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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. We have John Goldnack.

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Speaker 1: He is a vice president at Attico. Part let's start

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Speaker 1: off with the jobs numbers here because not only as

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Speaker 1: mid terms went to be one of the major drivers

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Speaker 1: with the jobs numbers as well. John, apologies on my part.

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Speaker 1: Let's start with your initial reaction to the jobs numbers today.

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Speaker 1: What was great was, you know, you see the markets

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Speaker 1: going up and down. There's a lot of good in

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Speaker 1: this job's report, um and then and then there's ways

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Speaker 1: that you know, you could interpret it a little bit differently.

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Speaker 1: But what I love about it wage growth, you know,

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Speaker 1: starting to slow down. We're seeing stability that's going to

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Speaker 1: allow companies that you know, that confidence to continue to hire.

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Speaker 1: The quits are holding steady, so some of the retention

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Speaker 1: strategies that are employers are putting in really slowing down

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Speaker 1: the churn that we saw a couple of quarters ago.

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Speaker 1: So I like to that consistency. One of the things

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Speaker 1: that Pals dated though, was that demand, can you know

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Speaker 1: substantially is exceeding supply right now? So I think we

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Speaker 1: do need to look at that labor participation rate. We're

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Speaker 1: holding flat there. Um, we've got to continue to focus

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Speaker 1: on upskilling and reskilling these workers so we can get

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Speaker 1: some of those leisure and hospitality colleagues that really haven't

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Speaker 1: been enjoying the fruit right now since COVID. We need

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Speaker 1: to get them in some other industries right now so

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Speaker 1: we can uptake this participation rate. And I think I

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Speaker 1: think we're gonna be in a good spot. But yeah,

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Speaker 1: there's still some pause I think in the labor market,

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Speaker 1: waiting to see what happens with these midterms. Yeah, it's

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Speaker 1: a really interesting point you make there. I want to

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Speaker 1: get into that a little bit more about the dislocation

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Speaker 1: between the openings that we're seeing and the participation rate.

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Speaker 1: Is that starting to come together in terms of people

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Speaker 1: getting into the jobs that are open or are we

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Speaker 1: are still seeing a gap there. We're still seeing a

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Speaker 1: gap there, but we're making progress. We're seeing employers take

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Speaker 1: a look at their job descriptions, looking at the you know,

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Speaker 1: the barriers to entry. Do you need a high school diploma?

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Speaker 1: Can we do some on the job training. We're also seeing,

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Speaker 1: you know, a re emergence of some vocational and technical

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Speaker 1: trade schools coming up. You know, if we can't upscale

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Speaker 1: or rescale, we're gonna have to create some workers to

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Speaker 1: come in. So I see people getting more creative, opening

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Speaker 1: up their days and letting letting new people come in. Um,

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Speaker 1: it's just a question of that the culture change. It's

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Speaker 1: going to take a little bit more time and as

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Speaker 1: we continue, you know, to improve. We're seeing so much

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Speaker 1: hiring and healthcare has been consistent, I mean, seven thousand

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Speaker 1: per month compared to nine thousand per month twenty two

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Speaker 1: versus twenty one. So what a huge investment in infrastructure.

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Speaker 1: But but you're right, there's a dislocation by sector and

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Speaker 1: until we can get the whole up in that participation rate, UM,

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Speaker 1: we still have to stay focused on reskilling and upskilling workers. Well,

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Speaker 1: speaking of a diversion by sector, I I'm interested in

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Speaker 1: the oil and gas sector specifically. Believe only four hundred

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Speaker 1: jobs were added in that sector sector that the Biden

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Speaker 1: administration has been actively trying to really ramp up in

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Speaker 1: terms of production. In turn, the industry saying, look, we

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Speaker 1: are still in dealing with supply chain issues despite these

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Speaker 1: record profits. We can't ramp up production that quickly. Where

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Speaker 1: does the jobs market falls. They're a little bit of

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Speaker 1: catch up to be played by that sector. I think

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Speaker 1: when you look at energy in general, it's been it's

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Speaker 1: been growing. Energy has been a growing sector. So you

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Speaker 1: know this this comes into can we get people to

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Speaker 1: work around the clock, can we get second third shifts?

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Speaker 1: You know, oil industry is not a nine to five job,

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Speaker 1: so you're looking at a type of worker. Um, that's

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Speaker 1: a very narrow base. So again this comes down to,

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Speaker 1: you know, we need to reskill and bring people in

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Speaker 1: two different industries like energy, like healthcare that are growing. Um,

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Speaker 1: it's it's challenging. But you know, one of the other

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Speaker 1: things I think is important to note if you look

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Speaker 1: at the ADP report, UM specifically, they had a comment

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Speaker 1: there about company size and company size fifty employees. They

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Speaker 1: added two jobs per a DP. Now, if you look

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Speaker 1: at that, that's virtually almost all gains. So so what

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Speaker 1: that tells me a little bit I interpret that as

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Speaker 1: the larger companies right now have have got a little

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Speaker 1: bit of the talent they're they're holding right now, they've

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Speaker 1: got strategy, they're waiting to see what happens in the

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Speaker 1: mid terms, but it's created an opportunity window for these

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Speaker 1: small and midsized companies who have been fighting for the talent.

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Speaker 1: They're finally starting to get some of it right now.

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Speaker 1: So that was encouraging for me to see small and

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Speaker 1: midsized companies really make some gains. Um. I think we'll

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Speaker 1: see the fruit of that in the next couple of months,

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Speaker 1: certainly something we're going to keep our eye on. John

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Speaker 1: Golnac of a Deco, we thank you as always for

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Speaker 1: joining us an apologies again for the intro. I look

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Speaker 1: forward to to having you back on the show. What

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Speaker 1: also never gets old is analysis from a certain gentleman

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Speaker 1: who has just a real affinity for looking at things

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Speaker 1: state by state. Of course, as a background in Muty bonds,

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Speaker 1: so I feel like you never forget your first speak.

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Speaker 1: Matthew Winkler, Editor in chief Meritis joins me right here

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Speaker 1: in studio. Real pleasure I wanted before we get to

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Speaker 1: your column. Is that true? You never forget your first beat.

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Speaker 1: I think it's true, and it's always delight to be

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Speaker 1: with you. You're very sweet. Thank you. Um Well. He

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Speaker 1: wrote this incredible column about Ohio specifically, when you think

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Speaker 1: about globalization, Ohio doesn't necessarily immediately come to mind for me.

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Speaker 1: It's New York or l A maybe, but right, you know,

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Speaker 1: somewhere near the water m But he makes the argument

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Speaker 1: that Ohio is actually benefited, perhaps more than others from globalization.

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Speaker 1: Walks through that. So you're absolutely right. If you are

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Speaker 1: on the campaign trail, all you hear is very xenophobic

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Speaker 1: comments about businesses overseas from both the Democrat and the

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Speaker 1: Republican candidates for Senate j d Vance on the Republican

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Speaker 1: side and Ryan among the Democrats. What is the reality, however,

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Speaker 1: is that Ohio is um one of the greatest beneficiaries

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Speaker 1: of globalization, as measured by the fact that it has

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Speaker 1: more foreign owned factories per square thousand miles than any

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Speaker 1: other state in the country. And if you break that

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Speaker 1: down even more, h every business, the publicly traded Giant,

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Speaker 1: Procter and Gamble to family owned companies, they all are

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Speaker 1: huge beneficiaries of trade with China, Canada, and Mexico. And

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Speaker 1: that's a long running story. And if you consider that,

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Speaker 1: probably the factory worker as we know it historically has

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Speaker 1: been displaced mostly by automation. Ohio has actually been working

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Speaker 1: because of globalization. So that's really the story and it

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Speaker 1: and it doesn't stop. But nobody talks about this. And

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Speaker 1: every way you look at it, there's something like almost

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Speaker 1: eight hundred foreign factories in Ohio. You can't miss them.

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Speaker 1: I mean, if land in Columbus, for example, and just

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Speaker 1: drive a little bit north you hit Marysville, Ohio, which

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Speaker 1: is the center of Honda's North American UM production factory.

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Speaker 1: Of course they at The argument that anti globalists would

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Speaker 1: make is that it's added to the wealth gap between

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Speaker 1: rich and poor. That you know, so much labor can

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Speaker 1: be farmed out to foreign countries and the US doesn't

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Speaker 1: get that much in return. Are you seeing that in Ohio? Well,

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Speaker 1: not really, because Ohio has done very well recruiting uh,

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Speaker 1: not just Honda, but Siemens uh for example, air liquid

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Speaker 1: from France. UM. It's done a great job recruiting companies

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Speaker 1: from overseas and letting them prosper in Ohio, paying very

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Speaker 1: high wages. By the way, all of these companies that

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Speaker 1: are far and owned that operate in Ohio are the

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Speaker 1: ones that are providing the high is paying jobs. Now,

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Speaker 1: the biggest employer in Ohio is Walmart. They have something

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Speaker 1: like fifty five thousand what they call associates earning less

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Speaker 1: than eighteen dollars an hour. And by the way, you're

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Speaker 1: very well aware that Walmart gets a lot of its

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Speaker 1: stuff and has been for some time from China. So

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Speaker 1: there's Walmart employing more Ohioans than any other company. And

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Speaker 1: Ohio is okay with that because Walmart is the biggest

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Speaker 1: employer in Ohio. So then factor in the politics of this. Now,

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Speaker 1: what could change perhaps in Ohio given some of this rhetoric. Well, unfortunately,

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Speaker 1: that's saying the truth is the first casualty, and we

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Speaker 1: know it all too well in our own profession of journalism.

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Speaker 1: And UM, this contradiction, uh, and that's really what it is. UM.

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Speaker 1: The lack of honesty on the campaign trail or even

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Speaker 1: in the media narrative makes it difficult for people to

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Speaker 1: accept what, in fact, uh is the reality for not

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Speaker 1: just the US, but every modern economy in the world.

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Speaker 1: We're all inter interdependent, really, UM, and that's not going

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Speaker 1: to go away. I mean, even with all of the

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Speaker 1: recent hostility towards China, global trade is a reality, and uh,

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Speaker 1: you know your your point about fair trade. That's something

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Speaker 1: for politicians obviously to sort out. But in the meantime,

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Speaker 1: people are working in Ohio because of globalization. I mean

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Speaker 1: in some way, Matt, is this just a matter of

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Speaker 1: you know, China is an easier political punching bag than

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Speaker 1: automation to some extent, Well, it's it's easier insofar as

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Speaker 1: China is an autocracy, I mean, where you want to

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Speaker 1: call it a dictatorship, So it's an easy target. Having

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Speaker 1: said that, it's the second largest economy in the world,

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Speaker 1: and it's the one that's grown the most UH in

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Speaker 1: our lifetimes. So um, yeah, you can assail China. But

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Speaker 1: just about every global business that we know of, UH

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Speaker 1: does business in China. And it's two ways. I mean, Ohio,

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Speaker 1: by the way, exports quite a bit of its stuff

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Speaker 1: to China. It gets more of its stuff from China.

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Speaker 1: But it's a two way trade, if you like. And

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Speaker 1: that's the reality for a lot of states. Of course.

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Speaker 1: Matt Winkler Bloomberg News as founder and editor in chief emeritus,

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Speaker 1: I might add wrote this incredible column. Folks check it

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Speaker 1: out on Bloomberg dot Com and of course Bloomberg Opinion. O.

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Speaker 1: P I N I'll go on your Bloomberg terminal. We

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Speaker 1: are very excited to have him in studio, and of

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Speaker 1: course he has I'm sure more columns ahead of the

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Speaker 1: midterms next week. We're very excited about this next guest

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Speaker 1: joining us, especially ahead of mid terms, a really crucial moment,

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Speaker 1: not just for the markets, but for politics as well.

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Speaker 1: Is Governor Ned Lamont of the great state of Connecticut.

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Speaker 1: He's running for re election in two of course, I

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Speaker 1: guess Republican Bob Stefanowski, Governor, thank you as always for

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Speaker 1: making the time to join us up. Myself and Nathan

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Speaker 1: are are very very excited to have you. I want

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Speaker 1: to start off with a question about your business background.

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Speaker 1: This is at the end of the day Bloomberg Radio.

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Speaker 1: You and your opponent both have an extensive career in

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Speaker 1: business and finance. But I'm curious if you think the

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Speaker 1: Democratic Party has become too anti business or their policies

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Speaker 1: aren't promoting enough economic growth. That's certainly some of the

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Speaker 1: criticism that the Democratic Party has faced. I'll tell you

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Speaker 1: one thing gratty. I think they'd be well served to

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Speaker 1: have more people with a business background. You see some

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Speaker 1: in the governor's world, and I think that's really positive. UM.

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Speaker 1: I worked very closely with Charlie Baker up in Massa Chosetts.

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Speaker 1: We both have a business background, which I thought was

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Speaker 1: very helpful. Gina Romando next door to me in Rhode

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Speaker 1: Island before she went on the commerce And I do

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Speaker 1: think I'm the first one UM in forever here in

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Speaker 1: the state of Connecticut with a business. I started up

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Speaker 1: a business forty years ago building telecommunication systems came out

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Speaker 1: of the cable TV and it's the likes of experience

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Speaker 1: that I bring to this job every day, knowing what

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Speaker 1: it means to was small business, how our policies would

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Speaker 1: impact a small business. You know, Governor, your fellow governor

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Speaker 1: Democrat of California, Gavin Newsom, has made no secret of

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Speaker 1: his feeling that your party, the Democrats, are failing when

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Speaker 1: it comes to putting out a coherent economic message. Is

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Speaker 1: that of you you share and if so, what can

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Speaker 1: you do about it? I'll tell you what we've done

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Speaker 1: here in Connecticut. Create something called Advanced CT so I

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Speaker 1: get all the business leaders at the table. No more

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Speaker 1: of this adversarial relationship or two very different spheres. There

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Speaker 1: are best advocates for the state, Nathan, I mean, I'm

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Speaker 1: I'm a homer. When a company is thinking about coming

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Speaker 1: to the state or expanding the state, Um, you know,

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Speaker 1: you know what I'm gonna say and how I'm gonna

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Speaker 1: push up When I can send them this abody who's

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Speaker 1: an advanced manufacturing or i T or life sciences, who's

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Speaker 1: part of our advanced CT team. That's a good way

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Speaker 1: to reinvent and sell the company. Walk us through perhaps

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Speaker 1: some of the key voter issues here. I mean, we've

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Speaker 1: talked about inflation, the economy. A lot of us from

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Speaker 1: from Bloombergradi and bloomber Television are talking about just how

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Speaker 1: much that is going to drive the drive voters to

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Speaker 1: the polls. But it's also crime, it's abortion, it's immigration.

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Speaker 1: What would you say is the number one issue that

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Speaker 1: is driving voters? I think the economy front and center. Uh.

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Speaker 1: Here in Connecticut we've been flat as a pancake for

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Speaker 1: thirty years. We hadn't added a new job in thirty years. Uh,

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Speaker 1: and we were going from physical crisis to fiscal crisis.

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Speaker 1: It was a pretty lousy story. And the last you know,

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Speaker 1: four or five years, we're beginning to turn things around,

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Speaker 1: and we've had four balanced budgets in a row. We

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Speaker 1: did it without raising taxes. That sent a message loud

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Speaker 1: and clear to the business community. Connecticut beginning to get

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Speaker 1: its fiscal act and u together build on that. We

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Speaker 1: hadn't added jobs. Today, we've got created over a hundred

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Speaker 1: thousand new jobs that were really working hard to fill

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Speaker 1: right now. So when it comes to the economy, we're

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Speaker 1: telling that story loud and clear. But there's no getting

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Speaker 1: away from inflation and how that slams the middle class.

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Speaker 1: And we did what we could. We put in place

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Speaker 1: the biggest middle class tax cut in our history, and

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Speaker 1: that's money that when the people's pocket. As early as

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Speaker 1: this summer, Governor, there is some pushback from the Biden

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Speaker 1: administration at the moment against the idea that perhaps the

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Speaker 1: federal reserve needs a recession to really fully tackle on

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Speaker 1: inflation and in doing that have unemployment rise. Is Connecticut

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Speaker 1: prepared for such a move. We're as prepared as you

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Speaker 1: can be. For the first time ever. I've got a

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Speaker 1: three and a half billion dollar rainy day fund. What

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Speaker 1: does that mean? It's about fifteen percent of our revenues.

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Speaker 1: So I budgeted very conservatively. I assumed our capital gains

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Speaker 1: was gonna be going down, not up this year already.

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Speaker 1: Combine that with the fact that I got fiftum set

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Speaker 1: aside in cash as necessary if our revenues shortfall. I

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Speaker 1: don't want to do anything that upsets the apple cart.

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Speaker 1: I don't want to raise any taxes. I don't want

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Speaker 1: to slash education spending. That's what the ten previous governors

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Speaker 1: have done. That's not what I'm gonna do. At the

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Speaker 1: national level, Governor, as you know, there's talk about lifting

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Speaker 1: the debt ceiling if Democrats take back control of Congress,

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Speaker 1: although here from many pollsters, they don't think that's gonna happen.

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Speaker 1: Given the fiscal policy that you're putting forward in Connecticut.

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Speaker 1: Is there something that Democrats can take away from on

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Speaker 1: a national level from what you're doing in the state

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Speaker 1: of Connecticut. I think anything that gives people confidence you're

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Speaker 1: dealing with your long term issues, just not the short term,

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Speaker 1: makes the difference. It's a sense of direction. I don't

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Speaker 1: want anybody playing games with the debt ceiling. I've been

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Speaker 1: through this before as an observer when we're gonna shut

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Speaker 1: down government if we don't get our way, and now

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Speaker 1: as a governor, I can tell you how disastrous that

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Speaker 1: would be if there was a real risk that a

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Speaker 1: lot of the ongoing support we get from the federal

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Speaker 1: government was to be cut off all of a sudden.

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Speaker 1: So I really hope that's not a game that Congress

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Speaker 1: is going to play. So, then, is the spending that

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Speaker 1: we've seen from the BI part is an infrastructure Act

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Speaker 1: the Inflation Reduction Act? Is that something that you support?

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Speaker 1: That's up my support? Look, Nathan, I'm a We've got

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Speaker 1: a hundred year old bridges and old roads, old rails,

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Speaker 1: So this is a big deal for us. Every president

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Speaker 1: seems to be talking about infrastructure. Of Biden's the first

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Speaker 1: guy since Ike as far as I can figure out,

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Speaker 1: to really be serious about it. Look, we're geographic. We're

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Speaker 1: between New York and Boston. I can take twenty minutes

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Speaker 1: off your commute in each direction. It'll take you know,

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Speaker 1: five or six years to do it. But these are

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Speaker 1: the types of investments that the Infrastructure Bill allows us

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Speaker 1: to make. But these infrastructure investments were meant to kind

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Speaker 1: of manifest for lack of a better term, over a

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Speaker 1: much longer time horizon. We're talking potentially ten years. It's

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Speaker 1: not just about kind of roads and bridges. It's about say,

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Speaker 1: chip making facilities. Even I wonder, though, if there's a

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Speaker 1: risk to the Democratic Party and to this massive infrastructure investment,

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Speaker 1: if we not only see a Republican sweep in in

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Speaker 1: this midterm election, but potentially a Republican president. I'd be

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Speaker 1: very surprised if they wanted to roll back the Infrastructure

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Speaker 1: Bill that that did have some bipartisans support, thank you,

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Speaker 1: Mitt Romney and um that would surprise me. The Inflation

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Speaker 1: Reduction Act. Maybe you think we're putting too much money

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Speaker 1: into UM charging stations or resiliency to prevent against flooding.

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Speaker 1: But I think after Hurricane Ian people say, hey, probably

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Speaker 1: these are investments worth making. You know, I think you'd

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Speaker 1: probably have grid luck that the Republicans take over Congress

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Speaker 1: and not much had happened for the next two years.

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Speaker 1: But we've got a lot of our plate right now.

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Speaker 1: I've got to make sure it's appropriately invested. Of course,

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Speaker 1: there's a lot of talk as well, Governor about rolling

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Speaker 1: back entitlements, Social Security, Medicare Medicaid reform as well. You've

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Speaker 1: even heard from Joe Mansion, the Democrat from West Virginia,

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Speaker 1: saying that needs to be looked at as well. How

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Speaker 1: much of a concern is that for you. I'll tell

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Speaker 1: you what we've done here in Connecticut, Nathan. Um. You know,

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Speaker 1: they were talking about walking away from our pension obligations

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Speaker 1: to state employees we couldn't afford it, and to let

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Speaker 1: them fend for themselves. We've done just the opposite. Um.

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Speaker 1: We've paid down, not just made the required contributions to

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Speaker 1: the state veget funds, but paid down about ten percent

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Speaker 1: of it. We're look, we're no showcase. We still have

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Speaker 1: a big unfunded liability, but we're a lot better off

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Speaker 1: than we were before. And I really urged the federal

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Speaker 1: government to take it seriously. Everybody sort of kicks the

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Speaker 1: can on Social Security. You can't do that any longer.

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Speaker 1: Look what Chip and Ronnie did back in nineteen eighty

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Speaker 1: two or three. I think you'll see something like that

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Speaker 1: going forward. That's a throwback tip and Ronnie, I want

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Speaker 1: to ask you about that a little bit in terms

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Speaker 1: of the polarization we're seeing as well. I mean when

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Speaker 1: you think of Tip O'Neil and Ronald Reagan, you think

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Speaker 1: about you know, there was a time when the parties

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Speaker 1: could at least make a show of working together. Now

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Speaker 1: we have so much polarization in this country and threats

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Speaker 1: of political violence as well. Of course, we saw what

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Speaker 1: happened with the Speaker's husband last week. How do we

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Speaker 1: get past this polarization in our politics? Governor, you gotta

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Speaker 1: turn down the rhetoric. First of all, Um, I don't

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Speaker 1: get partisan much, but I think a lot of what

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Speaker 1: Donald Trump was saying five years ago made the impermissible permissible.

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Speaker 1: I can say here in Connecticut, I think we have

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Speaker 1: lowered the temperature. I'm a business guy and a progressive,

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Speaker 1: so I do pretty well with both wings, the Republican

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Speaker 1: and Democrat. I work like heck to bring people together.

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Speaker 1: We've done a fair amount on a bipartisan basis, and

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Speaker 1: anything I could do in that way lowers the temperature,

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Speaker 1: respect the voting process. Democracy is not a spectator sport. Governor.

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Speaker 1: I want to ask you about violence in America at

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Speaker 1: the moment, specifically politically motivated violence in America. There's a

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Speaker 1: wide by partisan majority of Americans who are worried about

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Speaker 1: this issue, and I believe there's a new Washington Post

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Speaker 1: ABC News poll that shows nearly nine how to ten

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Speaker 1: Americans are concerned that political divisions have intensified to the

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Speaker 1: point that there's an increased risk of violence. Is something

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Speaker 1: we've certainly seen here in New York City and across

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Speaker 1: the country. I'm sad to say, but how do you

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Speaker 1: tackle that? Social media has been a really um that

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Speaker 1: pours gasoline on the flames, and people are watching that

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Speaker 1: and a lot of things that you never say in person.

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Speaker 1: You see gin dup uh. Some of that's political, some

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Speaker 1: of it's just um, you know, threats. Somebody going online

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Speaker 1: and making a threat about his school or something. What

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Speaker 1: do you do? Do you shut it down? How do

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Speaker 1: you how do you handle that? Um? Number one um,

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Speaker 1: Like I said, said, lower the temperature. I try and

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Speaker 1: lead by example. I'm not a very polarizing guy, at

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Speaker 1: least I hope I'm not. I think that makes a difference.

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Speaker 1: And I think as if you see something, say something.

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Speaker 1: When I see some of the anti Semitic and racist

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Speaker 1: things that get um in graffiti and other threats, you've

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Speaker 1: got to say something loud and clear. You can't do

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Speaker 1: everything by law. You gotta do a lot by attitude.

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Speaker 1: Got about a minute left here, and we appreciate your time. Governor.

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Speaker 1: We know you're focused, of course on your own re

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Speaker 1: election race, but we want to get your take on

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Speaker 1: what you see from the midterms. Lots of talk about

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Speaker 1: a potential red wave. Is that what you're seeing from

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Speaker 1: where you sit in Connecticut? I hope not. I um

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Speaker 1: sometimes divided government's not all bad. You force people to

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Speaker 1: the center and get things done. I think it was

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Speaker 1: a big red wave that would just be um gridlock.

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Speaker 1: I'm not sure that's what you want, but I think

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Speaker 1: you know, for the Democrats, you've got to take care

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Speaker 1: of the everyday bread and butter, kitchen tabe issues. That's

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Speaker 1: inflation and that's a crime. You've got to hit those hard.

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Speaker 1: We've done that here in Connecticut, and I think that's

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Speaker 1: a message that Democrats to take around the country. The governor,

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Speaker 1: we thank you so much for your time. Governor, A

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Speaker 1: real pleasure to have you on Bloomberg Radio. Governor Ned

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Speaker 1: Lamont of the great State of Connecticut. We thank you

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Speaker 1: as always. Let's get the take from our one only

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Speaker 1: Ed Ludlow are Bloomberg News West Coast correspondent. He joins

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Speaker 1: us from San Francisco, once again going nationwide, from DC

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Speaker 1: to New York to San Francisco. Ed, in the context

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Speaker 1: of today's jobs report, where you saw such strength across

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Speaker 1: the board, tech sending a very different message. Yeah, it's

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Speaker 1: been a really strange week. Um, let's stay out loud

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Speaker 1: that the layoffs at Twitter are sort of specific and

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Speaker 1: anomalous in the context of other tech layoffs, right, because

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Speaker 1: Musk is doing something specific there. But what we've heard

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Speaker 1: in the last twenty four hours is Stripe, one of

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Speaker 1: the biggest par companies, laying off fourteen percent of staff,

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Speaker 1: Lift the Right sharing platform laying off percent of staff,

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Speaker 1: Amazon pulling back on its corporate worker footprint and hiring. Um,

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Speaker 1: and there are many others. Um it is. It is

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Speaker 1: a picture incongruous with the macro picture painted by these

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Speaker 1: jobs numbers. But then again, this is about tech and

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Speaker 1: tech leaders and executives at these companies battening down the

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Speaker 1: hatches because they're acting what we believe are signs of

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Speaker 1: cracks in the strengths of the businesses that they're operating.

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Speaker 1: Now that I know, even following all the developments with

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Speaker 1: Twitter very closely since Elon Musk took over ownership. There's

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Speaker 1: been so many headlines just crossing in the last hour

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Speaker 1: here about employees getting two months severance pay once they

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Speaker 1: get let go, and now Elon Musk tweeting that the

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Speaker 1: company has seen a massive drop in revenue from advertisers

428
00:23:55,640 --> 00:23:57,760
Speaker 1: pulling out. What do you make of some of these

429
00:23:57,800 --> 00:24:00,320
Speaker 1: latest moves? Yes, so on on the staff them selves.

430
00:24:00,320 --> 00:24:02,920
Speaker 1: I mean, let's just call this what this is. It's

431
00:24:02,960 --> 00:24:06,440
Speaker 1: deeply unpleasant that many thousands of people are losing their jobs.

432
00:24:06,480 --> 00:24:08,640
Speaker 1: I think that's worth stating. And that's not me giving

433
00:24:08,640 --> 00:24:12,200
Speaker 1: an opinion. That's you know what I'm hearing from Twitter insiders, sources,

434
00:24:12,200 --> 00:24:14,160
Speaker 1: and many people that have been laid off that I've

435
00:24:14,200 --> 00:24:18,439
Speaker 1: spoken to. UM. The severance is not confirmed company wide.

436
00:24:18,880 --> 00:24:20,800
Speaker 1: We believe it will be sixty days, but in New

437
00:24:20,880 --> 00:24:24,720
Speaker 1: York City, for example, UM, I'm told that staff will

438
00:24:24,760 --> 00:24:28,000
Speaker 1: be kept as non working employees through February second. They

439
00:24:28,000 --> 00:24:31,520
Speaker 1: will be paid significant severance in that period, but they'll

440
00:24:31,520 --> 00:24:35,680
Speaker 1: also stay long enough for another UM batch of restricted

441
00:24:35,720 --> 00:24:38,919
Speaker 1: stock units to vest an rsu Cliff, which you know

442
00:24:39,000 --> 00:24:42,800
Speaker 1: is additional compensation. Musk has not addressed the issues of layoffs.

443
00:24:42,800 --> 00:24:45,320
Speaker 1: As you said, he tweeted that right now, he's not

444
00:24:45,359 --> 00:24:47,719
Speaker 1: talking about in the past, he's talking about in this moment,

445
00:24:48,119 --> 00:24:51,639
Speaker 1: Twitter's revenues being hit, advertisers are pulling back. That's a

446
00:24:51,640 --> 00:24:55,119
Speaker 1: concession from him. And why will Elon Musk's mind. What

447
00:24:55,240 --> 00:24:58,280
Speaker 1: he's saying is it's because these advertisers are being pressured

448
00:24:58,280 --> 00:25:01,000
Speaker 1: by lobby groups who are concerned about content moderation on

449
00:25:01,000 --> 00:25:04,800
Speaker 1: the platform. And I also read I believe when we're

450
00:25:04,800 --> 00:25:06,440
Speaker 1: new reporting, which I want to say your name was

451
00:25:06,480 --> 00:25:09,320
Speaker 1: on this, but I'm not sure, but this idea that

452
00:25:09,359 --> 00:25:12,080
Speaker 1: a lot of these Twitter employees who haven't yet heard

453
00:25:12,119 --> 00:25:15,840
Speaker 1: about their jobs actually joining unions, some of them even

454
00:25:15,840 --> 00:25:19,360
Speaker 1: already forming a Twitter alumni network. What does this due

455
00:25:19,359 --> 00:25:22,520
Speaker 1: to the credibility of Twitter as a company one it

456
00:25:22,560 --> 00:25:25,560
Speaker 1: does ultimately want to hire in the future. Yeah. Look,

457
00:25:26,359 --> 00:25:29,760
Speaker 1: before Musk took over Twitter as a company of people

458
00:25:30,119 --> 00:25:34,959
Speaker 1: across the world, Asia, EMA, New York City, San Francisco,

459
00:25:35,560 --> 00:25:39,439
Speaker 1: it had a very distinct company culture. Um. Much of

460
00:25:39,480 --> 00:25:43,200
Speaker 1: that was carried over from Jack Dawsey's leadership into paragag Row.

461
00:25:43,600 --> 00:25:45,400
Speaker 1: You know, some of the reporting we've done, for example,

462
00:25:45,440 --> 00:25:49,440
Speaker 1: is that Musk has taken pretty severe actions like canceling

463
00:25:49,800 --> 00:25:51,879
Speaker 1: what they call a day of rest, and there was

464
00:25:51,920 --> 00:25:54,159
Speaker 1: so much readership at this story on the terminal, I

465
00:25:54,160 --> 00:25:57,520
Speaker 1: couldn't believe it. So basically, you know, throughout the pandemic period,

466
00:25:57,960 --> 00:25:59,840
Speaker 1: there was one day month where Twitter staff were given

467
00:25:59,840 --> 00:26:02,320
Speaker 1: the day off to kind of recuperate, a day of rest,

468
00:26:02,359 --> 00:26:05,320
Speaker 1: and must got rid of that. Um, he's kind of

469
00:26:05,400 --> 00:26:07,119
Speaker 1: That's just one example of him. I'm doing the culture.

470
00:26:07,119 --> 00:26:09,800
Speaker 1: So on the unionization effort, Um, what does it mean

471
00:26:09,840 --> 00:26:12,159
Speaker 1: for Twitter long term? It's impossible to say. You know,

472
00:26:12,200 --> 00:26:14,080
Speaker 1: all I can tell you is that there are lots

473
00:26:14,119 --> 00:26:19,560
Speaker 1: of people UM at Twitter at all levels, whether it's sales, engineering, marketing,

474
00:26:19,920 --> 00:26:22,880
Speaker 1: who loved that company and are desperately sad that they've

475
00:26:22,920 --> 00:26:25,679
Speaker 1: been part of this layoff process. And and you know,

476
00:26:26,040 --> 00:26:29,520
Speaker 1: many people, I'm told by sources, we're trying to find

477
00:26:29,520 --> 00:26:32,159
Speaker 1: creative ways to stay. They volunteered for kind of the

478
00:26:32,160 --> 00:26:34,879
Speaker 1: projects that Musk was pushing, like Vine or the Twitter

479
00:26:34,880 --> 00:26:37,639
Speaker 1: Blue project, because they felt that if they volunteered for

480
00:26:37,680 --> 00:26:39,800
Speaker 1: such a project, they might be seen as sort of

481
00:26:39,800 --> 00:26:42,679
Speaker 1: willing and Musk might keep them. UM. But you know,

482
00:26:43,119 --> 00:26:46,440
Speaker 1: unionized Asian efforts across technology have been a mixed bag

483
00:26:46,480 --> 00:26:48,880
Speaker 1: this year. I think about Amazon for example, Guys, they've

484
00:26:48,880 --> 00:26:52,240
Speaker 1: had some successes but also some failures to um in

485
00:26:52,240 --> 00:26:55,720
Speaker 1: in unionizing different workplaces. Well just quickly, and we know

486
00:26:55,760 --> 00:26:58,520
Speaker 1: how resisting elon Musk is to unionization just from what

487
00:26:58,560 --> 00:27:01,560
Speaker 1: we've seen it. Tesla keeps going forward. And now when

488
00:27:01,560 --> 00:27:05,080
Speaker 1: we have a class action lawsuit against the layoffs on unfolding,

489
00:27:05,119 --> 00:27:09,320
Speaker 1: I mean, what could this mean for worker musk relations

490
00:27:09,359 --> 00:27:13,280
Speaker 1: in the new Twitter? Yes, so um Musk was sued.

491
00:27:13,440 --> 00:27:16,399
Speaker 1: Twitter was sued by a class action lawsuit here in

492
00:27:16,440 --> 00:27:21,160
Speaker 1: San Francisco. The accusation is that workers say the company

493
00:27:21,359 --> 00:27:24,160
Speaker 1: did these layoffs with the now without giving enough notice

494
00:27:24,200 --> 00:27:27,680
Speaker 1: based on federal law. I'm talking about warn notices right. Um.

495
00:27:27,720 --> 00:27:29,560
Speaker 1: We actually are still trying to report this out, but

496
00:27:29,600 --> 00:27:32,080
Speaker 1: I imagine that there will be a number of lawsuits

497
00:27:32,119 --> 00:27:35,560
Speaker 1: over the timing and how these layoffs were communicated, both

498
00:27:35,600 --> 00:27:39,719
Speaker 1: in line with federal and state laws. Bloomers at Luve

499
00:27:39,760 --> 00:27:42,879
Speaker 1: Law always a pleasure of joining us from San Francisco.

500
00:27:43,240 --> 00:27:46,480
Speaker 1: Never a day of rest. I don't know when he sleeps.

501
00:27:46,960 --> 00:27:49,119
Speaker 1: By the way, breaking news left and right on on

502
00:27:49,200 --> 00:27:51,720
Speaker 1: some of this for the organization. We thank you as

503
00:27:51,760 --> 00:27:57,480
Speaker 1: always for your time for your insight, Nathan. An exciting

504
00:27:57,560 --> 00:28:01,399
Speaker 1: day for us, headline number on for the for the

505
00:28:01,480 --> 00:28:04,520
Speaker 1: for the Job's day. For the market, perhaps not so

506
00:28:04,600 --> 00:28:06,720
Speaker 1: much because it doesn't feel like there's a clear message.

507
00:28:06,760 --> 00:28:11,800
Speaker 1: Two sixty one thousand jobs on an estimate of just one, right,

508
00:28:11,840 --> 00:28:13,760
Speaker 1: A little bit of a mixed bag when you see

509
00:28:13,760 --> 00:28:17,879
Speaker 1: that kind of strong creation number on the payrolls and

510
00:28:17,960 --> 00:28:20,560
Speaker 1: also a little bit of an uptick on the unemployment

511
00:28:20,680 --> 00:28:24,760
Speaker 1: rate as well. It's uh, maybe giving investors a little

512
00:28:24,760 --> 00:28:28,000
Speaker 1: bit of direction to look for, but certainly the direction

513
00:28:28,040 --> 00:28:30,240
Speaker 1: for the markets is up, up, up at the moment.

514
00:28:30,400 --> 00:28:32,800
Speaker 1: It is even as we start to see average hourly

515
00:28:32,840 --> 00:28:35,920
Speaker 1: earnings to hire as well the labor force participation rate

516
00:28:36,119 --> 00:28:38,160
Speaker 1: coming in line with estimates. But are we where we

517
00:28:38,240 --> 00:28:40,760
Speaker 1: need to be? And is the Federal Reserve happy with

518
00:28:40,800 --> 00:28:43,479
Speaker 1: this number. Let's bring in our next guest here, Jeffrey Cleveland,

519
00:28:43,520 --> 00:28:47,320
Speaker 1: chief economists over at Payden and Regal, to get his take. Jeffrey,

520
00:28:47,360 --> 00:28:51,560
Speaker 1: thank you as always for joining us this number that

521
00:28:51,600 --> 00:28:54,640
Speaker 1: we got from the Job's Report. From a fiscal perspective,

522
00:28:54,800 --> 00:28:58,880
Speaker 1: the Biden administration clearly celebrating more jobs in America. But

523
00:28:59,400 --> 00:29:02,440
Speaker 1: how much much of a margin of deceleration do we

524
00:29:02,520 --> 00:29:05,600
Speaker 1: need to really see the Federal r reserve excuse me,

525
00:29:06,040 --> 00:29:10,479
Speaker 1: perhaps take their foot off the book, Gospital. Well, I mean,

526
00:29:10,480 --> 00:29:12,280
Speaker 1: I tell you there's something for everyone in this report.

527
00:29:12,360 --> 00:29:14,840
Speaker 1: If you want to be bullish, you point to the

528
00:29:14,880 --> 00:29:18,000
Speaker 1: non farm payroll beat. You want to be bearished, then

529
00:29:18,080 --> 00:29:20,040
Speaker 1: maybe you point to the household survey in the rise

530
00:29:20,040 --> 00:29:22,640
Speaker 1: in the unemployment rate. So you can probably tell any

531
00:29:22,680 --> 00:29:25,760
Speaker 1: story you want to tell. I would tell you, though

532
00:29:25,800 --> 00:29:29,320
Speaker 1: you probably want to put more emphasis on the establishment survey.

533
00:29:29,480 --> 00:29:32,600
Speaker 1: And you know, if we're adding jobs, you know, the

534
00:29:32,640 --> 00:29:35,920
Speaker 1: three months average of almost two nine thousand jobs per

535
00:29:35,920 --> 00:29:40,200
Speaker 1: months in the last three months, this really strong job growth. Um,

536
00:29:40,360 --> 00:29:43,960
Speaker 1: the Fed you've talked to you listen to share Powell

537
00:29:44,120 --> 00:29:47,000
Speaker 1: the other day talking about the labor market being out

538
00:29:47,000 --> 00:29:50,600
Speaker 1: of balance, and um, certainly you know from the payroll

539
00:29:50,680 --> 00:29:53,960
Speaker 1: data today it's just confirmation of that you have very

540
00:29:54,040 --> 00:29:57,440
Speaker 1: strong job growth. So I think the Fed probably prefer

541
00:29:57,840 --> 00:30:01,040
Speaker 1: much slower job growth enough to get unemployment rate up

542
00:30:01,200 --> 00:30:05,120
Speaker 1: UM maybe a percentage point. So that would that would

543
00:30:05,200 --> 00:30:06,880
Speaker 1: mean I mean, if you do the math, you need

544
00:30:07,520 --> 00:30:09,920
Speaker 1: job growth really to stall out to fall under a

545
00:30:10,000 --> 00:30:13,440
Speaker 1: hundred thousand per month, and we're not seeing that two

546
00:30:13,480 --> 00:30:17,960
Speaker 1: hundred today, you know, Jeffrey. I wonder if a lot

547
00:30:18,000 --> 00:30:21,400
Speaker 1: of investors sort of took note of the commentary today

548
00:30:21,440 --> 00:30:25,360
Speaker 1: from Richmond FED President Thomas Barkins saying that we can

549
00:30:25,440 --> 00:30:28,120
Speaker 1: credibly say now that the FED has its foot on

550
00:30:28,160 --> 00:30:32,600
Speaker 1: the break, does this job's report can keep up the

551
00:30:32,600 --> 00:30:35,800
Speaker 1: case for them that they can start to slow down

552
00:30:35,920 --> 00:30:37,960
Speaker 1: on rates or does there need to be more data

553
00:30:38,000 --> 00:30:40,640
Speaker 1: coming in. I don't think that. I think it's too

554
00:30:40,640 --> 00:30:42,680
Speaker 1: soon to jump to that conclusion, but I have to

555
00:30:42,720 --> 00:30:45,320
Speaker 1: tell you, I mean again, you look at that household survey.

556
00:30:45,640 --> 00:30:47,800
Speaker 1: You could say, well, the unemployment rate rose a bit,

557
00:30:47,880 --> 00:30:50,280
Speaker 1: that's a sign of the economy slowing. I don't know

558
00:30:50,320 --> 00:30:54,480
Speaker 1: if I would say that it's very choppy, noisy survey. Um,

559
00:30:54,520 --> 00:30:56,840
Speaker 1: the unemployment rate has been kind of bouncing around where

560
00:30:56,840 --> 00:30:58,640
Speaker 1: it is now for for the better part of the

561
00:30:58,720 --> 00:31:02,600
Speaker 1: last six months. The household serve is really choppy. Um,

562
00:31:02,720 --> 00:31:04,840
Speaker 1: it's had some big gains and some in down months.

563
00:31:04,960 --> 00:31:07,640
Speaker 1: I don't know. I wouldn't I wouldn't confirm that. Also,

564
00:31:07,680 --> 00:31:09,960
Speaker 1: the wage growth data has slowed maybe a little bit

565
00:31:10,080 --> 00:31:12,520
Speaker 1: month to month. I think the increase today was point

566
00:31:12,560 --> 00:31:15,200
Speaker 1: four percent month to month, a little bit slower than

567
00:31:15,240 --> 00:31:17,640
Speaker 1: we saw, you know, earlier this year and then last year,

568
00:31:18,120 --> 00:31:20,560
Speaker 1: but point four month a month is still pretty strong

569
00:31:21,040 --> 00:31:24,320
Speaker 1: wage growth. We're hanging out around five percent year on

570
00:31:24,440 --> 00:31:28,000
Speaker 1: year wage growth, and that is not consistent, in my view,

571
00:31:28,400 --> 00:31:31,200
Speaker 1: with two percent inflation. I think it's far too soon

572
00:31:31,240 --> 00:31:33,200
Speaker 1: for the Fed to say they're they're putting the brakes

573
00:31:33,200 --> 00:31:36,720
Speaker 1: on here. Thank you, Jeffrey Cleveland. I'm so glad you

574
00:31:36,760 --> 00:31:39,600
Speaker 1: said that, because I literally have asked a lot of

575
00:31:39,600 --> 00:31:42,160
Speaker 1: economists on the show whether to a two percent inflation

576
00:31:42,200 --> 00:31:45,520
Speaker 1: target is actually reasonable um um in the long term

577
00:31:45,560 --> 00:31:49,080
Speaker 1: when you have this sticky wage inflation, uh that that

578
00:31:49,120 --> 00:31:52,080
Speaker 1: won't really go away. But I'm curious how that squares with,

579
00:31:52,240 --> 00:31:55,760
Speaker 1: for example, the Biden administrations moves to on shore a

580
00:31:55,840 --> 00:31:58,840
Speaker 1: lot of manufacturing on shore, a lot of production. Doesn't

581
00:31:58,880 --> 00:32:02,800
Speaker 1: that just create um a tailwind if you will, for

582
00:32:02,960 --> 00:32:04,840
Speaker 1: labor market that needs to have some of the steam

583
00:32:04,880 --> 00:32:09,719
Speaker 1: let out. It depends. I mean, in terms of inflation,

584
00:32:10,280 --> 00:32:13,200
Speaker 1: we have benefited from twenty five or thirty years of

585
00:32:13,360 --> 00:32:17,440
Speaker 1: globalization and technology. Where are our goods? The good side

586
00:32:17,480 --> 00:32:20,440
Speaker 1: of your CPI ledger if you will. Goods prices were

587
00:32:20,440 --> 00:32:23,120
Speaker 1: falling for most of that period. Um, so if on

588
00:32:23,240 --> 00:32:25,920
Speaker 1: shoring means it's going to be much more expensive to

589
00:32:25,960 --> 00:32:28,320
Speaker 1: produce goods, then you know that could be a problem

590
00:32:28,400 --> 00:32:31,760
Speaker 1: for overall inflation. The reason we had to present inflation

591
00:32:31,800 --> 00:32:33,640
Speaker 1: for the better part of two decades, you know, leading

592
00:32:33,680 --> 00:32:36,600
Speaker 1: into COVID, was that goods prices were falling and that

593
00:32:36,680 --> 00:32:40,400
Speaker 1: was off setting roughly three percent services inflation. So it

594
00:32:40,560 --> 00:32:43,560
Speaker 1: is to get back to that scenario. To get back

595
00:32:43,600 --> 00:32:45,760
Speaker 1: to that two percent story, you probably need to see

596
00:32:46,080 --> 00:32:48,480
Speaker 1: goods prices falling again, because I don't think we're going

597
00:32:48,520 --> 00:32:51,000
Speaker 1: to see a big distileration and services side. I don't

598
00:32:51,000 --> 00:32:53,040
Speaker 1: know if that makes sense, but that's that's how I

599
00:32:53,080 --> 00:32:55,600
Speaker 1: think about it. If we can on shore and still

600
00:32:55,600 --> 00:32:58,240
Speaker 1: produce goods very very cheaply, then and maybe that will

601
00:32:58,280 --> 00:33:00,360
Speaker 1: work out fine for the inflation story. We just have

602
00:33:00,480 --> 00:33:02,840
Speaker 1: to see. I think it's too soon to have a

603
00:33:02,840 --> 00:33:05,120
Speaker 1: really strong conviction on that on that part of the story.

604
00:33:05,280 --> 00:33:07,920
Speaker 1: So just thirty seconds left here, Jeffrey is to percent

605
00:33:08,040 --> 00:33:12,200
Speaker 1: a realistic inflation target not in the next twelve months, No,

606
00:33:12,840 --> 00:33:14,880
Speaker 1: I don't think so, just because what we're seeing on

607
00:33:14,920 --> 00:33:18,479
Speaker 1: the services side um and then the good side. We've

608
00:33:18,520 --> 00:33:21,320
Speaker 1: we've seen goods prices to decelerate, but there not enough,

609
00:33:21,360 --> 00:33:24,920
Speaker 1: and we're seeing very strong, as you know, services price growth,

610
00:33:25,080 --> 00:33:28,080
Speaker 1: everything for medical care services to rents. We'll get an

611
00:33:28,120 --> 00:33:32,360
Speaker 1: update next week. Right, I'm looking for another month of

612
00:33:32,440 --> 00:33:34,920
Speaker 1: point five percent months and months growth, so that is

613
00:33:35,160 --> 00:33:37,240
Speaker 1: very strong inflation. So it's it's hard to see two

614
00:33:37,240 --> 00:33:39,440
Speaker 1: percent in the next year. I'm so glad we had

615
00:33:39,440 --> 00:33:42,800
Speaker 1: this conversation, Jeffrey Cleveland. I just feel very relieved that

616
00:33:43,000 --> 00:33:46,240
Speaker 1: someone agrees with me. Jeffrey Cleveland, Chief Economists over at

617
00:33:46,280 --> 00:33:48,880
Speaker 1: Paydon Regal. We thank you, as always for your insight

618
00:33:49,240 --> 00:33:55,600
Speaker 1: in your time on this job day in America. Thanks

619
00:33:55,600 --> 00:33:59,080
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe

620
00:33:59,080 --> 00:34:02,240
Speaker 1: and listen to interview is an Apple Podcasts or whatever

621
00:34:02,320 --> 00:34:06,000
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

622
00:34:06,240 --> 00:34:10,080
Speaker 1: at Matt Miller three. On Fall Sweeney, I'm on Twitter

623
00:34:10,120 --> 00:34:12,919
Speaker 1: at pt Sweeney before the podcast. You can always catch

624
00:34:13,040 --> 00:34:14,600
Speaker 1: us worldwide at Bloomberg Radio