WEBVTT - Bloomberg Businessweek Weekend - January 27th, 2023 0:00:01.320 --> 0:00:05.680 This is Bloomberg business Week Inside from the reporters and 0:00:05.840 --> 0:00:09.400 editors who bring you America's most trusted business magazine, plus 0:00:09.440 --> 0:00:13.400 bloom all business finance and tech news. The Bloomberg Business 0:00:13.400 --> 0:00:18.600 Week Podcast with Carol Masser and Tim stinebec from Bloomberg Radio. 0:00:19.360 --> 0:00:21.599 The Bloomberg Big Take story in the upcoming new issue 0:00:21.600 --> 0:00:24.760 of Bloomberg Business Week add on newstands tomorrow, already online 0:00:25.000 --> 0:00:27.240 at Bloomberg dot com slash business Week. It's also on 0:00:27.280 --> 0:00:30.640 the Bloomberg Terminal. The story Tim taps into how traditional 0:00:30.680 --> 0:00:34.599 economic indicators, well they can't predict the timing of a downturn, 0:00:34.680 --> 0:00:37.040 and then some of the newer forecasting methods they're just 0:00:37.120 --> 0:00:38.959 kind of untested. Yeah, this is why I calling us 0:00:38.960 --> 0:00:41.239 recession is trickier than ever before, especially with all the 0:00:41.280 --> 0:00:43.800 mixed signals that we're getting. It is just not easy. 0:00:43.800 --> 0:00:48.240 We hear over and over again, it's not easy from CFOs, 0:00:48.479 --> 0:00:50.960 it's tough. Here with the story we got Bloomberg News 0:00:51.159 --> 0:00:54.160 US econom reporter Katya Dmitrieva on zoom VI in the 0:00:54.200 --> 0:00:56.920 ninety nine one studio and Bloomberg Bureau in Washington, d C. 0:00:57.040 --> 0:00:59.120 Along with the editor of Business Week Joe Webber, he's 0:00:59.160 --> 0:01:02.240 here in the bloom Berk Interactive Broker's studio. Come on, Joel. 0:01:02.240 --> 0:01:03.600 I thought this was easy. I thought all you had 0:01:03.640 --> 0:01:05.800 to do was be the national view of economic research 0:01:06.040 --> 0:01:08.600 and you just you know, say, look in your crystal ball. 0:01:08.640 --> 0:01:10.759 And I thought that tells you exactly when the recession 0:01:10.920 --> 0:01:13.080 may or may not know. Yeah, and on top of 0:01:13.120 --> 0:01:15.360 that that no pressure for economists here because they've had 0:01:15.400 --> 0:01:19.200 some noteworthy misses. Uh, you know, there's an inflation thing 0:01:19.319 --> 0:01:23.959 and some GDP. Yeah. So so really, what's what's happened 0:01:24.000 --> 0:01:26.959 here is this, Uh, there's been a proliferation of data. 0:01:27.440 --> 0:01:30.480 Everybody's got an opinion now, right, gad you And and 0:01:30.600 --> 0:01:33.160 what is the best we can come up with with 0:01:33.200 --> 0:01:37.000 how to figure out how to call a recession? Yeah, 0:01:37.400 --> 0:01:41.039 there's a lot of data, you know, in addition to 0:01:41.080 --> 0:01:45.480 the traditional indicators, you also have all of the new ones. 0:01:45.560 --> 0:01:49.640 You know, everything from the open table restaurant reservations to 0:01:50.880 --> 0:01:53.120 where people are flying and if they're flying, if they're 0:01:53.160 --> 0:01:56.160 coming back into the office, and then even things like 0:01:56.320 --> 0:01:59.200 plastic surgery. Some economists like to look at that as 0:01:59.200 --> 0:02:01.880 a gauge of so of how much people are spending 0:02:01.880 --> 0:02:06.040 on things that are completely discretionary of the time. So 0:02:06.320 --> 0:02:08.120 you have a lot of stuff to look at. Um, 0:02:08.440 --> 0:02:14.000 and unfortunately, you know, unfortunately it's no easier this time 0:02:14.040 --> 0:02:18.239 around with this data than it was, for example, during 0:02:18.440 --> 0:02:21.720 the last recession or pre COVID I should say, twenty nineteen, 0:02:21.720 --> 0:02:24.400 when everyone was thinking, okay, we're due for a recession 0:02:25.480 --> 0:02:30.360 before times the PC pre COVID times. Um, you know, 0:02:30.560 --> 0:02:35.639 I think right now, Uh, there is some indication of stress. Um, 0:02:35.760 --> 0:02:38.560 there is some indication that things are slowing down. But 0:02:38.639 --> 0:02:41.520 the tricky thing is trying to figure out when you're 0:02:41.680 --> 0:02:45.200 piecing together all these different pieces of the economy, Um, 0:02:45.360 --> 0:02:47.720 is the image that you get that we're entering a 0:02:47.760 --> 0:02:50.840 recession or is it simply a renormalization and kind of 0:02:50.840 --> 0:02:56.000 a slowing down to something we might have seen. So 0:02:56.600 --> 0:02:59.880 that's what's proving very difficult for for a lot of it. 0:03:00.000 --> 0:03:02.040 Ponymous right now, I'm so glad we're talking to you 0:03:02.120 --> 0:03:04.480 right now. We we just spoke with Mario Cordero, who 0:03:04.600 --> 0:03:09.320 runs the Port of Long Beach, and he was saying that, um, 0:03:09.360 --> 0:03:10.560 you know, we kind of like tried to hold his 0:03:10.560 --> 0:03:13.160 feet to the fire and get him to say whether 0:03:13.200 --> 0:03:14.400 or not we're in a recession, whether or not he 0:03:14.440 --> 0:03:15.720 sees one coming. I mean, this is the guy who 0:03:15.760 --> 0:03:18.320 can look out his window and see the economic activity. 0:03:18.400 --> 0:03:19.760 You know, how many ships are lined up in the 0:03:19.760 --> 0:03:23.080 economic activity that's taking part. And he wouldn't. He was like, 0:03:23.080 --> 0:03:26.320 I'm on team soft landing, but he wasn't comfortable making 0:03:26.320 --> 0:03:27.840 a call. We said like yes or no, and he 0:03:27.840 --> 0:03:31.000 wouldn't do it. Yeah, he wouldn't do it, right, Yeah, 0:03:31.200 --> 0:03:33.120 you know, I mean that's the exact same experience that 0:03:33.200 --> 0:03:35.040 you're going to get with a lot of other economists 0:03:35.120 --> 0:03:37.320 right now. I mean even Claudia Sam you know, she 0:03:37.760 --> 0:03:40.040 created the some rule. Uh, this is sort of when 0:03:40.080 --> 0:03:42.600 you talk about art versus science and economy. This is 0:03:42.680 --> 0:03:45.280 pretty much as science as you can get. You know. 0:03:45.360 --> 0:03:48.640 It's a line on a chart attracts the unemployment rate 0:03:48.680 --> 0:03:51.280 over time compared to the sort of past twelve months 0:03:51.320 --> 0:03:55.120 unemployment rate, and it is very accurate in terms of 0:03:55.120 --> 0:03:58.880 predicting at a certain point. Okay, we've entered a recession. 0:03:58.960 --> 0:04:01.240 And yet even when I was chatting with her, she 0:04:01.320 --> 0:04:03.960 was saying, you know, I hope that it's wrong this 0:04:04.000 --> 0:04:07.520 time around, and there's a chance that it might be wrong. 0:04:07.680 --> 0:04:11.360 This time around, because the consumer outlook is still pretty 0:04:11.400 --> 0:04:14.160 strong and we haven't seen a lot of kind of 0:04:14.880 --> 0:04:19.200 impact negative impact in the labor market yet. Um. And again, 0:04:19.440 --> 0:04:23.440 I mean, we could enter a situation where consumer spending 0:04:23.480 --> 0:04:25.920 managers to hold up. Right. So we saw the retail 0:04:25.920 --> 0:04:29.440 sales figures for the past few months pretty dismal, but 0:04:29.560 --> 0:04:32.480 we're coming off of that high, right, So, um, we 0:04:32.520 --> 0:04:35.040 could enter a situation where companies have a bit more 0:04:35.120 --> 0:04:37.920 room to cut prices now, um, now that the FED 0:04:38.040 --> 0:04:40.520 is kind of done its job and we're seeing inflation 0:04:40.600 --> 0:04:42.680 slow down a bit. Um, And then we could have 0:04:42.720 --> 0:04:45.320 consumers saying, Okay, I'm going to keep spending, maybe not 0:04:45.400 --> 0:04:47.040 like I did two years ago or a year ago, 0:04:47.120 --> 0:04:49.360 but you know, I'm going to keep this economy going. 0:04:49.560 --> 0:04:52.920 Everyone's going to keep doing their part. Uh. So it's 0:04:52.960 --> 0:04:56.400 just still a big question mark words later, you know, 0:04:56.480 --> 0:04:59.840 twenty economists interviews later, and it's still to be do 0:05:00.000 --> 0:05:03.560 my part. Um, So what about the yield curve Because 0:05:03.560 --> 0:05:07.920 that's then as you write a tried and true recession indicator, 0:05:08.880 --> 0:05:11.880 does it still hold as much weight as we've always 0:05:11.920 --> 0:05:14.680 thought or is it sort of slightly maybe less? And 0:05:14.760 --> 0:05:17.280 these other things kind of take into account, like what 0:05:17.279 --> 0:05:21.000 what's the new uh, you know, the new thinking on 0:05:21.960 --> 0:05:25.839 inverted yield curves. Yeah, the yield curve is a funny 0:05:25.839 --> 0:05:29.279 one people people love it and it's a great Um. 0:05:29.320 --> 0:05:32.160 It's a great indicator of what investors are thinking and 0:05:32.200 --> 0:05:36.120 whether they see kind of a recession down the road. 0:05:36.240 --> 0:05:40.279 And it's pretty straightforward. Um when sort of the short 0:05:40.400 --> 0:05:43.840 versus long term the curve inverts, like it's a it's 0:05:43.839 --> 0:05:46.320 a signal. It's one signal of many signals. Um, But 0:05:46.360 --> 0:05:48.440 how does it compare with a drop in sales of 0:05:48.480 --> 0:05:53.520 men's underwear? Yeah? Yeah, I know Alan Green's fans favorite 0:05:53.600 --> 0:05:57.159 or used to be his favorite indicator. Um. You know, 0:05:57.320 --> 0:06:00.240 it's it's more accurate than a lot of other indicators. Thing. 0:06:00.400 --> 0:06:03.120 The thing with the yield curban version, though, is that 0:06:03.960 --> 0:06:05.880 there could be a false positive. So we have in 0:06:05.920 --> 0:06:08.560 the nineteen sixties where the yield curve inverted and we 0:06:08.600 --> 0:06:12.680 didn't have a recession immediately afterwards. And we also had 0:06:12.720 --> 0:06:15.640 the yield curve inverting twice at least twice last year, 0:06:16.160 --> 0:06:18.640 and we're you know, I mean you could talk to 0:06:18.680 --> 0:06:20.880 some economists they'd argue we're already in a recession. But 0:06:21.200 --> 0:06:24.640 we don't see, um, the traditional signs of a recession 0:06:24.880 --> 0:06:27.720 right this very second. So you could maybe even call 0:06:28.120 --> 0:06:30.919 call that a false positive. So with a lot of 0:06:30.920 --> 0:06:34.920 these indicators, like you really have to take them all together, 0:06:35.120 --> 0:06:38.520 so yield curve plus the so rule plus you know, 0:06:38.560 --> 0:06:41.880 for example, the Conference Boards Leading Indicator index, which is 0:06:42.080 --> 0:06:44.280 weakening and flashing rent. And it's gonna wait for a 0:06:44.360 --> 0:06:46.080 year when everybody says, oh, guess what we were in 0:06:49.480 --> 0:06:53.599 It already happened. Hey, listen, how does though there's a 0:06:53.600 --> 0:06:55.680 great sound bite in your in your story are a 0:06:55.680 --> 0:06:59.360 great quote about how this is the most traditional of 0:06:59.440 --> 0:07:01.880 traditional recessions in a couple of decades, right the last 0:07:01.880 --> 0:07:04.560 two we know, right, we had the financial meltdown, the 0:07:04.600 --> 0:07:07.120 housing crisis, that's one, and then you had a pandemic 0:07:07.120 --> 0:07:09.480 that shut down the economy thirty seconds left her. It 0:07:09.560 --> 0:07:12.440 being traditional makes it easier or harder to call. It 0:07:12.560 --> 0:07:14.960 makes it just as hard to call. I mean, we're 0:07:15.040 --> 0:07:16.960 lucky this time and that right now we don't have 0:07:17.000 --> 0:07:19.800 a black Swan event at least not yet fingers crossed 0:07:19.840 --> 0:07:22.120 like we did for the last two, especially the last 0:07:22.120 --> 0:07:26.240 pandemic recession. Um. But it doesn't make it any easier. 0:07:26.240 --> 0:07:28.440 In fact, I would argue it makes it harder because 0:07:28.480 --> 0:07:31.480 you're seeing uh, you know, kind of a slowdown of demand, 0:07:31.560 --> 0:07:35.480 but you're also seeing these mixed signals of like positive 0:07:35.520 --> 0:07:38.440 things happening in the economy. So I would say it's 0:07:38.520 --> 0:07:40.440 it's just as hard as it was before. That was 0:07:40.520 --> 0:07:43.960 Katia Dmitrieva. She's a US economy reporter for Bloomberg News. 0:07:44.160 --> 0:07:46.320 Business Week editor Joel Webber. We'll be back with us 0:07:46.400 --> 0:07:48.880 just a bit later. Really relevant story, right, especially with 0:07:48.920 --> 0:07:51.440 that FED meeting coming this week. It's tricky for the FED. 0:07:51.640 --> 0:07:54.960 It's tricky for calling a US recession and envy those jobs, Caroll, No, 0:07:55.240 --> 0:07:57.680 not at all all right. Well, one of the confounding 0:07:57.720 --> 0:08:01.080 metrics that Katia wrote about was jobs data. Since the start, 0:08:01.960 --> 0:08:05.680 we've seen mass layoffs from the likes of Microsoft, Amazon, Alphabet, Ford, 0:08:05.960 --> 0:08:08.720 also three M, Spotify, and IBM. Just this past week, 0:08:08.720 --> 0:08:11.040 but we had another weekly jobtless claims number that showed 0:08:11.080 --> 0:08:14.240 the labor market still tight. Yeah, government jobs data still 0:08:14.240 --> 0:08:17.000 depicting a rather tight labor market here in the US. 0:08:17.320 --> 0:08:19.440 For a closer look at some key job trends, we 0:08:19.480 --> 0:08:21.880 caught up with Dr Mona Moore, sed she's the founder 0:08:21.920 --> 0:08:25.120 and CEO at Generation. It's an independent nonprofit that was 0:08:25.160 --> 0:08:28.240 founded by mackenzie to help prepare people for the workforce. 0:08:28.400 --> 0:08:30.880 We've got with us this afternoon. Dr Mona Moore set 0:08:31.000 --> 0:08:34.240 founder and CEO at Generation. This is an independent nonprofit. 0:08:34.280 --> 0:08:36.160 It was founded a few years ago by McKenzie to 0:08:36.200 --> 0:08:39.200 help prepare people for jobs. She joins s via zoom 0:08:39.200 --> 0:08:41.720 from Washington, d C. Dr Morshed, good to have you 0:08:41.800 --> 0:08:44.079 with us this afternoon. I want to talk more about 0:08:44.080 --> 0:08:45.880 Generation just a second. But first of all, I want 0:08:45.880 --> 0:08:47.760 to get your thoughts on on what we're seeing in 0:08:47.880 --> 0:08:49.680 terms of layoffs. And I want to look at this 0:08:49.720 --> 0:08:51.839 in the context of, you know, we're still in a 0:08:51.960 --> 0:08:55.000 jobs market that's you know, really really tired. I mean 0:08:55.080 --> 0:09:02.080 unemployment rate it's historically low still absolutely so, there are 0:09:02.120 --> 0:09:06.040 a number of things happening right now. Um. Obviously, we're 0:09:06.040 --> 0:09:08.960 all waking up to headlines every day where there are 0:09:09.240 --> 0:09:13.280 slews of job cuts which are being announced. Um. That 0:09:13.360 --> 0:09:16.960 has a couple of ramifications. Um. First of all, obviously 0:09:17.000 --> 0:09:20.160 it means adversity for those individuals and those families. But 0:09:20.280 --> 0:09:23.400 what we're also saying is that there's a slowdown in 0:09:24.120 --> 0:09:27.640 new higher vacancies as well, UM in addition to the 0:09:27.720 --> 0:09:30.600 job cuts, and so there are two forces happening at 0:09:30.679 --> 0:09:36.160 the moment um. For those individuals who are spending a 0:09:36.240 --> 0:09:41.200 slowdown in new higher vacancies, what does that mean? So 0:09:41.480 --> 0:09:45.240 for postings for new hires, there's a slowdown in those. 0:09:45.360 --> 0:09:48.920 So there's both cuts as well as a slowdown and hiring. 0:09:49.440 --> 0:09:53.679 So it affects two populations, those currently in jobs who 0:09:53.679 --> 0:09:57.240 are losing them and those who are applying a fresh 0:09:57.520 --> 0:10:00.000 to new jobs. And so we're are starting to see day, 0:10:00.080 --> 0:10:02.600 at least in the US of UM it taking three 0:10:02.640 --> 0:10:06.320 to six months for people to find jobs in certain pockets. 0:10:06.880 --> 0:10:11.679 Now that's a certain picture. Now important to recognize the 0:10:11.679 --> 0:10:13.880 headlines that we see in the US do not apply 0:10:14.000 --> 0:10:17.640 equally across the world. So we're also seeing other geographies 0:10:17.800 --> 0:10:22.000 where there's been no slowdown at all in terms of hiring. 0:10:22.200 --> 0:10:26.240 And we're also seeing that UM although for tech jobs 0:10:26.240 --> 0:10:29.760 in particular, you might find slowdowns in tech companies, but 0:10:29.920 --> 0:10:32.560 there are other companies and other sectors. So it might 0:10:32.600 --> 0:10:35.200 be in the financial sector, it might be in manufacturing 0:10:35.240 --> 0:10:37.760 who are looking to hire for tech roles, and so 0:10:37.800 --> 0:10:43.319 that's another area of opportunity. Well, right, I mean, does 0:10:43.360 --> 0:10:46.559 this remind you at all of another job cycle? H 0:10:47.160 --> 0:10:54.760 two thousand and eight? Seriously? Seriously? Well, hopefully we don't 0:10:54.800 --> 0:10:57.080 reach that. I mean, so look, I think that what's 0:10:57.120 --> 0:10:59.880 what's important is to recognize this is all cyclical, right, 0:11:00.040 --> 0:11:02.880 and this cycle will take about two years to work 0:11:02.920 --> 0:11:08.080 itself out if if history is any indicator, um, so 0:11:08.480 --> 0:11:13.520 we're seeing a crunch and then again slow hiring, um, 0:11:13.520 --> 0:11:16.800 but then it will open up again. And and very 0:11:16.840 --> 0:11:20.959 importantly for job seekers is looking for those pockets where 0:11:21.040 --> 0:11:25.640 there is continued hiring and and that may not be 0:11:25.720 --> 0:11:27.520 in the tech sector, so it could be tech roles 0:11:27.640 --> 0:11:30.800 in other sectors. So is it safe to say, and 0:11:30.920 --> 0:11:32.600 just to kind of a little bit of a conclusion here, 0:11:32.640 --> 0:11:34.839 when we look at the data points that come from 0:11:34.840 --> 0:11:37.079 the government and elsewhere on the on the job market, 0:11:37.120 --> 0:11:39.480 which continue to show strength in the job market, are 0:11:39.480 --> 0:11:42.840 you saying it's really not the true picture or the 0:11:42.880 --> 0:11:46.880 full picture. It's a partial picture, right, you know, So 0:11:47.720 --> 0:11:51.839 again there is a partial when you look at which 0:11:51.880 --> 0:11:55.360 sectors are hiring versus where is there a slowdown. It's 0:11:55.400 --> 0:11:59.160 partial in terms of is it a global phenomena or 0:11:59.400 --> 0:12:03.240 is it a us phenomena UM. And then there is 0:12:03.360 --> 0:12:06.600 also a question I would say of demographics UM, because 0:12:06.679 --> 0:12:11.160 one thing that I will emphasize is that age matters 0:12:11.360 --> 0:12:14.720 when it comes to hiring. UM. We've done research and 0:12:14.720 --> 0:12:17.640 others have done research as well when you look at 0:12:17.760 --> 0:12:21.040 what happens when when you are aged forty plus it 0:12:21.200 --> 0:12:25.240 becomes much harder to find a job. That is why 0:12:25.360 --> 0:12:28.400 the majority of the long term unemployed six months or 0:12:28.440 --> 0:12:31.640 more are age forty plus. And that's across the O, E, C. D. 0:12:32.240 --> 0:12:37.880 So age matters here too and will impact unfortunately due 0:12:37.880 --> 0:12:41.880 to pervasive agism that we consistently see across employers and 0:12:41.880 --> 0:12:45.440 across geographies of how fast can you get yourself back 0:12:45.480 --> 0:12:48.400 into a job. So what's the focus for you at 0:12:48.400 --> 0:12:51.439 generation in terms of the types of the people who 0:12:51.840 --> 0:12:56.920 find themselves without jobs placing them age range? Yeah, So 0:12:57.040 --> 0:13:00.760 at generation we support adults of all a is UM 0:13:00.840 --> 0:13:06.720 so from eighteen years old to plus UM, and our 0:13:07.360 --> 0:13:11.880 learners are typically so first, they typically have a secondary 0:13:11.880 --> 0:13:16.920 school degree background UM. Over half our female the majority 0:13:16.960 --> 0:13:21.240 have dependence UM and they we are either placing them 0:13:21.360 --> 0:13:25.520 into their first job or we are supporting those who 0:13:25.559 --> 0:13:27.760 are age forty five plus and who may, for example, 0:13:27.800 --> 0:13:30.319 have been spending the last ten years working in retail 0:13:30.440 --> 0:13:33.120 or in logistics, and supporting to put them into green 0:13:33.240 --> 0:13:36.319 jobs or into tech jobs or whatever it might be. UM. 0:13:36.400 --> 0:13:39.040 So what we do is train and place learners into 0:13:39.080 --> 0:13:42.559 careers that otherwise would have been inaccessible. So I want 0:13:42.559 --> 0:13:45.440 to go back to something that you said earlier about 0:13:45.480 --> 0:13:48.360 this being reminding you of of two thousand eight. And 0:13:49.160 --> 0:13:50.680 you know, if we go back to two thousand and eight, 0:13:50.840 --> 0:13:55.319 the unemployment rate was right now it's at three point 0:13:55.360 --> 0:13:58.160 six percent. So what else about the environment right now 0:13:58.160 --> 0:14:00.400 that you're seeing out there tells you that this is 0:14:00.440 --> 0:14:04.079 similar to back then. I'm just not seeing it. There's 0:14:04.200 --> 0:14:07.959 UM an element of what I'll just call copycat behavior UM, 0:14:08.000 --> 0:14:10.880 which is when employers start to see that some companies 0:14:10.920 --> 0:14:15.520 are doing layoffs, it starts to make everyone much more conservative. UM. 0:14:15.600 --> 0:14:19.760 And that is and that is with regards to new hires. 0:14:19.960 --> 0:14:21.880 And so the question for us is because we are 0:14:21.920 --> 0:14:26.480 often placing people into entry level roles irrespective of which 0:14:26.480 --> 0:14:29.720 profession it's in, and so you start to see it 0:14:29.760 --> 0:14:32.960 taking longer to get people into rolls. So it's not 0:14:33.080 --> 0:14:35.200 that they will not make it, but you know it. 0:14:35.320 --> 0:14:38.160 Whereas before we could support someone within three months, it 0:14:38.240 --> 0:14:41.480 might now take six months, um and so, and we're 0:14:41.520 --> 0:14:44.920 seeing this also in the reticence of employers to also 0:14:45.080 --> 0:14:47.560 commit to saying, you know, these are the vacancies which 0:14:47.560 --> 0:14:50.000 we're going to have this month or that month. Everyone 0:14:50.120 --> 0:14:53.160 is watching and waiting to see what happens. In addition, 0:14:54.200 --> 0:14:56.840 the I m F recently came out to say that 0:14:56.880 --> 0:14:59.200 you know, a third of the world's economies are going 0:14:59.240 --> 0:15:01.240 to go into recess in this year, which is a 0:15:01.280 --> 0:15:05.480 big deal. Um. So twenty three is very much a 0:15:05.840 --> 0:15:11.120 watch and wait and observed. You know, mona earlier you 0:15:11.160 --> 0:15:13.040 said the government date, it's a partial picture of what's 0:15:13.040 --> 0:15:16.000 going on in the US labor market. So having said that, 0:15:16.240 --> 0:15:19.040 based on what you're saying, it sounds to me that 0:15:19.280 --> 0:15:22.320 very soon we might see some of this show up. 0:15:22.440 --> 0:15:28.800 Is that your expectations. The expectation is absolutely that over 0:15:28.880 --> 0:15:31.480 the coming months we're going to see not just for 0:15:31.520 --> 0:15:34.120 the U. S economy, but for the world how resilient 0:15:34.840 --> 0:15:38.440 is the hiring going to be. And it will obviously 0:15:38.840 --> 0:15:41.080 nothing will ever be true across the entire world, but 0:15:41.120 --> 0:15:44.400 it will be in pockets. Um. So you'll find some sectors. 0:15:44.440 --> 0:15:47.920 You know, clearly the tech sector is heavily affected right now, um, 0:15:47.960 --> 0:15:50.600 but you may not see that same trend in green 0:15:50.680 --> 0:15:53.360 jobs or in healthcare. And so this is why it's 0:15:53.400 --> 0:15:57.080 so important to look at the picture sector by sector 0:15:57.080 --> 0:16:02.479 and not just economy wide. Older workers. Do we need them? Absolutely? 0:16:02.520 --> 0:16:07.280 We need them? Um. You know, I think the age 0:16:07.320 --> 0:16:13.240 forty plus population is a remarkable asset that should be 0:16:13.560 --> 0:16:15.760 much more employed than is the case. You have a 0:16:15.760 --> 0:16:18.240 bunch of people around the news room and our kids 0:16:18.240 --> 0:16:20.080 who are listening to the like when did forty five 0:16:20.160 --> 0:16:25.560 become old? Because when you look at the when, when 0:16:25.600 --> 0:16:28.880 you look at government stats, the majority of the long 0:16:29.000 --> 0:16:33.880 term unemployed or age forty five plus? What it? As 0:16:33.880 --> 0:16:35.760 soon as you know, I say this to you as 0:16:35.760 --> 0:16:38.360 a fifty one year old. I recently had a birthday, um, 0:16:38.600 --> 0:16:43.080 and so thank you. It's interesting because you know, we 0:16:43.200 --> 0:16:46.160 talk about aging demographics and the impact it can have 0:16:46.480 --> 0:16:48.960 on a country's economy. Right. We've talked about it, certainly 0:16:49.000 --> 0:16:51.359 with Japan, We've talked about it with the US. Increasingly 0:16:51.360 --> 0:16:54.000 we've talked about it even with China, who's seeing an 0:16:54.000 --> 0:16:57.480 aging population in the costs that that has in in 0:16:57.560 --> 0:17:02.360 so many different ways. UM, I don't know. I'm not 0:17:02.400 --> 0:17:04.480 pretty sure what the smart I mean. Should we be 0:17:04.480 --> 0:17:06.600 putting these people to work? Isn't that better for the 0:17:06.600 --> 0:17:08.480 global economy? Or tim? What do you think? Well? Have 0:17:08.520 --> 0:17:10.840 one question for him on a ten seconds Okay, if 0:17:10.880 --> 0:17:13.000 somebody really young is listening right now thinking about what 0:17:13.040 --> 0:17:15.879 they're studying in college or studying in trade school, what 0:17:15.880 --> 0:17:21.719 should it be? Uh? I get this question frequently now, 0:17:21.840 --> 0:17:25.200 so look, I'm going to give a practice to answer, 0:17:25.240 --> 0:17:29.639 which very quickly. It's about how quickly you learn. It 0:17:29.840 --> 0:17:32.200 is often not about what you learn, it's how quickly 0:17:32.240 --> 0:17:35.680 you learned. I like that interesting. Alright, some really thoughts 0:17:35.720 --> 0:17:38.520 in terms of today's labor market. Dr Monamore said, founder 0:17:38.560 --> 0:17:41.119 and CEO of Generation, via Zoom from Washington, d C. 0:17:41.640 --> 0:17:45.200 You're listening to the Bloomberg Business Week podcast. Catch us 0:17:45.200 --> 0:17:47.879 live week days from two to five pm Eastern on 0:17:47.960 --> 0:17:51.720 Bloomberg Radio, the Bloomberg Business Band You Two. You can 0:17:51.760 --> 0:17:55.080 also listen live to our flagship New York station, Just 0:17:55.119 --> 0:17:59.880 Say Alexa, Play Bloomberg, E Love and Verdi. A wind 0:18:00.040 --> 0:18:03.359 turbine taller than the Statue of Liberty collapse last June 0:18:03.800 --> 0:18:08.080 in UH Aims ninety miles northwest of Oklahoma City, and 0:18:08.080 --> 0:18:11.159 a few days later another one tim collapsed in Colorado. 0:18:11.400 --> 0:18:13.440 The instances are part of a rash of recent wind 0:18:13.440 --> 0:18:16.920 turbine malfunctions across the US and Europe, ranging from failures 0:18:16.920 --> 0:18:20.040 of key components to full collapses. Writing about it in 0:18:20.040 --> 0:18:22.000 the new issue of Bloomberg Business Week is Ryan Bean, 0:18:22.080 --> 0:18:24.520 industrials reporter for Bloomberg News. He joins us along with 0:18:24.520 --> 0:18:27.080 the editor of the magazine, Joel Webber. Both are in 0:18:27.080 --> 0:18:30.080 our Bloomberg Interactive Broker's Studio. This story, by the way, 0:18:30.080 --> 0:18:31.800 it's in the new issue of Business Week. It's out 0:18:31.800 --> 0:18:33.920 on news stands later this week. You can already read 0:18:34.200 --> 0:18:36.440 the story online at Bloomberg dot com, slash business Week 0:18:36.480 --> 0:18:39.480 and of course always on the Bloomberg terminal. Joel, I 0:18:39.480 --> 0:18:41.800 want to start with you, how how bad is this? 0:18:41.840 --> 0:18:43.480 I mean, do we do we? You know? Are these 0:18:43.480 --> 0:18:45.639 things like falling all over the place? Hard? Hard to know? No, 0:18:46.240 --> 0:18:50.919 But the bigger story here is that uh as sustainable 0:18:50.960 --> 0:18:54.040 source of energy have become so much more cost effective. 0:18:54.160 --> 0:18:58.280 Everybody's been scaling up, so turbines have gotten bigger, bigger, bigger. 0:18:58.320 --> 0:19:01.520 It's like just imagine and steroids and these things have 0:19:01.640 --> 0:19:06.400 gotten massive, and at the same time, maybe the same 0:19:06.480 --> 0:19:09.280 quality control has been going into these products as that 0:19:09.280 --> 0:19:11.480 they've gotten bigger. So so, Ryan, what does this mean 0:19:11.600 --> 0:19:16.320 for the companies and for the rest of us who 0:19:16.440 --> 0:19:20.040 at the you know, live with turbines that might snap 0:19:20.080 --> 0:19:23.040 and be flailing around in the wild. Sure? Well, first 0:19:23.040 --> 0:19:24.880 of all, I don't think most people who live near 0:19:25.040 --> 0:19:27.399 or or or have these turbines in their community need 0:19:27.480 --> 0:19:31.240 to be super super worried all the time. But uh, 0:19:31.600 --> 0:19:33.800 right now, it means the companies are just paying a 0:19:33.880 --> 0:19:36.359 lot of money to address these quality issues. I mean, 0:19:36.760 --> 0:19:39.240 just a few days before we published the story, uh 0:19:39.280 --> 0:19:42.080 seem As Gamesa, one of the largest winterbine manufacturers in 0:19:42.119 --> 0:19:44.920 the world, announced you know, a pretty significant charge totaling 0:19:45.000 --> 0:19:47.760 hundreds of millions of euros related to you know, premature 0:19:47.800 --> 0:19:50.520 component failures in their turbines that were already installed. I mean, 0:19:50.560 --> 0:19:53.399 g E has taken you know, similar charges for to 0:19:53.480 --> 0:19:56.160 fix you know issues with their fleet of installed turbines. 0:19:56.440 --> 0:19:58.880 And I think you know, one thing that's important for 0:19:58.880 --> 0:20:01.560 for listeners to understand it is like this industry is 0:20:01.600 --> 0:20:04.280 still kind of in its I guess call it an adolescence, 0:20:04.320 --> 0:20:06.760 if you will. I mean, we've seen, you know, just 0:20:06.840 --> 0:20:10.080 not only turbines themselves get bigger, but projects get bigger 0:20:10.200 --> 0:20:12.800 and volume going up, and these companies have had a 0:20:12.880 --> 0:20:15.520 sort of race to develop a supply chain and rEFInd 0:20:15.520 --> 0:20:18.159 their manufacturing practices to go along with that growth. So 0:20:18.200 --> 0:20:19.800 I think that a lot of this is sort of 0:20:20.880 --> 0:20:23.600 growing pains to degree And what do we know about 0:20:24.160 --> 0:20:27.720 the factors? Are they external factors that are coming to 0:20:27.760 --> 0:20:30.600 bear on the turbines or is it the turbines it's 0:20:30.640 --> 0:20:34.360 themselves that seem to be faulty. It can be It's 0:20:34.400 --> 0:20:35.919 tough to say. It's a little bit of both, right, 0:20:35.960 --> 0:20:38.399 I mean, in one of these instances, you know that 0:20:38.560 --> 0:20:40.800 you mentioned at the beginning of the show, uh, some 0:20:40.880 --> 0:20:43.399 officials from the operator of the wind farm told you know, 0:20:43.520 --> 0:20:46.240 the local county commissioners that it was due to a 0:20:46.280 --> 0:20:50.280 blade flaw and that you know, four other turbines had 0:20:50.359 --> 0:20:53.880 experienced the same blade flaw that caused you know, similar failures. 0:20:54.000 --> 0:20:56.600 And then you know, over the course of our reporting, 0:20:56.640 --> 0:20:58.960 and you know, some of the other publicly reported uh, 0:20:59.000 --> 0:21:01.359 you know collapses, you know, some of them have been 0:21:01.400 --> 0:21:04.639 linked to construction issues. Uh, some of them have been 0:21:04.640 --> 0:21:08.359 looked to defects with with componentry. Uh, you know, so 0:21:08.480 --> 0:21:12.000 it's it's it's a variety of things. It's nobody. I 0:21:12.040 --> 0:21:14.840 don't know if nobody has been hurt, but but none 0:21:14.840 --> 0:21:18.320 of the instances that we reported on had any injuries involved. 0:21:18.320 --> 0:21:21.320 Now what's interesting is it's not just land turbines. This 0:21:21.440 --> 0:21:23.760 also happened, at least in one instance, to an offshore 0:21:23.760 --> 0:21:27.320 wind turbine. As that's describing your in your story. And 0:21:27.560 --> 0:21:29.480 I'm wondering, Ryan, I I see stories like this and 0:21:29.520 --> 0:21:32.640 I think about the politics of of wind because it's 0:21:32.720 --> 0:21:34.520 very political. You know, if we think back to what 0:21:34.600 --> 0:21:37.359 happened in Texas a couple of years ago during the 0:21:37.359 --> 0:21:39.960