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Speaker 1: Broadcasting live to New York, Bloomberg eleventh Rio to Washington,

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Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco,

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Speaker 1: The Bloomberg Radio Plus happened Bloomberg dot Com. This is

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Speaker 1: Bloomberg Surveillance. Good morning everyone, Bloomberg Surveillance. Three Days of

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Speaker 1: the Job Economy a DP yesterday course, Job's day tomorrow.

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Speaker 1: Right now our economic indicators brought you by Commonwealth Financial Network.

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Speaker 1: When it's time to change the conversation, talk with the

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Speaker 1: broker dealer r I A that's ready to listen Call

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Speaker 1: six six four six two three six three eight or

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Speaker 1: visit Commonwealth dot com to learn more. He's thick with

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Speaker 1: economic data. Here's Vincent del Judas, Benny. Good morning, tom.

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Speaker 1: Jobless claims up by eleven thousand last week, topping forecast

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Speaker 1: a two hundred seventy six thousand Going into the report,

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Speaker 1: Economists had anticipated no change again. Jobless claims up by

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Speaker 1: eleven thousand to two hundred seventy six thousand earlier Challengers

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Speaker 1: Job Cut report for March showing a more than thirty

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Speaker 1: one increase you over year, still on the agenda data

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Speaker 1: on Chicago manufacturing at the Bloomberg First Work Desk, I'm

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Speaker 1: Vinny del Judy, so let's go back to anywhere. Vinny,

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Speaker 1: thank you so much. A minimal market movement there, and

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Speaker 1: we'll give because I have a lot more tomorrow. On

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Speaker 1: an April one Job's Day, it was no uh surprise

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Speaker 1: to see Dean Mackie taking in each and every word

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Speaker 1: and from Janet Yelling and the Q and A from

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Speaker 1: Dean Hubbard and uh Vice Sherman Blinder as well. It

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Speaker 1: was an event and it's an event that still shakes

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Speaker 1: the market. Dan Mackie for years at Berkeley's at Point

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Speaker 1: seven to Steve Cohen shop Dean, good morning, Good morning.

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Speaker 1: Where are we? What I what I love about your work?

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Speaker 1: When within the optimism of d mackie economics is you

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Speaker 1: will change on a dime. Are you adjusting your outlook

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Speaker 1: at the end of this quarter? Uh? I mean in

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Speaker 1: terms of this quarter's growth or the general outlook, just

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Speaker 1: a general outlook. Uh No, I don't see any reason

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Speaker 1: to be changing views at this time. In fact, I'm

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Speaker 1: pretty encouraged by the general tone of the U S

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Speaker 1: data we we have. The labor market continues to roll

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Speaker 1: along at a at a very steady pace, and in

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Speaker 1: many ways, I think that's the best indicator of the

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Speaker 1: underlying momentum in the economy. So when are we going

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Speaker 1: to see any gains in wages beyond the bottom of

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Speaker 1: the minimum wage grouping? Well, we are seeing, you know, modest,

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Speaker 1: modest gains in earnings. We're saying two two and a

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Speaker 1: half percent growth in average early earnings. I think the

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Speaker 1: the actual trend is probably somewhat stronger than that because

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Speaker 1: that number is being masked by things like older workers

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Speaker 1: retire ring being replaced by younger workers. Those compositional effects

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Speaker 1: are are important. So I think if you look at

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Speaker 1: the same worker over time, like we look at in

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Speaker 1: the Atlanta FED index, uh, the numbers notably higher in

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Speaker 1: terms of wage growth. No, no, I just look and

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Speaker 1: we're waiting and waiting, Dean. What has been the biggest

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Speaker 1: surprise of the weight over the last three or four years.

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Speaker 1: I mean, we just are waiting for the spirit to

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Speaker 1: step in, and it has. Why is that? Well, I

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Speaker 1: think that one thing people are waiting for, which will

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Speaker 1: probably never come, is growth rates like we had in

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Speaker 1: prior expansions. So I think that that colors people's views

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Speaker 1: of what strong growth should mean. When you know one

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Speaker 1: potential was two and after three and we're growing four percent.

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Speaker 1: Everyone was very happy Now with potentials one to one

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Speaker 1: and a half, and we're growing to people still aren't

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Speaker 1: very happy about it, and it doesn't see seemed to

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Speaker 1: be that strong. Do you sense here a generational shift

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Speaker 1: all of the politics at the moment, or or is

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Speaker 1: there a sense of Okay, we're in this rogoff Reinhardt,

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Speaker 1: We're out nine years, ten years, whatever, and then we

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Speaker 1: get back. I don't think we're going to go back

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Speaker 1: to those those old growth rates. And mainly, in my view,

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Speaker 1: that's student demographics, just baby boomers retiring, the labor force

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Speaker 1: growing much more slowly in the years to come than

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Speaker 1: it did in prior years. That's the biggest effect. In addition,

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Speaker 1: you lay around to that very weak productivity growth. Maybe

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Speaker 1: that gets better at some point down the road, but

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Speaker 1: there's certainly no evidence that it's improving right now. So

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Speaker 1: when we talk about demographics, I'm just behind the baby boomers.

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Speaker 1: So I've watched them trample like an elephant and ruin

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Speaker 1: everything in their path, But coming up. A couple of

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Speaker 1: generations behind me are the millennials, and this is even

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Speaker 1: a bigger group in raw numbers than the baby boomers.

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Speaker 1: What are they going to do to the overall economy? Well,

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Speaker 1: for the near term, you know, things like the labor

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Speaker 1: force participation rate first, say, the next decade or so,

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Speaker 1: that's going to keep falling because just in terms of

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Speaker 1: peer math, people leaving versus people coming in, that's going

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Speaker 1: to the baby boomers are going to dominate that. Um.

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Speaker 1: You know, the millennials may change things in other ways.

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Speaker 1: You know, we are seeing somewhat different behavior among that

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Speaker 1: group in terms of flower homeownership rate or flower buying

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Speaker 1: of homes. Um. You know, there there there are differences

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Speaker 1: from that perspective, and we'll see if those changes. The

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Speaker 1: millennials get older, they may start to buy homes at

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Speaker 1: are greater rate, etcetera. But right now they're not. You know,

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Speaker 1: I look at where we are, Dean, and against something

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Speaker 1: you've written about in your work at Stanford as well,

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Speaker 1: is the overlay of a lack of productivity. Is it

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Speaker 1: mismeasurement or is it tangible? I'm I'm biased towards the

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Speaker 1: idea that it's it's not mismeasurement in general. Um, I'm

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Speaker 1: not convinced that there is there is reason to think

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Speaker 1: that every year things are getting a lot better than

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Speaker 1: the year before and all of that is not being captured. Um.

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Speaker 1: You know, I think there's always mismeasurement in the data.

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Speaker 1: It's it's a case that needs needs to be fleshed

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Speaker 1: out much more. The idea that the miss spasurement is

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Speaker 1: getting greater and greater and greater every year. This is

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Speaker 1: an important thing. Let's catch up on this with Dan

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Speaker 1: mac internext section. Dan mack at was point seven to

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Speaker 1: economics very productivity. Uh, we were sobered nine uh ninety

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Speaker 1: days ago. We're sobered now on the lect there, whether

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Speaker 1: it's Alan Greenspanner, Dan Mackie, that's what the pros are focused. Well,

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Speaker 1: the the old quote is productivity is showing up everywhere

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Speaker 1: except the data. And I think that's something we could

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Speaker 1: talk to Dean about in the next segment. Yeah, we

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Speaker 1: will do that. Barry Ridultson, Tom Keene, Job's day tomorrow,

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Speaker 1: Jim Gross, Jim Gross, and Bill Glassman with us. Jim

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Speaker 1: Glassman and Bill Gross will be with us tomorrow. Charles

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Speaker 1: Evans coming up about an hour's time with Kathleen Hayes

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Speaker 1: as well. Green and the screen up fractionally in the

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Speaker 1: equity markets this morning, Bloomberg Surveillance this hour, a bunch

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Speaker 1: of by Volvo cars, White planes. Visit Volvo cars, white

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Speaker 1: Planes dot com with our news. There's Michael Tom Barry,

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Speaker 1: Thank you very much. The other presidential candidates are criticizing

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Speaker 1: Donald Trump for his saying that if abortion becomes illegal,

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Speaker 1: women who get one should face some sort of punishment.

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Speaker 1: Trump later reversed himself, but the backlash was immediate. Republican

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Speaker 1: rival Jed Cruz says, once again Trump has demonstrated that

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Speaker 1: he has not seriously thought through the issues. Republican arrival

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Speaker 1: John Ksi says he knows Trump would reverse himself. Speaking

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Speaker 1: with ABC News this morning, Kase says he's staying in

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Speaker 1: the race because of things like Trump's record on women

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Speaker 1: and cruises, call force avalance of Muslin neighborhoods. I don't

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Speaker 1: believe Donald Trump is going to be the nominee, and

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Speaker 1: this underscores his problem. This is why I stay in

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Speaker 1: the race. Look, people say, why does he stay in

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Speaker 1: the race? What am I supposed to get out and

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Speaker 1: leave it to these guys. Democrat Hillary Clinton tweeted about Trump,

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Speaker 1: we can't let someone with this much contempt for women's

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Speaker 1: rights anywhere near the White House. Democratic presidential candidate Bernie

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Speaker 1: Sanders campaign says it has raised thirty nine million dollars

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Speaker 1: so far just this month. It is day one of

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Speaker 1: a nuclear security summit in Washington. President Obama, along with

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Speaker 1: Asian leaders, would talk about North Korea and concerns over

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Speaker 1: its nuclear weapons program. Global News twenty four hours a day,

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Speaker 1: powered by our twenty four hundred journalists more than a

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Speaker 1: hundred fifty news bureaus from around the world. Now Michael

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Speaker 1: Bart top Michael, thanks so much time for the Bloomberg

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Speaker 1: NT me see sports are with us? John Stoish, are

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Speaker 1: all right, Tom? Last thing anything he wants right At

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Speaker 1: the end of the long spring training and injury Yankee

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Speaker 1: suffered actually two yesterday, we're leaving Andrew Miller hitting the

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Speaker 1: right non throwing risk by a line drive as a

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Speaker 1: chip fracture. Not known how long Miller will be out,

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Speaker 1: but the bullpen was seen as the yanks biggest strength,

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Speaker 1: and it's now thin or all this. Chapman headed a

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Speaker 1: thirty game suspension, and Brian Mitchell, who made the team

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Speaker 1: after an impressive spring, also yesterday injured his toe. He's

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Speaker 1: headed for an m R I. Mets winless in the

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Speaker 1: last thirteen grape Fruit League games, will play the Cubs

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Speaker 1: tonight in Las Vegas. Matt Harvey two winnings. Yesterday, perhaps

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Speaker 1: upset with the way that bladder issue was reported, refused

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Speaker 1: to speak with the media. You will start the opener

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Speaker 1: Sunday Kansas City Knicks, where without christophs porzingis injured shoulder,

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Speaker 1: they blew a lead in Dallas and fell the story,

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Speaker 1: making the most dudes. The Lakers divided locker room after

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Speaker 1: rookie D'Angelo Russell secretly videotape teammate Nick Young discussing cheating

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Speaker 1: on his fiancee, and the video surfaced on social media.

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Speaker 1: We play around and we joke and we and we

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Speaker 1: laugh and we say things that you don't you don't

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Speaker 1: really repeat. And that was just an incident of I

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Speaker 1: guess planning, planning too much goes wrong, and I take

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Speaker 1: the full blame for that, recording the video or doing that.

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Speaker 1: But leak in the video wasn't wasn't wasn't last night

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Speaker 1: that the Lakers got a rare win they beat Miami.

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Speaker 1: With the Bloomberg NBC Sports Update, I'm John Stash John,

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Speaker 1: thanks so much for John Trucker. The videos that we

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Speaker 1: shoot here for social media on our commercial breaks are

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Speaker 1: just spindle arecer? Are you? Are you grocery shopping this afternoon? Uh?

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Speaker 1: You know what? I just I tried out the European

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Speaker 1: supermarket Aldi the low cost just just for giggles and uh,

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Speaker 1: you have to buy your own bag and you have

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Speaker 1: to wrap, you have to wrap the shopping cart. Prices

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Speaker 1: are great. The excitement of what we talked for some

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Speaker 1: research to John Amazon Prime very good. There's the theory

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Speaker 1: for very rare holds. Charles Evans. Coming up is Surveillance

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Speaker 1: Flash And I'm Carra in Moscow. This updates brought to

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Speaker 1: you by Sector spider e t F s. Why by

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Speaker 1: a single stock when you can invest in the entire

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Speaker 1: sector visit sector spd r s dot com are called

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Speaker 1: six sector et F. The number of applications for unemployment

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Speaker 1: benefits in the US climb last week to a two

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Speaker 1: month high, a sign of more moderate labor market progress.

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Speaker 1: Initial jobless claims increased by eleven thousand to two hundred

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Speaker 1: seventy six thousand in the weekend in March, and that's

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Speaker 1: the highest since the end of January. US stock index futures, meanwhile,

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Speaker 1: our little change, with stock sending for their first monthly

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Speaker 1: gain in four this following a rally that took the

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Speaker 1: SNP five hundred two, this year's high. We checked the

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Speaker 1: markets every fifteen minutes throughout the trading day on Bloomberg Again.

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Speaker 1: US Stock Index future is there little change the decks

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Speaker 1: in Germany's down six tenths percent, CAC in Paris down

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Speaker 1: nine tenths percent, in the FT one hundred down three

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Speaker 1: tenths per cent ten your treasury down one thirty second,

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Speaker 1: the yeld one point eight two percent yield on a

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Speaker 1: two year point seven five percent nim X screwed oil

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Speaker 1: up a quarter percent or ten cents to thirty eight

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Speaker 1: forty three. A barrel comic schoold is up seven tenths

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Speaker 1: percent or eight dollars ninety cents a twelve thirty seven

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Speaker 1: fifty announced, the euro a dollar thirteen ninety five, and

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Speaker 1: the yen one twelve point two three. That's a Bloomberg

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Speaker 1: Business flash, Tom and Barry Karen, thanks so much. It

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Speaker 1: is eight on Wall Street. The following is from Bloomberg

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Speaker 1: View opinions in commentary from Bloomberg columnists. I'm Megan mccartell,

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Speaker 1: columnst for Bloomberg View. California has reached a deal to

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Speaker 1: raise its statewide minimum waged to fifteen dollars an hour.

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Speaker 1: This is a big broad political experiment. Question is whether

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Speaker 1: it was into a big broad disaster dramatically higher minimum

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Speaker 1: wages or gaining steam everywhere. But so far they've mostly

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Speaker 1: been tried in cities with a large and affluent professional

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Speaker 1: class that can afford to pay somewhat more for goods

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Speaker 1: and services. That doesn't mean that raising the minimum wage

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Speaker 1: won't cause any problems even in those places. Even the

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Speaker 1: professional class does have a budget, and if restaurant meals

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Speaker 1: and dry cleaning bills go too high, they'll have to

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Speaker 1: cut back somewhere else, throwing people out of work. The

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Speaker 1: effect of the fifteen dollar minimum wage, however, is apt

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Speaker 1: to be very different in San Francisco, where the average

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Speaker 1: weekly wage is roughly seventeen hundred dollars, and it is

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Speaker 1: in Mariposa County, where the average weekly wages more like

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Speaker 1: six d and forty dollars. Who in counties like that

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Speaker 1: is going to subsidize increasing the wages of half the population.

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Speaker 1: If we're going to try these sorts of experiments, we

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Speaker 1: should try them slowly in small places, with ample time

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Speaker 1: to evaluate their effects, and with an understanding the results

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Speaker 1: in some places may not generalize well to others. Instead,

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Speaker 1: legislators increasingly seem to be opting for quick blanket solutions

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Speaker 1: that may deal crippling bolws to local economies that can

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Speaker 1: ill afford. I'm Megan mccartell. For more of you, please

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Speaker 1: go to Bloombergview dot com or view go on the

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Speaker 1: Bloomberg terminal. This has been Bloomberg View and Bloomberview commentary

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Speaker 1: is give here an hourly weekdays. I'm Bloomberg Radio. This

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Speaker 1: is gonna be fun, folks. Please pay attention Kathleen Hayes.

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Speaker 1: We'll interview Charles Evans. He is the Chicago Fed President

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Speaker 1: and he has been truly out front in our monetary thinking.

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Speaker 1: We are honored to speak with Dean Mackie out of

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Speaker 1: Stanford with point seven to Steve Cohen Shop point seven

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Speaker 1: to Chrise for years at Barclays. Dr Mackie. Let's talk

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Speaker 1: Charles Evans, and what's so cool here is he is

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Speaker 1: a disciple of Bennett McCollum out of Carnegie Mellon. And

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Speaker 1: this is Stanford out on the West coast, and there's

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Speaker 1: salt water, there's Great Lakes, there's the Virginia School, and

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Speaker 1: then there's the Freshwater School. Largely associated with Bennett McCallum,

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Speaker 1: uh and with Marvin good Friend and with char Evans

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Speaker 1: as well. What is Charles Evans economics as you perceive it.

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Speaker 1: I think Charles Evans is a very practical economist. I

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Speaker 1: don't think he's he's terribly colored by any particular school

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Speaker 1: of thought. He seems to be aimed primarily at just

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Speaker 1: figuring out what's going on with the economy. He has

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Speaker 1: his own views, which are at times very different than

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Speaker 1: the consensus of economists. But I don't detect a particular

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Speaker 1: plant in his in his work. I strongly, strongly agree

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Speaker 1: with that. And this is one of the guys who's

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Speaker 1: always thinking, always supple when people say he's leading the FED.

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Speaker 1: To me, that dialogue, Dr Mackie is the idea where

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Speaker 1: he's been suspect about buoyant economic growth. Is that what

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Speaker 1: you've perceived? Well, I attended his speech yesterday at the

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Speaker 1: Forecasters Club, and he I think the dominant thing in

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Speaker 1: his thinking is just he's nervous that we won't get

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Speaker 1: back to two percent inflation. I think if we get

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Speaker 1: back to two percent inflation, he would be much less

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Speaker 1: devilished than he's been for for quite some time. So

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Speaker 1: I don't think he's you know, and and I think if, if,

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Speaker 1: for example, a year from now, core inflation is well

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Speaker 1: above two percent, he will not be on the devilish

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Speaker 1: end of the committee, I do not think. So. So

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Speaker 1: let's talk about different types of inflation. Because we all

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Speaker 1: know commodity prices have collapsed and we've certainly been enjoying

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Speaker 1: the benefits of that. But what about inflation on the

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Speaker 1: services side? What about things like healthcare and education that

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Speaker 1: seems to be maintaining a very robust level of price increase.

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Speaker 1: I think there is a big economy between things that

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Speaker 1: are exposed to the dollar and foreign global events, um

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Speaker 1: you know, mainly on the good side of the economy

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Speaker 1: versus the service side. The service side is mainly driven

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Speaker 1: by domestic developments, especially the labor market and the services sector.

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Speaker 1: Inflation is quite strong, and that's that's what's pushing primarily,

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Speaker 1: what's been pushing core inflation higher over in recent months.

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Speaker 1: And what about the wage side of the equation. Are

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Speaker 1: we any closer to seeing some increases in wages anytime

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Speaker 1: over the next few quarters or is that still something

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Speaker 1: that's gonna lag for a while. I think it's wage growth,

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Speaker 1: which you know, to be fair already is positive. It's

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Speaker 1: two to two and a half percent. I think that

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Speaker 1: will continue to drift higher. Uh the the I think

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Speaker 1: that measures like the Atlanta FEDS wage tracker, which adjust

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Speaker 1: for compositional effects right now that's at three point two percent,

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Speaker 1: that will that will also continue to move higher. So

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Speaker 1: my step back, the thing that's true of every business

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Speaker 1: cycle is that as the unemployment rate falls over time,

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Speaker 1: wage growth picks up. There's no exceptions to that. And

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Speaker 1: I don't think the cycle will prove to be uh,

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Speaker 1: extremely different on that front. The timing can be tricky

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Speaker 1: of month to month, etcetera, but not always happens. I mean,

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Speaker 1: every fit is is different. Richmond and of course Charles

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Speaker 1: Evans with Chicago D macky, do you get value from

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Speaker 1: the Atlanta g d P now forecast, which tweaks g

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Speaker 1: d P day to day. I certainly watch it, and

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Speaker 1: it's it's interesting to see how it evolves. I'm not

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Speaker 1: convinced it's you know, there's a lot of folks out

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Speaker 1: there doing tracking estimates in a different way and not

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Speaker 1: the now casting, but they're you know, adding up the

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Speaker 1: g d P. I don't think there's persuasive evidence that

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Speaker 1: the g d P now is is better over time

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Speaker 1: than the others. Sometimes it is, sometimes it isn't. So

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Speaker 1: it's worth watching all of them. But certainly I think

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Speaker 1: it's a valuable contribution. And then, and to be clear here,

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Speaker 1: if you and many others say, look, the recession chip

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Speaker 1: chat is just off the mark, how do you define

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Speaker 1: a growth recession? Is it a sequence of subpart quarters?

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Speaker 1: Is as g d P now says, we're in as

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Speaker 1: we speak. I'm I'm not a big fan of that term,

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Speaker 1: you know, the way you're not. That's why the way

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Speaker 1: I look at the world, GDP growth is on a

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Speaker 1: trend of roughly two to two and a half percent.

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Speaker 1: We're going to have some stronger quarters, some weaker quarters,

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Speaker 1: I think, you know, I think there's a distinction between

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Speaker 1: that world, which has its ups and downs, and and

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Speaker 1: a truly recessionary world where you're turning to negative job growth, etcetera.

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Speaker 1: So I don't I'm not persuaded, for example, that if

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Speaker 1: if we get half a percent on the first quarter,

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Speaker 1: that that's that's a terribly negative sign. That thought I

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Speaker 1: heard at the yelling speech wasn't me looking at my

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Speaker 1: dessert as it hit the floor the brick that it was.

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Speaker 1: It was d Mackie falling off his chair with all

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Speaker 1: that you said, your dean, you must have been stunned

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Speaker 1: listening to the truly devilish angles at the chair took.

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Speaker 1: You know, it wasn't surprising she was devilish given her

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Speaker 1: press conference a couple of weeks ago, which also was doubblish,

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Speaker 1: but to the extent of the devilishness was was surprising

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Speaker 1: at this speech, you know, so the way the way

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Speaker 1: I had characterized that we're getting closer and closer to

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Speaker 1: the FEDS full employment goal, we're getting closer to their

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Speaker 1: inflation goal. And she sounds like she's getting more and

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Speaker 1: more worried all the time, and it it that's that's

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Speaker 1: what's difficult to fully grap grasp, especially when markets have

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Speaker 1: largely recovered their losses that we saw on the first quarters.

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Speaker 1: So then what's left is a very small Global Girls

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Speaker 1: downgrade of a couple of months ago as as the

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Speaker 1: primary worry, and I have a trouble getting extremely worried

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Speaker 1: about that. So where does I put you in the

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Speaker 1: parlor game? Obviously you're not going to pine on April,

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Speaker 1: but I mean, are you two three, four six rating increases?

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Speaker 1: I think the best thing to do now is not

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Speaker 1: to focus on the data and how that's likely to

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Speaker 1: affect FED policy, because the data would call for clearly

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Speaker 1: call for the FED hiking in June. But you know,

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Speaker 1: one thing that's difficult about what she said is she

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Speaker 1: was applauding the market pricing out the March hike and

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Speaker 1: saying that that made made things better. So the market

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Speaker 1: is now pricing out the June hike and if you

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Speaker 1: follow that reasoning, than you know, than then that must

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Speaker 1: be making things better. And then why would the FED

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Speaker 1: contradict that? Um, So you get into the circular loop.

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Speaker 1: That's that at some point the FED is going to

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Speaker 1: have to train the market rather than the other way around.

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Speaker 1: But we seem to be some way off from that

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Speaker 1: very so, so does longer for lower turn into longer forever?

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Speaker 1: I don't think so. If my view of the world

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Speaker 1: is correct, I think the said will will ultimately fall

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Speaker 1: behind in terms of of inflation and the unemployment rate

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Speaker 1: falling to unsustainably low levels. Um. But that's not a

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Speaker 1: worry for right now. So for right now, I think

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Speaker 1: the message from the FED is risk on. You know,

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Speaker 1: the FAD is not going to be when we get

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Speaker 1: strong data, the FAD is not going to be trying

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Speaker 1: to move a lot faster because of that, And if

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Speaker 1: we get weak data, the Fed's not going to be

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Speaker 1: moving at all. Do thank you so much? Macie point

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Speaker 1: seven two Economics. Of course, in a tumultual sweek of

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Speaker 1: economics or the Yellings speech, folks was stunning, uh in

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Speaker 1: the in the fallout from it again in forty five,

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Speaker 1: Maker forty eight minutes Kathleen Hayes in conversation with the

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Speaker 1: president of Chicago Fed without Question, the interview of the

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Speaker 1: day Charles Evans, every new every every word that he

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Speaker 1: says will be studied for some form of direction in

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Speaker 1: these most interesting times. Berry Dholes and Tom Keene Another

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Speaker 1: hour of Bloomberg surveillance.