320 Michael bar and get the latest world in national headlines. Michael, 0:10:56.400 --> 0:10:59.160 Mike Town, thank you very much. Former Massachusetts Governor Mitt 0:10:59.240 --> 0:11:03.680 Romney will give us speech later today calling out Donald Trump. Romney, 0:11:03.679 --> 0:11:09.200 who was the Republican presidential nominee, says Trump is a phony. 0:11:09.360 --> 0:11:12.600 Four Republicans will gather on stage for tonight's Fox News 0:11:12.640 --> 0:11:16.280 presidential debate in Detroit. Ben Carson will be a no show, 0:11:16.559 --> 0:11:19.120 having signaled that he is on the verge of officially 0:11:19.200 --> 0:11:22.880 quitting his white house bid. A white Alabama police officer 0:11:22.960 --> 0:11:24.760 has charged with the murder in the shooting death of 0:11:24.800 --> 0:11:27.840 a black man. A family lawyer says Greg Gunn was 0:11:27.880 --> 0:11:31.040 walking home when he was killed outside a neighbor's house. 0:11:31.400 --> 0:11:35.200 An attorney for Montgomery officer, Aaron Smith calls the arrest 0:11:35.480 --> 0:11:39.120 a political witch hunt. Global News twenty four hours a day, 0:11:39.120 --> 0:11:42.280 powered by our twenty four hundred journalists and more than 0:11:42.320 --> 0:11:45.080 a hundred fifty news bureaus from around the world. I'm 0:11:45.120 --> 0:11:47.920 Michael Barr, Mike Micha, thanks so much. We're gonna rip 0:11:47.960 --> 0:11:49.760 up the script of Stewart Off and P and C. 0:11:49.960 --> 0:11:54.640 Neil Dutta just out with a fabulous chart showing the 0:11:54.720 --> 0:11:58.800 bipolar nature of this American economy. You need to stay 0:11:58.840 --> 0:12:06.440 tuned for that future negative to Bloomberg Surveillance. The news 0:12:06.480 --> 0:12:08.520 update brought to you by Mercedes Ben's. This month, here 0:12:08.559 --> 0:12:11.000 Mercedes Ben's Tri state dealers welcome Spring with limited time 0:12:11.000 --> 0:12:13.120 offers on select models like the Sporty c L A 0:12:13.200 --> 0:12:15.959 and Versatile g l A, each engineered in price to move. 0:12:16.040 --> 0:12:24.160 Visit m b USA Dot com today. Surveillance continues global 0:12:24.240 --> 0:12:27.640 business news twenty four hours a day. If Bloomberg dot com, 0:12:27.840 --> 0:12:30.679 the radio plus mobile app and on your radio, this 0:12:31.080 --> 0:12:34.720 is a Bloomberg Business flash. And I'm car in Moscow, 0:12:34.840 --> 0:12:36.920 US dock in. Day's futures are a little change to 0:12:37.000 --> 0:12:39.240 lower this morning. Let's go to the First Word Breaking 0:12:39.240 --> 0:12:42.480 news desk for today's morning call. And here's Bill Maloney. 0:12:42.520 --> 0:12:45.360 Good morning, Bill, Good morning Karen. That's right us. You 0:12:45.480 --> 0:12:48.280 just are quiet today. Doubt future is currently lower by 0:12:48.320 --> 0:12:51.080 twenty points, as apps and as a futures are lower 0:12:51.160 --> 0:12:53.920 by two. The US ten yield at one point eight 0:12:54.040 --> 0:12:57.720 five percent, and your PM markets are mostly lower this morning. 0:12:57.960 --> 0:13:01.400 Frances down point four percent on the US economic front 0:13:01.520 --> 0:13:06.040 dight thirty non farm productivity and initial jobs claims at market, 0:13:06.120 --> 0:13:08.599 US services p M I and at ten o'clock I 0:13:08.840 --> 0:13:13.320 s M, non manufacturing, composite factory orders and durable goods orders. 0:13:13.720 --> 0:13:16.319 In other news, Herbal Life said active new member data 0:13:16.400 --> 0:13:19.680 had errors. Shares a down eight percent pre market, and 0:13:19.720 --> 0:13:22.720 a deal news. The Wallstreet Journal reported Samson Night said 0:13:22.760 --> 0:13:25.760 near a deal to buy too Me after de Bellous Knight, 0:13:25.800 --> 0:13:29.240 American Eagle Q and EPs view top to estimates, Costco 0:13:29.360 --> 0:13:32.040 missed and regarding errings. This morning, joy Global Q and 0:13:32.120 --> 0:13:35.559 loss was wider than expected. Tech Data beat and CIANA 0:13:35.640 --> 0:13:39.240 Q when adjusted EPs also beat. Finally, some Q wall 0:13:39.240 --> 0:13:42.680 shoot upgrades and downgrades at Bank of America, Alcola cut 0:13:42.720 --> 0:13:46.360 to neutral, Lateral Energy raised to neutral, and Marathon Petroleum 0:13:46.440 --> 0:13:49.120 raised to buy. Sharon Williams raised to buy over at 0:13:49.160 --> 0:13:52.480 City Group, Intel raised to outperform at Robert Baird and 0:13:52.559 --> 0:13:56.319 Freeport mcmarhon cut to neutral versus by over at UBS. 0:13:56.760 --> 0:13:58.840 Live from the First Breaking News Desk on Bill Maloney 0:13:58.880 --> 0:14:02.040 Karen All, thanks bailan to hear live breaking news over 0:14:02.080 --> 0:14:04.880 your Bloomberg type squaw could go on your terminal, that's 0:14:04.880 --> 0:14:06.880 ask you you a w K go and that's a 0:14:06.920 --> 0:14:10.640 Bloomberg business flash. Tom and Mike Karen, thanks so much. 0:14:10.640 --> 0:14:13.960 Futures negative two and a churn into the screen as well. 0:14:14.040 --> 0:14:18.280 Bloomberg Surveillance. Brought to you by Investco. Investco believes it's 0:14:18.320 --> 0:14:22.440 time to bench the benchmarks to consider active management and 0:14:22.520 --> 0:14:26.400 factor based strategies. Find out more at investco dot com. 0:14:26.520 --> 0:14:30.200 Slash high Conviction without Question. The chart of the day. 0:14:30.240 --> 0:14:33.840 Neil Data, Renaissance, Macro folks. I'm not gonna send it 0:14:33.840 --> 0:14:37.800 out because it's his proprietary chart. We protect copyright here. 0:14:38.080 --> 0:14:42.840 Contact Renaissance Macro for his wonderful chart. Stewart often, you 0:14:42.880 --> 0:14:49.280 know the chart layoffs and layoff announcements the American economy 0:14:49.680 --> 0:14:54.080 and then separate energy. I have no idea how stark 0:14:54.160 --> 0:14:56.480 it is. I mean, we know energy is flat on 0:14:56.520 --> 0:14:59.760 its back, but the layoff announcements for the rest of 0:14:59.800 --> 0:15:04.040 them America are shockingly good. How does the FED to 0:15:04.120 --> 0:15:08.000 handle that? Well, the FED knows, I mean, it can't 0:15:08.040 --> 0:15:12.000 directly target the energy industry. I haven't seen the chart, 0:15:12.080 --> 0:15:15.680 but you know the Challenger of Gray Christmas number was out. 0:15:15.840 --> 0:15:19.080 It did show a drop in UH layoffs in January 0:15:19.120 --> 0:15:23.120 and February January February, though, we're still up by thirty 0:15:23.200 --> 0:15:26.720 three percent from a year ago. But as you mentioned, 0:15:28.520 --> 0:15:32.040 of the layoffs, twenty five thousand people in the month 0:15:32.080 --> 0:15:34.880 of February. Now those are announced layoffs. That doesn't mean 0:15:34.920 --> 0:15:37.520 they're out of the job yet, but will be soon. 0:15:38.160 --> 0:15:40.720 But look at what's happened now for we'll see you tomorrow, 0:15:40.800 --> 0:15:46.200 probably tomorrow. The fourteenth straight month losses in the energy industry, 0:15:46.240 --> 0:15:49.640 and they've been averaging about ten thousand a month uh 0:15:49.680 --> 0:15:54.480 since frankly January of twenty fifteen. And this suggests they 0:15:54.520 --> 0:15:57.120 may be picking up the pace of that uh. And 0:15:57.200 --> 0:15:59.000 that's one of the reasons why. I mean, I've got 0:15:59.000 --> 0:16:03.600 about two hundred and rising jobs tomorrow, but for the 0:16:03.640 --> 0:16:06.720 whole year, you know, we're thinking we'll google date closer 0:16:06.760 --> 0:16:09.720 to two million jobs. Last year we created two point 0:16:09.800 --> 0:16:13.720 seven million. And part of that difference is layoffs in 0:16:13.720 --> 0:16:17.880 the energy industry going in to adding to laying off 0:16:17.920 --> 0:16:22.400 in and probably even deeper in. But from the FEDS 0:16:22.440 --> 0:16:26.040 point of view, uh, you know, they can't target the 0:16:26.160 --> 0:16:29.920 energy industry. They know there's a supply issue. I think 0:16:29.920 --> 0:16:32.080 they have to look, as you said, at what's happening 0:16:32.200 --> 0:16:36.400 outside of energy. Knowing both in energy and manufacturing there 0:16:36.440 --> 0:16:40.360 what economists like to call multiplier effects. You throw the 0:16:40.360 --> 0:16:43.440 stone into the lake and the ripples go around, and 0:16:43.520 --> 0:16:47.160 that is going to affect other industries, other companies, and 0:16:47.200 --> 0:16:52.080 other individuals. But you're right, so far it's been extraordinarily contained. 0:16:52.120 --> 0:16:54.480 And then Mike, you know, it goes to Kruger's to America's. 0:16:54.560 --> 0:16:58.200 This is a different debate. There's a debate about labor 0:16:58.280 --> 0:17:02.000 economy and wage growth. In a broader macro view, this 0:17:02.080 --> 0:17:07.920 is about the micro dynamics of job formation and disformation. 0:17:07.960 --> 0:17:12.440 It's a different story. Yeah. I mean one of the 0:17:12.520 --> 0:17:16.800 least followed numbers by economists is the Challenger Job Cuts Report, 0:17:16.880 --> 0:17:19.720 because it's worldwide, not just in the United States, and 0:17:19.760 --> 0:17:23.520 many of those jobs never actually get cut or it's attrition. 0:17:24.040 --> 0:17:27.760 But when you uh, the real question Stewart is, of course, uh, 0:17:28.600 --> 0:17:31.879 when you have we knew that there is there have 0:17:31.960 --> 0:17:34.960 been layoffs and left more laoffs coming in the energy industry. 0:17:35.200 --> 0:17:38.040 It's when it follows on, when when the energy people 0:17:38.119 --> 0:17:41.000 are no longer working in, no longer spending money at 0:17:41.040 --> 0:17:43.640 the local stores, and the local stores go out of business. 0:17:43.680 --> 0:17:46.520 That's a problem. And I note that in North Dakota 0:17:47.440 --> 0:17:51.280 the unemployment rate is still two point seven even after 0:17:51.320 --> 0:17:54.680 all the layoffs. Well, Mike, and I think that gets 0:17:54.720 --> 0:17:57.359 to the idea that you know, well we are reading 0:17:57.400 --> 0:18:03.600 about announced layoffs in energy, Nobody in maybe the transportation industry, 0:18:03.640 --> 0:18:07.680 the airlines, or the hotels or the motels, or technology 0:18:07.880 --> 0:18:12.280 or some parts of manufacturing said we hire twenty thousand 0:18:12.359 --> 0:18:16.159 or a thousand people this month because our energy costs 0:18:16.160 --> 0:18:19.040 are down, and that is a big savings and we're 0:18:19.080 --> 0:18:23.119 seeing a little stronger demand. So you you see, you know, 0:18:23.240 --> 0:18:25.879 you always hear the bad news, and there is plenty 0:18:25.920 --> 0:18:28.520 of it and legitimate, but what you don't see is 0:18:28.560 --> 0:18:30.400 the good news. The only way you kind of see 0:18:30.440 --> 0:18:32.920 it in general was look at the total job numbers 0:18:33.440 --> 0:18:36.840 and if they're up two hundred thousand tomorrow despite the 0:18:36.920 --> 0:18:39.959 layoffs and energy, and looking over the last twelve or 0:18:39.960 --> 0:18:44.960 thirteen months, jobs are up about two hundred thousand a month, 0:18:45.080 --> 0:18:48.879 even absorbing the losses and energy. So there are positive 0:18:48.920 --> 0:18:52.960 effects of people getting jobs or keeping jobs, or maybe 0:18:52.960 --> 0:18:56.359 now getting better wages because of the dropping energy. And 0:18:56.400 --> 0:19:00.480 I've been adamant about the fact that the net impact 0:19:00.480 --> 0:19:03.960 on the US economy of lower energy prices as positive, 0:19:04.359 --> 0:19:07.200 but a lot of distributional effects and there's not much 0:19:07.240 --> 0:19:10.000 the FED can or should do about it. And by 0:19:10.000 --> 0:19:13.200 the way, it's also helping Europe, it's helping Japan, it's 0:19:13.240 --> 0:19:16.359 helping China. Maybe not enough, but think of where the 0:19:16.480 --> 0:19:18.800 U s economy and some of those economies might be 0:19:19.320 --> 0:19:22.919 if gasoline was coming up on or fifty a gallon 0:19:23.480 --> 0:19:28.120 and oil prices were still nine hundred bucks a Gallon. Yeah, 0:19:28.240 --> 0:19:30.280 it's not to say the least. Stuart Off in brilliant, 0:19:30.280 --> 0:19:32.760 Thank you so much with p n C H Financial, 0:19:32.800 --> 0:19:35.280 Michael McKie, John Tucker emailing me yesterday in the middle 0:19:35.280 --> 0:19:37.280 of the show. I think you know as our as 0:19:37.320 --> 0:19:40.800 our proxy for cheap New Jersey gas. Mr Tucker was 0:19:40.800 --> 0:19:44.960 suggesting a dollar fifty six. That was my memory. Could 0:19:45.000 --> 0:19:47.840 we get under a dollar and I'm not ready for 0:19:47.880 --> 0:19:50.280 that as well. On an inflation of justice basis here 0:19:50.320 --> 0:19:52.960 there um, but we need John to come in and 0:19:53.000 --> 0:19:55.359 tell us what he's spending his extra money on. Yes, 0:19:55.440 --> 0:19:59.480 we do no question about that. Economic data. Will review 0:19:59.520 --> 0:20:07.359 product of any later today. Bloomberg Surveillance coming up there, 0:20:07.400 --> 0:20:09.320 with all due respect. Highlight brought to you by land Rover. 0:20:09.400 --> 0:20:10.880 If it's in your nature to cast off the every 0:20:10.920 --> 0:20:12.960 day and seek adventure, the Discovery Sport was built to 0:20:12.960 --> 0:20:15.520 help your search. Visit landover tri State dot com for 0:20:15.600 --> 0:20:18.000 special offers during the only Adventure Sales event. Land Rover 0:20:18.080 --> 0:20:26.360 Above and Beyond broadcasting live to New York, Bloomberg eleventh 0:20:26.960 --> 0:20:31.720 to Washington, d C, Bloomberg to Boston, Bloomberg twelve ons 0:20:31.760 --> 0:20:36.000 to San Francisco, Bloomberg n to the Country Series Exam 0:20:36.119 --> 0:20:39.560 Channel one ninety and around the globe the Bloomberg Radio 0:20:39.640 --> 0:20:45.240 Bus and Bloomberg dot Com. This is Bloomberg Surveillance. It 0:20:45.400 --> 0:20:47.879 is a thirty on Wall Street. I'm Michael McKee along 0:20:47.920 --> 0:20:50.600 with Tom Keen. Our Economic indicators today, brought to you 0:20:50.640 --> 0:20:53.840 by Commonwealth Financial Network. When it's time to change the conversation, 0:20:53.880 --> 0:20:56.200 talk with a broker dealer? Are I a that's ready 0:20:56.200 --> 0:21:00.000 to listen? Call six six six two three six three 0:21:00.080 --> 0:21:03.000 or visit common Wealth dot com to learn more. Here's 0:21:03.040 --> 0:21:06.600 Vinnie deal Judais. At the first word desk, Micael Economic 0:21:06.640 --> 0:21:09.720 News jobless claims. They are up by six thousand a 0:21:09.760 --> 0:21:14.199 two hundred seventy eight thousand, topping forecast. Revised data on 0:21:14.359 --> 0:21:19.120 fourth quarter productivity meantime down two point two percent less 0:21:19.119 --> 0:21:23.080 than forecast. Unit labor costs up three point three percent again, 0:21:23.160 --> 0:21:26.879 jobless claims rising last week, up by six thousand to 0:21:27.000 --> 0:21:29.640 two hundred seventy eight thousand. At couple of first word 0:21:29.640 --> 0:21:31.760 Desk'm Vidye del Judai. Let's go back to New York 0:21:32.440 --> 0:21:36.879 Vine Dell ju Uh. Well, I don't know whether you 0:21:36.960 --> 0:21:39.880 call a move from a negative three percent a three 0:21:39.920 --> 0:21:42.720 percent contraction in productivity to a two point two percent 0:21:42.760 --> 0:21:45.600 contraction is good news or not, I suppose on a 0:21:45.640 --> 0:21:49.240 relative asis, but the unit labor cost job three point 0:21:49.280 --> 0:21:52.320 three percent is catch people's eye. Can you adjust the 0:21:52.359 --> 0:21:55.840 mic of our next steam guest? He is UM, he's 0:21:55.840 --> 0:21:59.480 been he's been searching for something to do moving into spring, 0:21:59.520 --> 0:22:03.439 and some were in onto Cleveland and Philadelphia. Maybe we 0:22:03.440 --> 0:22:07.400 could get them to be the gop SR. I mean, 0:22:07.680 --> 0:22:11.440 I think there's a job opportunity. I don't. I don't 0:22:11.440 --> 0:22:15.800 think I'm qualified, but they definitely need somebody go ahead. 0:22:16.040 --> 0:22:19.400 Where we're watching what's going on with fascination and wondering. 0:22:20.000 --> 0:22:21.960 We were talking over the last two days while we 0:22:21.960 --> 0:22:24.200 were done in Washington about how Wall Street is seeing 0:22:24.200 --> 0:22:26.840 all this, I mean, leaving aside individual candidates, with the 0:22:26.880 --> 0:22:31.600 fracturing of one party, um, the move to the left uh, 0:22:31.640 --> 0:22:34.439 and in the other party, um, the people with the 0:22:34.480 --> 0:22:37.680 money and a lot at stake, how they're viewing all 0:22:37.720 --> 0:22:40.720 of this at this point, I think with fear intrepidation. 0:22:40.840 --> 0:22:44.160 I think people on Wall Street. People on Wall Street 0:22:44.200 --> 0:22:47.679 are basically not that ideological in many ways. They have, 0:22:47.760 --> 0:22:48.960 you know, they have a point of view, they have 0:22:49.000 --> 0:22:51.520 they may belong to a party. But they're not extremists. 0:22:51.520 --> 0:22:54.560 They're kind of pragmatists. They're kind of centrists, a bit 0:22:54.600 --> 0:22:57.520 like the majority owner of Bloomberg LP. And there's our 0:22:57.560 --> 0:23:02.560 there's our Disclaimers radio stage, uh and and so they 0:23:02.680 --> 0:23:05.320 view all this with alarm. They they you know, in 0:23:05.320 --> 0:23:07.360 an extreme case, they worry that we could go off 0:23:07.400 --> 0:23:10.480 the deep end into into some unknown political area, the 0:23:10.480 --> 0:23:13.600 way countries in europeath from time to time. And even 0:23:14.080 --> 0:23:17.000 short of that, they worry about about, you know, who's 0:23:17.000 --> 0:23:19.720 going to be in the White House. Mr Trump enjoys, 0:23:19.760 --> 0:23:23.320 as far as I can tell, zero support on Wall Street. 0:23:23.080 --> 0:23:25.600 I don't know anybody in the business community, but I 0:23:25.640 --> 0:23:27.879 shouldn't say anybody, but virtually nobody in the business can 0:23:27.920 --> 0:23:30.760 be supporting him for any number of reasons. I think 0:23:30.760 --> 0:23:33.199 on the Democratic side, things have gotten a bit what 0:23:33.280 --> 0:23:35.960 I would call better, in that I think Hillary Clinton's 0:23:36.000 --> 0:23:39.160 path to the nomination is now quite clear, and so 0:23:39.359 --> 0:23:41.120 while she may have moved a bit to the left 0:23:41.200 --> 0:23:43.920 during this primary season, I think I don't think we're 0:23:43.920 --> 0:23:46.480 gonna have a socialist as the Democratic nominee. Let's see, 0:23:46.560 --> 0:23:49.439 right now, that's the issue. You nail it. Absolutely, People 0:23:49.520 --> 0:23:53.680 shift through an election year. Do you see any perception 0:23:54.320 --> 0:23:57.760 that any of the three Republican front runners right now 0:23:58.359 --> 0:24:02.439