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Speaker 1: This is Bloomberg Surveillance. That wage growth continues to pick

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Speaker 1: up as I expected will. That's going to be increasingly

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Speaker 1: uncomfortable having rates close to zero. If you look in

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Speaker 1: this recovery, and especially since the Affordable Care Act passed,

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Speaker 1: virtually all of the job growth has been in full

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Speaker 1: time jobs. Were creating a boat voted job than we

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Speaker 1: We're creating on average over two or thousand jobs per month,

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Speaker 1: and that's a lot more than we need to absorb

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Speaker 1: in the growth in the Orkan age population. Bloomberg Surveillance

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Speaker 1: your link to the world of economics, finance, and investment

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Speaker 1: on Bloomberg Radio. Good morning everyone, It is Job's Day

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Speaker 1: Michael McKee and Tom King. Mr McKee is off of Berry.

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Speaker 1: Rid Holtz has given us wonderful perspective through the week.

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Speaker 1: We're thrilled to have him with his Job's Day Berry. Yes, jobs, jobs, jobs, jobs, jobs,

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Speaker 1: that's what are you When I gonna be April fool free.

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Speaker 1: They did a whole bowtime montage behind me on television,

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Speaker 1: which wouldn't have worked on a radio. I actually set

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Speaker 1: up your terminals so that all the data feeds coming

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Speaker 1: into you is from a different which was actually we

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Speaker 1: can talk to Villi Powder about nineteen seventy four. There's

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Speaker 1: some distinctions there versus where we are now. Anyways, we say,

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Speaker 1: good morning, job today. We've got a wonderful lineup and

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Speaker 1: we start strong with Villain Powder. We'll get the Professor

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Speaker 1: Powder in a moment Bloomberg Surveillance this morning, This job's

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Speaker 1: day brought to by Investco. Don't settle for average in

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Speaker 1: your portfolio. To Investco, the right approach means investing with

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Speaker 1: high conviction. Find out more at investco dot com. Slash

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Speaker 1: high Conviction. And I must say it was a thrill

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Speaker 1: to spend an in ordinarily long amount of time with

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Speaker 1: Investco's managers. Uh this week Kevin Holden, Megan Walsh was

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Speaker 1: just absolutely thrilled to meet Megan. She is truly one

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Speaker 1: of the world's great dividend investors. And it's good to

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Speaker 1: meet the Investco people. Uh this week, let's get right

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Speaker 1: to at Villain Powder with us into Barry's point. Professor, you,

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Speaker 1: I remember the seventy seventy slowdown, which was a goods collapse?

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Speaker 1: Is China in a goods collapse? Though you say China's

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Speaker 1: entire straits are there manufacturing equivalences between America Europe seventy four.

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Speaker 1: Seventy four was in particle to response to the first

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Speaker 1: oil price shock, and the old price shock has gone

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Speaker 1: the other way. This's a huge counter factual. I think

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Speaker 1: they're both very h painful episodes. Uh. But China, I

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Speaker 1: think it has to go through a to trouble that

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Speaker 1: is mainly of it of its own making right, that

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Speaker 1: they have to change their growth model from something that

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Speaker 1: is explore driven in capex driven and very credit dependent

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Speaker 1: and dependent to something most sustainable. And they've they're talking

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Speaker 1: to talk at the moment, but they even in uh

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Speaker 1: simply shifting put action out of the no longer viable

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Speaker 1: sort of heavy lifting state and enterprise sectors, uh to

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Speaker 1: something that has the future. They're talking four or five years,

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Speaker 1: and there's four or five Oh. Yes. The process of

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Speaker 1: shutting down excess capacity is, even in the optimistic scenarios

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Speaker 1: painted by the premiere, is going to take years and years.

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Speaker 1: And that means that we've all have a drag on

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Speaker 1: the economy, accentuation of bad dead situations and continued need

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Speaker 1: for consumption support. If you're not to slow down further

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Speaker 1: profess about it, you you referenced the credit situation there.

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Speaker 1: We were discussing yesterday with um the gentleman from Barclays

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Speaker 1: that China is looking at potentially thirty trillion dollars in

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Speaker 1: debt of their own making, not the third parties, but

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Speaker 1: within the country. How does China work off this massive

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Speaker 1: debt load they've created in a relatively short period of time. Yes,

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Speaker 1: a lot of it has been created since the Great

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Speaker 1: Financial Crisis thousand eight nine, and it's threatened to spill

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Speaker 1: over to China. But the fact that this debt is

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Speaker 1: off the making it many domestically held and also domestic

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Speaker 1: currently nominated, isn't the way the good news. It will

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Speaker 1: be a lot harder if this was a traditionally merged

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Speaker 1: market story where most of the debt is owed to

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Speaker 1: foreign a senility nominator. Okay, but I'll go with that.

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Speaker 1: But that's in the Russian equivalence. Then we've seen significant

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Speaker 1: Russia depreciation. Is the prescription of city grope. Stephen England,

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Speaker 1: are in your team that we must have Chinese devaluation.

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Speaker 1: Not by itself that would do very little. But we

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Speaker 1: need in China is a combined fiscal, monetary and exchange

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Speaker 1: age stimulus, which would indeed involved I think there's some

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Speaker 1: at least depreciation and your study of economic history, the

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Speaker 1: former giant of a London school of economics and political economy,

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Speaker 1: do they have within a totalitarian regime the ability to

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Speaker 1: coordinate fiscal, monetary and foreign exchange policy and indeed theory

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Speaker 1: people have to find out exactly. No one knows. Jonathan

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Speaker 1: Spence doesn't know. Being uh a totalitarian it's not uh

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Speaker 1: guarantee for being able to coordinate. I mean, look at Zimbabwe.

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Speaker 1: This is not the Dutch of the seventeenth century, right, Well,

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Speaker 1: they want to have your coordinate to died all right?

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Speaker 1: Think they were, of course the ultimate Confederacy. Yeah, and

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Speaker 1: there was seven hundred thousand of them I think, or

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Speaker 1: some some tiny number. So let's let's talk a little

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Speaker 1: bit about, um, the employment situation in the United States.

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Speaker 1: And regardless of what this month's jobs data is, what

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Speaker 1: are we fourteen point three point fourteen point five million

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Speaker 1: private sector jobs created? Is this the sixty or seventy

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Speaker 1: consecutive month of expansion. As much as people complain about

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Speaker 1: a possible profits recession or other things, the actual economy

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Speaker 1: seems to be doing fairly well. Jobs creation has been

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Speaker 1: doing very well. I think it is a really spectacular run. Uh,

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Speaker 1: but we're not seeing is real GDP growth that in

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Speaker 1: the past have gone along with this space of job creation.

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Speaker 1: And of course we have no significant restoration in the

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Speaker 1: share of labor income in g d P and reduction inequality,

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Speaker 1: so there's is no the cup is half empty. So

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Speaker 1: that's a significant aspect we're not seeing big wage gains.

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Speaker 1: The other side of that, I think is a little

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Speaker 1: more nuanced, is where is the productivity gains. The argument

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Speaker 1: that's being made in some quarters is they're they're we're

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Speaker 1: just not measuring them, We're just not seeing them talk

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Speaker 1: to us about productivity. It's possible that, especially in the

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Speaker 1: service sector where it's very difficult to get proper sort

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Speaker 1: of quality adjusted pricing disease so called hedonic price in disease,

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Speaker 1: that we are under recording productivity growth. That's not just

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Speaker 1: two for the I T stuff that people point to,

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Speaker 1: artificial intelligence all that, but it's true for services in general.

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Speaker 1: But I doubt actually whether that is the bulk of

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Speaker 1: the explanation. In my view, the apps perductivity growth is

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Speaker 1: that well, the innovations are there, and uh, and the

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Speaker 1: potential productivity growth is there. You only see this in

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Speaker 1: the actual data and if it gets embodied encapital, equipment

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Speaker 1: or people, and that's something they're doing. Okay, this is important.

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Speaker 1: Net Phelps, the Laureate from Columbia, gave a speech at

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Speaker 1: b I S Pushing eight years ago. I consider the

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Speaker 1: greatest speech with Mervyn Kin Scotland speech, those two speeches

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Speaker 1: of the crisis. Net Phelps said, basically, I paraphrase the

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Speaker 1: Great Laureate, we're waiting for a jump condition of technological progress.

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Speaker 1: Do you see out there within his very mentions correctly

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Speaker 1: the new productivity, the new innovation, the new technological progress.

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Speaker 1: Is it enough to get us to a new and

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Speaker 1: better productivity or is it ephemeral? Provided the are embodying

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Speaker 1: the new technologies, the new innovation cell phones even you

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Speaker 1: have a cell phone? Right, that that compared to GDP

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Speaker 1: is chicken feed. Right. You have to get this stuff

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Speaker 1: in every aspect of of economic life, and that requires

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Speaker 1: investment and retraining and containing education. And where the country

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Speaker 1: is falling short is on decree. I mentioned human capital, information, infrastructure,

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Speaker 1: and even privately I got one minute left, never enough

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Speaker 1: time with villain about or do we need a new

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Speaker 1: about of non austerity fiscal stimulus. Do we need David

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Speaker 1: blanche Flower to take over developed nation economies and spend

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Speaker 1: some money. I don't know about David blanch Flower, but

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Speaker 1: we have to spend it intelligently. And it means that

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Speaker 1: in the US it would have to be spent mainly

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Speaker 1: on infrastructure and education, not just the high school level,

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Speaker 1: but permanent, permanent education. And for the rest of the

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Speaker 1: world in China, the stimulus has to be consumption orienta.

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Speaker 1: So it's very country specific, but that is an answer,

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Speaker 1: and it is it includes inefvitably fiscal stimulus. Almost that

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Speaker 1: this has been so valuable this morning. From significantly way

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Speaker 1: to die Berry. You should have seen Bowder and TV

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Speaker 1: was significantly waited dots significant excuse me, sign I got

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Speaker 1: just gotta be minus their significant way to dots to

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Speaker 1: your discussion of the dire straits of China. Villain Powder

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Speaker 1: of City Group, thank you so much. He has more

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Speaker 1: than a little bit to do this job's day. We're

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Speaker 1: gonna continue that discussion through the morning. Jim Glassman will

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Speaker 1: join us from JP Morgan and then Bill gross will

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Speaker 1: join us afterwards. Then, of course much to talk to

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Speaker 1: Mr Gross about the bond market in fixed income is

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Speaker 1: well is the nation's labor economics, Berry, Ridholtz and Tom

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Speaker 1: Keening the futures of negative eight down futures negative fifty

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Speaker 1: five yields churning tenure points seven four percent. Then Brent

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Speaker 1: crude down ninety cents. John Nichols waite with us in

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Speaker 1: a moment this hour, Bloomer smlans. This job today brought

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Speaker 1: you by Westchester Subaru. Visit Westchester subar ut dot com

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Speaker 1: where the New York News. Here's Michael Barns. I'm very

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Speaker 1: thank you, very much. The New York Senate has started

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Speaker 1: debating part of the budget that includes raising the state's

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Speaker 1: minimum wage to fifteen dollars an hour. Last nine, Governor

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Speaker 1: Andrew Cuomo and Tom state lawmakers reached an agreement on

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Speaker 1: a budget that will include a gradual minimum wage increase.

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Speaker 1: California Governor Jerry Brown will sign a similar measure to

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Speaker 1: raise the state's minimum wage on Monday. North Korea and

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Speaker 1: the Islamic State will be on the minds of world

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Speaker 1: leaders as they assemble today for the second and final

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Speaker 1: day of the Nuclear Security Summit in Washington. For the

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Speaker 1: first time. Ever, more people in the world are obese

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Speaker 1: than underweight. According to new analysis publishing in The Lancet,

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Speaker 1: the number of obese people has climbed from a hundred

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Speaker 1: five million in nineteen to six hundred forty million today.

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Speaker 1: Global News twenty four hours a day. I'm Michael Barr,

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Speaker 1: Tom Berry and Michael Bark. Thank you so much. It

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Speaker 1: is job's day. In the next hour, we'll go beneath

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Speaker 1: the headline data with Jim Glassman, with Bill Gross. We

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Speaker 1: do that once a month. Berry, Rid Olds, Tom Keene,

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Speaker 1: Bloomberg's surveillance. Next Oil Savannah was brought to you by Untucked.

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