WEBVTT - Piegza: May showed a modest spending pace

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<v Speaker 1>Broadcasting live to New York, Bloomberg even to Washington, d C,

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<v Speaker 1>Bloomberg Surveillance. It is a thirty on Wall Street. I'm

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<v Speaker 1>learn more? Vinnie del Judai says at the first word desk,

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<v Speaker 1>it looks like we went shopping in May, Yes, Michael.

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<v Speaker 1>Retail sales up point five percent in May, copping Wall

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<v Speaker 1>Street forecasts excluding auto's up point four percent, matching forecasts

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<v Speaker 1>the Control Group up point four percent, topping for asked

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<v Speaker 1>retail sales up point five percent, and May economists going

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<v Speaker 1>into the report it expected to gain a point three

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<v Speaker 1>percent inflation News meantime, import price indecks May up one

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<v Speaker 1>point four percent year over a year, though down five percent.

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<v Speaker 1>To put up our first work desk company tails, Judice,

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<v Speaker 1>lets go back to New York. Well, I one thing

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<v Speaker 1>to point out about that import price number down five percent, Yes,

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<v Speaker 1>but it was down five point seven percent revised negative

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<v Speaker 1>five point three percent the prior month. So it has

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<v Speaker 1>improved inflation on a month over month basis. Import price

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<v Speaker 1>inflation up one point four percent. One presumes that's basically oil.

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<v Speaker 1>Just in the headline data, there's six statistics and they're

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<v Speaker 1>all Every single statistic is most constructively uh with a

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<v Speaker 1>better tone. The tenure moved to a higher yield. But

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<v Speaker 1>I'm actually sort of surprised, Mike. I guess it shows

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<v Speaker 1>you the Brexit effect. I'm I'm a bit surprised at

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<v Speaker 1>the lack of market move. It will see, maybe we'll

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<v Speaker 1>see more as people digest these numbers. Well, people do

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<v Speaker 1>seem to want the weight of evidence as opposed to

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<v Speaker 1>a one thing. But I'm looking at the overall month

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<v Speaker 1>over month numbers. Furniture sales and building material sales down.

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<v Speaker 1>Building material sales down and high one percent after a

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<v Speaker 1>two percent declined the month before, which is interesting because

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<v Speaker 1>housing starts haven't been particularly weak. And then of course,

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<v Speaker 1>your favorite department stores taking out on the Chin down

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<v Speaker 1>nine tenths, but almost everything else is up. Obviously, you

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<v Speaker 1>got a big boost from higher gas prices. UH, gasoline

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<v Speaker 1>station sales up two point one. But what does it

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<v Speaker 1>all mean? Does it put a floor under the idea

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<v Speaker 1>that the US economy is collapsing. Lindsay Peza is chief

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<v Speaker 1>economists for Stephl Nicholas out in Chicago, and Lindsay, you

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<v Speaker 1>have been relatively negative on the US economy. Does this

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<v Speaker 1>give you a little bit more confidence? Well, I think

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<v Speaker 1>it would have given me a bit more confident if

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<v Speaker 1>we if we've seen back to back months outside spending

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<v Speaker 1>for the consumer. Now, certainly April was not revised, and

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<v Speaker 1>so that's still above one percent spending, but May it's

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<v Speaker 1>just half a percent. That that's a pretty modest spending pace,

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<v Speaker 1>So it's still positive. Consumers are still out of the

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<v Speaker 1>marketplace buying big screen TVs, buying new spring dresses, but

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<v Speaker 1>they're doing so at a slightly more moderate pace. So

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<v Speaker 1>I would have liked to have seen again another outsized

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<v Speaker 1>increase in May to really undermine. Uh, that's a concern

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<v Speaker 1>that I have about the the US consumer. What's I mean,

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<v Speaker 1>this is two months in a row where, um, whether

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<v Speaker 1>it's not outsized or not, we've seen consumer spending rise.

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<v Speaker 1>What makes you concerned about consumers? Well, I think at

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<v Speaker 1>this point we have really experienced any sort of positive

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<v Speaker 1>momentum that we could from low gasoline prices, and that

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<v Speaker 1>really is my concern because remember, against the backdrop of

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<v Speaker 1>what the consumer is doing, we've been paying a significan

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<v Speaker 1>can lower price filling up the family car at lower

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<v Speaker 1>cost fuel, and that is translated into thousands of dollars

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<v Speaker 1>of extra cash into the consumer's pockets. And when the

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<v Speaker 1>consumer saves a thousand, typically they go out into the

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<v Speaker 1>marketplace and they spend two thousand because they feel wealthier.

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<v Speaker 1>So we should be seeing an upward trajectory in sales,

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<v Speaker 1>but instead, when we look at these retail numbers on

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<v Speaker 1>an annual basis, we see a lot of volatility, with

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<v Speaker 1>the consumers stuck in this two to three percent growth range,

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<v Speaker 1>down from a near five percent spending pace just eighteen

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<v Speaker 1>months ago. So again, still positive, but we're still seeing

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<v Speaker 1>that waning momentum in the consumer sector against the backdrop

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<v Speaker 1>of lower energy prices. When you look at this, how

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<v Speaker 1>does it fold into a GDP estimate, or I should

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<v Speaker 1>say almost the tone of two GDP. Is your vector

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<v Speaker 1>to a stronger economic growth in America or is it

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<v Speaker 1>a more tepid growth? Well, I think in the second

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<v Speaker 1>quarter this does line up with the idea that we

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<v Speaker 1>will see above trend growth slightly above. So we're looking

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<v Speaker 1>for about two and a half percent, which certainly is

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<v Speaker 1>a step in the right direction from less than one

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<v Speaker 1>percent growth in the first quarter, but a far cry

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<v Speaker 1>from that near four percent rebound that we're used to

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<v Speaker 1>when we look back to two thousand and four, two

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<v Speaker 1>thousand and fifteen, and so it's a much more tepid

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<v Speaker 1>first half of the year growth rate, really a far

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<v Speaker 1>cry from the robust type of activity that the FED

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<v Speaker 1>had anticipated to follow forward after that liftoff in December.

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<v Speaker 1>So the economy does appear to be still in positive territory,

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<v Speaker 1>but losing momentum from that trend and two percent pace. Well,

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<v Speaker 1>I wonder how much has to do with the fact

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<v Speaker 1>that we get a bad piece of data and the

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<v Speaker 1>markets all sink and the headlines all read uh, you

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<v Speaker 1>know things are terrible, uh, And then you have presidential

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<v Speaker 1>candidates running around the country telling everybody things are terrible. Uh,

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<v Speaker 1>you know how much of it is confidence that maybe

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<v Speaker 1>could be reversed. Well, I think that goes to speak

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<v Speaker 1>to just how fragile a consumer's perception of the US

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<v Speaker 1>economy really is. It's one data point can derail that

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<v Speaker 1>more positive assessment of the US economy, and in fact,

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<v Speaker 1>I would extrapolate that out to the very fragile position

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<v Speaker 1>the FETE is in as well. Remember we had weeks

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<v Speaker 1>a very hawkish rhetoric that all of a sudden was

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<v Speaker 1>derailed by one weaker than expected May employment report. If

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<v Speaker 1>the set really did view the economy as being on

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<v Speaker 1>strong footing, that May employment report should not have impacted

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<v Speaker 1>their commitment to raise rates near term. Lindsey, thank you

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<v Speaker 1>so much. Stephen Nicholas. I don't know what she's complaining about.

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<v Speaker 1>She's in Chicago. Cubs have an eight and a half

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<v Speaker 1>game leak. I mean, you gotta be feeling good about

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<v Speaker 1>life if you're living in Chicago, at least on the

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<v Speaker 1>North Side. No, it's a great story developing now that

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<v Speaker 1>we've moved on from the Pittsburgh Penguins. The who we're

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<v Speaker 1>not talking about my generation. Yeah, thank you for the

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<v Speaker 1>many comments I had no idea. How many Pittsburgh Penguins

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<v Speaker 1>fans we had in our world headquarters. It's a shock,

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<v Speaker 1>Reachel Sales a very good statistic. This hour of surveillance

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<v Speaker 1>is brought to you by Volvo Cars, White Planes. Visit

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<v Speaker 1>Volvo Cars, White Planes dot Com. Here's Michael Barr with

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<v Speaker 1>the latest World of national headlines. Mike Tom, thank you

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<v Speaker 1>very much. Homeland Security Secretary j Johnson is urging vigilance

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<v Speaker 1>after Sunday's mass shooting at an Orlando, Florida nightclub. Johnson,

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<v Speaker 1>speaking to ABC, says the attack is looking more like

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<v Speaker 1>the work of a lone wolf. Johnson also says the

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<v Speaker 1>best way to prevent lone wolf attacks is to work

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<v Speaker 1>with the Muslim community and not create an immigration ban

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<v Speaker 1>proposed by a presumptive Republican presidential nominee Donald Trump. We

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<v Speaker 1>need to build bridges to communities, to American Muslim communities

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<v Speaker 1>right now to encourage them to help us in our

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<v Speaker 1>homeland security efforts. France says the murders of a policeman

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<v Speaker 1>and his live in female partner were an act of terrorism.

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<v Speaker 1>The attackers stabbed them to death outside of Paris. The

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<v Speaker 1>attacker was killed by French Police how Speaker Paul Ryan

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<v Speaker 1>plans to unvail a regulatory overhaul proposal that includes expanding

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<v Speaker 1>energy production on federal land, limiting lawsuits against businesses, and

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<v Speaker 1>scaling back the Dodd Frank financial regulation Loan Global News

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<v Speaker 1>twenty four hours a day, powered by our twenty four

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<v Speaker 1>hundred journalists more than a hundred fifty news bureaus around

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<v Speaker 1>the world. I'm Michael Barr, Mike, Tom Hey, Good Michael.

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<v Speaker 1>Time now for the land over Precipitate Blueberg, NBC Sports

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<v Speaker 1>Update with Rob Bushka Rough Good morning, Mike, and Tom

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<v Speaker 1>not Many gave the Cavaliers a chance in Game five

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<v Speaker 1>of the NBA Finals of Golden State. Down three one

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<v Speaker 1>of the series, and again the Cavaliers do have Lebron

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<v Speaker 1>James the right hel focus turned back by Russ tries

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<v Speaker 1>that again gets the foul life's out of the paint.

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<v Speaker 1>Good pump they got hit and puts it up, puts

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<v Speaker 1>it in the chance for the free point play Cavalier's

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<v Speaker 1>radio in the call, James and Kyrie Irving both had

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<v Speaker 1>forty one for Cleveland to climb back into the series

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<v Speaker 1>with a one twelve nineties seven Druvving of the champs,

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<v Speaker 1>putting their celebration on ice for now. It's a hundred

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<v Speaker 1>and seventy fourth time in the playoffs alone that Lebron

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<v Speaker 1>has scored twenty or more points. Steph Curry and Off

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<v Speaker 1>ninety five but a game high four turnovers. Game six

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<v Speaker 1>Thursday night in Cleveland, the Yankees and Mets both had

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<v Speaker 1>the night off. The Yankees will be in Colorado for

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<v Speaker 1>an eight forty first pitch. Nathan Vivaldi will square off

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<v Speaker 1>against Jorge del Rosa, and the Yankees are hoping to

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<v Speaker 1>restore a little pop and perhaps some championship pedigree at

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<v Speaker 1>first while waiting for Mark to Sharon's nee to come around.

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<v Speaker 1>They've signed former Met Ike Davis, who you remember his

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<v Speaker 1>father Ron want to ring in pin stripes back in

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<v Speaker 1>seventy eight. The Mets they host Pittsburgh, who have yet

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<v Speaker 1>to name a starter tonight. While the Mets will hand

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<v Speaker 1>the ball to Jacob to Grom NFL training camp still

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<v Speaker 1>six weeks away, it's gonna be here before you know it.

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<v Speaker 1>For the Jets, though, they have a standoff on their

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<v Speaker 1>hands with Mohammad Wilkerson says he won't sign his franchise

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<v Speaker 1>to could miss the start of camp in July over

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<v Speaker 1>a contract dispute and called America Play. Mexico continues it's

0:10:06.760 --> 0:10:09.520
<v Speaker 1>unbeaten streak. They played away one one tie with Venezuela,

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<v Speaker 1>while Uruguay made quick work of Jamaica three nothing. And

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<v Speaker 1>that is your NBC Bloomberg A sports update, Mike Tom,

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<v Speaker 1>thanks so much. Appreciate that this morning a churn to

0:10:18.760 --> 0:10:22.960
<v Speaker 1>the markets even after retail sales better than good report.

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<v Speaker 1>The tenure yield rounded up one point six zero percent.

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<v Speaker 1>That's good in the tape. Better in a Brexit Remain

0:10:32.120 --> 0:10:36.880
<v Speaker 1>challenge Europe. The two year yield German two year is

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<v Speaker 1>much more negative than twenty four hours ago, but actually

0:10:41.040 --> 0:10:44.280
<v Speaker 1>not that bad. Negative point five eight one is a

0:10:44.320 --> 0:10:48.240
<v Speaker 1>three basis point move on German short term paper. These

0:10:48.240 --> 0:10:51.160
<v Speaker 1>are huge numbers. The end was a one oh five

0:10:51.240 --> 0:10:54.880
<v Speaker 1>weaker in the last ninety minutes one oh six point

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<v Speaker 1>zero one. This is Bloomberg surveillance. Stay with us. The

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