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Speaker 1: Broadcasting live to New York, Bloomberg to Washington, d C,

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Speaker 1: Bloomberg to Boston, Bloomberg twelve Honors, to San Francisco, Bloomberg nine,

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Speaker 1: to the country, zoeus at Jamn Chaneral one ninety and

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Speaker 1: around the globe the Bloomberg Radio Plus Appen Bloomberg dot Com.

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Speaker 1: This is Bloomberg Surveillance. Good morning, seven thirty. On jobs today,

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Speaker 1: I'm Michael McKee along with Tom Keene. Outside of jobs,

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Speaker 1: some news that people are watching. Tom Barracks colony. Capitol

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Speaker 1: going to combine with north Star Realty Finance and north

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Speaker 1: Star Asset Management Group all Stock Deal forms a real

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Speaker 1: estate investment trust fifty eight billion under management. Mentioned this earlier.

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Speaker 1: JP Morgan Chase CEO Jamie Diamond wades into the Brexit debate,

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Speaker 1: warning in England today the investment bank may have to

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Speaker 1: cut jobs in the UK if the country decides to

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Speaker 1: exit the European Union. The bank has more than sixteen

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Speaker 1: thousand employees. They're being Capitol peg Asian a Capital evaluating

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Speaker 1: bids for Takata, the Japanese Airbank's bag supplier behind that

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Speaker 1: record safety recall. That's according to people familiar with the matter.

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Speaker 1: And Delta and United Continental are weighing bids for Avianca,

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Speaker 1: Columbia's state owned airline, exploring strategic options, they say, including

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Speaker 1: a full or partial sale. Let's check out with Michael

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Speaker 1: Barr now and get the latest world and national headlines

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Speaker 1: by Mike, Thank you very much. The search continues for

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Speaker 1: four soldiers who are missing after their troop carrier overturned

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Speaker 1: in a rain swollen creek at Ford Whood, Texas. Five

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Speaker 1: other soldiers were killed. Defense Secretary Ash Carter. We're going

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Speaker 1: to make sure that we learn lessons that we can

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Speaker 1: from the investigations we conduct after these incidents, and that

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Speaker 1: we take actions in the future to prevent such accidents

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Speaker 1: and keep our people safe. Near Nashville, Tennessee, a pilot

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Speaker 1: was killed when his Blue Angels fighter jet crashed. President

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Speaker 1: Obama used his final commencement address to a US military

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Speaker 1: academy to urge Air Force cadets to find the right

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Speaker 1: balance between force and diplomacy. The presidential the Air Force

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Speaker 1: Academy's class of six and they must not allow the

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Speaker 1: US to turn away from the world. At least nineteen

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Speaker 1: journalists were attacked while covering food protests in downtown Caracas.

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Speaker 1: That's according to a non governmental organization that monitors freedom

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Speaker 1: of expression in Venezuela's capital. The assaults included robberies allegedly

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Speaker 1: by members of the National Guard and armed civilians. Global

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Speaker 1: News twenty four hours a day. I'm Michael, bar Mike.

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Speaker 1: Thank you, Michael. Time now for the Bloomberg innbcs A

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Speaker 1: landover Parsippani sports update. Here's John stessha Alright, Michael. Surprise

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Speaker 1: in Game one of the NBA Finals, not Golden State winning,

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Speaker 1: but the way the Warriors won, getting more points from

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Speaker 1: their backup guards than they're much more heralded starters. Steph

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Speaker 1: Curry and CLAYT. Thompson together scored twenty points and Sean

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Speaker 1: Livingston had that by himself. Leaneo Barbosa added eleven off

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Speaker 1: the bench. Those two shot a combined thirteen for fifteen,

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Speaker 1: and the Warriors won Game one one oh four to

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Speaker 1: eighty nine. The Calves came from fourteen down to briefly

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Speaker 1: lead in the third quarter, but the Warriors pulled away

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Speaker 1: from there. Bench scoring was forty five to ten for

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Speaker 1: Golden State. Came to a Sunday again in Oakland. Took

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Speaker 1: a while for the Yankees didn't get it hit until

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Speaker 1: the sixth inning, but finally some runs four and the seventh.

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Speaker 1: They held on to win the rain out makeup in

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Speaker 1: Detroit five to four, Baltimore be meat, the Red Sox

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Speaker 1: twelve to seven as the Oils hit seven on runs,

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Speaker 1: Seattle sixteen, San Diego thirteen. The Mariners trail twelve to

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Speaker 1: two in the sixth inning and came back to win.

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Speaker 1: The Mets were off. They have put David right under

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Speaker 1: the sable disk with that naggy neck injury that they

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Speaker 1: say could keep him out for a prolonged period. Serina

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Speaker 1: Williams down three one opening set of her semifinal match

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Speaker 1: at the French Open, with Kiki Barton with the Bloomberg

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Speaker 1: NBC Sports Update. I'm John Stash, Thank you John. And

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Speaker 1: they always say watched the dollar, and we are watching

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Speaker 1: the dollar ahead of the jobs report. It is a

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Speaker 1: scotch uh stokers, shall we say, against most currencies, but um,

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Speaker 1: the end is h is unchanged right now, the yearn

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Speaker 1: one away eighty seven and the pound. Course they've got

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Speaker 1: their own issues to worry about over in Great Britain

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Speaker 1: as they prepare for the Brexit vote ahead for US

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Speaker 1: here on Bolberg Surveillance. It's the jobs report coming up.

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Speaker 1: We're gonna talk with Alan Krueger and then we'll get

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Speaker 1: a preview from James Classman of JP Morgan Chase and

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Speaker 1: get reaction from Bill Gross. The market is putting in

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Speaker 1: a little bit of a positive tone right now. SMP

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Speaker 1: features up by a point, down features up by sixteen.

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Speaker 1: We were be calmed earlier, but we are getting closer

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Speaker 1: and closer to the number an hour from now. We're

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Speaker 1: gonna check in with Bob mon now and get the

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Speaker 1: Blueberg n j I T STEM Report brought to you

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Speaker 1: by New Jersey Institute of Technology, investing more than a

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Speaker 1: dred and ten million dollars a year and applied research

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Speaker 1: to solve problems and improved life. Learn more stories Have

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Speaker 1: Innovation Dot n j I T Dot to you, Michael,

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Speaker 1: good morning. Here's what's making news in science, technology, engineering

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Speaker 1: and math. The summer and fall, the Atlantic Ocean could

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Speaker 1: become a hurricane testing site of sorts. After decades of warmth,

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Speaker 1: there's evidence the Atlantic is cooling, and that change could

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Speaker 1: mean fewer hurricanes wreaking havoc on coastal communities and economies.

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Speaker 1: It's part of a cycle called the Atlantic multidecatal oscillation

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Speaker 1: and convinced they stick these terms in just a test

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Speaker 1: us let's call it the A m O for short.

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Speaker 1: Not nearly as snappy as El Nino in the Pacific,

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Speaker 1: but this could even overshadow that. The theory is that

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Speaker 1: the Atlantic cools and warms every twenty five to forty years,

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Speaker 1: changing the African monsoon and easterly jetstream, air pressure over

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Speaker 1: the ocean, and levels of wind shear. All these can

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Speaker 1: add or to tract from hurricane lifespans. The thing is

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Speaker 1: not everyone believes the A m O affects hurricanes that way.

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Speaker 1: There are competing hypotheses and this cycle is giving scientists

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Speaker 1: more of the data they need to build their knowledge

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Speaker 1: on effects of this phenomenon. Honeywell is warning of growing

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Speaker 1: cyber attacks by state sponsored hackers. The cybersecurity provider says

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Speaker 1: they're increasingly targeting industrial facilities from oil refineries to nuclear

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Speaker 1: power plants with sophisticated attacks aimed at capturing data and

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Speaker 1: remotely controlling the sites. How they will provide cybersecurity for

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Speaker 1: more than four hundred industrial sites worldwide, and Walmart is

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Speaker 1: linking up with Uber and Lift using their services to

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Speaker 1: enlist drivers in grocery deliveries. The world's biggest retailer is

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Speaker 1: aiming to match the convenience of services offered by Amazon

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Speaker 1: dot Com and other e commerce companies. That's this morning's

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Speaker 1: Bloomberg and j I T Stem Report, Michael Babo, and

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Speaker 1: thank you very much. That is almost a kind of

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Speaker 1: perfect set up for our next guest. Alan Krueger is

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Speaker 1: of course with Princeton University. He was the former chief

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Speaker 1: economist at the Labor Department in the Treasury Department and

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Speaker 1: a guy who has done a lot of work on

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Speaker 1: the labor market, including this new gig economy. Alan, what's

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Speaker 1: the latest on what you've found about the gig economy.

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Speaker 1: I mean, they're gonna start delivering groceries in uber and

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Speaker 1: lift cars and one more set of jobs that in

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Speaker 1: theory goes away. Well, actually that's probably a whole new

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Speaker 1: set of jobs, um, since it's not so easy to

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Speaker 1: get your groceries over now. Um. But I think it

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Speaker 1: makes a fair amount of sense, Mike, because the area

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Speaker 1: where we've seen online gig economy the most is transportation

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Speaker 1: and food delivery uber Less, Grubhub, and in some sense

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Speaker 1: it's is a merger of those two. If I want

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Speaker 1: to look at the jobs report any particular month and

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Speaker 1: see the impact where of the gig economy, where would

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Speaker 1: I look? You won't find it for a couple of reasons.

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Speaker 1: One in the establishment survey, the careld survey h only

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Speaker 1: employees are on the payroll are included, and the gig

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Speaker 1: workers are overwhelmingly independent contractors, and the household survey does

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Speaker 1: a terrible job picking it up. So I don't think

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Speaker 1: that these UH workers are being reflected in many of

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Speaker 1: our current statistics. But at the time it's still quite

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Speaker 1: small UH. Various estimates point that only had half a

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Speaker 1: percent of the U S workforce is involved in some

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Speaker 1: type of online gig work. Is This is something though,

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Speaker 1: that needs to be addressed by the Bureau of Labor Statistics,

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Speaker 1: growing enough that it just starts the numbers and policymakers

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Speaker 1: don't really know who's doing what. I think we need

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Speaker 1: to do a much better job job tracking it. At

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Speaker 1: a minimum, we need to do the contingent Worker survey

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Speaker 1: more frequently. But even the content Worker Survey, which hasn't

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Speaker 1: been done since the PUS of five by the BLS,

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Speaker 1: has some problems when it comes to the gig economy

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Speaker 1: since it focuses on the main job and a lot

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Speaker 1: of workers are doing this part time as a secondary.

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Speaker 1: And let me bring in Tom here with a question

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Speaker 1: he asked me on the air this morning and I

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Speaker 1: couldn't answer, So I'm gonna put it to you, because

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Speaker 1: you're the smarter guy here. When you look at the

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Speaker 1: the job creation on a month to month basis, over

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Speaker 1: the last two years, standard deviation and change has dwindled

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Speaker 1: away to almost nothing. It's about one standard deviation per

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Speaker 1: month um. Why why have we gotten so incredibly consistent

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Speaker 1: in job creation? You know, that's a really good question.

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Speaker 1: H I think it looked at g dps playing something similar.

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Speaker 1: Even though there are big fluctuations, they're actually less than

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Speaker 1: they had been quarter the quarter. And I think we're

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Speaker 1: seeing to some standard continuation of the moderation that existed

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Speaker 1: before the Great Recession. Uh. Why that's taking place is

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Speaker 1: not so clear, but I think this does look a

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Speaker 1: lot like we were seeing, uh for the Great Recession,

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Speaker 1: certainly in terms of quarterly GDP fluctuations. But does it

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Speaker 1: have implications at all for for policy or is it

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Speaker 1: just an interesting factoid? Well, I think it makes like

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Speaker 1: a little bit easier for policymakers because it makes it

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Speaker 1: a little bit easier to read the tea leaves if

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Speaker 1: the leaves are moving around lass. At the same time,

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Speaker 1: the revisions to the data are still quite large, so um,

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Speaker 1: I think we haven't narrowed the sampling variability that comes

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Speaker 1: along with measuring the US economy. But the US company

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Speaker 1: itself is being a little bit more stable, and I

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Speaker 1: think that's a positive thing for for the US. It

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Speaker 1: means that we're growing in a steady pace. Krueger is

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Speaker 1: with us. It is Jobs Day. Of course we have

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Speaker 1: remember Tom mad magazine used having its masstead the usual

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Speaker 1: gang of idiots. We have the usual gang of really

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Speaker 1: smart people joining us today coming up Jim Glassman and

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Speaker 1: then Bill gross and uh Scott Mathers. So you don't

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Speaker 1: want to turn your dial. Stay with us here on

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Speaker 1: Blueberg Surveillance Jobs Day. Bloomberg Surveillance brought to you by

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Speaker 1: Bank of America, Mary Lynch. Seeing what others have seen,

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Speaker 1: but uncovering what others may not. Global research that helps

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Speaker 1: you a harness disruption. Vote to top global research from

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Speaker 1: five years running. Mary Lynch, Pierce, Fenter, and Smith Incorporated,

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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot Com, the Radio plus Mobile Act and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Cameron Moscow.

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Speaker 1: US stock index futures are a little change this morning,

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Speaker 1: with the SNP five hundred and a seven month high

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Speaker 1: as investors away the government's monthly pay rolls report. We

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Speaker 1: checked the markets every fifteen minutes throughout the trading day

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Speaker 1: on Bloomberg SNP E mini futures up a point, DOWIE

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Speaker 1: Mini futures up eighteen nasdac EMITTI futures down one DAX

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Speaker 1: in Germany's up six tenths per set ten year treasury

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Speaker 1: up one thirty second to yield one point seven nine percent.

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Speaker 1: Yield on the two year point eight eight percent. Now,

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Speaker 1: I'm ex Scrude oil down three tenths per cent or

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Speaker 1: fourteen cents to forty nine O three a barrel comex

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Speaker 1: Scholl the a tenth of upper center a dollar forty

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Speaker 1: towl fourteen announced the euro a dollar eleven forty two,

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Speaker 1: the en one oh eight point eight six. Valian Pharmaceuticals

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Speaker 1: receiving a notice of default from some bondholders because of

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Speaker 1: the delay in filing its quarterly financial results with the regulators.

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Speaker 1: Buy out firm Riverstone Holdings will acquire Talent Energy, the

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Speaker 1: US independent power producer that went public a year ago

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Speaker 1: for one point eight billion dollars in cash, and Chancellor

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Speaker 1: of the Exchequer George Osborne roping into JP Morgan Chase

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Speaker 1: boss Jamie Diamond and to back up his warnings about

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Speaker 1: the cost of leaving the European Union. As Pole suggested,

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Speaker 1: the UK government is struggling to get its message across.

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Speaker 1: And as a Bloomberg Business Flash, Tom and Mike Karen enough,

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Speaker 1: thanks so much. A Bloomberg's Today, and that's this morning

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Speaker 1: bunch of by Interactive Brokers Traders University. Even experienced traders

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Speaker 1: ahead I b k RB dot com slash stay Ahead.

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Speaker 1: Alan Krueger with us. We're staying ahead with Alan Krueger

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Speaker 1: from Princeton University. Is a we speak of a labor economy. Alan,

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Speaker 1: You and I've talked many, many times before about two

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Speaker 1: America's Yes wealth and income inequality. But the basic idea

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Speaker 1: that we're looking at aggregant numbers at eight thirty this

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Speaker 1: morning that barely describe the separation of these two Americas,

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Speaker 1: is the gap widening. That the gap, first of all,

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Speaker 1: has been widening for the last thirt or five years.

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Speaker 1: And um, it's a little bit hard to tell month

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Speaker 1: to month, but I don't think there's much indication that

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Speaker 1: it starts to narrow within it within, it's starting to narrow.

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Speaker 1: And I mean, I'm hearing that very low wage people

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Speaker 1: are doing better, very high wage people are doing better.

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Speaker 1: What will we glean from the middle class in today's

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Speaker 1: odds report, Well, the average early earnings data will partly

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Speaker 1: reflect what's going on with the middle class. Uh. I think, well,

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Speaker 1: we're gonna see tom and I think this is a

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Speaker 1: positive development. Is as the labor market gets even better,

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Speaker 1: I think we will see stronger wage growth for those

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Speaker 1: at the bottom and moderate income earners. The only time

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Speaker 1: in the last thirty or five years where we had

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Speaker 1: rested from growing inequality was in the late but the

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Speaker 1: economy was strong. But I think these structural problems are

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Speaker 1: still with us. I mean, I think it will be

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Speaker 1: very nice to have a high pressure labor market, but

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Speaker 1: I think the forces were causing polarization are gonna still

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Speaker 1: be working and probably worse because the extreme and equality

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Speaker 1: that we've seen are making it harder and harder for

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Speaker 1: its ends family's to get their kids a good education,

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Speaker 1: for them to get summer jobs, and for them to

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Speaker 1: get internships, and having connections that helped higher income kids.

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Speaker 1: And Mark carm Bondel's UH this morning from UNI Credit

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Speaker 1: was just brilliant on the Atlanta Fed Wage Tracker, which

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Speaker 1: is a very optimistic series. He's very, very big on

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Speaker 1: that unique Atlanta Fed series, indicating a better wage growth

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Speaker 1: than some of the other series that we have. We

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Speaker 1: did a chart on surveillance teleision this morning showing that

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Speaker 1: the PC core is starting to rise in tandem with

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Speaker 1: average hourly earnings. Alan and wondering if if we are

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Speaker 1: indeed seeing the beginnings of some wage push inflation or

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Speaker 1: at least wage dragged along inflation. UH, what the FED

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Speaker 1: wants to see? What Janet Yellen has been talking about

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Speaker 1: for years. The way I look at the data, Mike,

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Speaker 1: I think that the job markets unfolding the way that

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Speaker 1: one would expect, especially in view of the fact that

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Speaker 1: we're not seeing much of a recovery and labor force participation,

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Speaker 1: so I think the job market is getting tighter. UH.

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Speaker 1: Nominal wage cloth so far this year has been over

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Speaker 1: three and I think that is pulling up the sky

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Speaker 1: and the PC price inflation measures. Is that will let

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Speaker 1: encourage the Fed to let the economy run hot or

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Speaker 1: can they admit that because they got to have the

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Speaker 1: inflation credibility. Well, that's a really good question in my view.

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Speaker 1: Even that inflation was below their target for so long,

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Speaker 1: I think it would be appropriate for them to allow

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Speaker 1: it to see about their target for an equal amount

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Speaker 1: of time by an equal amount. Uh. I haven't heard

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Speaker 1: them state that. I think if that's their strategy, which

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Speaker 1: a number of economists have suggested, that would be very

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Speaker 1: good for them to be clear about. UM. But I

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Speaker 1: think that they can afford to raise rates of the

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Speaker 1: slow pace still be accommodating for the economy. Even if

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Speaker 1: they raise rates in June by another funny five basis points,

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Speaker 1: real interest rates will still be negative. That will still

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Speaker 1: be supporting the expansion as long as the markets don't

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Speaker 1: overreact to it and kind of freak out over it. Uh.

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Speaker 1: Those are still historically very low interest rates. Given where

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Speaker 1: we are in the job money, how low are they

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Speaker 1: too low at this point? No, I think they. I

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Speaker 1: think they've been feeling their way through and it's it's

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Speaker 1: very hard to criticize now given where inflation is and

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Speaker 1: given some of the financial UH instability around the world.

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Speaker 1: I think they're navigating these uncertain times pretty well. What

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Speaker 1: what do you think the Fed should do? Um, they

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Speaker 1: have to make a decision based on today's admittedly flawed

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Speaker 1: data UH, and Jenny Ellen is gonna probably tell us

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Speaker 1: essentially what it is on Monday, at least the markets

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Speaker 1: are certainly hoping she does. But do they Should they

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Speaker 1: go ahead a and raise rates and be If so,

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Speaker 1: should they do it in June or wait till July.

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Speaker 1: First of all, I don't think there's much difference if

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Speaker 1: they raise and or Uly, and the big scheme of things,

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Speaker 1: what I would recommend they do is and I'm sure

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Speaker 1: they are keeping a very close watch on financial markets

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Speaker 1: and the Brexit boat, and it there's any risk of

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Speaker 1: deschedulization and markets and they run up to the Brexit boat,

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Speaker 1: it seems to me that there is very little lost

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Speaker 1: by waiting from June until July. On the other hand,

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Speaker 1: if markets look the way they do today, which is diffirmed,

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Speaker 1: then UH I would play means towards raising in June

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Speaker 1: conditional lot the data that are coming in. But as

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Speaker 1: I said, I think they're gonna go continue to raise

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Speaker 1: rates at a pretty slow pace. UM and I think

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Speaker 1: it's probably referring to them that we've avoided the deflation

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Speaker 1: craft that was a risk to go back five months ago,

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Speaker 1: six months ago, and it's probably reassuring that the labor

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Speaker 1: market is solving the way that you expect and past

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Speaker 1: trends based on I don't play a rate of five percent.

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Speaker 1: Professor Krueger Scott Sumner has been very, very visible and

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Speaker 1: touting the value of paying attention to nominal GDP. He

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Speaker 1: wrote a brilliant article, whether people agree or disagree that

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Speaker 1: it was thought provoking and brilliant in Foreign Affairs magazine

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Speaker 1: this month UH the FED in the Great Recession, how

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Speaker 1: better monetary policy can avert the next crisis? And he

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Speaker 1: growed it with great collegiality towards people who are you know,

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Speaker 1: in the cross hairs of the moment in economics. Should

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Speaker 1: we pay more attention to nominal g D P and

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Speaker 1: be more aggressive about targeting to that combination of real

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Speaker 1: growth and inflation. Well, I think it's an intriguing idea. UH.

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Speaker 1: I think there are a number of uh obstacles to

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Speaker 1: doing to doing it well. However, UM to one thing,

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Speaker 1: GDP is very poorly insured than the early reports. You know,

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Speaker 1: the initial reportive GDP growth in to four or two

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Speaker 1: thousand eight was something about minus three percent, and it's

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Speaker 1: sort it was like minus eight point nine. So there

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Speaker 1: was a major major regions revision there. The labor data

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Speaker 1: more accurate than their first reports, even though those are annointed. Um. Secondly,

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Speaker 1: I think you get a pretty good fix on an

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Speaker 1: old g DT normal GDP growth from what's going on

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Speaker 1: the labor market, from wage growth, price growth, and productivity growth.

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Speaker 1: So UM, I think it's important that the FED cast

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Speaker 1: a broad net, but I wouldn't change their mandate. I

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Speaker 1: think the FED dual mandate has actually served the US

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Speaker 1: quite well, and I think one of the reasons why

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Speaker 1: we're doing better than Europe's because of the dual mandate

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Speaker 1: that the FED has are we likely Howard Ward was

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Speaker 1: just I suggesting that the biggest black swan out there

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Speaker 1: for him as the potential of recession. So are we

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Speaker 1: going to do uh, continue to do well as as

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Speaker 1: you point out, or are you worried at all? Now?

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Speaker 1: I've been saying the same thing as you know five years,

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Speaker 1: that the economy is continuing to heal. I don't think

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Speaker 1: there's a natural dynamic in the US economy. That's just

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Speaker 1: because this recovery has now gone on for seven years,

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Speaker 1: that it's about to turn into a recession. As you know, Mike,

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Speaker 1: early on this year, when people were raising recession scares,

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Speaker 1: I said, I see a continued extension of around the

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Speaker 1: two percent rate, and I don't see anything that fundamentally changed.

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Speaker 1: I think that the main threat is the presidential election

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Speaker 1: coming up, where we have a candidate who breaks all

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Speaker 1: boundaries when it comes to economic policies. He says he

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Speaker 1: would renegotiate the debt, So I think that's a complete

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Speaker 1: wild content market started to take some of Donald Trump's

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Speaker 1: comment seriously. I think we've see a lot more volatility.

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Speaker 1: Apart from that, I don't thank you so much, Kruger.

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Speaker 1: Sorry to cut you off. We're gonna run here and

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Speaker 1: move on on our job. Stay coverage. He's the former

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Speaker 1: chairman of the President's Council of Economic Advisors. As we

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Speaker 1: moved to Jim Glassman, m Bill Gross. Michael thought that

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Speaker 1: was fascinating what he said about the obstacles of looking

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Speaker 1: at nominal Yeah, the people proposed solutions and you know

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Speaker 1: things to think through. Its job, say Michael McKee and

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Speaker 1: Tom Keane beneath the headline data in thirty two minutes,

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Speaker 1: Bloomberg Surveillance