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Speaker 1: Broadcasting live to New York, Gloomberg eleventh Yo to Washington,

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

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Speaker 1: Bloomberg to the Country, US Exam Channel one ninety and

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Speaker 1: around the globe the Bloomberg Radio plus Avin Bloomberg dot Com.

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Speaker 1: This is Bloomberg Surveillance. Good morning. I'm Michael McKee along

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Speaker 1: with Tom Keane. Economic Indicators brought to you by Commonwealth

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Speaker 1: at the first Word desk in video. We got a

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Speaker 1: nice surprise out of the Empire State Index this morning. Yes,

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Speaker 1: Michael Moore, evidence manufacturing is perking up. The Empire Manufacturing

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Speaker 1: Index in New York Fed popping forecast at nine point

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Speaker 1: five six. With commodity prices recovering a bit that dollar weakening,

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Speaker 1: there's some evidence businesses are stepping up spending on capital

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Speaker 1: investment again. This regional economic report piece of the puzzle

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Speaker 1: from the New York Fed. The Empire State Manufacturing index

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Speaker 1: topping forecasts at nine point five six coming in and

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Speaker 1: about forty five minutes national data from the Federal Reserve

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Speaker 1: in Washington, and industrial production the output of the nation's factories,

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Speaker 1: minds and utilities at the Bloombark First Work Desk, Cofidi

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Speaker 1: Del Tunic, let's go back to New York. Thank you

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Speaker 1: very much. Vinnie joining us now Conrad da Quadras. He's

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Speaker 1: a senior economists founding partner of our d Q Economics,

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Speaker 1: and Conrad, we've had a couple of investors on the

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Speaker 1: show this morning, already suggesting that what we're seeing in

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Speaker 1: manufacturing is maybe the leading edge of a bit of

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Speaker 1: a pickup in economic growth in the United States. The

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Speaker 1: first quarter not so good, but given the dollar falling back,

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Speaker 1: some manufacturing is getting better and that's good for the

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Speaker 1: economy overall as the rest of the year goes on.

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Speaker 1: I think it is. And it has been the sector

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Speaker 1: that's been the weakest area of the U s economy

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Speaker 1: recently as UH it's been a sector that's been forced

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Speaker 1: to adjust to a stronger dollar. It's been forced to

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Speaker 1: adjust to UH shift an activity in energy related industries,

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Speaker 1: and now we're starting to see some some evidence. I

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Speaker 1: would say back in February we started to get a

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Speaker 1: few tentative reports, but we've built on that. With the

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Speaker 1: THEM Manufacturing Index rising above fifty for the first time

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Speaker 1: since August of last year. We've seen it in Global

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Speaker 1: p m I s U China's government p m I

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Speaker 1: for example, on manufacturing rows above fifty UH for the

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Speaker 1: first time since last summer UH, and now starting to

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Speaker 1: get the April readings on activity. That suggests that we've

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Speaker 1: built on that a bit. Of course, as you mentioned,

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Speaker 1: the more important report on manufacturing of a little bit

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Speaker 1: more lagging comes out later on this morning within dulstrial

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Speaker 1: production that might not show as as upbeat a pictures

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Speaker 1: as these reports because it's based predominantly on hours worked

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Speaker 1: UH in the first release, and that was a bit

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Speaker 1: softer in March. You know, the Empire number doesn't get

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Speaker 1: a whole lot of a tension um. It doesn't mean

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Speaker 1: as much to people as as some of the others. Philadelphia,

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Speaker 1: for example, gets more attention Chicago and the national I

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Speaker 1: s M numbers. Well, you know, with all respect to

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Speaker 1: the New York Fed, I think the reason why the

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Speaker 1: Empire state doesn't get as much attention is just a

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Speaker 1: tremendously volatile relative to the other manufacturing surveys. If you

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Speaker 1: look at the amount of time that the index spends

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Speaker 1: below its break even zero level or well above zero

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Speaker 1: versus the shifts in the I s M above or

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Speaker 1: below fifty that the pictures is is completely different, and

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Speaker 1: so there's actually not much correlation on a month to

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Speaker 1: month basis between the Empire state and the I M.

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Speaker 1: For our part, we don't actually even use it as

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Speaker 1: one of the regional indicators that we use to forecast

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Speaker 1: the I s M. So it's encouraging to see it.

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Speaker 1: But before we read too much into the signs on

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Speaker 1: manufacturing activity early in the second quarter, we want to

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Speaker 1: see some of the other regional surveys, the Chicago km I,

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Speaker 1: Richmond FED Index, and of course the I s which

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Speaker 1: is out in a couple of weeks. The Empire Factory

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Speaker 1: Employment Index, the sub index in that number did rise

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Speaker 1: as well, and yesterday we saw jobless names go down

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Speaker 1: to UM tie in its historic lows. So what do

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Speaker 1: we see in terms of employment in the United States

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Speaker 1: and how does that square with what we're seeing in

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Speaker 1: terms of GDP and production. But that's a really good question. Now, uh, again,

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Speaker 1: in recent data, very different picture depending on which of

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Speaker 1: those indicators that we're looking at. The labor market continues

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Speaker 1: to point to very solid levels activity in the US.

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Speaker 1: We've seen better than two d increases and employment continue

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Speaker 1: in the early part of UM. And for our part,

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Speaker 1: that's really what we focus on when we're trying to

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Speaker 1: judge the short term trends and in economic activity. UM.

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Speaker 1: A lot of people and I think a lot of

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Speaker 1: people at the FED, and we heard this yesterday with

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Speaker 1: your Bloomberg interview with Dennis Lockhart, I tend to focus

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Speaker 1: a lot on the GDP data. And my opinion is

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Speaker 1: that's a mistake. So in a couple of weeks we're

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Speaker 1: going to get the GDP data for the first quarter.

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Speaker 1: It's likely to be quite soft. UM. I think that

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Speaker 1: that was added to with this week's retail sales report. UM.

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Speaker 1: And so where we might be looking at a GDP

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Speaker 1: number that somewhere a little bit above one percent and

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Speaker 1: a very different picture on the economy than what the

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Speaker 1: employment data are suggesting. But the problem with GDP is

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Speaker 1: it just doesn't give us a good indication of the

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Speaker 1: shortness of the condition of the economy and the short

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Speaker 1: run UM, the data are subject to significant revision. I

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Speaker 1: looked at the first release of GDP in the last

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Speaker 1: ten years versus where GDP is now UH, and on

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Speaker 1: average it's one percentage point different UM and in many

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Speaker 1: occasions the first release has the wrong sign on it

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Speaker 1: relative to where it is now. So UM it just

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Speaker 1: is I think a mistake. I think it's a mistake

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Speaker 1: on the part of the FED to pay as much

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Speaker 1: attention to GDP and the very short run as they

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Speaker 1: do UH. And I think in the first quarter they're

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Speaker 1: going to continue to paint very different pictures of the

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Speaker 1: economy depending on if we look at employment, which as

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Speaker 1: you mentioned in April, is still looking pretty solid with

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Speaker 1: the early reading on jobless claims for April, and now

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Speaker 1: we're starting to get some of these manufacturing reports that

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Speaker 1: are pointing to continued fairly solid growth in an employment

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Speaker 1: early in the second quarter. Conrad de Quadras, senior kind

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Speaker 1: of founding partnered RTQ Economics, thanks for joining us this

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Speaker 1: morning to look at the numbers that we have gotten

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Speaker 1: so far. Empire manufacturing coming in at nine point six

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Speaker 1: after zero point six the prior month. This is for

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Speaker 1: April vide l Judas mentioning, we get industrial production at

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Speaker 1: nine fifteen Wall Street time expected to contract by a

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Speaker 1: tenth of a percent, Manufacturing as part of that, expected

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Speaker 1: to rise a tenth. We also get figures in that

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Speaker 1: release on utility production and mining mining heavily affected by

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Speaker 1: what's happening in the oil industry. And then we get

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Speaker 1: to the University of Michigan consumer sentiment numbers at ten

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Speaker 1: o'clock expect to derise a point to ninety two. But

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Speaker 1: what the Fed wants to see is the inflation figures.

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Speaker 1: People say they see two point seven percent inflation over

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Speaker 1: the next year. Will that rise or fall? We'll have

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Speaker 1: those numbers for you here on Bloomberg Radio. This hour

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Speaker 1: of Savanance is brought to you by BMW Mount Kisco

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Speaker 1: is at BMW mount Kisco dot com. Here's Michael Barr

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Speaker 1: with the latest world in the national headlines. Michael, Mike,

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Speaker 1: thank you very much. Democratic presidential candidates Hillary Clinton and

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Speaker 1: Bernie Sanders had a spirited debate last night in Brooklyn.

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Speaker 1: They aggressively challenged each other over Wall Street, banks, minimum wage,

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Speaker 1: gun control, and foreign policy. Meanwhile, all three Republican presidential

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Speaker 1: candidates who are in New York City for a state

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Speaker 1: Republican gallop. Republican National Committee chairman Ryn's previous says his

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Speaker 1: party is working towards unity after a divisive primary season.

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Speaker 1: It isn't easy. I'm not trying to claim it isn't

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Speaker 1: and there is drama, but that's what our party needs

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Speaker 1: to do. We need to come together, We need to

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Speaker 1: pick an Andy. We need to come together and put

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Speaker 1: her eye on the price, which is the White House.

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Speaker 1: President Obama will call for Britain to remain part of

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Speaker 1: the European Union. President Obama will travel to the UK

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Speaker 1: next week. The president's advisors told reporters a vote to

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Speaker 1: leave the EU would diminish Britain's influence in the world.

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Speaker 1: More than one hundred aftershocks have hit southern Japan since

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Speaker 1: the magnitude six point five earthquake yesterday. It killed nine

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Speaker 1: people and injured about eight hundred others. Rescue teams are

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Speaker 1: combing through the ubble looking for any survivors. Global News

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Speaker 1: twenty four hours a day, powered by our twenty four

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Speaker 1: hundred journalists and more than a hundred fifty news bureaus

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Speaker 1: from around the world. I'm Michael bar Mike Thank you, Michael.

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Speaker 1: Time now for the Bloomberg NBC Sports update, Here's Jon Stessha.

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Speaker 1: Mike Stanley kept layoffs in South Florida. The Islanders trailed

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Speaker 1: three different times, but took to lead the third period,

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Speaker 1: held on at the and Thomas christ stop yarm or

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Speaker 1: Yager in the final minute. Rights made forty two days.

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Speaker 1: Aisles were outshot forty six twenty six, but a one

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Speaker 1: game one at Florida five to four. Panthers had not

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Speaker 1: lost a game all season when they scored at least

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Speaker 1: four goals. Quick turnaround. Game two is tonight. I hope

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Speaker 1: so in Washington. After the best regular season, the Caps

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Speaker 1: have had a lot of playoff disappointments, but they opened

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Speaker 1: up to nothing over Philadelphia. Henrik Lunkquiz visited an ice specialist.

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Speaker 1: Rangers do not believe it's a serious injury. They're hoping

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Speaker 1: they have lunk Wist in goal for Game two in

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Speaker 1: Pittsburgh tomorrow afternoon. The Rangers will again be without captain

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Speaker 1: Ryan McDonough. The Penguins won the opener. The Yankees lost

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Speaker 1: at Toronto for to two. Marcus Stroman gave up only

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Speaker 1: three hits. Nathan Vivaldi gave up a three run, four

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Speaker 1: forty five ft home run to Josh Donaldson a solo

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Speaker 1: shot Detroit. Tillewitzki is Joe Girardi on Vivaldi. I thought

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Speaker 1: he was really pretty good. He made a couple of stakes.

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Speaker 1: He threw a split that didn't really do much to

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Speaker 1: Donaldson and the slider it's too low. It didn't really

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Speaker 1: do much. And the most part, you know, his command

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Speaker 1: was really good tonight, and I thought he pitched really

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Speaker 1: well for those two mistakes cost him. Banks home tonight

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Speaker 1: for Seattle Mets in Cleveland. Will the twins are braves? Ever,

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Speaker 1: when they're both oh and eight minutes so to be

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Speaker 1: eaten by the White Sox, Atlanta lost and Washington Bryce

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Speaker 1: Harper's one hundred career home run his first Grand Slam.

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Speaker 1: Nationals are seven and one of the Cubs or eight

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Speaker 1: and one with a route of Cincinnati. NFL schedules out.

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Speaker 1: The opener is the Super Bowl rematch Carolina at Denver.

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Speaker 1: The Jets Week one host Cincinnati, but six of the

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Speaker 1: jets next eight games are on the road. Giants yet

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Speaker 1: again starting the season against the Cowboys. Their trip to

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Speaker 1: London week seven to play the Los Angeles Rams with

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Speaker 1: the Bloomberg NBC's Sports Update. I'm John Stash, Thank you John. Well.

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Speaker 1: We are watching markets try to figure out direction this morning,

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Speaker 1: and right now it looks like we are going to

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Speaker 1: have a lower open SMP features down by four points,

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Speaker 1: giving up some ground after that better than expected uh

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Speaker 1: Empire manufacturing report in New York, stock six hundred in

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Speaker 1: Europe down by two points, now half percent. This is

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Speaker 1: Bloomberg surveillance, Bloomberg Radio, Bloomberg surveillance brought to by Bentley

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