1 00:00:02,360 --> 00:00:05,760 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:05,800 --> 00:00:08,880 Speaker 1: dot com, the Radio plus Mobile Act and on your radio. 3 00:00:09,160 --> 00:00:12,959 Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow. 4 00:00:13,000 --> 00:00:16,119 Speaker 1: This updates brought to you by National Realty Returns on 5 00:00:16,200 --> 00:00:18,599 Speaker 1: cash and rented real estate find them at n r I, 6 00:00:18,800 --> 00:00:22,040 Speaker 1: a dot net u S Stock Index Future is extending 7 00:00:22,040 --> 00:00:25,479 Speaker 1: the clients amid retail sales data that rekindled concern that 8 00:00:25,480 --> 00:00:29,200 Speaker 1: the world's largest economy isn't immune to slowing growth overseas. 9 00:00:29,240 --> 00:00:31,640 Speaker 1: And we checked the markets every fifteen minutes throughout the 10 00:00:31,680 --> 00:00:35,680 Speaker 1: trading day on Bloomberg SNP EVENY futures down eleven points down, 11 00:00:35,720 --> 00:00:38,960 Speaker 1: EVENI futures down eighty four, NAS doc euny futures down 12 00:00:39,000 --> 00:00:41,600 Speaker 1: sixteen and the decks in Germany's down eight tenths per cent. 13 00:00:41,880 --> 00:00:44,320 Speaker 1: Can your treasury up eleven thirty seconds? The yeld one 14 00:00:44,360 --> 00:00:46,680 Speaker 1: point nine two percent yield on the two year point 15 00:00:46,760 --> 00:00:49,360 Speaker 1: nine three percent. Now I'm ex screwed. Oil down two 16 00:00:49,360 --> 00:00:52,120 Speaker 1: point seven percent or dollar one to thirty six sixteen. 17 00:00:52,159 --> 00:00:55,000 Speaker 1: A barrel comaxs goal there is down seven tenths per cent, 18 00:00:55,120 --> 00:00:57,200 Speaker 1: or nine dollars ten cents to twelve thirty six and 19 00:00:57,280 --> 00:01:00,200 Speaker 1: ounce the euro at dollar eleven nineteen. The end one 20 00:01:00,240 --> 00:01:04,000 Speaker 1: twelve point seven one. That report showed US retail sales 21 00:01:04,040 --> 00:01:06,240 Speaker 1: dropped a tenth of upper cent in February, and the 22 00:01:06,319 --> 00:01:09,440 Speaker 1: prior months gain was revised to a decline. Now calls 23 00:01:09,480 --> 00:01:12,520 Speaker 1: into question the narrative that bigger gains and consumer spending 24 00:01:12,520 --> 00:01:15,360 Speaker 1: with propelled economic growth at the start of the year. 25 00:01:15,760 --> 00:01:18,560 Speaker 1: Separated data showed wholesale prices in the US felt you 26 00:01:18,680 --> 00:01:21,080 Speaker 1: tenths per cent in February, held down by lower fuel 27 00:01:21,120 --> 00:01:24,919 Speaker 1: costs that have kept inflation languishing below the Federal Reserve school. 28 00:01:25,000 --> 00:01:30,040 Speaker 1: And that's a Bloomberg Business flash, Tom and Mike Karra Mosco, 29 00:01:30,360 --> 00:01:36,760 Speaker 1: thank you very much. Some other numbers, oh wal Street. 30 00:01:38,240 --> 00:01:41,800 Speaker 1: The following is from Bloomberg View. Opinions and commentary from 31 00:01:41,840 --> 00:01:45,840 Speaker 1: Bloomberg columnists. I'm Justin Fox, a columnist for Bloomberg View. 32 00:01:46,280 --> 00:01:48,600 Speaker 1: The past decade and a half have been tough for 33 00:01:48,680 --> 00:01:52,320 Speaker 1: American workers. The median household brings in less money than 34 00:01:52,320 --> 00:01:56,160 Speaker 1: it did in two thousand, adjusted for inflation. The percentage 35 00:01:56,160 --> 00:02:00,240 Speaker 1: of adults without jobs has risen. Recent economics were urch 36 00:02:00,320 --> 00:02:03,960 Speaker 1: gives trade with China. Some of the blame. Politicians and 37 00:02:04,040 --> 00:02:07,680 Speaker 1: voters have taken notice. Raising trade barriers is a major 38 00:02:07,800 --> 00:02:11,919 Speaker 1: theme of the surprisingly successful presidential campaigns of Donald Trump 39 00:02:11,960 --> 00:02:15,720 Speaker 1: and Bernie Sanders. That got me wondering there are other 40 00:02:15,800 --> 00:02:18,520 Speaker 1: wealthy countries where the average workers seems to have fared 41 00:02:18,560 --> 00:02:21,400 Speaker 1: better since two thousand than in the US. Can that 42 00:02:21,520 --> 00:02:25,000 Speaker 1: be chalked up to higher trade barriers? It doesn't look 43 00:02:25,040 --> 00:02:27,320 Speaker 1: like it. To get a sense of where things might 44 00:02:27,320 --> 00:02:30,240 Speaker 1: be going better for workers, they used the United Nations 45 00:02:30,240 --> 00:02:34,480 Speaker 1: Inequality Adjusted Human Development Index, which combines income measures with 46 00:02:34,560 --> 00:02:38,239 Speaker 1: health and education indicators. Then I looked at the International 47 00:02:38,320 --> 00:02:42,239 Speaker 1: Chamber of Commerce's Open Markets Index, which measures a country's 48 00:02:42,240 --> 00:02:45,600 Speaker 1: openness to trade. Of the twenty six countries that score 49 00:02:45,680 --> 00:02:48,480 Speaker 1: higher than the US on the Human Development Index, all 50 00:02:48,520 --> 00:02:51,400 Speaker 1: but three also score higher on the trade openness ranking. 51 00:02:51,840 --> 00:02:55,959 Speaker 1: Free trade and widely shared prosperity are clearly not incompatible. 52 00:02:56,560 --> 00:02:59,600 Speaker 1: I'm justin Fox, a columnist for Bloomberg View. For more 53 00:02:59,600 --> 00:03:02,679 Speaker 1: bloom our opinion in commentary, please get a Bloomberg View 54 00:03:02,680 --> 00:03:05,600 Speaker 1: dot com or view go on the Bloomberg terminal. This 55 00:03:05,800 --> 00:03:09,600 Speaker 1: has been Bloomberg View. Bloomberg View commentaries can be heard 56 00:03:09,639 --> 00:03:15,040 Speaker 1: hourly weekdays on Bloomberg Radio tagtown. You're in, Yeah, Carl 57 00:03:15,040 --> 00:03:17,520 Speaker 1: tannembob with this as we look at the American economy 58 00:03:17,600 --> 00:03:21,480 Speaker 1: and uh, the backdrop here is a sharp revision negative 59 00:03:22,040 --> 00:03:25,799 Speaker 1: to retail sales markets to move on the news and good. 60 00:03:25,880 --> 00:03:28,720 Speaker 1: Mr tannemb Im. Dr Tannembom pushes against it and says 61 00:03:29,800 --> 00:03:32,600 Speaker 1: there's some glimmers of optimism out there as well. Carl, 62 00:03:32,600 --> 00:03:35,520 Speaker 1: I just made up a chart, which I'm hesitant to 63 00:03:35,560 --> 00:03:37,480 Speaker 1: say in March will be my chart of the year. 64 00:03:38,160 --> 00:03:40,560 Speaker 1: It's a thirty year look at real GDP, which is 65 00:03:40,640 --> 00:03:44,600 Speaker 1: migrated on a regression from under four percent to under 66 00:03:44,640 --> 00:03:48,200 Speaker 1: two percent. How do we turn that around? It's the 67 00:03:48,240 --> 00:03:52,440 Speaker 1: politic politics of the moment, it's the economics of the moment. 68 00:03:53,000 --> 00:03:56,080 Speaker 1: Retail sales consumer is not going to do that. How 69 00:03:56,080 --> 00:04:01,320 Speaker 1: do you turn around real GDP? Wow, that's weighty question 70 00:04:01,440 --> 00:04:04,360 Speaker 1: for early morning. But I think the long term issues 71 00:04:04,400 --> 00:04:07,200 Speaker 1: that we've got are really to to see what we 72 00:04:07,240 --> 00:04:11,160 Speaker 1: can do to improve our potential rate of economic growth. Tom. 73 00:04:11,680 --> 00:04:13,360 Speaker 1: The chart that you may be looking at a similar 74 00:04:13,360 --> 00:04:14,960 Speaker 1: to others that I've seen that take a look at 75 00:04:15,000 --> 00:04:17,440 Speaker 1: a tenure moving average over let's say forty or fifty 76 00:04:17,520 --> 00:04:20,520 Speaker 1: years that show the decline, and of course the economists 77 00:04:20,520 --> 00:04:21,960 Speaker 1: would tell you that you build up to that with 78 00:04:22,040 --> 00:04:25,720 Speaker 1: two quantities. One is the population or labor force growth 79 00:04:25,880 --> 00:04:29,960 Speaker 1: and productivity growth. Obviously, we've got baby boomers retiring and 80 00:04:30,000 --> 00:04:33,880 Speaker 1: deservedly so, but we'll need to renew the labor force 81 00:04:34,000 --> 00:04:38,599 Speaker 1: in numbers and also skills. The discussions really centers on 82 00:04:38,800 --> 00:04:41,760 Speaker 1: in that realm around immigration, which is a huge issue 83 00:04:41,800 --> 00:04:44,880 Speaker 1: so far on the campaign trail, but from a number's perspective, 84 00:04:44,920 --> 00:04:48,640 Speaker 1: typically immigration is very beneficial to those countries that assimilate well. 85 00:04:49,200 --> 00:04:51,120 Speaker 1: And then on the productivity side, we've got a lot 86 00:04:51,160 --> 00:04:53,440 Speaker 1: of thesis out there is to what we might do 87 00:04:53,600 --> 00:04:57,479 Speaker 1: or or or not do, frankly, to to increase that level. 88 00:04:57,680 --> 00:04:59,840 Speaker 1: A lot of the public spending on infrastructure that we 89 00:05:00,000 --> 00:05:04,560 Speaker 1: need in order to remain economically fluid has been stunted 90 00:05:04,600 --> 00:05:07,480 Speaker 1: by the fiscal austerity that's needed. Not even so much 91 00:05:07,480 --> 00:05:09,080 Speaker 1: at the national level, but as you know, a lot 92 00:05:09,120 --> 00:05:11,360 Speaker 1: of this is handled at the state and local level, 93 00:05:11,400 --> 00:05:14,400 Speaker 1: where finances in many places are a lot more tenuous. 94 00:05:14,640 --> 00:05:16,880 Speaker 1: And then also I think that there's an opportunity for 95 00:05:16,960 --> 00:05:19,960 Speaker 1: whomever is sitting at whatever seats next January to find 96 00:05:20,000 --> 00:05:22,640 Speaker 1: those in near term incentives to get a little bit 97 00:05:22,640 --> 00:05:26,000 Speaker 1: more investment in R and D and CAPEX going, so 98 00:05:26,040 --> 00:05:30,200 Speaker 1: that if we can make the investments today, will reap 99 00:05:30,240 --> 00:05:33,839 Speaker 1: the returns tomorrow, and the dire predictions of the economists 100 00:05:33,839 --> 00:05:39,320 Speaker 1: like Bob Gordon or Larry Summers will not come true. Um. 101 00:05:39,360 --> 00:05:41,640 Speaker 1: My name is Carl Tannerbaum and I'm running for president. 102 00:05:45,240 --> 00:05:47,640 Speaker 1: I was a little taken about. I mean, Bob Gordon 103 00:05:47,720 --> 00:05:50,960 Speaker 1: is not really dire making dire predictions. He's just saying 104 00:05:51,200 --> 00:05:54,479 Speaker 1: productivity won't be as high as it was. Well, Mike, 105 00:05:54,600 --> 00:05:56,800 Speaker 1: his last paper where he wrote the book, I think, 106 00:05:56,880 --> 00:05:59,120 Speaker 1: was entitled the End of American Growth. So I don't 107 00:05:59,120 --> 00:06:01,960 Speaker 1: know how much dark are you can get on that front. Well, 108 00:06:01,960 --> 00:06:04,680 Speaker 1: perhaps he stole a page from the tabloid newspapers and 109 00:06:04,839 --> 00:06:10,159 Speaker 1: exaggerate the headlines to copies of the paper. Here's my 110 00:06:10,320 --> 00:06:14,320 Speaker 1: question for you, Carl. We're talking earlier with our political 111 00:06:14,360 --> 00:06:17,640 Speaker 1: and and c J. Done and uh Chuck Todd who 112 00:06:17,720 --> 00:06:20,960 Speaker 1: suggests that given the nature of the campaign we've had, 113 00:06:21,320 --> 00:06:23,960 Speaker 1: it's gonna be very difficult for anybody to govern next year. 114 00:06:24,200 --> 00:06:27,520 Speaker 1: So what happens You're you're suggesting that there are things 115 00:06:27,600 --> 00:06:30,440 Speaker 1: they could do to get productivity going in the economy going. 116 00:06:30,480 --> 00:06:34,560 Speaker 1: What happens if nothing happens, what happens to the economy, Mike, 117 00:06:34,600 --> 00:06:37,719 Speaker 1: would be hard to imagine an environment where governance is 118 00:06:37,760 --> 00:06:39,800 Speaker 1: harder than it is today. I'll just say that at 119 00:06:39,839 --> 00:06:41,200 Speaker 1: the outset it so, I'm not sure that we're going 120 00:06:41,240 --> 00:06:44,719 Speaker 1: to see such a paradigm change as we deal with 121 00:06:44,760 --> 00:06:47,279 Speaker 1: a new administration. I will say though, that there's a 122 00:06:47,279 --> 00:06:50,479 Speaker 1: body of work in economics that finds that that uncertainty 123 00:06:50,600 --> 00:06:54,800 Speaker 1: policy uncertainty is the enemy really of business progress and 124 00:06:54,839 --> 00:06:58,960 Speaker 1: market progress, and we're certainly getting tested on that front today. 125 00:06:59,400 --> 00:07:02,560 Speaker 1: I think redlock the status quo is not good fiscally 126 00:07:02,640 --> 00:07:06,080 Speaker 1: because of the hill of healthcare costs and social security 127 00:07:06,080 --> 00:07:08,080 Speaker 1: costs and pension costs we have at the local level 128 00:07:08,160 --> 00:07:10,520 Speaker 1: that we're facing. We do need to face those as 129 00:07:10,560 --> 00:07:13,120 Speaker 1: soon as as possible, because kicking the can down the 130 00:07:13,120 --> 00:07:15,520 Speaker 1: curb is going to run into a wall in the 131 00:07:15,560 --> 00:07:19,680 Speaker 1: not too distant future. When you look, Carl at the 132 00:07:19,800 --> 00:07:22,200 Speaker 1: makeup here, and this has been the art debate, it 133 00:07:22,280 --> 00:07:25,600 Speaker 1: can go either way, optimist or pessimis do you look 134 00:07:25,640 --> 00:07:29,080 Speaker 1: at the all in economy? Are are things so distorted 135 00:07:29,120 --> 00:07:32,520 Speaker 1: that X out trades and even energy dynamics right now, 136 00:07:32,760 --> 00:07:36,239 Speaker 1: which is it. I think you have to be very careful, 137 00:07:36,280 --> 00:07:40,000 Speaker 1: including the energy dynamics, because it's challenging to understand where 138 00:07:40,080 --> 00:07:42,560 Speaker 1: energy will settle in and what the American component of 139 00:07:42,600 --> 00:07:45,160 Speaker 1: that will look like. Our own view is that over 140 00:07:45,200 --> 00:07:47,680 Speaker 1: the long term, you know, energy demand globally is going 141 00:07:47,720 --> 00:07:50,080 Speaker 1: to be strong, and the supply but that we have 142 00:07:50,200 --> 00:07:52,800 Speaker 1: now will eventually dissipate. That should be good for our 143 00:07:52,840 --> 00:07:56,480 Speaker 1: producers and bring that back to being an important contributor 144 00:07:56,520 --> 00:07:59,960 Speaker 1: to our economy. But the fundamentals that we talked about earlier, 145 00:08:00,040 --> 00:08:02,160 Speaker 1: which are you know, what is our potential for growing, 146 00:08:02,360 --> 00:08:04,080 Speaker 1: are the ones that are going to be much more lasting, 147 00:08:04,080 --> 00:08:06,680 Speaker 1: and I think those need to be the focus of policy. 148 00:08:06,800 --> 00:08:08,080 Speaker 1: Before we let you go here, we have to ask 149 00:08:08,080 --> 00:08:10,120 Speaker 1: about the other numbers out today. Do you pay a 150 00:08:10,160 --> 00:08:12,920 Speaker 1: whole lot of attention to pp I essentially pp I 151 00:08:13,040 --> 00:08:17,680 Speaker 1: file demand flat and then um the New York I 152 00:08:17,960 --> 00:08:21,240 Speaker 1: s M numbers. So the pp I mike. We've had 153 00:08:21,360 --> 00:08:24,120 Speaker 1: kind of a quiet recovery and energy and commodity prices 154 00:08:24,160 --> 00:08:26,560 Speaker 1: over the last several weeks of taking the edge off 155 00:08:26,560 --> 00:08:29,960 Speaker 1: of that on inflation, and that certainly will feed into 156 00:08:29,960 --> 00:08:32,760 Speaker 1: the conversation that begins with the FED today, where I 157 00:08:32,800 --> 00:08:34,640 Speaker 1: think the numbers are better than they thought they'd be 158 00:08:34,679 --> 00:08:37,800 Speaker 1: a month ago. It will be very interesting at the discussions. Carl, 159 00:08:37,840 --> 00:08:42,920 Speaker 1: thank you so much, Carlam Company surveillance correction here I said, 160 00:08:43,480 --> 00:08:45,800 Speaker 1: New York, IM, they're not the I s M. They 161 00:08:45,800 --> 00:08:48,760 Speaker 1: don't come from the purchasing managers. They come from survey 162 00:08:48,800 --> 00:08:52,079 Speaker 1: by the New York Federal Reserve. Empire Manufacturing. It was 163 00:08:52,200 --> 00:08:56,800 Speaker 1: up to positive zero point six to from sixteen point 164 00:08:56,840 --> 00:08:59,440 Speaker 1: six four, So a big change there. Well, I'm glad 165 00:08:59,440 --> 00:09:01,640 Speaker 1: you bring it up and that folks were buried by 166 00:09:01,800 --> 00:09:05,880 Speaker 1: tertiary economic data. And what I find interesting is some 167 00:09:06,040 --> 00:09:11,000 Speaker 1: of it, like the Dallas inflation statistic, has real merit. Mike, 168 00:09:11,040 --> 00:09:13,000 Speaker 1: what do you think of all these you know, sub 169 00:09:13,320 --> 00:09:17,600 Speaker 1: sub sub indusicries like Empire Manufacturing. Well, they don't tell 170 00:09:17,640 --> 00:09:19,520 Speaker 1: you much about what's going on in the in the 171 00:09:19,600 --> 00:09:22,679 Speaker 1: national economy, and there's no relationship between the Empire number 172 00:09:22,720 --> 00:09:24,600 Speaker 1: and the national I s M number. But if you 173 00:09:24,600 --> 00:09:26,800 Speaker 1: put them all together, it gives you sort of a 174 00:09:26,840 --> 00:09:31,120 Speaker 1: region by region picture of how things are going. And uh, 175 00:09:31,240 --> 00:09:34,520 Speaker 1: we have seen a deterioration across the country. And now 176 00:09:34,600 --> 00:09:37,160 Speaker 1: if this one's leading us back up again, that would 177 00:09:37,160 --> 00:09:39,959 Speaker 1: be good news. Yeah, it's just fascinating, folks. All of 178 00:09:39,960 --> 00:09:44,200 Speaker 1: our interviews on radio, out at iTunes, out on podcasts, 179 00:09:44,240 --> 00:09:46,520 Speaker 1: we are thrilled to reoffer that to your team is 180 00:09:46,559 --> 00:09:49,520 Speaker 1: doing a great job of getting those out. Going to iTunes, 181 00:09:49,520 --> 00:09:54,440 Speaker 1: search Bloomberg's Surveillance and you will find any number of 182 00:09:54,480 --> 00:09:58,360 Speaker 1: good interviews, including Richard Hass yesterday with the consul and 183 00:09:58,480 --> 00:10:02,040 Speaker 1: Form Relations and dr In A Bomb and Alan Ruskin 184 00:10:02,920 --> 00:10:06,680 Speaker 1: and others. A futures negative eleven, Dow futures negative eighty three. 185 00:10:07,280 --> 00:10:10,600 Speaker 1: I'm gonna call it a two week churn to the market. 186 00:10:10,640 --> 00:10:14,600 Speaker 1: With a better equity framework, we forgot the doubt closing 187 00:10:14,760 --> 00:10:21,240 Speaker 1: seventeen thousand two nine, the vix not at mass complacency, 188 00:10:21,320 --> 00:10:25,199 Speaker 1: but nevertheless very good sixteen point nine two, way below 189 00:10:25,240 --> 00:10:29,400 Speaker 1: the twenty long term average yields, come into the risk 190 00:10:29,520 --> 00:10:32,439 Speaker 1: off off the retail data they were in earlier, and 191 00:10:32,520 --> 00:10:37,680 Speaker 1: come in more ever more in one but still a 192 00:10:37,800 --> 00:10:41,600 Speaker 1: churn to the market. And you know, the press conference tomorrow, 193 00:10:41,640 --> 00:10:44,720 Speaker 1: what what does she not say at the press conference? 194 00:10:46,920 --> 00:10:52,320 Speaker 1: What does she not say? And she doesn't talk about 195 00:10:53,120 --> 00:11:01,720 Speaker 1: dates were times data dependent. Yeah, actual progress Green Shoots. 196 00:11:01,760 --> 00:11:06,400 Speaker 1: Remember Green Shoots. We were younger. Green Shoots was a 197 00:11:06,400 --> 00:11:09,640 Speaker 1: few years ago. Futures negative eleven death futures Neinka of 198 00:11:09,679 --> 00:11:12,680 Speaker 1: eighty four, Another hour of Bloomberg's surveillance