1 00:00:03,279 --> 00:00:06,680 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:06,720 --> 00:00:09,800 Speaker 1: dot com, the Radio plus mobile app, and on your radio. 3 00:00:10,080 --> 00:00:14,840 Speaker 1: This is a Bloomberg Business Flag Bloomberg World Handquarters. I'm Charlie. 4 00:00:14,840 --> 00:00:17,880 Speaker 1: How Ut Stocks edging higher as investors way the jobs 5 00:00:17,960 --> 00:00:20,479 Speaker 1: data and rate bets. This update is brought to you 6 00:00:20,520 --> 00:00:24,759 Speaker 1: by e t F Exchange sixteen b n y Melon's 7 00:00:24,800 --> 00:00:28,720 Speaker 1: Annual et F Symposium September nine to the twenty one 8 00:00:29,120 --> 00:00:33,839 Speaker 1: in Data Point, California. This essential conferences complementary for r 9 00:00:33,920 --> 00:00:37,239 Speaker 1: I A S, but space is limited. Register now at 10 00:00:37,280 --> 00:00:40,880 Speaker 1: b n y melon dot com. Slash E t F 11 00:00:41,560 --> 00:00:44,559 Speaker 1: Stocks higher, SMP five hundred index up seven on this 12 00:00:44,760 --> 00:00:48,120 Speaker 1: Job's Friday to a game there of three tents of 13 00:00:48,200 --> 00:00:51,519 Speaker 1: one percent. Nez Stack also climbing by three tents of 14 00:00:51,600 --> 00:00:54,080 Speaker 1: one percent. The Dow also up by that amount. The 15 00:00:54,400 --> 00:00:57,120 Speaker 1: SMP five hundred index, as we mentioned, up seven, nes 16 00:00:57,160 --> 00:01:00,560 Speaker 1: Stack up fifteen to fifty two forty two. Now Industrial 17 00:01:00,640 --> 00:01:03,920 Speaker 1: is up fifty to eighteen thousand, four hundred sixty nine. 18 00:01:03,920 --> 00:01:07,400 Speaker 1: The ten year down nine thirty seconds, yield one point six. 19 00:01:08,319 --> 00:01:10,640 Speaker 1: Gold up ten eight, the ounce high by eight tens 20 00:01:10,640 --> 00:01:15,320 Speaker 1: of one percent. West Texas Intermediate cruet four barrel right now, 21 00:01:15,600 --> 00:01:19,120 Speaker 1: up two point seven percent. I'm Charlie Pellett and that's 22 00:01:19,360 --> 00:01:23,920 Speaker 1: a Bloomberg Business flash. You're listening to Taking Stock with 23 00:01:24,000 --> 00:01:28,240 Speaker 1: Kathleen Hayes and Pim Fox on Bloomberg Radio. I'm Kathleen Hayes, 24 00:01:28,319 --> 00:01:33,360 Speaker 1: broadcasting live at the US Tennis Open here in Flushing Meadows, 25 00:01:33,400 --> 00:01:37,080 Speaker 1: Corona Park, Queens. My co host Pim Fox is on vacation. 26 00:01:37,200 --> 00:01:39,639 Speaker 1: He'll be back in the office and on the show 27 00:01:39,720 --> 00:01:43,039 Speaker 1: on Tuesday. Phillion for him today. Well, actually, he's a 28 00:01:43,160 --> 00:01:45,480 Speaker 1: very special guest here at the Open every year on 29 00:01:45,760 --> 00:01:48,880 Speaker 1: Bloomberg Radio. Alan Krueger. He's the been and Professor of 30 00:01:48,880 --> 00:01:52,560 Speaker 1: Economics and Public Affairs at Princeton University's former head of 31 00:01:52,560 --> 00:01:56,440 Speaker 1: the Council of Economic Advisers, and he's also an avid 32 00:01:56,600 --> 00:01:59,000 Speaker 1: tennis fan. Alan is always great to have you here. 33 00:01:59,400 --> 00:02:01,480 Speaker 1: You have the will this job? Tell me about it 34 00:02:02,760 --> 00:02:05,400 Speaker 1: every year every year, my friend and watch a ton 35 00:02:05,600 --> 00:02:08,000 Speaker 1: of tennis. You know. There we're gonna talk about jobs 36 00:02:08,080 --> 00:02:10,000 Speaker 1: and there are you know jobs created here at the 37 00:02:10,080 --> 00:02:12,079 Speaker 1: Open for two weeks, right, because they do do a 38 00:02:12,120 --> 00:02:14,160 Speaker 1: lot of hiring and to put on this event that 39 00:02:14,320 --> 00:02:17,360 Speaker 1: is just so complicated has so many moving parts, but 40 00:02:17,520 --> 00:02:19,519 Speaker 1: you know, come in and come out. It's a great 41 00:02:19,560 --> 00:02:22,560 Speaker 1: sports event in some respects. I guess the US economy 42 00:02:22,639 --> 00:02:24,960 Speaker 1: is going in that direction and that we have more 43 00:02:24,960 --> 00:02:27,239 Speaker 1: and more workers who are working as contract workers and 44 00:02:27,320 --> 00:02:31,919 Speaker 1: freelancers doing short term jobs. Now, Ellen, that's a good 45 00:02:32,000 --> 00:02:34,360 Speaker 1: question to look at, because we got the jobs report 46 00:02:34,360 --> 00:02:37,519 Speaker 1: today a hundred fifty one. Um, you know, Lord Amester 47 00:02:37,560 --> 00:02:39,840 Speaker 1: of President Cleveland, Cleveland Fed went out of our way, 48 00:02:39,840 --> 00:02:41,600 Speaker 1: I think to point out, you only need seventy five 49 00:02:41,960 --> 00:02:44,720 Speaker 1: to a hundred fifty jobs to keep the unemployment rate steady, 50 00:02:44,760 --> 00:02:48,360 Speaker 1: if not moving lower. So so we get that. But this, 51 00:02:48,360 --> 00:02:53,760 Speaker 1: this move from part time to uh, full time, is 52 00:02:53,800 --> 00:02:55,960 Speaker 1: what a lot of people still aspire to, don't you think? 53 00:02:56,080 --> 00:02:59,320 Speaker 1: Or or are we really in such a gig economy now? Well, 54 00:02:59,360 --> 00:03:03,800 Speaker 1: over the last decade we've had very fast growth in 55 00:03:03,800 --> 00:03:08,520 Speaker 1: independent contract work, freelancers, workers being contracted out. And for 56 00:03:08,560 --> 00:03:11,640 Speaker 1: some workers that's a better situation they have more control 57 00:03:11,639 --> 00:03:14,359 Speaker 1: over their hours, more flexibility for companies that could be 58 00:03:14,680 --> 00:03:17,880 Speaker 1: more efficient or productive. Uh. Yet for others they prefer 59 00:03:17,960 --> 00:03:19,960 Speaker 1: to have its traditional job. So I think it's a 60 00:03:20,040 --> 00:03:24,680 Speaker 1: very heterogeneous sector. Um. We're also seeing over the last 61 00:03:24,680 --> 00:03:28,760 Speaker 1: few years, very rapid growth in on demand work uber 62 00:03:28,800 --> 00:03:32,000 Speaker 1: type jobs, task grabbit. They still only represent about half 63 00:03:32,000 --> 00:03:34,160 Speaker 1: a percent of the workforce. We don't do a very 64 00:03:34,160 --> 00:03:36,720 Speaker 1: good job capturing them in the statistics that came out 65 00:03:36,760 --> 00:03:40,120 Speaker 1: this morning. Uh. Fortunately they're still small, so it's not 66 00:03:40,160 --> 00:03:43,040 Speaker 1: really distorting our picture of how the economy is doing. 67 00:03:43,360 --> 00:03:46,320 Speaker 1: But over time it's going to be a much bigger concern. Now, 68 00:03:46,480 --> 00:03:49,680 Speaker 1: what about the momentum in the economy. Yesterday we've got 69 00:03:49,680 --> 00:03:54,040 Speaker 1: the Institute a Supply Management Manufacturing reported fell back below fifty. Uh. 70 00:03:54,120 --> 00:03:57,240 Speaker 1: The consumer has been just about the only consistent driver 71 00:03:57,320 --> 00:03:59,800 Speaker 1: of growth this year GDP year over year on a 72 00:04:00,000 --> 00:04:02,360 Speaker 1: are just the last three quarters of something around one percent. 73 00:04:02,880 --> 00:04:05,280 Speaker 1: Maybe it's going to bounce up to three percent when 74 00:04:05,320 --> 00:04:07,040 Speaker 1: you look at the jobs numbers, when you look at 75 00:04:07,040 --> 00:04:08,600 Speaker 1: all these different factoris how does it look to you? 76 00:04:09,160 --> 00:04:11,160 Speaker 1: Do look okay to me? I think we're going to 77 00:04:11,240 --> 00:04:14,760 Speaker 1: grow about two percent this year. Having the consumer power 78 00:04:14,760 --> 00:04:17,880 Speaker 1: of the recovery, I think that's actually very helpful. Consumers 79 00:04:18,080 --> 00:04:22,279 Speaker 1: account for seventy of the US economy, so seeing households 80 00:04:22,320 --> 00:04:27,640 Speaker 1: in a stronger position with higher income with lower gasoline prices, 81 00:04:27,720 --> 00:04:30,280 Speaker 1: I think that should support the economy. I think there's 82 00:04:30,320 --> 00:04:33,320 Speaker 1: still room for housing to expand. So this recovery is 83 00:04:33,320 --> 00:04:35,080 Speaker 1: not going to be the strongest one on record, but 84 00:04:35,120 --> 00:04:36,880 Speaker 1: it could well be the longest. And I think that's 85 00:04:36,880 --> 00:04:39,440 Speaker 1: what we should be rooting for. Okay, and I guess, 86 00:04:39,480 --> 00:04:41,479 Speaker 1: but the question is the longest on record? Do you 87 00:04:41,520 --> 00:04:43,520 Speaker 1: need to start raising interestates? You and I were both 88 00:04:44,360 --> 00:04:47,240 Speaker 1: attendees at the Jackson Hole the Kansas City Fits im 89 00:04:47,240 --> 00:04:50,560 Speaker 1: Poseum in Jackson Hole, Wyoming. In fact, just a week 90 00:04:50,560 --> 00:04:53,080 Speaker 1: ago we were sitting listening to some very very big papers. 91 00:04:53,120 --> 00:04:54,960 Speaker 1: We were listening to Janet Yellen say the case for 92 00:04:55,080 --> 00:04:58,880 Speaker 1: great high has strengthened, which seems very broad. That doesn't 93 00:04:59,279 --> 00:05:02,520 Speaker 1: incline you to any direction. In two separate interviews, now 94 00:05:02,680 --> 00:05:04,960 Speaker 1: what verst in Jackson Hall and then on Bloomberg Television 95 00:05:04,960 --> 00:05:07,760 Speaker 1: this week, stand Fish of the vice chair seems to 96 00:05:07,760 --> 00:05:09,840 Speaker 1: really be trying to push in the direction of hey, 97 00:05:09,880 --> 00:05:12,280 Speaker 1: at least one interest rate increase this year. You get 98 00:05:12,279 --> 00:05:16,120 Speaker 1: a sense that perhaps that the vice chair is trying 99 00:05:16,120 --> 00:05:18,479 Speaker 1: to lead the chair towards the rate hike if he 100 00:05:18,520 --> 00:05:22,799 Speaker 1: thinks it's so necessary. It is a committee, and members 101 00:05:22,839 --> 00:05:25,440 Speaker 1: of the committee can have different views. My own view 102 00:05:25,839 --> 00:05:28,960 Speaker 1: is that the Fed should move slowly to raise rates. 103 00:05:29,240 --> 00:05:34,000 Speaker 1: I think one rate hike later this year would be appropriate. Uh, 104 00:05:34,200 --> 00:05:36,159 Speaker 1: you have to bear mind, even if rates can hop 105 00:05:36,200 --> 00:05:38,279 Speaker 1: another twenty five basis points, we're still going to have 106 00:05:38,360 --> 00:05:42,279 Speaker 1: very accommodative monetary policy. I think what the FED wants 107 00:05:42,320 --> 00:05:44,760 Speaker 1: to do and should do is avoid a situation where 108 00:05:44,760 --> 00:05:47,720 Speaker 1: it has to ratchet up rates very quickly. So if 109 00:05:47,720 --> 00:05:50,800 Speaker 1: they move up one rate hike this year, two next year, 110 00:05:50,880 --> 00:05:52,960 Speaker 1: I think that's moving out a pace set slow enough 111 00:05:53,040 --> 00:05:55,919 Speaker 1: that they're going. Uh. If the recovery continues as I 112 00:05:56,120 --> 00:05:58,760 Speaker 1: as I expect it would, I think there'll be in 113 00:05:58,760 --> 00:06:01,039 Speaker 1: a better position so that they don't have to yank 114 00:06:01,120 --> 00:06:02,840 Speaker 1: up rates very quickly and pull the rug out of 115 00:06:02,880 --> 00:06:06,240 Speaker 1: the recovery. I'm speaking with Alan Krueger, Professor of Economics 116 00:06:06,400 --> 00:06:08,880 Speaker 1: and Public Affairs at Princeton University, former head of the 117 00:06:08,880 --> 00:06:12,320 Speaker 1: Council of Economic Advisors in the Obama administration, and we're 118 00:06:12,480 --> 00:06:15,919 Speaker 1: live at the US Open in Queens and New York. 119 00:06:16,240 --> 00:06:19,120 Speaker 1: Alan productivity. We also got numbers this week which showed 120 00:06:19,120 --> 00:06:22,880 Speaker 1: the productivity is just lagging and sagging every which way 121 00:06:22,920 --> 00:06:25,200 Speaker 1: it can businesses. That's a big question. Why are they 122 00:06:25,240 --> 00:06:28,400 Speaker 1: so uncertain? Why won't they commit to longer term projects. 123 00:06:28,400 --> 00:06:32,000 Speaker 1: Some people blame very low interest rates as as part 124 00:06:32,000 --> 00:06:34,800 Speaker 1: of that borrowing costs are low. Let people look out 125 00:06:34,839 --> 00:06:37,680 Speaker 1: over the horizon and they're uncertain because they figured this 126 00:06:37,760 --> 00:06:41,320 Speaker 1: situation has to change. What's hurting our productivity so much? 127 00:06:41,680 --> 00:06:44,600 Speaker 1: That's an excellent question, and I don't think there's uh 128 00:06:45,240 --> 00:06:47,840 Speaker 1: compelling answer. To be honest, I think there is a 129 00:06:47,880 --> 00:06:50,039 Speaker 1: lot of uncertainty out there. I think some of it's 130 00:06:50,040 --> 00:06:52,160 Speaker 1: coming from the presidential election. I mean, we have a 131 00:06:52,240 --> 00:06:55,120 Speaker 1: candidate who said he'd like to renegotiate the US debt, 132 00:06:55,240 --> 00:06:58,839 Speaker 1: So it's possible Donald Trump wins, we're gonna have quite 133 00:06:58,920 --> 00:07:01,840 Speaker 1: dramatic change in economic policy, in my view, not for 134 00:07:01,880 --> 00:07:04,440 Speaker 1: the better. Also, there's a lot of uncertainty in the 135 00:07:04,480 --> 00:07:08,839 Speaker 1: world economy. I think that's probably more important than Federough 136 00:07:08,880 --> 00:07:11,640 Speaker 1: Reserve policy. And in fact, the low interest rates should 137 00:07:11,680 --> 00:07:15,360 Speaker 1: facilitate investment. So this you just said on one of 138 00:07:15,360 --> 00:07:18,480 Speaker 1: the big themes from everybody who speaks from the Federal 139 00:07:18,480 --> 00:07:20,960 Speaker 1: Reserve lately, and they seems to be people are trying 140 00:07:21,000 --> 00:07:23,480 Speaker 1: to get the message across. If you're a central banker 141 00:07:23,640 --> 00:07:27,720 Speaker 1: in almost any country that monetary policy only has so 142 00:07:27,800 --> 00:07:30,240 Speaker 1: much power at this point when you're when you've been 143 00:07:30,280 --> 00:07:33,320 Speaker 1: at zero rates or lower for so long, and now 144 00:07:33,800 --> 00:07:37,720 Speaker 1: governments have to step up. Legislators have to agree on 145 00:07:37,880 --> 00:07:39,920 Speaker 1: steps because if we're going to move ahead, we need 146 00:07:40,120 --> 00:07:42,200 Speaker 1: we need some sort of fiscal push, some kind of 147 00:07:42,200 --> 00:07:44,160 Speaker 1: government spending. Do you agree with that? I think it's 148 00:07:44,200 --> 00:07:46,680 Speaker 1: been that way for a while. I think the US 149 00:07:46,760 --> 00:07:50,200 Speaker 1: Congress should have done much more a few years ago 150 00:07:50,240 --> 00:07:53,160 Speaker 1: in terms of investing more infrastructure, helping a long term 151 00:07:53,240 --> 00:07:56,200 Speaker 1: unemployee get back on their feet. Uh, there's only so 152 00:07:56,280 --> 00:07:59,640 Speaker 1: much that monetary policy can do. I think making investments 153 00:07:59,640 --> 00:08:02,200 Speaker 1: in recent arch and development and an infrastructure who will 154 00:08:02,280 --> 00:08:05,680 Speaker 1: raise our competitiveness and productivity in the future, especially given 155 00:08:05,720 --> 00:08:08,120 Speaker 1: the low rates today, it makes a lot of sense. Well, Alan, 156 00:08:08,160 --> 00:08:13,240 Speaker 1: you've done so much research in depth, from your your research, 157 00:08:13,360 --> 00:08:16,400 Speaker 1: from all the people you've worked with. When you think 158 00:08:16,400 --> 00:08:19,280 Speaker 1: of the said invest in infrastructure, can you give us 159 00:08:19,280 --> 00:08:22,400 Speaker 1: something specific, an idea maybe people have not looked out closely, 160 00:08:22,480 --> 00:08:24,680 Speaker 1: or something that has been tried that you see as 161 00:08:24,720 --> 00:08:29,600 Speaker 1: an example of something that can be productivity boosting, job boosting, well, 162 00:08:29,680 --> 00:08:33,840 Speaker 1: just maintaining our existing infrastructure. Uh, Repairing our roads and 163 00:08:33,840 --> 00:08:37,160 Speaker 1: bridges and highways has a very high return. UH. So, 164 00:08:37,559 --> 00:08:39,719 Speaker 1: I know people are worried about shovel already and so on, 165 00:08:40,360 --> 00:08:42,839 Speaker 1: but we have all of this infrastructure out there that's 166 00:08:42,840 --> 00:08:45,600 Speaker 1: in disrepair. Think about how many potholes you've run over 167 00:08:46,080 --> 00:08:48,920 Speaker 1: the pothole tax. I know I've paid quite a bit 168 00:08:48,960 --> 00:08:51,280 Speaker 1: this year to to have my car repaired because of 169 00:08:51,640 --> 00:08:55,040 Speaker 1: uh roads that are dysfunctional. Um So that's an easy 170 00:08:55,080 --> 00:08:57,840 Speaker 1: thing to do and also would put a lot of 171 00:08:57,880 --> 00:09:00,679 Speaker 1: construction workers back to work. There's other things which are 172 00:09:00,720 --> 00:09:03,000 Speaker 1: also pretty easy. We had during the Recovery Acts something 173 00:09:03,080 --> 00:09:07,000 Speaker 1: called Build America bonds. Build America bonds were taxable municipal bonds. 174 00:09:07,320 --> 00:09:11,360 Speaker 1: They're much fairer, much more democratic form of investment because 175 00:09:11,520 --> 00:09:14,920 Speaker 1: moderate income people, lower income people benefit from having Build 176 00:09:14,920 --> 00:09:17,920 Speaker 1: America bonds and their portfolios. So we could bring back 177 00:09:17,920 --> 00:09:20,760 Speaker 1: Build America bonds. Okay, So we are at the US 178 00:09:20,840 --> 00:09:23,920 Speaker 1: Open and you come out here every year. So um 179 00:09:24,040 --> 00:09:27,360 Speaker 1: jack sock an American having a pretty good match with 180 00:09:27,400 --> 00:09:30,480 Speaker 1: the Silk today. Who are you rooting for? Who are 181 00:09:30,480 --> 00:09:32,880 Speaker 1: you betting on the on the men's side, Well, it's 182 00:09:32,880 --> 00:09:35,920 Speaker 1: hard not to bet against marian and Djokovic. But it 183 00:09:36,040 --> 00:09:38,000 Speaker 1: is nice to see Americans doing well. I was watching 184 00:09:38,120 --> 00:09:40,560 Speaker 1: Ryan Harrison and I actually left during a tie break 185 00:09:40,559 --> 00:09:42,760 Speaker 1: to come here to join you. So I'm glad you 186 00:09:42,840 --> 00:09:45,360 Speaker 1: got the tennis, um, and it is nice to see 187 00:09:45,360 --> 00:09:49,360 Speaker 1: so many young Americans doing well. How about on the 188 00:09:49,360 --> 00:09:52,400 Speaker 1: women's side. On the women's side, of course, it's hard 189 00:09:52,440 --> 00:09:57,840 Speaker 1: to bet against against Serena UM. I watched matched earlier today, 190 00:09:58,080 --> 00:10:01,679 Speaker 1: So that's Ova who had up at mugu Rosa, and 191 00:10:01,920 --> 00:10:04,720 Speaker 1: it was very exciting. She lost the first three games 192 00:10:04,720 --> 00:10:07,840 Speaker 1: and then came storming back. Uh. So be interesting for 193 00:10:07,840 --> 00:10:10,360 Speaker 1: me to see how far she can go. Uh. In 194 00:10:10,440 --> 00:10:14,400 Speaker 1: terms of tennis broadly, Uh, what could you tell people 195 00:10:14,400 --> 00:10:17,320 Speaker 1: who have never been tennis fans that? What? What draws 196 00:10:17,360 --> 00:10:20,719 Speaker 1: you to it? Why are you so addicted to tennis watching? Well, 197 00:10:20,760 --> 00:10:22,840 Speaker 1: this is a great event. You see the best athletes 198 00:10:22,880 --> 00:10:25,040 Speaker 1: in the world playing tennis. You can watch them up close. 199 00:10:25,160 --> 00:10:27,839 Speaker 1: During the first week in the outer courts, I sat 200 00:10:28,000 --> 00:10:31,079 Speaker 1: right behind Sevetzolva's coach and two friends who went to 201 00:10:31,120 --> 00:10:34,439 Speaker 1: high school with her. So Uh, it's an easy event 202 00:10:34,480 --> 00:10:37,400 Speaker 1: to go to. There are plenty of seats, especially there 203 00:10:37,280 --> 00:10:41,400 Speaker 1: are the early rounds and uh, just a great spirit 204 00:10:41,440 --> 00:10:43,600 Speaker 1: out here. I agree, and it helps that people like 205 00:10:43,640 --> 00:10:46,240 Speaker 1: you join us every year. I'm happy to come back. 206 00:10:46,400 --> 00:10:49,160 Speaker 1: I know Alan Kruger faces and he's not working for 207 00:10:49,200 --> 00:10:51,400 Speaker 1: the U. S Tennis Association. By the way, those are 208 00:10:51,920 --> 00:10:54,640 Speaker 1: sincere comments and I couldn't agree with you more. Alan Krueger, 209 00:10:54,960 --> 00:10:57,959 Speaker 1: then then professor of Economics and Public Affairs at Princeton University, 210 00:10:58,040 --> 00:11:01,880 Speaker 1: is also former head of the Council of Economic Advisors. Again, Alan, 211 00:11:01,880 --> 00:11:05,080 Speaker 1: thanks so much for joining us. Coming up, we're gonna 212 00:11:05,080 --> 00:11:07,720 Speaker 1: be taking a look at Dave Wilson, our stocks editor 213 00:11:07,960 --> 00:11:11,560 Speaker 1: Chart of the day. I'm Kathleen Hayes, and this is 214 00:11:11,600 --> 00:11:12,160 Speaker 1: Bloomberg