WEBVTT - Troubling Signs Lurk Within Shocking Job Gains: LaSalle CEO 0:00:02.680 --> 0:00:05.360 Welcome to the Bloomberg Penl podcast. I'm Paul swing you, 0:00:05.400 --> 0:00:07.720 along with my co host Lisa Brahma Ways, each day 0:00:07.720 --> 0:00:10.280 we bring you the most noteworthy and useful interviews for 0:00:10.320 --> 0:00:12.560 you and your money. Whether at the grocery store or 0:00:12.600 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.560 --> 0:00:18.000 Podcasts or wherever you listen to podcasts, as well as 0:00:18.000 --> 0:00:22.000 at Bloomberg dot com. Fascinating numbers that came out today 0:00:22.120 --> 0:00:26.800 absolutely blew away any and all projections via US economists 0:00:26.920 --> 0:00:30.200 and frankly raised a lot of questions given the anecdotal 0:00:30.280 --> 0:00:32.440 data that we keep getting, Tom, what did you make 0:00:32.720 --> 0:00:35.720 of this information? I think a lot of it's the 0:00:35.720 --> 0:00:39.279 PPP money. I think, if if I read the data correctly, 0:00:39.440 --> 0:00:41.920 the report that a lot of the people coming back, 0:00:42.000 --> 0:00:44.640 or a decent percentage were furlog were the furloged folks, 0:00:45.000 --> 0:00:48.080 which means, and I listened, beggars can't be choosers. We're 0:00:48.120 --> 0:00:51.520 adding people to work who weren't working. But these aren't 0:00:51.520 --> 0:00:54.240 newly created jobs. They're old jobs bringing people back, which 0:00:54.240 --> 0:00:56.200 is a positive sign, and to look at it any 0:00:56.200 --> 0:00:58.840 other way as crazy, and we should be very optimistic 0:00:58.840 --> 0:01:02.560 from this number so interesting, Tom, it's um I think 0:01:02.560 --> 0:01:05.000 no matter either. Are some nuances in this number time, 0:01:05.040 --> 0:01:08.440 but it's just signal to you kind of at the 0:01:08.560 --> 0:01:13.200 very least setting a bottom for the employment picture. I'm 0:01:13.200 --> 0:01:16.039 not necessarily sure about that. I think for the short term, 0:01:16.080 --> 0:01:19.400 meaning sixty days, it's probably abottom. But what we've got 0:01:19.440 --> 0:01:21.440 to see is what happens in the end of the 0:01:21.440 --> 0:01:24.880 third quarter, in early fourth quarter, if the airline travel 0:01:24.959 --> 0:01:27.959 doesn't pick up, in the airlines lay people off, and 0:01:28.200 --> 0:01:31.720 hotels UH don't continue to grow. If if we do 0:01:31.800 --> 0:01:35.119 get another spike from COVID, and what happens in that 0:01:35.200 --> 0:01:39.720 regard um to working in the in the restaurant service space, 0:01:40.040 --> 0:01:43.520 I think we could have another big, big hit, Tom. 0:01:43.560 --> 0:01:45.760 I think it's fascinating to get your view. I know 0:01:45.840 --> 0:01:48.600 you've been more optimistic than a lot of economists have 0:01:49.120 --> 0:01:51.880 over the past months and years when we've had you 0:01:51.960 --> 0:01:55.000 on and always added really good perspective. Right now, you 0:01:55.120 --> 0:01:58.200 sound less optimistic than a lot of people are when 0:01:58.200 --> 0:02:01.000 they take a look at these numbers. What are you 0:02:01.080 --> 0:02:06.120 seeing on the ground that's making you less optimistic? So 0:02:06.200 --> 0:02:08.480 what's happened in a in a in a true recession 0:02:08.520 --> 0:02:12.480 which I believe we're in is companies stop hiring in volume. 0:02:12.520 --> 0:02:14.760 They have key hires they need to make, and they 0:02:14.800 --> 0:02:17.000 may get a new project and they bring people on, 0:02:17.320 --> 0:02:19.760 but there isn't growth for few there is. They are 0:02:19.880 --> 0:02:23.520 isn't hiring for future growth because they believe they're gonna 0:02:23.560 --> 0:02:26.400 need it. And that belief is what's been fueling this 0:02:26.480 --> 0:02:29.640 bull market for ten years, is that companies keep thinking 0:02:29.639 --> 0:02:32.480 it's going to get stronger and better, and it has been. 0:02:32.840 --> 0:02:35.960 And now what we've seen, uh is companies are not 0:02:36.080 --> 0:02:39.880 hiring in volume. We're not seeing sales hiring, which is 0:02:39.919 --> 0:02:43.280 a really big indicator. When companies are building up their salesforce, 0:02:43.600 --> 0:02:46.800 it means they're anticipating that they'll be more revenue growth, 0:02:46.800 --> 0:02:49.040 and that leads to other areas of the business not 0:02:49.160 --> 0:02:51.560 seeing that in volume. A few hires here and there, 0:02:51.840 --> 0:02:55.120 but again not in volume, and that gives me some concern. 0:02:55.560 --> 0:02:58.400 And then temporary staffing, which we have a large business 0:02:58.400 --> 0:03:01.840 practice in that area, is usually a leading indicator, and 0:03:01.880 --> 0:03:04.760 it's not It's not as terrible as the search business, 0:03:04.919 --> 0:03:07.320 but it definitely isn't starting to grow at the rapid 0:03:07.400 --> 0:03:10.040 volume that we've seen over the past ten and really 0:03:10.080 --> 0:03:13.320 past twenty years, so I'm a little bit apprehensive. And 0:03:13.320 --> 0:03:15.959 then the liquidity issue is what's going to happen after 0:03:16.000 --> 0:03:19.520 the p PP money rolls off and companies don't have 0:03:19.600 --> 0:03:22.839 to keep their employees anymore. And if revenues aren't there, 0:03:23.000 --> 0:03:26.480 whether it's due to COVID, whether it's due to social unrest, 0:03:27.040 --> 0:03:30.480 is are we going to have a situation where companies 0:03:30.520 --> 0:03:35.480 have there's more bankruptcies? Tom, This is an incredibly important conversation. Frankly, 0:03:35.600 --> 0:03:37.920 what you are telling me finally is giving me some light. 0:03:38.280 --> 0:03:40.440 I've had so many questions this morning. This is one 0:03:40.440 --> 0:03:42.800 of the most confusing data dumps I have ever seen 0:03:42.840 --> 0:03:46.320 in my life. And even with the p PP taken 0:03:46.440 --> 0:03:49.440 into account, as Matt Bosler of Bloomberg News was just 0:03:49.480 --> 0:03:51.960 talking about, that still would only bring not only I 0:03:51.960 --> 0:03:54.040 mean it's still catastrophic, but it would bring the unemployment 0:03:54.120 --> 0:03:57.960 rate up to about six still well below consensus. So 0:03:58.280 --> 0:04:01.280 is it that the market is better than people expected, 0:04:01.280 --> 0:04:05.160 but not as necessarily good as the headline numbers here imply, 0:04:05.560 --> 0:04:08.600 or is it closer to what people had expected. We 0:04:08.720 --> 0:04:12.040 just aren't seeing that level of actual layoffs just yet. 0:04:13.280 --> 0:04:15.640 Well we've seen is is that the service level can 0:04:15.680 --> 0:04:18.599 only get hit so hard. It's that's the difference between 0:04:18.680 --> 0:04:23.040 restaurants and hospitality versus white collar. Is if the restaurants 0:04:23.080 --> 0:04:26.360 lay everybody off, which is what essentially has happened, there 0:04:26.480 --> 0:04:28.919 is no more cutting. If you have a company, a 0:04:28.960 --> 0:04:32.680 Fortune five company that's done layoffs like a bowling or 0:04:32.680 --> 0:04:35.440 who are an airline or whomever else, they're not laying 0:04:35.440 --> 0:04:38.400 off the entire company. And that's what the restaurants have 0:04:38.520 --> 0:04:41.520 done for the most part. And so what we see 0:04:41.560 --> 0:04:44.520 now is there there really isn't that much more room 0:04:44.560 --> 0:04:47.240 to go on the service side on the hospitality side. 0:04:47.520 --> 0:04:50.799 So now it is does part two of the real 0:04:50.880 --> 0:04:53.719 white collar layoffs we've had them, but we haven't had 0:04:53.920 --> 0:04:56.680 If you eliminated all the service jobs and you just 0:04:56.800 --> 0:04:59.679 had the white collar layoffs, it wouldn't be anywhere nearly 0:04:59.720 --> 0:05:01.960 as at a stropic. We'd probably be sitting at seven 0:05:02.000 --> 0:05:05.960 and a half percent unemployment and it wouldn't be that bad. So, Tom, 0:05:05.960 --> 0:05:08.040 do you expect that? Is that something that you kind 0:05:08.040 --> 0:05:10.800 of survey some of the companies that you're in touch with, 0:05:10.920 --> 0:05:14.479 you expect kind of more white collar office level type 0:05:14.480 --> 0:05:18.479 of layoffs across the economy coming up. Well, that'll be 0:05:18.480 --> 0:05:20.640 the really interesting thing. And we have to see. I 0:05:20.640 --> 0:05:23.040 mean to me, that's the difference between the V curve 0:05:23.160 --> 0:05:26.239 versus the you or the L curve of of does 0:05:26.400 --> 0:05:30.320 things do things bounce back? Now? The one opportunistic or 0:05:30.520 --> 0:05:34.520 or optimistic both probably is the strength of the stock 0:05:34.560 --> 0:05:38.080 market is seeing that the market is saying we're looking 0:05:38.120 --> 0:05:40.600 at companies from the long term. We're not looking at 0:05:40.600 --> 0:05:42.760 a month over month or even in the quarter that 0:05:42.800 --> 0:05:44.960 we're saying who's the strong company and will they be 0:05:45.000 --> 0:05:46.960 strong at the end of this year in the early 0:05:47.000 --> 0:05:49.240 part of next year. And that lends me to believe 0:05:49.520 --> 0:05:51.719 that companies are going to have the liquidity to be 0:05:51.760 --> 0:05:54.279 able to hire people. So there is optimism on that. 0:05:54.600 --> 0:05:57.080 But I think all of the BLS numbers until we 0:05:57.120 --> 0:06:00.800 get into the July reports the first week in August 0:06:01.080 --> 0:06:03.440 are a little bit of smoke and mirrors to really 0:06:03.520 --> 0:06:07.120 see how things level off. Stands the p P P alright, 0:06:07.160 --> 0:06:11.520 So looking forward, there is a question about whether this report, 0:06:11.560 --> 0:06:14.200 given how much better than expected it was, whether it 0:06:14.240 --> 0:06:18.159 reduces the pressure on Congress to pass additional fiscal and 0:06:18.160 --> 0:06:21.839 and and stimulus, whether it takes the pressure off the 0:06:21.839 --> 0:06:25.520 Federal Reserve to keep its bazooka wide open. I'm totally 0:06:25.520 --> 0:06:29.240 conflating different metaphors there. I'm just wondering, though, from your perspective, 0:06:29.279 --> 0:06:34.599 how worried you are about that. I think that we 0:06:34.640 --> 0:06:37.240 should not do any more stimulus at the time being. 0:06:37.600 --> 0:06:41.719 I think I think the government uh overshot quite frankly, now, 0:06:41.839 --> 0:06:44.000 I'm not I'm not being critical of it from the 0:06:44.040 --> 0:06:46.760 standpoint of in a in a catastrophe, you have to 0:06:46.839 --> 0:06:50.080 do things at the moment, and it's easy to have hindsight. 0:06:50.360 --> 0:06:53.160 But writing the check to everybody who makes under seventy 0:06:53.200 --> 0:06:57.320 five thousand employed or unemployed really wasn't necessary. And what 0:06:57.360 --> 0:07:00.720 we saw was that comping people wanted to have jobs 0:07:00.720 --> 0:07:03.760 and companies needed to have jobs. And the real challenge 0:07:03.760 --> 0:07:06.200 we're gonna face in Part two or Part three, however 0:07:06.240 --> 0:07:08.800 you look at it, is the federal stimulus on the 0:07:08.880 --> 0:07:12.280 unemployment and people who are making more money being unemployed 0:07:12.280 --> 0:07:14.400 in these service jobs, and when they go back to work, 0:07:14.760 --> 0:07:17.240 that's where the dynamics going to be felt come July. 0:07:18.080 --> 0:07:21.720 All right, So, Tom, we've had differing states have different 0:07:22.000 --> 0:07:24.920 kind of schedules for reopening their economies. Are we seeing 0:07:24.920 --> 0:07:28.520 any regional impact unemployment data that might be reflect that. 0:07:29.840 --> 0:07:31.480 You know what, I'd be frank with you, I haven't 0:07:31.480 --> 0:07:33.440 had a chance to study that that much, but I 0:07:33.480 --> 0:07:36.400 do think that that from what who I've been talking 0:07:36.440 --> 0:07:39.480 to c e O s and finance and HR leaders 0:07:39.800 --> 0:07:42.440 in the in the southern below the Mason Dixon line, 0:07:42.640 --> 0:07:45.680 that it really is two different economies, and we're seeing 0:07:45.720 --> 0:07:50.320 that those those areas, geographically speaking, are much more prone 0:07:50.320 --> 0:07:54.560 to be proactive um and optimistic versus versus the northern 0:07:54.640 --> 0:07:57.800 the Northern States. Just real quick here, Tom Gimble, before 0:07:57.800 --> 0:08:01.280 we let you go, is there any color sector that 0:08:01.360 --> 0:08:04.920 you are most concerned about from here that you expect 0:08:05.120 --> 0:08:08.760 would suffer the first or the next round of layoffs. 0:08:10.000 --> 0:08:13.560 Here's the really interesting thing for this recession versus the 0:08:13.640 --> 0:08:15.760 last two where I was running a business in OH 0:08:15.840 --> 0:08:20.080 one and O eight No. Nine, is this isn't sector focused. 0:08:20.360 --> 0:08:24.600 It's company focused across all sectors. So you could have 0:08:24.960 --> 0:08:28.360 an airline that actually ends up being okay and and 0:08:28.400 --> 0:08:30.760 the majority of others that are that are in the toilet, 0:08:31.000 --> 0:08:33.320 and that could be for every single company. I'm seeing 0:08:33.360 --> 0:08:37.319 it in insurance and technology and manufacturing that that many 0:08:37.360 --> 0:08:40.000 companies aren't doing great, but there's a few outliers that 0:08:40.080 --> 0:08:43.360 really are doing well. So but if I had to 0:08:43.400 --> 0:08:45.600 put my finger on it, I would say that that 0:08:45.679 --> 0:08:48.320 a lot of technology based companies, I think you're gonna 0:08:48.320 --> 0:08:50.960 see if things don't pick up, are gonna be laying 0:08:50.960 --> 0:08:54.680 people off because their profits are lagging and they don't 0:08:54.720 --> 0:08:56.520 have the A lot of them don't have the funding 0:08:56.559 --> 0:08:58.880 to go out and just hire people. And that's a 0:08:58.880 --> 0:09:02.560 real interesting dynamic, the nonprofitable companies that exist in the 0:09:02.600 --> 0:09:05.240 tech space. Tom, thanks so much for joining us on 0:09:05.320 --> 0:09:09.160 this historic jobs Friday. Tom Gimbal, founder and CEO of 0:09:09.240 --> 0:09:16.679 LaSalle Network based in Chicago, breaking down those numbers. Joining 0:09:16.720 --> 0:09:20.760 us now is someone with incredible history just surveying the 0:09:20.800 --> 0:09:24.640 ground and the research in every aspect of the economy. 0:09:24.920 --> 0:09:28.439 Danielle de Martino Booth, chief executive officer and chief strategistic 0:09:28.520 --> 0:09:32.640 Quill Intelligence, also a Bloomberg opinion columnist who spent years 0:09:32.640 --> 0:09:35.400 of the Dallas Federal Reserve as an adviser there. She 0:09:35.480 --> 0:09:39.120 is joining us from Dallas. Danielle, as you pass into 0:09:39.200 --> 0:09:42.760 the numbers that we got today showing that the jobless 0:09:42.840 --> 0:09:46.400 rate actually declined even though it had been expected, to increase. 0:09:46.800 --> 0:09:50.080 What's your main takeaway about the strength of the U. S. Economy? 0:09:50.559 --> 0:09:53.400 You know, my biggest takeaway is that if you look 0:09:53.600 --> 0:09:57.120 at the continuing claims number and you compare that to 0:09:57.160 --> 0:09:59.120 the size of the workforce, you get to thirteen point 0:09:59.200 --> 0:10:03.880 one percent, and so this is bizarrely so really, I 0:10:03.920 --> 0:10:07.440 mean truly. I was one of the people who said, typo, uh, 0:10:07.760 --> 0:10:10.240 it's kind of reflective of where the U. S. Economy 0:10:10.480 --> 0:10:13.480 is right now with thirteen point one percent of the 0:10:13.480 --> 0:10:18.360 population collecting unemployment benefits at the moment um. My other 0:10:18.400 --> 0:10:22.840 takeaway was that the BLS is error, UH is equivalent 0:10:22.920 --> 0:10:25.760 to what the unemployment rate was a few months ago 0:10:26.280 --> 0:10:29.079 that they're they're saying possibly three percent distortion in the 0:10:29.200 --> 0:10:32.320 unemployment rate. I think that's where we were back in February. 0:10:32.440 --> 0:10:36.160 So it's just this is really incredible data to see. 0:10:36.679 --> 0:10:39.640 I think you have to keep your focus on the 0:10:39.640 --> 0:10:43.559 weeds right now, look at what companies are doing, not 0:10:43.600 --> 0:10:47.160 what the data are saying, because it's obviously completely thrown 0:10:47.160 --> 0:10:49.839 off by many different factors. And that's what I try 0:10:49.880 --> 0:10:52.000 and do. I try and pay attention to what individual 0:10:52.080 --> 0:10:55.960 companies are doing around the country on a daily basis, So, 0:10:56.120 --> 0:10:58.319 daniel I mean, as President Trump was just saying in 0:10:58.360 --> 0:11:01.240 the Rose Garden, he from his first spective, he believes 0:11:01.240 --> 0:11:03.280 that the worst is over, and then you know America 0:11:03.360 --> 0:11:06.199 is on its way back. Does a data point like this, 0:11:06.679 --> 0:11:09.160 you know, kind of confirm that or again, are you 0:11:09.240 --> 0:11:11.040 going to step back and maybe look at a lot 0:11:11.200 --> 0:11:16.160 more data at the more granular level. I'm gonna keep 0:11:16.240 --> 0:11:20.600 focusing on granularity at Bloomberg put out a great report 0:11:20.679 --> 0:11:23.679 this week that showed that the next wave of higher 0:11:23.720 --> 0:11:27.000 income paying jobs could be up to six million UM. 0:11:27.240 --> 0:11:29.920 And you know, I've just been following the past few 0:11:30.000 --> 0:11:32.679 days and whether you're talking about a K Steel or 0:11:32.800 --> 0:11:37.040 Auto Nation or UM Stitch Fixed, which was a Unicorn 0:11:37.080 --> 0:11:41.359 in San Francisco laying off of its workforce, Carpenter Technology 0:11:41.360 --> 0:11:45.400 in Philadelphia of its workforce UM and another you know, 0:11:45.600 --> 0:11:49.360 Perella Weinberg seven percent tied to deal making Lazy Boy 0:11:49.440 --> 0:11:53.120 ten percent of its workforce, UM, Saber, the software technology 0:11:53.120 --> 0:11:56.120 company for for for the global travel industry eight hundred 0:11:56.160 --> 0:11:58.920 in additions to the four hundred and committed voluntary early retirements. 0:11:58.920 --> 0:12:03.160 I'm talking about the last four day hours. Yeah, Danielle, 0:12:03.200 --> 0:12:06.199 So if you're focused on the granularity, I'm wondering what 0:12:06.240 --> 0:12:09.880 you're seeing on the ground in the daily and weekly 0:12:09.960 --> 0:12:13.320 statistics that we're getting, and I'm wondering if you could 0:12:13.360 --> 0:12:16.920 compare that with the headline figure from the Job's report. 0:12:16.960 --> 0:12:19.400 In other words, you know, people are saying it's as hypo, 0:12:19.520 --> 0:12:23.080 it's an error, they questioned the data. But are there 0:12:23.080 --> 0:12:28.720 obvious discrepancies or is this just very explainable classification issues 0:12:28.760 --> 0:12:31.200 with the p p P program and other issues that 0:12:31.240 --> 0:12:33.079 will come to the four over time. But the bottom 0:12:33.120 --> 0:12:35.720 line takeaway here is that the labor market isn't as 0:12:35.760 --> 0:12:39.760 bad as many people expected. Well, I think that that 0:12:39.920 --> 0:12:44.400 is is partially mathematical. We are going to have mathematically, 0:12:44.480 --> 0:12:48.640 we are going to have a tremendous uh improvement in 0:12:48.720 --> 0:12:52.360 the numbers in going forward, regardless of what area of 0:12:52.400 --> 0:12:54.680 the economy you're you're talking about, because we have to 0:12:54.679 --> 0:12:57.000 come off the bottom. We can't stay on the bottom 0:12:57.080 --> 0:13:00.760 and reopen at the same time their diametor really opposed. 0:13:00.960 --> 0:13:03.480 We've seen the same phenomena in Italy. We've seen a 0:13:03.640 --> 0:13:07.480 tremendous decline in their unemployment rate, for example. So we're 0:13:07.520 --> 0:13:10.160 going to have this happen. But if you look at 0:13:10.200 --> 0:13:14.640 Google trends on unemployment insurance searches, that is completely flatlined, 0:13:14.720 --> 0:13:18.160 meaning it's no longer improving. If you look at people's intentions. 0:13:18.280 --> 0:13:21.240 Fresh data out of Cox Automotive this morning, people are 0:13:21.280 --> 0:13:24.160 saying that they're going to delay a car purchase for 0:13:24.160 --> 0:13:27.320 the first time since early March. It's it's popped right 0:13:27.320 --> 0:13:30.800 back up to the hive. So we are reopening. But 0:13:30.880 --> 0:13:33.120 my question is going to be, once we get past 0:13:33.280 --> 0:13:36.840 the less bad, what is the follow through going to 0:13:36.880 --> 0:13:39.400 look like? And I think that that is a great unknown. 0:13:39.800 --> 0:13:43.120 But in real time data, we're starting to see weakness 0:13:43.160 --> 0:13:46.640 re emerge despite the reopening of the of the economy. 0:13:46.880 --> 0:13:49.920 So where do you think that's going to leave Congress, Danielle, 0:13:49.960 --> 0:13:53.080 I mean, we do have uh, some more fiscal stimulus 0:13:53.160 --> 0:13:55.720 kind of winding its way through Congress. Doesn't seem to 0:13:55.720 --> 0:13:59.000 be a lot of uh. I guess, you know, impetus 0:13:59.000 --> 0:14:00.520 to get this thing done quick. Where do you think 0:14:00.559 --> 0:14:02.120 the next step is going to be from Congress in 0:14:02.200 --> 0:14:05.960 terms of stimulus? Well, you know there's the irony, right, 0:14:06.360 --> 0:14:10.640 You've got potential legislation being proposed to have a job 0:14:10.720 --> 0:14:13.960 credit paid to pay people to come back into the 0:14:13.960 --> 0:14:16.880 workforce because so many are collecting more with this additional 0:14:16.920 --> 0:14:20.040 six dollars a week. Small business owners that have reopened 0:14:20.040 --> 0:14:22.840 are like, well, I can't get my employees back by 0:14:22.880 --> 0:14:26.880 the same token. What kind of extra incentive do we 0:14:27.000 --> 0:14:29.680 have now to pass this legislation? Now that the president 0:14:29.880 --> 0:14:32.400 has informed the country that it's not a V shaped 0:14:32.400 --> 0:14:34.960 recovery but a rocket ship, So why do you go 0:14:35.040 --> 0:14:37.040 back to the to the drawing board and say that 0:14:37.080 --> 0:14:39.640 we need to to put more stimulus into this economy 0:14:39.760 --> 0:14:43.400 if it's fully recovered. So going forward, what are you 0:14:43.400 --> 0:14:47.080 watching in order to determine how much some of the 0:14:47.200 --> 0:14:50.480 labor market is declining? I guess I'm I come up 0:14:50.480 --> 0:14:53.160 with speechless just because this has been such a fast 0:14:53.240 --> 0:14:57.560 moving labor market and economic recession that it's hard to 0:14:57.640 --> 0:15:00.520 pinpoint the numbers, and the data has been all over 0:15:00.560 --> 0:15:02.200 the place. I mean, some people could say that there 0:15:02.240 --> 0:15:05.360 is discrepancy with the state and local claims in part 0:15:05.400 --> 0:15:08.480 because of processing issues there, So perhaps this is a 0:15:08.520 --> 0:15:11.720 more comprehensive number. What are you looking for to confirm 0:15:11.840 --> 0:15:14.920 your view that, yes, the labor market is weak, and 0:15:15.040 --> 0:15:17.080 yes there was a bit of an improvement, but it 0:15:17.120 --> 0:15:21.840 appears to be plateau ng, so I'm actually following. I'm 0:15:21.880 --> 0:15:24.720 trying to be as stringent as I possibly can with data. 0:15:24.960 --> 0:15:28.480 I'm looking for permanence. And I actually checked in with Challenger, 0:15:28.520 --> 0:15:31.720 Gray and Christmas yesterday just to confirm that what they report, 0:15:32.040 --> 0:15:34.800 which has seems so really low compared to some of 0:15:34.800 --> 0:15:37.320 the large numbers we're seeing, but they did confirm that 0:15:37.360 --> 0:15:41.360 they only report permanent layoffs. So we're at one point 0:15:41.440 --> 0:15:44.480 four million or so. Uh, since this whole thing has started, 0:15:44.600 --> 0:15:47.600 the highest level in history is almost two million. It 0:15:47.760 --> 0:15:50.920 looks like we'll get there by July or so. So 0:15:51.040 --> 0:15:54.560 I'm going to continue to watch things like bankruptcy filings. Uh, 0:15:54.600 --> 0:15:56.680 these are companies that are going away and not coming back. 0:15:56.680 --> 0:15:58.760 I'm going to continue to watch permanent layoffs. I'm going 0:15:58.800 --> 0:16:02.040 to stay in the weed and and continue to run 0:16:02.040 --> 0:16:04.640 my Twitter polls and asking people what they're actually doing, 0:16:05.120 --> 0:16:08.280 if they're if they're truly I am ready to go 0:16:08.320 --> 0:16:10.880 back and spend like I used to spend, or if 0:16:10.880 --> 0:16:14.280 this reticence remains. So, I think the weeds are going 0:16:14.320 --> 0:16:16.800 to be the right place to be because it's so 0:16:16.960 --> 0:16:21.240 difficult to follow data when everything every economics textbook in 0:16:21.280 --> 0:16:23.960 the world tells you that the unemployment rate is the 0:16:24.000 --> 0:16:27.000 most lagging of all economic indicators, and yet it lad 0:16:27.440 --> 0:16:29.120 coming right out of the gate because we shut the 0:16:29.120 --> 0:16:32.960 economy down, So the old rules don't apply if unemployment 0:16:33.000 --> 0:16:37.440 is leading us into recession. So Danielle, as you look 0:16:37.480 --> 0:16:40.840 at your GDP model, and you're obviously, uh, employment is 0:16:40.880 --> 0:16:43.440 a big, big factor, and it does the data we 0:16:43.520 --> 0:16:47.560 got today materially change kind of your outlook for how 0:16:47.600 --> 0:16:49.200 the rest of this year and into next year is 0:16:49.200 --> 0:16:53.840 going to unfold in terms of kind of the economic growth. Well, 0:16:53.880 --> 0:16:56.320 I mean, at this point you could you could take 0:16:56.360 --> 0:16:59.760 a guess. I mean, there's no methodology today because my 0:16:59.760 --> 0:17:01.480 mess atology has been throwing out the window. But if 0:17:01.480 --> 0:17:03.160 I was just throw spaghetti on the wall and see 0:17:03.160 --> 0:17:05.520 if it's six, I would say maybe the second quarter 0:17:05.600 --> 0:17:06.840 is not going to be as bad as some of 0:17:06.880 --> 0:17:09.320 the most dire predictions out there. If you look at 0:17:09.720 --> 0:17:13.840 the spectrum of Bloomberg consensus estimates UM. But that by 0:17:13.880 --> 0:17:17.080 that same token again, if you're seeing reticence and if 0:17:17.119 --> 0:17:21.960 you're seeing higher income paying job growth come down UM, 0:17:22.119 --> 0:17:24.919 then you're going to see a more sclerotics third and 0:17:25.000 --> 0:17:28.280 fourth quarter growth than what's being anticipated based on the 0:17:28.280 --> 0:17:31.639 original kind of we're gonna see a U shaped recovery. 0:17:31.920 --> 0:17:34.000 So one of the things I'm following the most closely 0:17:34.000 --> 0:17:36.359 I suggest you do as well, is every Thursday in 0:17:36.359 --> 0:17:39.440 the Bloomberg Consumer Comfort data, I've been following those who 0:17:39.440 --> 0:17:45.080 make seventy dollars a year their confidence. Unlike overall, the 0:17:45.119 --> 0:17:48.600 consumer comfort headline has yet to come back. It's continued 0:17:48.640 --> 0:17:51.479 to pick down week after week, and that would indeed 0:17:51.520 --> 0:17:54.720 reflect whether or not worth seeing hire income paying job 0:17:55.160 --> 0:17:57.960 job losses. Danielle, Just to wrap this all up, I 0:17:58.000 --> 0:18:01.080 know you can follow the consumer credit space very carefully, 0:18:01.119 --> 0:18:04.600 and one thing that I found, uh surprisingly positive is 0:18:04.640 --> 0:18:07.679 the lack of the increase in defaults and delinquencies that 0:18:07.720 --> 0:18:10.840 many people had expected. And one of the reasons why 0:18:10.920 --> 0:18:14.240 is because people said the enhancement employment benefits, the checks 0:18:14.280 --> 0:18:16.359 that everyone got mailed that who earned a less than 0:18:16.400 --> 0:18:20.120 eventy five tho dollars helped pat out the resources. How 0:18:20.200 --> 0:18:23.520 much do you think that has been a cushion against 0:18:23.600 --> 0:18:28.440 losses in consumer credit versus actual strength and rehiring that 0:18:28.480 --> 0:18:32.680 we saw hinted at with this job's report. Oh look, 0:18:32.840 --> 0:18:34.800 I'm going to use the President's favorite word here. I 0:18:34.800 --> 0:18:39.160 think it's been tremendous. Um. Look, we we have seen 0:18:39.240 --> 0:18:43.159 the We've seen an arresting in subprime auto delinquency because 0:18:43.200 --> 0:18:47.280 again one in five people receiving an employment benefits are 0:18:47.320 --> 0:18:50.920 making double what they made before. We've seen obviously the 0:18:51.920 --> 0:18:54.840 forbearance on mortgages, but even though we've still got nearly 0:18:54.880 --> 0:18:57.480 nine percent of all mortgages in forbearance, you haven't seen 0:18:57.520 --> 0:19:00.000 that play out because they put a hold on people's 0:19:00.119 --> 0:19:03.320 on that being reflected in people's credit reports. We haven't seen. 0:19:03.720 --> 0:19:06.359 We haven't seen evictions go up. We haven't seen you know, 0:19:06.520 --> 0:19:09.880 renters are not in major distress. Again, this stimulus has 0:19:09.880 --> 0:19:13.720 been extremely powerful for the lowest income earners in America, 0:19:14.320 --> 0:19:16.360 more than two thirds of whom are bringing in more 0:19:16.400 --> 0:19:19.200 than they did prior to this. Daniel thanks so much 0:19:19.200 --> 0:19:21.320 for joining us. I really appreciate your thoughts and comments. 0:19:21.400 --> 0:19:25.280 Danielle di Martino Booth CEO and chief strategist for Quill Intelligence. 0:19:29.000 --> 0:19:31.440 Markets are ripping on the back of that job's number. 0:19:31.480 --> 0:19:34.399 Let's see where the real action is. We welcome Bluebrick 0:19:34.440 --> 0:19:37.280 Stocks editor Dave Wilson as well as Matt Bosler. He's 0:19:37.280 --> 0:19:39.480 a Bloomberg fed reporter. We'll get his thoughts on these 0:19:39.560 --> 0:19:43.600 jobs and numbers. Dave, what are you looking at right here? Really? 0:19:43.920 --> 0:19:46.800 I mean, if you want to understand what's going on 0:19:46.880 --> 0:19:50.280 today here, here's one way you can frame it. Best 0:19:50.359 --> 0:19:53.200 performing of the eleven main industry groups in the SMP 0:19:53.280 --> 0:19:55.800 five hundred by far is energy. Of course, you're talking 0:19:55.800 --> 0:19:59.600 about an economically sensitive sector there, and so you know, 0:19:59.760 --> 0:20:02.040 if oil prices are going up, you figured it's not 0:20:02.160 --> 0:20:07.200 great for the likes of airlines and cruise lines and 0:20:07.280 --> 0:20:11.439 you know other companies that you know that they use fuels, 0:20:11.480 --> 0:20:14.760 they are gonna be facing higher costs down the line. 0:20:14.840 --> 0:20:18.320 Forget that. I mean you look, you see Americans shares 0:20:18.400 --> 0:20:21.960 up twenty two and a half percent after rising forty 0:20:22.000 --> 0:20:26.600 one percent yesterday. You see Carnival in Norwegian among the 0:20:26.640 --> 0:20:29.480 best performers, Royal Caribbean too, So those are your three 0:20:29.800 --> 0:20:32.399 cruise line stocks in the s and P five up 0:20:32.440 --> 0:20:35.560 at least thirteen and a half percent. So you know, 0:20:35.760 --> 0:20:40.680 this is really, you know, a market where given what 0:20:40.720 --> 0:20:43.359 we saw on the jobs front, people are figuring the 0:20:43.359 --> 0:20:46.680 economies coming around that people are gonna want to spend, 0:20:46.840 --> 0:20:50.320 that they're gonna take the plane trips and the cruises 0:20:50.400 --> 0:20:53.480 down the line that they have been putting off because 0:20:53.480 --> 0:20:56.840 of the coronavirus. So put it all together, I mean, 0:20:56.920 --> 0:21:00.800 it's it's a market that's showing real straight too. And 0:21:00.880 --> 0:21:04.119 let's just give some perspective on what's driving this. The 0:21:04.160 --> 0:21:07.600 expectation was for seven and a half million jobs to 0:21:07.640 --> 0:21:11.200 be lost in this May non farm payrolls report. Instead 0:21:11.600 --> 0:21:15.320 there was a two point five million jobs gain. And 0:21:15.359 --> 0:21:18.639 I want to dig into what we actually were seeing. Matt, 0:21:18.640 --> 0:21:21.280 come on in here. Some people saying, how did Wall 0:21:21.320 --> 0:21:25.280 Street economists get this so wrong? Based on the anecdotal 0:21:25.320 --> 0:21:28.399 evidence coming out of states, coming out of federal official 0:21:28.480 --> 0:21:33.000 data sources. Yeah, so there are definitely some important caveats 0:21:33.000 --> 0:21:35.320 to note with this report, some of which the BLS 0:21:35.400 --> 0:21:37.680 actually did note in the text of the release they 0:21:37.720 --> 0:21:40.880 put out. I think the biggest one is that, um, 0:21:40.920 --> 0:21:45.840 there might have been a classification issue wherein um, you know, uh, 0:21:46.000 --> 0:21:49.480 some people who were should have been classified as unemployed 0:21:49.480 --> 0:21:53.520