1 00:00:02,400 --> 00:00:11,039 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:13,640 --> 00:00:17,400 Speaker 2: The single best idea on a job's day. This could 3 00:00:17,440 --> 00:00:20,800 Speaker 2: be a forty minute, single best idea all through the show. 4 00:00:20,880 --> 00:00:24,240 Speaker 2: And what we do is during the show, the team 5 00:00:24,239 --> 00:00:27,000 Speaker 2: that I have, which is depleted by three interns they 6 00:00:27,040 --> 00:00:29,319 Speaker 2: all went back to school. But the team that I have, 7 00:00:29,440 --> 00:00:31,360 Speaker 2: we go back and forth like do this person do 8 00:00:31,440 --> 00:00:33,600 Speaker 2: this one or that? And we sort of knew on 9 00:00:33,680 --> 00:00:36,239 Speaker 2: jobs Day we were heading. But even with that, there 10 00:00:36,240 --> 00:00:41,240 Speaker 2: could have been five, six, seven, eight conversations moments across 11 00:00:41,320 --> 00:00:46,159 Speaker 2: Bloomberg Surveillance today that were just extraordinary. Major shout out 12 00:00:46,159 --> 00:00:49,159 Speaker 2: to Jeffrey U of bn Y who got us started 13 00:00:49,240 --> 00:00:53,960 Speaker 2: strong on the international effect of this American debate on 14 00:00:54,000 --> 00:00:57,520 Speaker 2: our labor economy and what our central bank will do. 15 00:00:57,600 --> 00:01:01,320 Speaker 2: That's how we frame it. Mark Zandi will join us, optimistic, 16 00:01:01,440 --> 00:01:05,360 Speaker 2: Claudius sum will join us, without question, the most influential 17 00:01:05,360 --> 00:01:10,160 Speaker 2: economist of the year. But first Neil Duda, Neil Dudda 18 00:01:10,200 --> 00:01:13,160 Speaker 2: will join us, and he was on before the report 19 00:01:13,400 --> 00:01:16,160 Speaker 2: saying let's go, let's go. Here's Neil Dudda of renmac 20 00:01:16,480 --> 00:01:16,880 Speaker 2: on j. 21 00:01:17,000 --> 00:01:21,880 Speaker 3: Paul get going. That's what it says, go fifty with 22 00:01:22,000 --> 00:01:25,440 Speaker 3: a promise to do as much as necessary to stabilize 23 00:01:25,520 --> 00:01:28,880 Speaker 3: labor market conditions. So the labor market, I guess it 24 00:01:29,000 --> 00:01:30,720 Speaker 3: kind of falls into what we were just saying many 25 00:01:30,760 --> 00:01:33,240 Speaker 3: minutes ago, not nearly as strong as people think it is. 26 00:01:33,640 --> 00:01:33,680 Speaker 2: No. 27 00:01:33,880 --> 00:01:36,959 Speaker 3: I mean, the three month trend on non farm private 28 00:01:37,000 --> 00:01:40,440 Speaker 3: perils is running below one hundred thousand. I mean, that's 29 00:01:40,520 --> 00:01:44,160 Speaker 3: not a good number. That's barely break even. And I 30 00:01:44,160 --> 00:01:47,560 Speaker 3: think it's arguably actually worse than that because one of 31 00:01:47,560 --> 00:01:49,560 Speaker 3: the reasons why the number even looked as good as 32 00:01:49,560 --> 00:01:52,360 Speaker 3: it did is because we saw an uptake in construction employment. 33 00:01:52,720 --> 00:01:55,120 Speaker 3: That's not going to last because everything we know about 34 00:01:55,160 --> 00:01:58,600 Speaker 3: construction right now is that units under constructure are under 35 00:01:58,640 --> 00:02:02,280 Speaker 3: constructure collapsing. Why are we hiring all these people to 36 00:02:02,400 --> 00:02:06,720 Speaker 3: build one exactly? That implyes a margin squeeze for builders, 37 00:02:06,720 --> 00:02:08,720 Speaker 3: which I don't think they can tolerate right now. So 38 00:02:09,160 --> 00:02:11,560 Speaker 3: this is all about the FED trying to create a 39 00:02:11,560 --> 00:02:15,280 Speaker 3: handoff from income led growth to credit led growth. That's 40 00:02:15,280 --> 00:02:17,120 Speaker 3: what this is about. So they need to keep cutting 41 00:02:17,160 --> 00:02:19,440 Speaker 3: until the credits area of the economy turn. 42 00:02:19,800 --> 00:02:22,800 Speaker 2: Neil Dudda with comments before eight thirty, and then you 43 00:02:22,919 --> 00:02:26,760 Speaker 2: joined us afterwards with those comments about let's go, let's go. 44 00:02:26,800 --> 00:02:30,320 Speaker 2: This seems to be the raining idea. I don't have 45 00:02:30,360 --> 00:02:33,480 Speaker 2: the math in front of me here Friday, roughly ten 46 00:02:33,520 --> 00:02:37,919 Speaker 2: am Eastern time, but I could certainly think that over 47 00:02:37,919 --> 00:02:40,720 Speaker 2: the week in the literature of fifty beeps twenty five beeps, 48 00:02:41,360 --> 00:02:43,800 Speaker 2: and that will be important. But what's far more important 49 00:02:43,840 --> 00:02:47,200 Speaker 2: to me is where is this fed moving in November, 50 00:02:48,040 --> 00:02:52,239 Speaker 2: in December and into next year. Caution in the labor 51 00:02:52,360 --> 00:02:56,120 Speaker 2: market comes from Claudia Sam. She was heated today that 52 00:02:56,200 --> 00:02:58,440 Speaker 2: she's not going to call a recession and all that 53 00:02:58,520 --> 00:03:02,080 Speaker 2: and the criticisms and and the rest of it. But 54 00:03:02,480 --> 00:03:08,040 Speaker 2: here's Claudia Sum with the caution in the labor wind. 55 00:03:08,360 --> 00:03:11,400 Speaker 1: It's not headed in the right direction. This is the 56 00:03:11,480 --> 00:03:14,080 Speaker 1: thing I am most concerned about again. Just you know, 57 00:03:14,160 --> 00:03:18,240 Speaker 1: the numbers, like the numbers themselves, Okay, fine, it's just 58 00:03:18,520 --> 00:03:21,120 Speaker 1: things have been slowing and we can and not because 59 00:03:21,280 --> 00:03:24,520 Speaker 1: I am you know, hair on fire, that are recessions 60 00:03:24,520 --> 00:03:28,400 Speaker 1: around the corner. I'm really concerned that we're losing a 61 00:03:28,560 --> 00:03:31,920 Speaker 1: slipping away of a really good labor market and we 62 00:03:32,000 --> 00:03:34,920 Speaker 1: need this as good as it gets and there should 63 00:03:34,960 --> 00:03:37,560 Speaker 1: be nothing weaker than what it takes thet inflation down 64 00:03:37,600 --> 00:03:40,400 Speaker 1: and we are like the train is still moving and 65 00:03:40,600 --> 00:03:41,760 Speaker 1: is not in the right direction. 66 00:03:42,320 --> 00:03:44,720 Speaker 2: Claudia Samner. I'm sure there'll be much more on her 67 00:03:44,800 --> 00:03:49,880 Speaker 2: through the weekend literature as well. Finally, then I really 68 00:03:50,000 --> 00:03:53,520 Speaker 2: deframe this out at Moody's. He is an institution. Mark 69 00:03:53,680 --> 00:03:58,200 Speaker 2: Zandy was seminal and important in two thousand and eight, 70 00:03:58,280 --> 00:04:01,520 Speaker 2: two thousand and nine, and it's almost there's a guy 71 00:04:01,560 --> 00:04:05,240 Speaker 2: free to kayak where you clear the market. And Zandy 72 00:04:05,240 --> 00:04:07,360 Speaker 2: would say, look, we're going to clear our problems. We're 73 00:04:07,400 --> 00:04:10,040 Speaker 2: going to clear our challenges and get to a better place. 74 00:04:10,720 --> 00:04:13,120 Speaker 2: And he did that in the pandemic in January of 75 00:04:13,160 --> 00:04:16,640 Speaker 2: twenty twenty and for the twelve months afterwards. You know, 76 00:04:16,760 --> 00:04:21,440 Speaker 2: this is this ugly medical crisis. We will clear it 77 00:04:21,560 --> 00:04:24,640 Speaker 2: and move on. Mark Zandy today on where we are 78 00:04:24,640 --> 00:04:28,200 Speaker 2: in the job economy, and particularly looking at the fact 79 00:04:28,279 --> 00:04:33,240 Speaker 2: of a four point x unemployment rate, Zandy of moody says, 80 00:04:33,760 --> 00:04:34,640 Speaker 2: it's not that bad. 81 00:04:35,080 --> 00:04:37,400 Speaker 4: Just look at the numbers. I mean, top four point 82 00:04:37,400 --> 00:04:40,760 Speaker 4: two percent unemployment. I mean, okay, maybe be nicer if 83 00:04:40,800 --> 00:04:43,359 Speaker 4: it were four. I'm on board with that. I mean 84 00:04:43,520 --> 00:04:45,839 Speaker 4: it's maybe on the soft side of one point four 85 00:04:45,880 --> 00:04:49,240 Speaker 4: point two percent unemployment. We're creating a lot of jobs 86 00:04:49,279 --> 00:04:51,919 Speaker 4: across lots of different industries and have been for you know, 87 00:04:52,040 --> 00:04:57,800 Speaker 4: quite some time. Inflation that's back in the bottle almost 88 00:04:57,880 --> 00:05:01,520 Speaker 4: no matter how you measure it. So you know, we're 89 00:05:01,520 --> 00:05:03,440 Speaker 4: growing at a potential. And by the way, here's the 90 00:05:03,480 --> 00:05:06,599 Speaker 4: here's the thing that's really you know, makes me encouraged. 91 00:05:06,960 --> 00:05:10,279 Speaker 4: The economy's potential is very strong. I mean, we're seeing 92 00:05:10,279 --> 00:05:12,080 Speaker 4: a lot of labor force growth. Well that's one of 93 00:05:12,160 --> 00:05:14,720 Speaker 4: the that's the key reason why unemployment is not tired 94 00:05:14,760 --> 00:05:17,720 Speaker 4: here over the past year. That goes to immigration, and 95 00:05:17,800 --> 00:05:19,320 Speaker 4: you know there's a lot of costs there, but the 96 00:05:19,320 --> 00:05:21,960 Speaker 4: benefit obviously is the strong labor force growth. And look 97 00:05:21,960 --> 00:05:25,600 Speaker 4: at those productivity growth numbers, and you know, I mean 98 00:05:25,640 --> 00:05:28,520 Speaker 4: it's hard to argue that whether it's sustainable or not, 99 00:05:28,640 --> 00:05:30,040 Speaker 4: but it feels like there's a lot of good things 100 00:05:30,080 --> 00:05:32,760 Speaker 4: happening underneath all the business formation we're beginning since the 101 00:05:32,760 --> 00:05:35,440 Speaker 4: pandemic hit. It's probably reaping benefit. And this is all 102 00:05:35,480 --> 00:05:37,919 Speaker 4: before AI kind of kicks in. So you add up 103 00:05:37,920 --> 00:05:40,719 Speaker 4: all the productivity gains, you add in the labor force growth, 104 00:05:40,720 --> 00:05:44,280 Speaker 4: and that's a strong growing economy. And the FED trick. 105 00:05:44,440 --> 00:05:46,560 Speaker 4: The trick for the FED here is, you know, let 106 00:05:46,600 --> 00:05:49,800 Speaker 4: the economy take the foot off the breaks sufficiently to 107 00:05:49,800 --> 00:05:52,479 Speaker 4: allow the economy to grow at its higher potential. That's 108 00:05:52,480 --> 00:05:55,680 Speaker 4: a very different issue or a problem. If demand we're evaporating, 109 00:05:55,760 --> 00:05:58,960 Speaker 4: that's not what's going on here. So you know, objectively, 110 00:05:59,120 --> 00:06:01,320 Speaker 4: take a step back. This economy is good. 111 00:06:02,120 --> 00:06:04,839 Speaker 2: Mark Sandy with the crux of the matter, and that 112 00:06:04,960 --> 00:06:08,159 Speaker 2: is productivity. One of the rules of productivity. I'm going 113 00:06:08,200 --> 00:06:10,800 Speaker 2: to look at it as a three ratio six dot 114 00:06:10,920 --> 00:06:14,680 Speaker 2: item of capital dynamics, labor dynamics, and this thing called 115 00:06:14,680 --> 00:06:19,120 Speaker 2: tota factor productivity, which is just this odd compendium of 116 00:06:19,200 --> 00:06:23,839 Speaker 2: technological progress. And the answer is that is the great unknown, 117 00:06:24,600 --> 00:06:28,719 Speaker 2: and certainly we've seen some optimism in productivity over the 118 00:06:28,760 --> 00:06:33,960 Speaker 2: recent quarters. We're on YouTube. Subscribe to Bloomberg Podcast. Thank 119 00:06:34,000 --> 00:06:36,680 Speaker 2: you for the notes today. People trying us out on 120 00:06:36,760 --> 00:06:40,159 Speaker 2: this job's day. On Apple car Play and Android Auto. 121 00:06:40,200 --> 00:06:42,839 Speaker 2: I didn't realize the growth there. I was brief to 122 00:06:42,880 --> 00:06:46,080 Speaker 2: actually this morning by one of the interns off of 123 00:06:46,160 --> 00:06:49,800 Speaker 2: that really really spectacular Apple car Play. It is safer, 124 00:06:50,400 --> 00:06:52,560 Speaker 2: it is better. They've got all new software out for 125 00:06:52,640 --> 00:06:55,880 Speaker 2: it as well, and to our radio signals Bloomberg eleven 126 00:06:55,920 --> 00:06:58,080 Speaker 2: three zero in New York, ninety nine one at Washington, 127 00:06:58,680 --> 00:07:01,280 Speaker 2: ninety two nine in Boston. We'll see you next week 128 00:07:01,320 --> 00:07:13,120 Speaker 2: on Apple Podcasts. This is single best idea.