Speaker 1: This is Bloomberg day Break Weekend, our global look at
Speaker 1: the top stories in the coming week from our Daybreak
Speaker 1: anchors all around the world. And straight ahead on the
Speaker 1: program Inflation. I'm Tom Busby in New York.
Speaker 2: I'm Kallen Hepga in London, where we're looking at the
Speaker 2: UK jobs market puzzle.
Speaker 3: I'm dek Krisner. Leaders at the Aussion Summit will consider
Speaker 3: the relationship between Japan and China.
Speaker 4: We get the Biden administration's takeaways from the latest jobs report.
Speaker 4: I'm Joe Matthew in Washington.
Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
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Speaker 6: Good day to you.
Speaker 1: I'm Tom Busby, and we begin today's program with the
Speaker 1: state of the US economy and what it means for
Speaker 1: the Federal Reserve when the FMC gets together later this month,
Speaker 1: and joining us to talk about. That is Bloomberg's International
Speaker 1: Economic and Policy correspondent Michael McKee.
Speaker 6: Michael, thanks for being here.
Speaker 1: Let's talk about that better than forecasts, but still rather
Speaker 1: Fed friendly August jobs report that we got this past week.
Speaker 7: It probably means that there's not going to be a
Speaker 7: rate increase in September twentieth at the next FED meeting.
Speaker 7: They can hold off. No reason in these latest numbers
Speaker 7: that they need to tighten, and there's a faction on
Speaker 7: the FED that thinks that they've done enough, so they'll
Speaker 7: probably do a pause and wait and see what happens
Speaker 7: between now and November first, when the meeting after that
Speaker 7: takes place. The jobs report you put it well, because
Speaker 7: it's in a sense mixed news. The hiring has slowed.
Speaker 7: The number four June was for July rather was revised
Speaker 7: down significantly, and maybe August will be too, we don't
Speaker 7: know yet. But and the unemployment rate went up to
Speaker 7: three point eight percent, but that's all within the scope
Speaker 7: of what the FED is expecting because they have raised
Speaker 7: interest rates. They were thinking this would slow demand and
Speaker 7: that would slow the labor market, and they had predicted
Speaker 7: four point one percent unemployment by the end of the year.
Speaker 7: That was thought to be kind of out of reach
Speaker 7: and that they might have to adjust that forecast, but
Speaker 7: now looks like it is certainly possible if we get
Speaker 7: a couple more months, like August.
Speaker 1: Three notches higher from three point five to three point
Speaker 1: eight percent. Now part of that though, maybe more people
Speaker 1: looking for a job, and also that bankruptcy filing by Yellow.
Speaker 1: I mean, that's tens of thousands of jobs.
Speaker 7: Yellow was a big contributor, thirty seven thousand jobs taken
Speaker 7: off the top line because they went out of business.
Speaker 7: Now a lot of that will reverse. From what I understand,
Speaker 7: a lot of the Yellow drivers have found new work
Speaker 7: because other companies were looking for drivers. So we'll see
Speaker 7: what that looks like when we get to the September
Speaker 7: employment report, the SAG after Obviously, with a strike, you
Speaker 7: have sort of a volatile situation where employees can come
Speaker 7: and go off payrolls depending on when things are settled.
Speaker 7: Interesting that it took this long for that to show
Speaker 7: up in the data, But one of the big reasons
Speaker 7: for that is most of those people are essentially freelancers,
Speaker 7: and the way the Bureau of Labor Statistics looks at
Speaker 7: payrolls as they see whether you get paid in the
Speaker 7: pay period, including the twelfth of the month, So a
Speaker 7: lot of those people probably didn't get paid in those
Speaker 7: time periods, or they got their residual checks or something
Speaker 7: outside that window, so they weren't counted until now.
Speaker 1: Also, the Fed's preferred measure of inflation.
Speaker 7: The PCEE. The important number there is not the slight
Speaker 7: rise in the year over year headlining core, but the
Speaker 7: fact that headlining core rose on a month over a
Speaker 7: month basis by two tenths of a percent for the
Speaker 7: second month in a row, because it shows the FED
Speaker 7: on a sequential basis that we are making progress against inflation.
Speaker 6: And if you.
Speaker 7: Annualize those numbers, like the year over year numbers, then
Speaker 7: you come out with about two point four percent for
Speaker 7: a number if that's what happens the rest of the year.
Speaker 7: So it shows that the FED is getting closer to
Speaker 7: what it's looking for, which is something around three percent
Speaker 7: or a little below by.
Speaker 6: The end of the year.
Speaker 1: And the Fed's going to have more data between now
Speaker 1: and their meeting in September.
Speaker 7: Normally, the week after payrolls is kind of empty of
Speaker 7: significant indicators, but because the way the calendar fell this time.
Speaker 7: With the jobs report coming on the first of the month,
Speaker 7: there are a couple of indicators that people are going
Speaker 7: to be watching. One as ISM services. Now we would
Speaker 7: have been looking at that for guidance on hiring, but
Speaker 7: now we know what the hiring was. The question is
Speaker 7: going to be after today's slightly better than expected the
Speaker 7: the ISM manufacturing report. That would suggest that maybe if
Speaker 7: Tim Fiori, who runs that report, is correct about it
Speaker 7: being that we were in the trough for manufacturing, we
Speaker 7: might see us in the trough for services too, and
Speaker 7: the number could come in slightly better than expected, which
Speaker 7: is something that makes the soft landing argument.
Speaker 1: And the week after that CPI for August retail sales
Speaker 1: for that same month.
Speaker 7: The sales number for retail sales last month and for
Speaker 7: spend in the spending report this past week were higher
Speaker 7: than anticipated, And the question is do Americans still want
Speaker 7: to keep spending at that same rate because most of
Speaker 7: their savings from the pandemic checks they got is gone.
Speaker 7: The savings rate went down last month, so it'll be
Speaker 7: interesting to see what kind of numbers we get in
Speaker 7: terms of back to school spending. Normally, a month where
Speaker 7: you'd see a boost, so we'll look at that, but
Speaker 7: it's also CPI is going to be what everybody's watching.
Speaker 7: It'll be the next indicator. It's more timely in terms
Speaker 7: of when it comes out than the PCE, So if
Speaker 7: it shows continued progress, I'll just put a nail in
Speaker 7: the coffin of a September rate increase. And I think
Speaker 7: what you'll start to see is if it comes in
Speaker 7: lower than expected or at a reasonable level, then that'll
Speaker 7: cause people to back off the idea of a November
Speaker 7: rate increase as well.
Speaker 6: So CPI a little uneven.
Speaker 1: We did you know a last meeting there was a
Speaker 1: twenty five basis points increase, But it's heading in the
Speaker 1: right direction.
Speaker 7: Right, We're heading in the right direction, and the FAT
Speaker 7: is clearly close to ending. The debate has been about
Speaker 7: whether they need to do one more increase or not.
Speaker 7: And at this point, maybe twenty five basis points doesn't
Speaker 7: do a whole lot to crimp borrowing, but it might
Speaker 7: be sending a signal, So there's the question do you
Speaker 7: need to send that signal or not. The argument of
Speaker 7: those who think the FED should finish is that they
Speaker 7: still have lagged impacts coming from their previous rate increases
Speaker 7: that are really starting to hit the economy now, and
Speaker 7: they make a good case in that the hiring has
Speaker 7: slowed and other parts of the economy have slowed. Americans
Speaker 7: are still spending, but you can maybe see the darkness
Speaker 7: at the end of the tunnel to reverse that. And
Speaker 7: so we'll see if they see any reason in the
Speaker 7: data right now.
Speaker 1: It doesn't look like it now, Mike, you were at
Speaker 1: Jackson Hole and Chairman Powell acknowledge the economic backdrop right
Speaker 1: now a little more favorable than it was a year ago.
Speaker 1: He made clear though, the Bank is prepared to raise
Speaker 1: interest rates if it determines more hikes are needed, noting
Speaker 1: that a resilient economy comes with risks that inflation could reaccelerate.
Speaker 6: So there's still a chance.
Speaker 7: There's still a chance, and there are signs that the
Speaker 7: economy is still doing well and is growing faster than anticipated.
Speaker 7: So if that's the case, does that create additional demand
Speaker 7: that puts us out of whack with supply and leads
Speaker 7: to some inflation. So far, it looks like the odds
Speaker 7: are that it doesn't, but the Fed has to make
Speaker 7: sure and they don't want to get in a situation
Speaker 7: where they're leading the markets astray by letting people think
Speaker 7: that they're done and then maybe having to come back in.
Speaker 7: That happened to the Reserve Bank of Australia, it happened
Speaker 7: to the Bank of Canada, and they don't want to
Speaker 7: repeat that, so they will keep their options open and
Speaker 7: tell people we're still maybe thinking about raising grades, probably
Speaker 7: into twenty twenty four.
Speaker 1: Oh boy, now this week you're going to get a
Speaker 1: chance to talk to New York Federal Reserve Bank President
Speaker 1: John Williams, maybe talk about monetary policy, the economic outlook
Speaker 1: and all that tell me about Bloomberg's Market Forum FX
Speaker 1: in focus event.
Speaker 7: Well, certainly everybody's concerned about what's happening with the dollar.
Speaker 7: Is it going up still, is it going to start
Speaker 7: backing off? And so that's the focus of the conference.
Speaker 7: But with John Williams, we have one of the most
Speaker 7: important decision makers on the Fed. He is the vice
Speaker 7: chairman of the Open Market Committee, the group that sets
Speaker 7: interest rates, and he has a permanent vote on the committee,
Speaker 7: and he is seen as one of the people closest
Speaker 7: to Jay Powell, the chairman. So if you kind of
Speaker 7: know what John Williams is thinking, You'll have a pretty
Speaker 7: good idea of what Jay Powell is thinking, and so
Speaker 7: that makes him a really important and interesting guest for us.
Speaker 1: Exciting week ahead, Michael, thank you so much for being
Speaker 1: here and coming up on Bloomberg Daybreak weekend. Some big
Speaker 1: economic data coming out this week in the UK. We'll
Speaker 1: get a preview. I'm Tom Busby and this is Bloomberg.
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Speaker 1: This is Bloomberg day Break weekend, our global look ahead
Speaker 1: at the top stories for ves in the coming week.
Speaker 1: I'm Tom Busby in New York. Up later in our
Speaker 1: program a trip to Jakarta to preview the Assion Business
Speaker 1: and Investment Summit twenty twenty three. But first, the UK
Speaker 1: has the worst inflation problem in the G seven, but
Speaker 1: there are signs things are improving. The latest food price
Speaker 1: data shows the pace of price increases is slowing, and
Speaker 1: in the coming days we'll get a key update on
Speaker 1: the jobs market, including wage growth. That's the metric policy
Speaker 1: makers at the Bank of England are most worried about.
Speaker 1: And for more, let's head to London and bring in
Speaker 1: Bloomberg Daybreak Europe ankers Caroline Hepgar and Stephen Carroll.
Speaker 9: Tom.
Speaker 2: The UK has had a very tight labor market combined
Speaker 2: with sky high inflation. Bloomberg's Jobs report with the Recruitment Firm,
Speaker 2: read next week, could give us a valuable early insight
Speaker 2: into the jobs market in the UK and whether things
Speaker 2: are improving. Recent data's offered something of a puzzle. You've
Speaker 2: got rising unemployment and falling vacancies, but wages have actually
Speaker 2: still been going up. Blomberg Economics thinks that the unemployment
Speaker 2: rate might reach five percent by the middle of next year,
Speaker 2: but private sector pay growth for the three months to
Speaker 2: June was running at a staggering eight point two percent.
Speaker 2: To unpack all of this, I've been speaking to Bloemberg
Speaker 2: economist Anna Andrade and Economics report Lucy White about the
Speaker 2: jobs picture in the UK and the dilemma it poses
Speaker 2: for the Bank of England.
Speaker 9: So I think it's fair to say for the last
Speaker 9: two months now that the UK jobs market is calling.
Speaker 9: I think we can say that with a bit more
Speaker 9: confidence than probably at the start of the year, and
Speaker 9: that's because more indicators are moving in the right direction.
Speaker 9: So we've had these kind of declining vacancies for a while,
Speaker 9: but in the last two months you really got this
Speaker 9: kind of increase in unemployment. Now, the problem is that
Speaker 9: if you look historically, you know, the libor market is
Speaker 9: still tight, and we've created this charge that kind of
Speaker 9: measures supply versus demand. And because this kind of imbalance
Speaker 9: has been what's kind of keeping inflationary pressures high. And
Speaker 9: when you look at that, you see that the mismatch
Speaker 9: has eased a bit, but it's still far higher than
Speaker 9: anything you've seen historically. So it's cooling. The liberal market
Speaker 9: is calling. But the starting point was just an incredibly
Speaker 9: red hot jobs market. So you know, for the BOE
Speaker 9: that might mean, you know that more is needed.
Speaker 2: Lucy, how do you see the employment market at the moment?
Speaker 2: Cooling but from a very very difficult spot, and obviously
Speaker 2: part of that is also the migration story. But how
Speaker 2: do you see the labor market picture in the UK exactly?
Speaker 11: I mean, we are starting, as I said, we are
Speaker 11: starting to see that cooling. You know, anecdotally, I'm hearing
Speaker 11: more about you know, people being made redundant and stuff,
Speaker 11: although that is you know, kind of at a much
Speaker 11: lower level than it has been historically. But at the
Speaker 11: same time, you know, we came from, as I said,
Speaker 11: such a high point. We're having to you know, we've
Speaker 11: still got a skilled shortage in the UK. Many businesses
Speaker 11: are saying that, you know, whether it be you know,
Speaker 11: the very sort of high tech jobs that are in
Speaker 11: demand in the economy right now, or whether they're kind
Speaker 11: of high skilled manual jobs, you know, for example, worlders,
Speaker 11: you know, construction workers, as we're still importing huge numbers
Speaker 11: of people from abroad to help out with that skills gap.
Speaker 2: And where do you see the unemployment rate going then
Speaker 2: over the next six or twelve months, because obviously the
Speaker 2: campaign of interest rate hikes that we've seen from the
Speaker 2: Bank of England, part of that is to bring down
Speaker 2: wadge gains and employment. So what what's the forecast you
Speaker 2: think for the next six months.
Speaker 9: So in our forecast, essentially this kind of increase in
Speaker 9: unemployment that you've had over the past two months is
Speaker 9: just the beginning of a more sustained increase. We see
Speaker 9: the unemployment rate pecking at five percent by the middle
Speaker 9: of next year. And that's a very different outlook or
Speaker 9: sidely different outlook than the BOE. So we're a bit
Speaker 9: more downbeat. The BEE at its latest forecast, of course
Speaker 9: this was prior to the latest job jobs market data,
Speaker 9: but it saw the unemployment rate hovering close to four
Speaker 9: percent by the middle of next year. So that's a
Speaker 9: one percentage point difference, which is quite significant. And I
Speaker 9: think the difference between our forecast especially reflects the difference
Speaker 9: in our views on how the economy is going to evolve.
Speaker 9: We kind of see the economy tipping into recession, and
Speaker 9: as you said, because of you know, it's a monetary
Speaker 9: policy induced recession, and so we don't have a view
Speaker 9: that there will be a soft a soft landing. It's
Speaker 9: kind of that view. For you to believe in that view,
Speaker 9: you really need to think that interest rates kind of
Speaker 9: lost older power, and that's not what we're seeing in
Speaker 9: deliber market, in residential construction, so we're already seeing signs.
Speaker 2: So yeah, and that Goldilock sort of view of the economy,
Speaker 2: which is dominated in the US but has also kind
Speaker 2: of fed into the thinking in the UK, that does
Speaker 2: seem to have faded. It seemed to be something that
Speaker 2: was largely earlier this year. But the Bank of England's
Speaker 2: yet to be convinced.
Speaker 9: Yeah, I guess, so, I mean, we'll we'll we'll have
Speaker 9: we'll have more data, and I think they have They
Speaker 9: do think that the kind of the bounce back that
Speaker 9: you're seeing in real wages and the drop in energy
Speaker 9: prices that that's going to kind of I mean, and
Speaker 9: those are important factors right now that can kind of
Speaker 9: support the economy. But in the opposite direction, you have
Speaker 9: interest rates and in the PMI, you know, so many
Speaker 9: more businesses are quoting interest rates, so that's that's already
Speaker 9: having kind of an impact.
Speaker 2: Lucy. What sectors of the economy have held up sort
Speaker 2: of best in terms of jobs demand and again, what's
Speaker 2: the outlook over the next few months.
Speaker 11: Well, we've been doing some really interesting work with read
Speaker 11: Recruitment on this. They're one of the UK's biggest jobs
Speaker 11: platforms in terms of you know, vacancies and job vacancies
Speaker 11: and job offerings, and they have given us access to
Speaker 11: all of the job postings that they've been putting on
Speaker 11: their site since twenty eighteen. And there's some really interesting,
Speaker 11: you know, kind of hot spots in terms of the
Speaker 11: sectors that are doing well at the moment, where vacancies
Speaker 11: are high, where wages are high, and some of those
Speaker 11: are areas like the energy sector. Obviously, you know we've
Speaker 11: been seeing you know, huge price increases in energy bills,
Speaker 11: but that's in some ways translating into jobs as well. Also,
Speaker 11: the consulting sector is you know, as London's the London
Speaker 11: bubble always does particularly well in these times, So consulting
Speaker 11: is doing well. And there are other kind of you know,
Speaker 11: high skilled areas that are you know, particularly in demand
Speaker 11: right now.
Speaker 2: How much do you think that mandating work in office
Speaker 2: as opposed to work for hope is going to change
Speaker 2: and we talk about high end jobs GOLDM. Sachs for example,
Speaker 2: mandating a full return to you in person work. What
Speaker 2: sort of impact do you think that's going to have
Speaker 2: on the labor market. Is that such a big story
Speaker 2: here in the UK.
Speaker 11: Well, it's interesting because you know, we're coming from somewhere
Speaker 11: where a few months ago, the big theme was that
Speaker 11: the power was now in the hands of the workers.
Speaker 11: You know, there was such demand for workers that essentially
Speaker 11: people could negotiate the terms of their own employment. You know,
Speaker 11: everyone was demanding working from home, flexible working, and that
Speaker 11: is starting to shift. I think as we see the
Speaker 11: labor market calling you know, as you say, we're seeing
Speaker 11: several firms sort of saying, you know, we want you
Speaker 11: in at least three days, four days, sometimes even five
Speaker 11: days a week, and workers now don't quite have the
Speaker 11: same power, especially with inflation so high and you know,
Speaker 11: the worry that a recession might be coming. Workers don't
Speaker 11: quite have the same negotiating power to be able to
Speaker 11: fight that. And again, you know, the impact that we're
Speaker 11: going to see on different types of people in the
Speaker 11: labor market. You know, for example, since the pandemic ended,
Speaker 11: we've seen a huge rise in women's working hours, and
Speaker 11: I've been speaking to several experts on that. Many of
Speaker 11: them have said it is due to this rise in
Speaker 11: hybrid working, the fact that women who have typically tended
Speaker 11: to take on more care responsibilities are now able to
Speaker 11: work more of the hours that they want to because
Speaker 11: of this hybrid working, you know, if they're looking after children,
Speaker 11: and so the impact that we might see on that,
Speaker 11: you know, whether we s see women's hours reverting to
Speaker 11: pre pandemic levels remains to be seen.
Speaker 2: My thanks to Bloomberg Economics reporter Lucy White there and
Speaker 2: our economists Anna and ra Day speaking to me ahead
Speaker 2: of the Bloomberg Read Jobs report that comes out in
Speaker 2: the next few days. I'm Caroline hepget here in London.
Speaker 2: You can catch us every weekday morning for Bloomberg Daybreak
Speaker 2: you're at beginning at six am in London. That's one
Speaker 2: am on Wall Street.
Speaker 6: Tom, thank you, Steven and Caroline.
Speaker 1: Coming up on Bloomberg Daybreak Weekend, we head to Asia
Speaker 1: and a look at the upcoming as Yon Business and
Speaker 1: Investment Summit.
Speaker 6: I'm Tom Busby and this is Bloomberg.
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Speaker 1: Hight top Us be in New York with your global
Speaker 1: look ahead of the top stories for investors in the
Speaker 1: coming week. And this week in Jakarta, it's the Assion
Speaker 1: Business and Investment Summit, and for more, let's go to
Speaker 1: Hong Kong and Bloomberg Daybreak Asia host Ryan Curtis and
Speaker 1: his colleague Doug Krisner.
Speaker 3: Tom In the coming week, Indonesia will be hosting the
Speaker 3: forty third Ossion Leader Summit in Jakarta. This is going
Speaker 3: to be an opportunity to outline a long term vision
Speaker 3: for the group, but it will be difficult to ignore
Speaker 3: what has been happening north of the region, the growing
Speaker 3: tension between Japan and China. How concerned should these assion
Speaker 3: nations be over Tokyo's hardening stance against Beijing. Let's take
Speaker 3: a closer look now with Bloomberg's Isabelle Reynolds, Bloomberg Asia
Speaker 3: Government reporter, joining us from our studios in Tokyo. Isabelle,
Speaker 3: It's always a pleasure. It seems as though we have
Speaker 3: to begin with, and this may seem a little strange,
Speaker 3: the Chinese reaction to the move by Japan to release
Speaker 3: that radioactive wastewater from the Fukushima reactor. How will this
Speaker 3: or how has this impacted relation so far?
Speaker 12: Right well, despite Japan's best efforts to explain the releases
Speaker 12: as something that's safe, that's routine, despite having the endorsement
Speaker 12: of the IAEA, the nuclear body in international nuclear body,
Speaker 12: China has really reacted in an extremely negative fashion. That's
Speaker 12: been not just from the government, but from the public
Speaker 12: at large. So we've seen China slap a ban on
Speaker 12: Japanese seafood, and we've seen a sort of social media
Speaker 12: campaigns against Japan. We've seen a campaign of phone calls
Speaker 12: made from China to Japan to all sorts of organizations
Speaker 12: and individuals that are not even connected to this release.
Speaker 12: So it's created a whole lot of extremely negative emotion
Speaker 12: in both countries, which is going to be quite hard
Speaker 12: to get over it.
Speaker 3: This may seem like a bit of an odd pivot,
Speaker 3: but I'm wondering at the same time whether Japan's reputation
Speaker 3: has been tarnished enough to deter Chinese tourists because there
Speaker 3: has been such a trend that's been holding up for
Speaker 3: such a long time. It seems like that we're Chinese
Speaker 3: tourists have been flocking to Japan. Is there some risk
Speaker 3: that that could weaken now? Would it be maybe a
Speaker 3: longer term concern?
Speaker 12: That could be a concern I think in the coming months,
Speaker 12: But whether it will actually last a long time, I
Speaker 12: think is less certain. We actually have a bi I
Speaker 12: report out on this, and looking back at the numbers
Speaker 12: and previous spats that have existed between the two countries.
Speaker 12: We've seen a dip or quite a sharp fall for
Speaker 12: a few months, but it soon bounces back. So I
Speaker 12: think Japan might be relatively confident that although there will
Speaker 12: be a temporary effect, the Chinese tourists will come back
Speaker 12: in the end. Yet, the timing is a bit unfortunate
Speaker 12: because China had just sort of lifted the ban on
Speaker 12: group tours to a lot of countries, including Japan. So
Speaker 12: Prime Minister Kishada even had said that he hoped to
Speaker 12: see larger numbers of Chinese tourists in the coming months
Speaker 12: and years. So from that point of view, it's unfortunate
Speaker 12: for the tourism industry, but I don't think it will
Speaker 12: be necessarily a very long term effect.
Speaker 3: Recently, the Prime Minister, and I'm speaking here of Keisha,
Speaker 3: he labeled China as it's Japan's greatest strategic challenge. I'm
Speaker 3: wondering when you hear a statement like that, how it
Speaker 3: might reverberate across osion and whether it's brought maybe a
Speaker 3: little bit more anxiety to the region situation where if
Speaker 3: you're a leader of an Asian nation, you may be
Speaker 3: feeling some pressure to take sides right now to have
Speaker 3: to choose between the world second and the world's third
Speaker 3: largest economy.
Speaker 12: Yeah, I think that the choice in Asian now is
Speaker 12: really much more between China and the US. Japan is
Speaker 12: sort of very much a second string at the moment
Speaker 12: and a sort of a very close ally and increasingly
Speaker 12: close ally of the US. So I think that the
Speaker 12: bigger issue on that front will be the fact that
Speaker 12: Joe Biden is not taking part in the Asian summits
Speaker 12: this time around, and that may be seen negatively by
Speaker 12: some countries or leaders within the region.
Speaker 3: Although Vice President Kamala Harris will attend, and I'm wondering
Speaker 3: whether or not that's going to offer kind of a
Speaker 3: positive tone somewhat.
Speaker 12: Yes, I mean I think not to send anybody, or
Speaker 12: to send somebody much more junior would have been far worse.
Speaker 12: But on the other hand, I mean, for the President
Speaker 12: of Indonesia, he would very much want to have this
Speaker 12: sort of global attention and the glamour of hosting the
Speaker 12: US president, and quite frankly, the vice president isn't quite
Speaker 12: the same. So although Kamala Harris, we understand, we'll be
Speaker 12: making a huge effort to reach out to local people
Speaker 12: and she'll be having a very busy schedule with a
Speaker 12: lot of events. It just isn't quite the same if
Speaker 12: you don't have the president on the ground. Having said that,
Speaker 12: I think on arguing from the other side that this
Speaker 12: may not be a significant move by the US. They
Speaker 12: may not be intending any insult by this. President Biden
Speaker 12: has very much reached out to a lot of Southeast
Speaker 12: Asian countries, including the Philippines. He's made a great effort
Speaker 12: to restore ties there. He hosted the Singaporean Premiere last year,
Speaker 12: and then he indeed held a US especial, the first
Speaker 12: Special US Asian Summit at the White House last year.
Speaker 12: So I think from that point of view, they would
Speaker 12: argue that they have been trying to strengthen Asian ties.
Speaker 3: Nonetheless, I think we can agree that the global order
Speaker 3: is changing quite dramatically. In recent weeks, we saw China
Speaker 3: assert itself as a power behind the Brick Summit in Johannesburg.
Speaker 3: How is that being viewed in Japan right now, that
Speaker 3: China seems to be aggregating more of its authority, more
Speaker 3: of its power.
Speaker 12: Yes, I think that is something of a concern for Japan,
Speaker 12: which has always tried to sort of maintain strong ties
Speaker 12: with the Middle East because Japan doesn't have a lot
Speaker 12: of its own sort of natural resources and so has
Speaker 12: been very heavily reliant, of of course, on the Middle
Speaker 12: East for oil and so on. So to have those
Speaker 12: countries sort of move slightly out of its orbit and
Speaker 12: towards the kind of bricks and China side, I think
Speaker 12: is somewhat unnerving and is something that they will want
Speaker 12: to sort of tackle and try to balance out in
Speaker 12: the coming months. So it'll be interesting to see what
Speaker 12: they do to try to achieve that.
Speaker 3: I'm wondering from the Japanese perspective whether the summit in
Speaker 3: Jakarta presents an opportunity for Prime Minister a Kichi to
Speaker 3: perhaps get a boost in his approval rating. Do you
Speaker 3: think that's possible.
Speaker 12: I think there could be a possible boost on the margins.
Speaker 12: I don't think diplomatic efforts generally have a huge effect
Speaker 12: on public approval. The Japanese public is generally much more
Speaker 12: fixated on the bread and butter issues like probably most
Speaker 12: voters around the world, and his support at the moment
Speaker 12: is near its lows since he took office two years ago,
Speaker 12: and one of the main reasons for that is rising
Speaker 12: prices for things like gasoline and food, which are extremely
Speaker 12: concerning for many people in Japan. Having said that, if
Speaker 12: he is seen to be sort of standing up directly
Speaker 12: to China against these accusations that this water release from
Speaker 12: the Fakushima plant is dangerous, I think that will improve
Speaker 12: his image somewhat in the eyes of the Japanese people.
Speaker 3: So to that point, I'm wondering the Premier Liu Chung
Speaker 3: in China may be somewhat confrontational in that. Would that
Speaker 3: be your expectation that there is the potential for a
Speaker 3: bit of embarrassment here or the attempt to embarrass that.
Speaker 12: Could certainly potentially happen. One of the traditional events that
Speaker 12: we have at Asian is what's called the Asian plus
Speaker 12: three event, where you have not just the Asian leaders
Speaker 12: but also Japan, South Korea and China. And if China
Speaker 12: takes the opportunity of that event to sort of try
Speaker 12: and berate Japan over the Fakushima water release, that would
Speaker 12: be a rather unpleasant and uncomfortable situation, of course for
Speaker 12: the Japanese, and they will try to rebut that and
Speaker 12: put forward their own views on how this release is going.
Speaker 3: So we talked a moment ago about the possibility that
Speaker 3: this could maybe, maybe in a minor way, move the
Speaker 3: dial when it comes to kind of public sentiment with
Speaker 3: regard to the Japanese Prime minister. But I'm wondering how
Speaker 3: he is being seen right now within the government within
Speaker 3: his own party.
Speaker 12: He's never been a sort of hugely popular figure within
Speaker 12: his own party, but now that is also reflected in
Speaker 12: the among the general public as well, so he'll be
Speaker 12: He's planning, we believe, to reshuffle his cabinet next month
Speaker 12: in an effort to improve his standing, and he'll have
Speaker 12: to look carefully at which factions within his party are
Speaker 12: represented in the cabinet and so on to maintain his
Speaker 12: position until the party leadership election, which is just over
Speaker 12: a year away at the moment.
Speaker 3: What about the government's communication with China right now? Would
Speaker 3: that be something that the Prime Minister is really working
Speaker 3: to improve.
Speaker 12: I think he very much wants to improve communications with China,
Speaker 12: despite having called it a risk to Japan's security.
Speaker 3: I'll be looking forward to reading your coverage of the
Speaker 3: Ossion leader's summit on the Bloomberg terminal. Isabelle, thanks so
Speaker 3: much for being with us, sharing your insight. Bloomberg's Isabelle Reynolds,
Speaker 3: a Bloomberg Asia government reporter, joining from Tokyo. I'm Doug Krisner.
Speaker 3: You can join Brian Curtison myself for Bloomberg Daybreak Asia
Speaker 3: weekdays beginning at six am in Hong Kong, six pm
Speaker 3: on Wall Street, Tom.
Speaker 1: And coming up here on Bloomberg day Break Weekend, we
Speaker 1: head to DC for the Biden administration's takeaways from the
Speaker 1: August jobs Report.
Speaker 6: I'm Tom Busby, and this is Bloomberg.
Speaker 1: This is Bloomberg day Break Weekend, our global look ahead
Speaker 1: at the top stories for investors in the coming week.
Speaker 1: I'm Tom Busby in New York. Now, on Friday, we
Speaker 1: got the August Jobs report, showing a labor market undergoing
Speaker 1: a controlled cooling, punctuated by solid hiring, slower earnings growth,
Speaker 1: and more people returning to the workforce. For more, let's
Speaker 1: head to our Bloomberg ninety nine one newsroom in Washington
Speaker 1: and Bloomberg Sound On host Joe Matthew.
Speaker 4: That's on the impact of the jobs report. We'll surely
Speaker 4: stick with us through the holiday weekend. After the report
Speaker 4: dropped Friday, I caught up with Julie Sue, the acting
Speaker 4: Labor Secretary, for what the Biden administration is taking away
Speaker 4: from these numbers.
Speaker 13: So the slight uptick in unemployment was due entirely to
Speaker 13: more people coming into labor market. I think that is
Speaker 13: also a sign of optimism, right. It's a sign of
Speaker 13: the strength of our economy. It was also a very
Speaker 13: small uptick, so that the overall unemployment rate remains under
Speaker 13: four percent for the longest since the nineteen sixties.
Speaker 10: What do you think as we walk into this labor
Speaker 10: day when you see Wall Street rally on the idea
Speaker 10: of rising unemployment.
Speaker 13: I think that these are all signs that the president's
Speaker 13: economic agenda, what we call Bidenomics, is investing in America, right.
Speaker 13: The idea that if we do our jobs well, we
Speaker 13: can have a tight labor market where workers share in prosperity,
Speaker 13: where we recover from the economic catastrophe of the global
Speaker 13: pandemic to a point where we have steady and stable growth.
Speaker 13: That all this is not only possible, but it's actually happening.
Speaker 10: You've been asked a lot about union actions lately with
Speaker 10: regard to the UAW. What's going on in Hollywood right now?
Speaker 10: There could be flight attendants involved. This could go beyond that.
Speaker 10: I'm not going to ask you if you're getting involved yet,
Speaker 10: because I know you're waiting to be asked if that happens,
Speaker 10: to make a decision at some point. But what are
Speaker 10: your models telling you if all of these strikes were
Speaker 10: to coincide in the fall, what what that means for
Speaker 10: our economy?
Speaker 13: So let's put all this in the context of the
Speaker 13: job's day numbers that we're talking about. This is an
Speaker 13: economy that has defied all expectations in terms of its recovery,
Speaker 13: both the rapid pace of it and the and how
Speaker 13: broadly shared it is. This is Bidenomics in action. Part
Speaker 13: of the President's commitment is to empowering workers, making sure
Speaker 13: that workers get their fair share and do well. And
Speaker 13: part of that has meant that unions have more ability
Speaker 13: power to demand changes at the bargaining table. We've seen
Speaker 13: some really good results from that. Right the teamsters and
Speaker 13: ups resolved their issues. People wrung their hands about that
Speaker 13: too and wondered expected that not to happen. It not
Speaker 13: only happened, but they ratified a contract with some eighty
Speaker 13: six percent of members. The West Coast Ports twenty nine
Speaker 13: ports resolved issues that were really complicated as well, and
Speaker 13: have a multi year contract. These are what happens.
Speaker 5: Do you see this resolving itself?
Speaker 13: I mean, I'm not going to make a pretiction about that,
Speaker 13: but I do think that the process requires that we
Speaker 13: respect the party's ability and their continued commitment to bargaining
Speaker 13: at the table.
Speaker 10: I have to ask you about Taylor Swift.
Speaker 1: I don't know if you saw Taylor Swift.
Speaker 10: When she came to town, but we're hearing that the
Speaker 10: impact the Federal Reserve. You even mentioned this of her tour,
Speaker 10: and even Beyonce's tour to some extent, helped to paper
Speaker 10: over some weakness that might have otherwise emerged in this
Speaker 10: job's report. What's it going to look like when everyone
Speaker 10: comes off tour after the summer.
Speaker 13: So I'm going to say something about women in general. Right,
Speaker 13: women are powering this economic recovery. We can talk about Beyonce,
Speaker 13: we can about Taylor Swift. I want to talk about
Speaker 13: the record numbers of women in the job market.
Speaker 9: Now.
Speaker 13: Remember during the pandemic, women were pushed out of the
Speaker 13: labor market through things like our lack of paid leave,
Speaker 13: difficulty with accessing childcare. Those women are now back in
Speaker 13: the labor market. We have the fifth month of historic
Speaker 13: percentage of women in jobs, and I think we should
Speaker 13: continue that effort to create good jobs, create good union jobs,
Speaker 13: and make sure that everybody has access to them.
Speaker 4: It's acting Labor secret carry. Julie, Sue and Tom will see,
Speaker 4: of course, how the FED reacts to these jobs numbers
Speaker 4: just a couple of weeks at the next FED meeting
Speaker 4: in Washington.
Speaker 6: I'm Joe Matthew. Thanks Joe.
Speaker 1: That was Bloomberg Sound On host Joe Matthew reporting from
Speaker 1: our Bloomberg ninety nine to one newsroom in Washington. And
Speaker 1: you can hear sound on weekdays one to three pm
Speaker 1: on Bloomberg Radio, and starting Tuesday, you can watch the
Speaker 1: show live on YouTube. Just search for Bloomberg Global News
Speaker 1: and that does it for this edition of Bloomberg day
Speaker 1: Break Weekend. Join us again Monday morning at five am
Speaker 1: Wall Street Time for the latest on markets overseas and
Speaker 1: the news you need to start your day.
Speaker 6: I'm Tom Buzby. Stay with us.
Speaker 1: Top stories and global business headlines are coming up right now.