1
00:00:02,720 --> 00:00:07,200
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:07,840 --> 00:00:11,799
Speaker 2: The government shutdown started at midnight on Wednesday, but it'll

3
00:00:11,800 --> 00:00:15,120
Speaker 2: take a while to feel its full impact. Grebory Cordy

4
00:00:15,240 --> 00:00:18,040
Speaker 2: covers the White House for Bloomberg, and he says, shutting

5
00:00:18,079 --> 00:00:20,440
Speaker 2: down the US government is a process.

6
00:00:20,920 --> 00:00:24,360
Speaker 3: Actually coming into work on Wednesday morning, there's more traffic

7
00:00:24,400 --> 00:00:27,240
Speaker 3: in DC than there's been in a long time in

8
00:00:27,320 --> 00:00:30,280
Speaker 3: this sort of post COVID world that we're in, because

9
00:00:30,560 --> 00:00:33,720
Speaker 3: federal workers who have been working from home have to

10
00:00:33,760 --> 00:00:39,640
Speaker 3: come in to shut down the government, lock away their files,

11
00:00:39,880 --> 00:00:42,200
Speaker 3: put their out of office on meet with their boss

12
00:00:42,240 --> 00:00:44,440
Speaker 3: one last time, make sure everything's set before they can

13
00:00:44,680 --> 00:00:46,680
Speaker 3: go back home and be furloughed.

14
00:00:47,920 --> 00:00:50,479
Speaker 2: And it's at that point, Gregory says, when you and

15
00:00:50,520 --> 00:00:52,720
Speaker 2: I will start to feel the effects of a government

16
00:00:52,760 --> 00:00:55,840
Speaker 2: shut down in earnest. You'll call a government office with

17
00:00:55,880 --> 00:00:58,520
Speaker 2: a question and no one will pick up. Some scientific

18
00:00:58,560 --> 00:01:02,560
Speaker 2: research will stop, and agencies that collect and disseminate data

19
00:01:02,840 --> 00:01:04,840
Speaker 2: will stop doing that vital work.

20
00:01:05,160 --> 00:01:07,680
Speaker 3: I will give you one example of a very specific

21
00:01:07,760 --> 00:01:10,319
Speaker 3: way that this could impact seventy million Americans, and that

22
00:01:10,440 --> 00:01:15,600
Speaker 3: is that the October Consumer Price Index number is essential

23
00:01:15,640 --> 00:01:19,399
Speaker 3: for the social security Administration to compute the cost of

24
00:01:19,440 --> 00:01:23,640
Speaker 3: living adjustments for retirees who depend on social ob security benefits.

25
00:01:23,840 --> 00:01:26,720
Speaker 3: Social karement Administration has not said how they're going to

26
00:01:26,760 --> 00:01:28,640
Speaker 3: do that. If they're missing a month's worth of data,

27
00:01:28,680 --> 00:01:31,200
Speaker 3: will they just use eleven months? Will they delay it?

28
00:01:31,560 --> 00:01:34,320
Speaker 3: That just a routine use of government data that happens.

29
00:01:34,480 --> 00:01:37,640
Speaker 3: People don't think about it. But all of these mechanisms

30
00:01:37,680 --> 00:01:39,680
Speaker 3: are built on government data, and if you don't have

31
00:01:39,720 --> 00:01:42,800
Speaker 3: the government data, then you can't adjust for inflation.

32
00:01:43,160 --> 00:01:46,319
Speaker 2: Policymakers at the Federal Reserve also rely on those inflation

33
00:01:46,400 --> 00:01:50,040
Speaker 2: numbers and on data about the labor market. The latest

34
00:01:50,040 --> 00:01:53,320
Speaker 2: monthly jobs numbers were scheduled to be released on Friday,

35
00:01:53,720 --> 00:01:57,240
Speaker 2: but because of the government shutdown, they won't be Molly

36
00:01:57,280 --> 00:01:59,960
Speaker 2: Smith is an economics editor at Bloomberg, and she says

37
00:02:00,200 --> 00:02:02,600
Speaker 2: this is likely to make the Fed's next rate decision

38
00:02:02,720 --> 00:02:05,400
Speaker 2: at the end of October all the more complicated.

39
00:02:05,920 --> 00:02:08,320
Speaker 1: Remember, the Fed just lowered interest rates for the first

40
00:02:08,360 --> 00:02:11,080
Speaker 1: time this year. They've been thinking okay, Inflation has been

41
00:02:11,160 --> 00:02:14,160
Speaker 1: running still well above target, but the last jobs reports

42
00:02:14,160 --> 00:02:16,360
Speaker 1: seem to suggest that the labor market is starting to

43
00:02:16,400 --> 00:02:18,800
Speaker 1: really falter a bit, and that We've got to do something.

44
00:02:19,240 --> 00:02:22,280
Speaker 1: And that's what all of this has been hinging on about.

45
00:02:22,320 --> 00:02:25,800
Speaker 1: Expectations for another two cuts this year, expectations for any

46
00:02:25,840 --> 00:02:28,800
Speaker 1: next year. It's really all about the labor market and

47
00:02:29,360 --> 00:02:32,880
Speaker 1: that so depends then on what the government's data says.

48
00:02:36,360 --> 00:02:38,240
Speaker 2: I'm David Gera and this is the big take from

49
00:02:38,240 --> 00:02:42,079
Speaker 2: Bloomberg News Today on the show. A government shutdown impacts

50
00:02:42,120 --> 00:02:47,480
Speaker 2: the economy and economic data. What that means for policymakers, investors,

51
00:02:47,760 --> 00:02:56,680
Speaker 2: and everyday Americans who depend on it. The last government

52
00:02:56,720 --> 00:03:00,919
Speaker 2: shutdown started in December of twenty eighteen, lasted for thirty

53
00:03:00,919 --> 00:03:04,560
Speaker 2: five days. Donald Trump was the president, and there's been

54
00:03:04,600 --> 00:03:07,079
Speaker 2: a string of them, more than a dozen shutdowns since

55
00:03:07,120 --> 00:03:09,519
Speaker 2: Ronald Reagan was in the White House. But when I

56
00:03:09,560 --> 00:03:12,960
Speaker 2: sat down with Bloomberg's Gregory Cordy and Molly Smith, Gregory

57
00:03:12,960 --> 00:03:14,880
Speaker 2: told me this one is unique.

58
00:03:15,400 --> 00:03:18,000
Speaker 3: It feels different for a number of reasons. One is,

59
00:03:18,360 --> 00:03:22,919
Speaker 3: we've seen more political poorization. We have Congress as closely

60
00:03:23,000 --> 00:03:25,160
Speaker 3: divided as it's ever been in its history, just in

61
00:03:25,240 --> 00:03:28,200
Speaker 3: terms of the division between Republicans and Democrats. But it's

62
00:03:28,200 --> 00:03:31,200
Speaker 3: also different because this is a Trump shutdown in his

63
00:03:31,280 --> 00:03:34,840
Speaker 3: second term, where President Trump has decided to do things

64
00:03:34,840 --> 00:03:38,360
Speaker 3: a little bit differently, and so this shutdown, he has

65
00:03:38,480 --> 00:03:41,560
Speaker 3: threatened to not just furlough federal workers, but look for

66
00:03:41,600 --> 00:03:45,520
Speaker 3: ways to fire them. In the first hours of the shutdown,

67
00:03:46,080 --> 00:03:50,480
Speaker 3: the Department Transportation used as an excuse to freeze eighteen

68
00:03:50,600 --> 00:03:53,280
Speaker 3: billion dollars worth of infrastructure funding for New York City

69
00:03:53,320 --> 00:03:55,400
Speaker 3: on the pretext that, well, you know, we don't have

70
00:03:55,680 --> 00:03:59,680
Speaker 3: the Department of Transportation contracting officials that can release this money.

71
00:04:00,280 --> 00:04:03,080
Speaker 3: So there may be a number of things where these

72
00:04:03,080 --> 00:04:05,680
Speaker 3: were things the government did that the Trumpet administration didn't

73
00:04:05,720 --> 00:04:08,120
Speaker 3: particularly enjoy doing in the first place, and the shutdown

74
00:04:08,200 --> 00:04:11,200
Speaker 3: gives them a very convenient excuse not to do that.

75
00:04:11,240 --> 00:04:13,120
Speaker 3: In the meantime, the things that they want to do,

76
00:04:13,200 --> 00:04:15,400
Speaker 3: they have found ways to do them. And so one

77
00:04:15,400 --> 00:04:18,360
Speaker 3: of the things that we found looking through these shutdown

78
00:04:18,400 --> 00:04:20,960
Speaker 3: plans is it looks like fewer federal employees will be

79
00:04:21,000 --> 00:04:24,880
Speaker 3: furloughed because they've gotten creative in finding other sources of

80
00:04:24,880 --> 00:04:28,719
Speaker 3: funding and finding sort of new legal interpretations to say,

81
00:04:29,040 --> 00:04:31,799
Speaker 3: even though the law says Congress has said we can't

82
00:04:31,839 --> 00:04:34,800
Speaker 3: spend money if it hasn't been appropriated by Congress. These

83
00:04:34,839 --> 00:04:38,479
Speaker 3: are essential functions. They've they've broadened that definition to allow

84
00:04:38,800 --> 00:04:41,560
Speaker 3: more federal workers to show up to work even though

85
00:04:41,839 --> 00:04:44,120
Speaker 3: they won't get paid until the shutdown ends.

86
00:04:44,480 --> 00:04:46,400
Speaker 2: Molly, it's at moments like this one when I think

87
00:04:46,440 --> 00:04:49,720
Speaker 2: a lot of Americans become acquainted with or reacquainted with

88
00:04:49,800 --> 00:04:52,120
Speaker 2: all that the federal government does and how it interfaces

89
00:04:52,160 --> 00:04:54,760
Speaker 2: with with their lives. Economic data is a part of that.

90
00:04:54,800 --> 00:04:56,440
Speaker 2: We think about what the Labor Department does or the

91
00:04:56,440 --> 00:04:59,359
Speaker 2: Congress Department, but really all of these agencies are producing

92
00:04:59,720 --> 00:05:02,920
Speaker 2: data that's important. Could you just describe some the impact

93
00:05:02,960 --> 00:05:06,760
Speaker 2: of government shutdown has on their ability to collect and

94
00:05:06,839 --> 00:05:08,120
Speaker 2: disseminate that data.

95
00:05:08,320 --> 00:05:12,720
Speaker 1: So this totally ceases operations across these federal agencies, and

96
00:05:12,880 --> 00:05:16,320
Speaker 1: we've seen that in the most recent contingency plans that

97
00:05:16,360 --> 00:05:19,839
Speaker 1: the Department's released going into this shutdown. So for the

98
00:05:19,880 --> 00:05:23,360
Speaker 1: Buerau of Labor Statistics, which is housed within the Labor Department,

99
00:05:23,720 --> 00:05:25,799
Speaker 1: this is the one where we would get the employment

100
00:05:25,880 --> 00:05:27,960
Speaker 1: report from every month, where we would get the main

101
00:05:27,960 --> 00:05:30,760
Speaker 1: consumer price index, that's the key inflation gage that we

102
00:05:30,800 --> 00:05:33,640
Speaker 1: look to every month. These reports will not be coming

103
00:05:33,640 --> 00:05:36,520
Speaker 1: out on time as scheduled. All of these data releases

104
00:05:36,560 --> 00:05:39,880
Speaker 1: are going to be delayed, including the upcoming jobs report

105
00:05:39,880 --> 00:05:42,120
Speaker 1: that was supposed to be scheduled for this Friday. So

106
00:05:42,839 --> 00:05:46,320
Speaker 1: it really just casts an even bigger cloud over the

107
00:05:46,360 --> 00:05:50,240
Speaker 1: state of the economy right now because federal data is

108
00:05:50,320 --> 00:05:53,000
Speaker 1: really regarded as the gold standard for how to gauge

109
00:05:53,000 --> 00:05:54,279
Speaker 1: what's happening in the economy.

110
00:05:55,320 --> 00:05:58,320
Speaker 2: Could you just sort of help us understand how these

111
00:05:58,440 --> 00:06:01,679
Speaker 2: economic data are used across the economy broadly.

112
00:06:02,000 --> 00:06:05,159
Speaker 1: Yeah, So the big one, obviously for people who listened

113
00:06:05,200 --> 00:06:08,040
Speaker 1: to Bloombergy, is going to be whatever the Federal Reserve

114
00:06:08,080 --> 00:06:11,320
Speaker 1: has to say. So everyone's really wondering, then if this

115
00:06:11,440 --> 00:06:14,919
Speaker 1: shutdown does last into those latter stages that we have

116
00:06:14,960 --> 00:06:17,039
Speaker 1: a Federal Reserve meeting at the end of this month,

117
00:06:17,160 --> 00:06:19,840
Speaker 1: will they have the latest jobs report by then? Will

118
00:06:19,839 --> 00:06:21,839
Speaker 1: they have the latest CPI by then? Will they have

119
00:06:21,960 --> 00:06:25,440
Speaker 1: everything else that the BLS puts out that the agencies

120
00:06:25,440 --> 00:06:28,159
Speaker 1: within the Commerce Department, like the Census Bureau and the

121
00:06:28,160 --> 00:06:31,160
Speaker 1: Bureau of Economic Analysis puts out We just don't know yet,

122
00:06:31,200 --> 00:06:33,720
Speaker 1: but it affects every day Americans too.

123
00:06:33,960 --> 00:06:34,160
Speaker 2: You know.

124
00:06:34,279 --> 00:06:38,080
Speaker 1: Economic data is maybe it's not something that regular people

125
00:06:38,120 --> 00:06:40,960
Speaker 1: are using day to day, but in certain industries and

126
00:06:41,000 --> 00:06:44,240
Speaker 1: business planning, and really all levels of government, in all

127
00:06:44,320 --> 00:06:47,120
Speaker 1: levels of decision and investment making. This is so crucial.

128
00:06:47,480 --> 00:06:50,279
Speaker 1: A lot of people who work in construction or urban

129
00:06:50,320 --> 00:06:53,200
Speaker 1: planning would want to know what kind of estimates there

130
00:06:53,240 --> 00:06:55,120
Speaker 1: are if you were trying to do some kind of

131
00:06:55,160 --> 00:06:58,919
Speaker 1: new residential or commercial construction project, for example, and you

132
00:06:58,960 --> 00:07:03,480
Speaker 1: want to gauge what the local demographics are like to see, well,

133
00:07:03,480 --> 00:07:05,760
Speaker 1: if we're going to be building an apartment complex, who

134
00:07:05,839 --> 00:07:08,159
Speaker 1: lives in this area, what kind of wages do they make,

135
00:07:08,360 --> 00:07:10,280
Speaker 1: what kind of commute do they do to work. This

136
00:07:10,360 --> 00:07:12,440
Speaker 1: is all things that federal data point us to.

137
00:07:13,080 --> 00:07:15,920
Speaker 2: Gregre I know you've been sifting through contingency plans that

138
00:07:15,920 --> 00:07:18,840
Speaker 2: we've seen from omb the way that the federal government

139
00:07:18,920 --> 00:07:21,640
Speaker 2: is thinking about how the shutdown might unfold. When you

140
00:07:21,680 --> 00:07:24,440
Speaker 2: look at pass shutdowns, what can we learn, what can

141
00:07:24,480 --> 00:07:26,760
Speaker 2: we ascertain from how they approached the release of data,

142
00:07:26,800 --> 00:07:29,440
Speaker 2: the collection of data, this particular facet of what the

143
00:07:29,440 --> 00:07:30,320
Speaker 2: federal government does.

144
00:07:31,120 --> 00:07:33,400
Speaker 3: Well. One thing that's different this time is this is

145
00:07:33,400 --> 00:07:37,320
Speaker 3: the first shutdown that we've had since the Obama shutdown

146
00:07:37,520 --> 00:07:40,480
Speaker 3: of ten fifteen years ago that has happened at the

147
00:07:40,520 --> 00:07:42,440
Speaker 3: beginning of a fiscal year, and so we all know

148
00:07:42,480 --> 00:07:44,360
Speaker 3: the data comes out of the first of the month.

149
00:07:44,760 --> 00:07:46,760
Speaker 3: The last time we had a long shutdown, it was

150
00:07:46,840 --> 00:07:49,120
Speaker 3: over the holidays. It was kind of sleepy. That was

151
00:07:49,200 --> 00:07:52,360
Speaker 3: pre COVID. I don't think the FED was watching the

152
00:07:52,920 --> 00:07:56,120
Speaker 3: jobs numbers quite as closely as they are this time around,

153
00:07:56,600 --> 00:07:58,920
Speaker 3: and so frankly, a lot of federal data didn't come

154
00:07:58,920 --> 00:08:01,680
Speaker 3: out in previous shutdowns, and people didn't miss it quite

155
00:08:01,680 --> 00:08:04,760
Speaker 3: as much. It's as much about this economic moment that

156
00:08:04,760 --> 00:08:07,880
Speaker 3: we're in as it is about the shutdown. But also

157
00:08:08,160 --> 00:08:11,760
Speaker 3: remember there's a backdrop here where President Trump had fired

158
00:08:12,120 --> 00:08:14,760
Speaker 3: the commissioner of the Bureau of Labor Statistics, has not

159
00:08:14,840 --> 00:08:18,520
Speaker 3: been happy with the data that he's getting out of

160
00:08:18,560 --> 00:08:22,960
Speaker 3: the Labor Department anyway, and so a shutdown means we

161
00:08:23,000 --> 00:08:24,679
Speaker 3: don't get the data. But it also means for President

162
00:08:24,720 --> 00:08:27,840
Speaker 3: Trump that there's no chance of bad news coming out

163
00:08:27,920 --> 00:08:31,560
Speaker 3: of his administration on the labor market, at least as

164
00:08:31,600 --> 00:08:34,360
Speaker 3: long as there's a shutdown. And of course that will

165
00:08:34,400 --> 00:08:38,040
Speaker 3: catch up eventually, and those jobs numbers that we get,

166
00:08:38,080 --> 00:08:41,160
Speaker 3: when we do get them, will include a good number

167
00:08:41,280 --> 00:08:44,120
Speaker 3: of maybe seven hundred and fifty thousand federal employees who

168
00:08:44,160 --> 00:08:49,120
Speaker 3: will be unemployed during that stretch, not to mention maybe

169
00:08:49,360 --> 00:08:53,480
Speaker 3: another one hundred and fifty or more federal employees who

170
00:08:53,520 --> 00:08:56,920
Speaker 3: took the deferred resignation program that expired at the beginning

171
00:08:56,960 --> 00:08:59,800
Speaker 3: of this physical year. As of Wednesday, those are now

172
00:09:00,120 --> 00:09:02,679
Speaker 3: the federal payroll, and so there are going to be

173
00:09:02,679 --> 00:09:05,960
Speaker 3: a number of shocks to the next jobs report when

174
00:09:06,000 --> 00:09:06,559
Speaker 3: we get.

175
00:09:06,360 --> 00:09:09,880
Speaker 2: It coming up. What it'll mean for the Federal Reserves,

176
00:09:09,920 --> 00:09:13,560
Speaker 2: specifically not having new data on the US economy and

177
00:09:13,600 --> 00:09:17,960
Speaker 2: what policymakers, economists, and investors will rely on instead of

178
00:09:17,960 --> 00:09:28,640
Speaker 2: those government reports. The Federal Reserve's rate Setting Committee is

179
00:09:28,679 --> 00:09:31,840
Speaker 2: scheduled to meet next on October twenty eighth and twenty ninth,

180
00:09:32,360 --> 00:09:34,640
Speaker 2: and that'll happen whether or not the government is open.

181
00:09:35,240 --> 00:09:38,560
Speaker 2: In September, FED Chair Jerome Powell signaled he and his

182
00:09:38,640 --> 00:09:41,520
Speaker 2: colleagues are open to another rate cut this year, but

183
00:09:41,600 --> 00:09:45,040
Speaker 2: that will depend on the latest data, especially data on

184
00:09:45,120 --> 00:09:46,000
Speaker 2: the jobs market.

185
00:09:46,160 --> 00:09:47,840
Speaker 1: We're in a meeting by meeting situation.

186
00:09:47,960 --> 00:09:50,120
Speaker 2: We're going to be looking at the data. The FED

187
00:09:50,200 --> 00:09:53,200
Speaker 2: has been dealing with policy uncertainty whether it should cut

188
00:09:53,280 --> 00:09:56,079
Speaker 2: rates and if so, by how much, But it's also

189
00:09:56,120 --> 00:10:00,760
Speaker 2: been facing personnel uncertainty. On Wednesday, the Supreme Court, which

190
00:10:00,880 --> 00:10:04,240
Speaker 2: also stays open during government shut down, said President Trump

191
00:10:04,360 --> 00:10:07,720
Speaker 2: can't fire FED Governor Lisa Cook immediately. The court will

192
00:10:07,760 --> 00:10:11,480
Speaker 2: hold oral arguments in January. I asked Bloomberg's Molly Smith

193
00:10:11,520 --> 00:10:14,440
Speaker 2: about how the FED is handling all of this uncertainty.

194
00:10:15,000 --> 00:10:17,959
Speaker 1: It's a really feisty time at the FED right now,

195
00:10:18,040 --> 00:10:19,800
Speaker 1: which is I feel like, not a word we use

196
00:10:19,800 --> 00:10:22,960
Speaker 1: a lot to describe the FED. You know, it's usually

197
00:10:23,400 --> 00:10:25,280
Speaker 1: the FED as well as some of these other agencies

198
00:10:25,280 --> 00:10:28,320
Speaker 1: that I've named, tend to be you know, they function

199
00:10:28,440 --> 00:10:30,920
Speaker 1: best when you don't really hear about them. But there's

200
00:10:30,960 --> 00:10:34,400
Speaker 1: just been so much changeover at the FED recently, obviously

201
00:10:34,400 --> 00:10:37,000
Speaker 1: with Lisa Cook's position. We had a different FED governor

202
00:10:37,360 --> 00:10:40,560
Speaker 1: resign recently and that opened up a spot for Stephen

203
00:10:40,600 --> 00:10:43,560
Speaker 1: Myron to come into. So that was one of Trump's

204
00:10:43,559 --> 00:10:46,920
Speaker 1: top economic advisors who recently just joined the FED. Of course,

205
00:10:46,960 --> 00:10:50,760
Speaker 1: we have Chair J. Powell's term ending next year. There

206
00:10:50,760 --> 00:10:52,920
Speaker 1: are all these moving parts right now that I think

207
00:10:53,080 --> 00:10:55,600
Speaker 1: this maybe adds a little bit of stability the time

208
00:10:55,600 --> 00:10:58,160
Speaker 1: when there hasn't been a lot of stability at the FED.

209
00:10:58,280 --> 00:11:00,240
Speaker 1: So I'm sure, there's going to be so much more

210
00:11:00,280 --> 00:11:01,640
Speaker 1: on this to come that I don't think we've heard

211
00:11:01,640 --> 00:11:03,600
Speaker 1: the last of what's happening with Lisa Cook yet.

212
00:11:03,840 --> 00:11:06,520
Speaker 2: When FED policymakers gather in Washington at the end of

213
00:11:06,559 --> 00:11:09,160
Speaker 2: the month, they're going to review all the economic data

214
00:11:09,200 --> 00:11:12,199
Speaker 2: they have, and I asked Molly what they'll rely on

215
00:11:12,480 --> 00:11:14,400
Speaker 2: if they don't have a new jobs report or a

216
00:11:14,400 --> 00:11:15,440
Speaker 2: new CPI report.

217
00:11:16,040 --> 00:11:18,720
Speaker 1: So there are a lot of other companies that they

218
00:11:18,960 --> 00:11:21,480
Speaker 1: basically will look at their own metrics of their payroll

219
00:11:21,520 --> 00:11:25,480
Speaker 1: providers like ADP is one of them. Revellio will scrape

220
00:11:25,600 --> 00:11:29,840
Speaker 1: through job profiles online LinkedIn and indeed do similar metrics

221
00:11:29,960 --> 00:11:33,640
Speaker 1: using their own job platforms. This is basically what we're

222
00:11:33,840 --> 00:11:37,360
Speaker 1: left with. We just saw a metric from ADP about

223
00:11:37,400 --> 00:11:40,080
Speaker 1: their employment gauge in the month, which a lot of

224
00:11:40,120 --> 00:11:43,000
Speaker 1: economists typically don't like to look to already because it

225
00:11:43,040 --> 00:11:46,360
Speaker 1: doesn't closely align with what the BLS puts out. And

226
00:11:46,360 --> 00:11:48,400
Speaker 1: then on top of that, they had some issues adjusting

227
00:11:48,400 --> 00:11:50,240
Speaker 1: the data this time around, so that made it even

228
00:11:50,240 --> 00:11:54,240
Speaker 1: more difficult to interpret. But there are some other sources

229
00:11:54,280 --> 00:11:58,240
Speaker 1: that compile announcements on layoffs, so I would say it's

230
00:11:58,240 --> 00:12:02,160
Speaker 1: most expansive on the labor market side. There are a

231
00:12:02,160 --> 00:12:04,440
Speaker 1: few on the inflation side too. We do get some

232
00:12:04,480 --> 00:12:07,480
Speaker 1: others on consumer spending. Probably the best of what we

233
00:12:07,520 --> 00:12:10,000
Speaker 1: see is on the housing side. The National Association of

234
00:12:10,040 --> 00:12:14,320
Speaker 1: Realtors is usually the go to source for sales of

235
00:12:14,400 --> 00:12:17,920
Speaker 1: existing homes in the US, and that's based on contract closings,

236
00:12:17,960 --> 00:12:21,360
Speaker 1: and they also do a leading indicator based on contract signings.

237
00:12:21,520 --> 00:12:24,240
Speaker 1: So we still do get a decent amount of housing data,

238
00:12:24,280 --> 00:12:27,840
Speaker 1: granted not on the new homes or residential construction side.

239
00:12:27,880 --> 00:12:30,079
Speaker 1: That all comes from Census. And we do have all

240
00:12:30,080 --> 00:12:33,240
Speaker 1: these private sector sources, but a lot of them rely

241
00:12:33,360 --> 00:12:35,600
Speaker 1: on what the government has to say. They don't operate

242
00:12:35,640 --> 00:12:39,400
Speaker 1: totally independently of what the beer of Labor Statistics has

243
00:12:39,440 --> 00:12:42,240
Speaker 1: to say. So, needless to say, there are still holes.

244
00:12:42,320 --> 00:12:44,080
Speaker 1: They're just not going to add up to be the

245
00:12:44,080 --> 00:12:45,679
Speaker 1: full picture we'd have otherwise.

246
00:12:46,320 --> 00:12:49,640
Speaker 2: How did you read the numbers from ADP this morning

247
00:12:49,720 --> 00:12:51,760
Speaker 2: a miss compared to what the media and estimate was

248
00:12:52,120 --> 00:12:54,839
Speaker 2: saw revision from the last period as well. What does

249
00:12:54,880 --> 00:12:56,440
Speaker 2: that tell you bearing in mind what you just said,

250
00:12:56,440 --> 00:12:57,920
Speaker 2: which is it's not going to give you the same

251
00:12:58,080 --> 00:12:59,640
Speaker 2: picture that the Labor Department data would.

252
00:12:59,840 --> 00:13:03,800
Speaker 1: It was a particularly challenging ADP report to dissect because

253
00:13:03,840 --> 00:13:08,000
Speaker 1: they also then used a separate measure from the BLS

254
00:13:08,040 --> 00:13:12,400
Speaker 1: to readjust their data, so that resulted in the payrolls

255
00:13:12,640 --> 00:13:15,120
Speaker 1: dropping as much as they did. They fell thirty two

256
00:13:15,160 --> 00:13:18,680
Speaker 1: thousand in the month of September just for reference. Economists

257
00:13:18,720 --> 00:13:22,040
Speaker 1: that Bloomberg had surveyed had put in immediate estimate of

258
00:13:22,080 --> 00:13:24,600
Speaker 1: a gain of fifty one thousand, So it was a

259
00:13:24,600 --> 00:13:28,040
Speaker 1: bit challenging to get through to see what this meant

260
00:13:28,040 --> 00:13:31,000
Speaker 1: with the data methodology. Some economists even said they couldn't

261
00:13:31,040 --> 00:13:33,360
Speaker 1: totally make sense of it, and it just made it

262
00:13:33,440 --> 00:13:36,199
Speaker 1: even more difficult to rely on what ADP has to say.

263
00:13:36,559 --> 00:13:38,599
Speaker 1: Granted if you just take a step back, though, I

264
00:13:38,640 --> 00:13:41,400
Speaker 1: don't think this changes the overlying trend that we're seeing

265
00:13:41,440 --> 00:13:44,200
Speaker 1: in the labor market, that it is weakening, that we

266
00:13:44,280 --> 00:13:47,839
Speaker 1: are seeing pay gains soften, we are seeing hiring slowed down,

267
00:13:48,200 --> 00:13:50,800
Speaker 1: there's less demand for workers. I think right now the

268
00:13:50,880 --> 00:13:53,400
Speaker 1: question is just the speed of which that's happening.

269
00:13:53,440 --> 00:13:57,440
Speaker 2: At Gregory, I'm curious sort of how policymakers in Washington

270
00:13:57,480 --> 00:14:00,440
Speaker 2: are reacting or not reacting to this shutdown. I don't

271
00:14:00,440 --> 00:14:02,280
Speaker 2: think that we've gotten a statement from the Federal Serve,

272
00:14:02,320 --> 00:14:04,360
Speaker 2: for instance, or from any of these agencies that goes

273
00:14:04,400 --> 00:14:07,760
Speaker 2: beyond just the kind of contingency plans they're putting in place.

274
00:14:08,200 --> 00:14:11,280
Speaker 2: But what's the reaction, ben broadly is, as you've watched

275
00:14:11,280 --> 00:14:14,760
Speaker 2: this unfold over the last twelve hours or so, you know.

276
00:14:14,760 --> 00:14:18,000
Speaker 3: The thing about shutdowns is, I think we've just kind

277
00:14:18,000 --> 00:14:21,080
Speaker 3: of got inured to them somewhat. This is the case

278
00:14:21,080 --> 00:14:24,680
Speaker 3: where we have Congress unified control by Republicans, we have

279
00:14:24,760 --> 00:14:29,160
Speaker 3: Republican president, but Republicans don't have that supermajority in the

280
00:14:29,200 --> 00:14:33,400
Speaker 3: Senate that allow them to get past a possible Democratic filibuster.

281
00:14:34,560 --> 00:14:39,440
Speaker 3: It's a symptom of our polarization, but also some very

282
00:14:39,440 --> 00:14:43,880
Speaker 3: strong personalities here with Chuck Schumer and Hakeem Jeffries and

283
00:14:44,280 --> 00:14:47,200
Speaker 3: President Trump. We need to stop these premiums from going

284
00:14:47,280 --> 00:14:50,280
Speaker 3: up dramatically. We need to do it now. We're in

285
00:14:50,280 --> 00:14:54,240
Speaker 3: the midst of an incredible crisis, a healthcare crisis that

286
00:14:54,320 --> 00:14:55,600
Speaker 3: Republicans have caused.

287
00:14:56,720 --> 00:15:01,280
Speaker 1: Could be because the Democrats are they don't know what

288
00:15:01,280 --> 00:15:01,800
Speaker 1: they're doing.

289
00:15:02,240 --> 00:15:06,120
Speaker 3: They are dug in and it's very difficult to see

290
00:15:06,160 --> 00:15:07,720
Speaker 3: where the off ramp is.

291
00:15:07,960 --> 00:15:11,640
Speaker 2: This is a game of chicken, Molly, to borrow phrase

292
00:15:11,680 --> 00:15:15,400
Speaker 2: from Gregory here, inured? Is Wall Street likewise inured when

293
00:15:15,400 --> 00:15:17,880
Speaker 2: it comes to these shutdowns, or are we seeing markets

294
00:15:17,920 --> 00:15:20,880
Speaker 2: react to prospect of this unfolding differently the prospect of

295
00:15:20,880 --> 00:15:24,000
Speaker 2: they're being perhaps massive layoffs that unfold during the course

296
00:15:24,000 --> 00:15:24,600
Speaker 2: of the shutdown.

297
00:15:25,000 --> 00:15:27,400
Speaker 1: I was going to piggyback on that point anyway, because

298
00:15:27,400 --> 00:15:30,120
Speaker 1: this is just like something we're all just like, oh, okay,

299
00:15:30,120 --> 00:15:32,720
Speaker 1: here we go again. But as far as the market reaction,

300
00:15:33,240 --> 00:15:35,400
Speaker 1: I haven't really seen much of one, I think, And

301
00:15:35,440 --> 00:15:38,280
Speaker 1: that kind of also speaks to the fact that like, yeah,

302
00:15:38,320 --> 00:15:41,320
Speaker 1: we know the drill, we've seen how this shakes out,

303
00:15:41,400 --> 00:15:43,360
Speaker 1: but we don't know how long this is going to go,

304
00:15:43,960 --> 00:15:47,120
Speaker 1: what other services are going to be affected by this,

305
00:15:47,240 --> 00:15:49,080
Speaker 1: how much data is going to go buy that we

306
00:15:49,120 --> 00:15:51,960
Speaker 1: won't see. So I think it's still a little early

307
00:15:52,040 --> 00:15:53,880
Speaker 1: just to gauge how Wall Street's feeling about it.

308
00:15:54,240 --> 00:15:57,160
Speaker 2: We've talked awful lot about economic data, and Molly, let

309
00:15:57,160 --> 00:15:59,200
Speaker 2: me ask you lastly just about the economy, and you've

310
00:15:59,200 --> 00:16:01,520
Speaker 2: mentioned how the labor market is showing signs of cracking.

311
00:16:01,560 --> 00:16:04,880
Speaker 2: Their issues with it. As Gregory brought up, there is

312
00:16:04,920 --> 00:16:06,920
Speaker 2: the very real prospect here that we won't just see

313
00:16:06,920 --> 00:16:09,120
Speaker 2: furlough as we're going to see layoffs as a result

314
00:16:09,160 --> 00:16:12,520
Speaker 2: of this shutdown. What does that mean for the economy

315
00:16:12,520 --> 00:16:14,560
Speaker 2: as you kind of forecast out and think about the

316
00:16:14,560 --> 00:16:17,160
Speaker 2: impact that could have on as you've described it, very

317
00:16:17,160 --> 00:16:18,360
Speaker 2: fragile US economy.

318
00:16:18,720 --> 00:16:20,880
Speaker 1: I mean, Gregory raised a great point too, that we

319
00:16:20,880 --> 00:16:25,040
Speaker 1: were already expecting to see federal government employment fall in

320
00:16:25,080 --> 00:16:28,240
Speaker 1: the next jobs report because of what he had said

321
00:16:28,240 --> 00:16:30,920
Speaker 1: with the deferred resignations offer, is that if you had

322
00:16:30,960 --> 00:16:33,400
Speaker 1: accepted one of those, September was the last month you

323
00:16:33,400 --> 00:16:36,360
Speaker 1: would be on payroll. So the October jobs report will

324
00:16:36,400 --> 00:16:39,520
Speaker 1: show the impact of that. So just if we have

325
00:16:39,600 --> 00:16:43,080
Speaker 1: that many more layoffs as a result of this shutdown,

326
00:16:43,160 --> 00:16:46,440
Speaker 1: it's just going to exacerbate that. Whether that ripples out

327
00:16:46,480 --> 00:16:49,840
Speaker 1: to the broader economy, though, still really remains to be seen.

328
00:16:50,120 --> 00:16:53,760
Speaker 3: Keep in mind also that contractors, federal contractors could be effected,

329
00:16:53,760 --> 00:16:56,080
Speaker 3: as we're seeing in the New York City example, where

330
00:16:56,120 --> 00:17:00,520
Speaker 3: the Department Transportations frozen money for the second Ave Subway

331
00:17:00,720 --> 00:17:04,240
Speaker 3: and the Hudson Tunnel project. And so that's eighteen billion

332
00:17:04,280 --> 00:17:07,159
Speaker 3: dollars worth of construction that at the very least is

333
00:17:07,160 --> 00:17:10,080
Speaker 3: going to be delayed. And you know, when you are

334
00:17:10,119 --> 00:17:13,200
Speaker 3: a contractor, you very often live job to job and

335
00:17:13,280 --> 00:17:17,240
Speaker 3: paycheck to paycheck. So if the Trump administration extends this

336
00:17:17,440 --> 00:17:20,240
Speaker 3: shutdown to say, hey, look, you know we don't have

337
00:17:20,359 --> 00:17:25,640
Speaker 3: the contracting officers that can provide for infrastructure projects in

338
00:17:25,800 --> 00:17:28,640
Speaker 3: key places across the country, there could be a little

339
00:17:28,640 --> 00:17:29,960
Speaker 3: bit of a domino effect there as well.

340
00:17:31,920 --> 00:17:34,359
Speaker 2: This is the Big Take from Bloomberg News. I'm David Gurra.

341
00:17:34,720 --> 00:17:37,240
Speaker 2: To get more from The Big Take and unlimited access

342
00:17:37,280 --> 00:17:40,720
Speaker 2: to all of Bloomberg dot com, subscribe today at Bloomberg

343
00:17:40,760 --> 00:17:44,600
Speaker 2: dot com slash podcast offer. If you like this episode,

344
00:17:44,720 --> 00:17:46,840
Speaker 2: make sure to follow and review The Big Take wherever

345
00:17:46,840 --> 00:17:49,359
Speaker 2: you listen to podcasts. It helps people find the show.

346
00:17:49,880 --> 00:17:51,800
Speaker 2: Thanks for listening. We'll be back tomorrow.