WEBVTT - Bloomberg Surveillance TV: April 4, 2024 0:00:00.120 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.240 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.519 Terminal and the Bloomberg Business app. Michaelherson of twenty two 0:00:37.600 --> 0:00:40.839 V Research Rights in this the trade and investment relationship 0:00:40.880 --> 0:00:44.880 remains understrained, particularly on tech related issues. The intense geopolitical 0:00:45.000 --> 0:00:48.040 rivalry and domestic politics in each country limit the room 0:00:48.280 --> 0:00:51.519 for active cooperation. Michael and POLICEA say it's with us 0:00:51.560 --> 0:00:53.479 now for more. Michael, let's get straight into it. What 0:00:53.560 --> 0:00:55.480 is at the top of the agenda for Jannet Yellen 0:00:55.640 --> 0:00:56.240 on this trip. 0:00:57.920 --> 0:01:00.280 Well, I think for the US side, it's stuff only 0:01:00.440 --> 0:01:04.240 this issue of excess capacity or really you know, China's 0:01:05.040 --> 0:01:09.160 very aggressive focus on promoting advanced manufacturing, particularly in some 0:01:09.200 --> 0:01:12.520 of the same strategic sectors that the Biden administration is 0:01:12.520 --> 0:01:16.720 focused on, so electric vehicles, solar energy. That is top 0:01:16.800 --> 0:01:19.039 of the US age, and it's a trade issue, but 0:01:19.120 --> 0:01:21.520 it's also a macro issue for global growth. And I 0:01:21.520 --> 0:01:24.720 think that's one reason why it's Janet Yellen delivering this message, 0:01:25.240 --> 0:01:28.600 not necessarily US trade officials. That's definitely top of the 0:01:28.840 --> 0:01:31.360 top of the priority list for the US. 0:01:31.520 --> 0:01:33.720 Michael, when I was reading and listening to it, Jenny 0:01:33.720 --> 0:01:36.680 Ellen had to say, I kept thinking, what's the distinction 0:01:36.800 --> 0:01:40.160 and how big is the distinction between decoupling and enforcing 0:01:40.240 --> 0:01:41.240 a level playing field. 0:01:42.760 --> 0:01:46.479 I think for Treasury Secretary Yellen, there is a big 0:01:46.520 --> 0:01:49.200 distinction in the sense that I honestly think you know 0:01:49.280 --> 0:01:53.200 as a trained economist, that she believes that trade is 0:01:53.280 --> 0:01:58.160 good and that she wants to deliver a message that 0:01:58.200 --> 0:02:01.760 the US does not seek to couple. Now, that's kind 0:02:01.800 --> 0:02:04.080 of a controversial view in the US, and I think 0:02:04.080 --> 0:02:06.360 to some extent you've ben within the Biden administration, But 0:02:07.320 --> 0:02:09.960 generally speaking, I think she is trying to say, we 0:02:10.000 --> 0:02:13.320 want to have trade, but we need to address what 0:02:13.480 --> 0:02:16.120 on the US side is considered these distortions coming from 0:02:16.240 --> 0:02:18.160 China's manufacturing sector, a lot of. 0:02:18.080 --> 0:02:20.799 The focus has been on green energy and the supplies 0:02:20.800 --> 0:02:24.360 that are needed to really push forward the entire platform. 0:02:23.960 --> 0:02:25.200 By the Abdan administration. 0:02:25.800 --> 0:02:28.880 How much are the Biden's administration's hands tied in a 0:02:29.000 --> 0:02:33.560 way because they are looking to shift toward certain types 0:02:33.600 --> 0:02:37.399 of technologies that require metals and technologies that are dominated 0:02:37.400 --> 0:02:37.919 by China. 0:02:39.400 --> 0:02:44.600 It's a very difficult balancing act, and I think, you know, 0:02:44.639 --> 0:02:47.680 it's somewhat depends on the sector. It's something like solar. 0:02:48.440 --> 0:02:51.720 China's cost advantages are just so extreme at this point 0:02:51.880 --> 0:02:55.880 that you know, it's very difficult to meaningfully, you know, 0:02:56.040 --> 0:02:58.920 decouple from China or take really aggressive actions in the 0:02:58.919 --> 0:03:02.679 solar sector, something like electric vehicles. You know, it's a 0:03:02.760 --> 0:03:05.200 bit more nuanced. But I think that is the balance 0:03:05.280 --> 0:03:07.119 that they have to face. And again it's one reason 0:03:07.160 --> 0:03:09.960 why Jenny Yellen is out there. Instead of just slapping 0:03:09.960 --> 0:03:13.800 additional tariffs on these items, really the solution for both 0:03:13.800 --> 0:03:15.760 sides should be to try to work on some kind 0:03:15.760 --> 0:03:18.560 of accommodation to address the concerns on each side. 0:03:18.720 --> 0:03:21.560 She alluded to tariffs, though yesterday she said I wouldn't 0:03:21.600 --> 0:03:23.440 want to rule out other possible ways in which we 0:03:23.440 --> 0:03:27.040 would protect them talking about clean energy. Where does the 0:03:27.160 --> 0:03:29.840 US stand right now? Where is that tariff review? 0:03:32.480 --> 0:03:33.320 That's a good question. 0:03:33.520 --> 0:03:37.360 There is a terrorf review that's been underway, and you know, 0:03:37.400 --> 0:03:40.280 we've heard numerous times that you know it would be out, 0:03:40.760 --> 0:03:45.080 for example, at the end of last year. I think, frankly, 0:03:45.320 --> 0:03:49.040 it's unlikely that we're going to see any really aggressive moves, 0:03:49.160 --> 0:03:52.520 certainly to lower tariffs. And it is possible that we're 0:03:52.560 --> 0:03:55.320 going to see moves to increase some of those tariffs. 0:03:56.160 --> 0:03:58.720 Perhaps we would lower them on some of the consumer 0:03:58.760 --> 0:04:01.840 items that aren't strategic coming from China. But I think 0:04:02.040 --> 0:04:05.080 tariffs are going to remain part of the toolkit, especially 0:04:05.080 --> 0:04:07.240 on an area like logic vehicles. When you see this 0:04:07.400 --> 0:04:11.000 expert surge that's showing up in Europe but not showing 0:04:11.080 --> 0:04:12.920 up in the US, and I think trade officials in 0:04:12.960 --> 0:04:14.480 the US are going to want to keep it that way. 0:04:14.680 --> 0:04:16.680 That's the one we're looking for. Michael, Thank you, sir, 0:04:16.760 --> 0:04:17.359 Michael Hurston. 0:04:17.400 --> 0:04:17.599 There. 0:04:27.760 --> 0:04:30.640 John Balvan of black Rock remaining bullish writing this. We 0:04:30.720 --> 0:04:34.200 think upbeat risk appetite can broaden out beyond tech as 0:04:34.200 --> 0:04:38.480 more sectors adopt AI more broadly, rising of volatile yields 0:04:38.520 --> 0:04:41.159 have not disrupted the push hire and developed market equities. 0:04:41.200 --> 0:04:44.120 That's consistent with our view the mega forces such as 0:04:44.160 --> 0:04:47.360 AI are key drivers of returns. Now, John and police 0:04:47.400 --> 0:04:49.440 to say, John, just now for more, John, we'll get 0:04:49.440 --> 0:04:50.840 to the stock marketing just a moment. I just want 0:04:50.880 --> 0:04:53.719 you to views on Chairman Powell yesterday. Given the economic 0:04:53.800 --> 0:04:56.320 data we've seen so far, would you describe some of 0:04:56.320 --> 0:04:58.160 those data points it just bumps in the road, and 0:04:58.200 --> 0:04:59.599 the same way the Chairman has. 0:05:01.520 --> 0:05:03.320 Well, I think this is this is a long road. 0:05:03.440 --> 0:05:06.680 So if I look at the first stretch of that road, 0:05:06.680 --> 0:05:07.400 I think it's a bump. 0:05:07.480 --> 0:05:08.720 So we think inflation is. 0:05:08.680 --> 0:05:11.120 Going to be showing progress towards two over the next 0:05:11.160 --> 0:05:14.800 few months. The FED is data dependent, they're not forward looking, 0:05:14.839 --> 0:05:18.000 so they're going to be lured into we've solved inflation. 0:05:18.480 --> 0:05:19.520 That's going to be the story. 0:05:19.560 --> 0:05:23.400 That's part of the reason why we're kind of constructive 0:05:23.400 --> 0:05:24.240 on risk for now. 0:05:25.279 --> 0:05:27.040 And I think I think that's gonna be the sort 0:05:27.040 --> 0:05:27.560 of will cut. 0:05:27.760 --> 0:05:31.240 This is a FED that is bucked himself in December 0:05:31.400 --> 0:05:35.080 to be cut at some point this year, some point soon. 0:05:35.400 --> 0:05:37.600 I think the bar not to do that is pretty high. 0:05:37.680 --> 0:05:39.760 I mean, we can debate whether this is the right stance, 0:05:40.560 --> 0:05:43.440 but it is a stand. So as a result, a 0:05:43.440 --> 0:05:46.000 bit of forest inflation will cut the narrative for them 0:05:46.040 --> 0:05:48.760 that there's bumps, and they'll they'll be in a position 0:05:48.800 --> 0:05:51.160 to cut. So I think that's the story for the 0:05:51.160 --> 0:05:53.680 next few months, and that's why risk assets are set 0:05:53.720 --> 0:05:54.760 to will continue to perform. 0:05:54.920 --> 0:05:56.880 Is on. The story we've had over the last few 0:05:56.960 --> 0:05:59.440 days really is had to interpret the moves and bonds 0:06:00.200 --> 0:06:03.240 in commodities with regards to equities. How are you interpreting 0:06:03.279 --> 0:06:04.160 those moves? 0:06:05.480 --> 0:06:07.880 Yeah, I think the well, the first point to make 0:06:08.000 --> 0:06:11.599 is you we very much believe we're in a new regime, 0:06:11.680 --> 0:06:13.960 right so we're pro risk right now. I think that's 0:06:13.960 --> 0:06:17.040 has room to continue, room to run, but it's it's 0:06:17.120 --> 0:06:19.640 a very different environment. The idea that we're going back 0:06:19.680 --> 0:06:23.960 to through immaculate discinflation to the great moderation of pre pandemic, 0:06:24.000 --> 0:06:26.760 I think is not happening. And I think when you 0:06:26.760 --> 0:06:29.839 look at the bond vlatility that we're saying it continues. 0:06:30.080 --> 0:06:31.960 That was clearly the case of twenty twenty three, but 0:06:32.000 --> 0:06:35.159 like even this week, massive I think that's the biggest 0:06:35.200 --> 0:06:36.719 evidence we have that this is. 0:06:36.600 --> 0:06:39.919 Not, you know, back to the old regime. So I 0:06:39.960 --> 0:06:42.360 think we're saying, you know, a lot of valet the 0:06:42.440 --> 0:06:43.159 macro narrative. 0:06:43.200 --> 0:06:45.080 It takes a little bit of infra data to come 0:06:45.120 --> 0:06:49.080 in to lead to very significant reactions as we've seen. 0:06:49.120 --> 0:06:51.160 And then lo and behold that we're at the same 0:06:51.200 --> 0:06:53.039 point as we were like a week ago before the 0:06:53.080 --> 0:06:55.120 PCEE in terms of FED expectations. 0:06:55.400 --> 0:06:57.080 The only thing that has really changed is long term 0:06:57.160 --> 0:07:00.160 rates that are set at a higher level now. So 0:07:00.320 --> 0:07:02.200 I think it speaks to this environment where we can 0:07:02.320 --> 0:07:02.800 very much. 0:07:02.640 --> 0:07:05.000 See the FED starting to cut, but at the same 0:07:05.080 --> 0:07:08.440 time don't expect long term rates to follow suit and 0:07:08.880 --> 0:07:11.360 move down. I think we can very much see, you know, 0:07:11.440 --> 0:07:13.320 a FED that starts to cut rates, we're going to 0:07:13.360 --> 0:07:15.680 be only a couple anyway, and then we're going to 0:07:15.760 --> 0:07:18.360 at the same time see rates that are stable, long 0:07:18.440 --> 0:07:21.160 term rates that are stable or even go higher from here, which. 0:07:21.000 --> 0:07:23.480 Is the reason why you've been focusing on the short 0:07:23.560 --> 0:07:26.080 end of the yield curve. We had John Soface earlier 0:07:26.160 --> 0:07:28.920 this morning on who said that that stocks could continue 0:07:28.960 --> 0:07:31.760 to rally as long as ten youre treasure yields didn't 0:07:31.760 --> 0:07:34.840 reach six percent. Do you agree with that that if 0:07:34.880 --> 0:07:37.520 we had ten year treasure yields north of ten percent, 0:07:37.520 --> 0:07:39.760 that would not be north of five percent. Excuse me 0:07:39.960 --> 0:07:42.880 that that would not be a problem for equity evaluations. 0:07:44.320 --> 0:07:48.200 No, I wish just the case, But I find it 0:07:48.240 --> 0:07:50.720 hard to relax about this. 0:07:50.800 --> 0:07:53.200 So I think if we were really of the view 0:07:53.200 --> 0:07:54.120 that we're going. 0:07:53.960 --> 0:07:56.200 To six in a short order, like over the next year, 0:07:56.240 --> 0:08:00.720 six percent tenure very difficult to see equity that sailed 0:08:00.760 --> 0:08:03.040 through this, and I think we've seen some evidence of 0:08:03.080 --> 0:08:05.880 that right that go back to October of last twenty 0:08:05.920 --> 0:08:09.280 twenty three. Last year we went down north of five percent, 0:08:09.440 --> 0:08:12.760 and that was a very different narrative, felt very different. 0:08:13.960 --> 0:08:16.360 So I mean, over a course of ten years we 0:08:16.440 --> 0:08:19.400 might reset to a hier rate environment and realize that 0:08:18.880 --> 0:08:22.160 we can live with that. But I think the journey 0:08:22.200 --> 0:08:25.880 there will be one where equities will will feel more 0:08:25.880 --> 0:08:26.440 than bumpy. 0:08:26.760 --> 0:08:28.720 When people talk about a new regime, A lot of 0:08:28.720 --> 0:08:31.640 guests who come on surveillance talk about their investments in 0:08:31.680 --> 0:08:34.280 the energy sector as well as just commodities in general, 0:08:34.559 --> 0:08:37.960 that any AI adoption has to come with hard infrastructure 0:08:37.960 --> 0:08:40.920 investments that have not been fully accounted for. How much 0:08:40.960 --> 0:08:44.479 is Blackrock kind of adhering to that and really overweighting 0:08:44.559 --> 0:08:45.679 a host of commodities. 0:08:47.840 --> 0:08:53.720 So there is a massive restructuring of the economy that 0:08:53.760 --> 0:08:56.520 is happening. We think there's AI is one big piece 0:08:56.520 --> 0:09:00.680 of it, but we see five big mega forces. Graphics 0:09:00.760 --> 0:09:02.840 is going to lead to a big change in spending 0:09:02.920 --> 0:09:07.480 pattern and developed economies. The rewarding of geopolitics means that 0:09:07.520 --> 0:09:13.640 we have a different organization globally that requires adjustment. Infrastructure, 0:09:14.720 --> 0:09:18.360 we have the transition, the transition, and we think finance 0:09:18.400 --> 0:09:21.040 is restructuring itself as well. So big, big trends, all 0:09:21.080 --> 0:09:24.320 of them require adjustment and need adjustment that they have 0:09:24.400 --> 0:09:27.199 to involve some kind of very significant investment. 0:09:27.200 --> 0:09:28.160 I mean, if you only take. 0:09:28.040 --> 0:09:31.960 The transition, the energy transition, that's by itself, you know, 0:09:31.960 --> 0:09:33.160 a huge amount of investment. 0:09:33.520 --> 0:09:35.960 I think AI is in the middle and interacting with that. 0:09:36.440 --> 0:09:39.280 So yeah, I think infrastructure is a huge part of 0:09:39.320 --> 0:09:41.840 the year, the story of the year to come. Even 0:09:41.880 --> 0:09:46.199 if you don't have like very you know, bullish growth expectations, 0:09:46.880 --> 0:09:48.400 we still need a lot of investment. 0:09:48.520 --> 0:09:50.680 And for such an investment, so and. 0:09:50.640 --> 0:09:53.000 Yes, that's going to support commodities. I think it's harder 0:09:53.040 --> 0:09:56.960 to draw a link to this need for investment and 0:09:57.080 --> 0:09:59.400 what is going to mean for commodities. I think it's 0:09:59.440 --> 0:10:02.880 a much more blex story, but there is ultimately we're 0:10:02.920 --> 0:10:05.000 going to be drawing more in commodities as we as 0:10:05.000 --> 0:10:06.560 we deliver on these investments. 0:10:06.800 --> 0:10:10.160 You mentioned this changing geopolitical map. We have the Secretary 0:10:10.360 --> 0:10:13.040 of the Treasury over in China and she's talking about 0:10:13.040 --> 0:10:15.880 that they don't want to completely decouple from China. It's 0:10:15.920 --> 0:10:17.079 just about diversifying. 0:10:17.280 --> 0:10:18.240 Do you buy that? 0:10:18.320 --> 0:10:19.920 And if it was to be a decouple, how does 0:10:19.960 --> 0:10:21.040 that change your thesis? 0:10:23.000 --> 0:10:27.240 Well, I think the coupling, complete decoupling is even if 0:10:27.240 --> 0:10:27.480 that was. 0:10:27.440 --> 0:10:29.319 The objective, is not realistic, right. 0:10:29.360 --> 0:10:33.600 I mean, we're we're intertwined very fundamental ways globally, and 0:10:33.679 --> 0:10:37.160 so you know fully decoupling will will not will. 0:10:37.000 --> 0:10:37.920 Not even be on the table. 0:10:37.960 --> 0:10:40.160 So I think I don't see necessarily a lot of 0:10:40.160 --> 0:10:42.280 information in the comment like this, right, I mean, it's 0:10:42.480 --> 0:10:45.760 it's kind of a straw man that is unachievable. But 0:10:45.880 --> 0:10:47.760 there is a trend. I think the most important thing 0:10:47.760 --> 0:10:50.360 for me is that we are fragmenting. There is a 0:10:50.760 --> 0:10:54.040 there's a distansation that is happening. The question is how 0:10:54.160 --> 0:10:56.040 is it going to be negatid But in the meantime, 0:10:56.679 --> 0:10:59.480 aside from the politics and those trips, I think investors 0:10:59.840 --> 0:11:04.640 are investors and companies globally are adjusting and making plans 0:11:04.640 --> 0:11:06.480 that are accounting for the fact that the world will 0:11:06.520 --> 0:11:08.559 be more fragmented than it was. And I think that's 0:11:08.600 --> 0:11:10.400 a big that's one of the big mega forces that 0:11:10.600 --> 0:11:11.160 is happening. 0:11:11.679 --> 0:11:14.119 Uh. In his affecting decision even as we speak. 0:11:13.880 --> 0:11:15.320 Is John inf that's the case? Do I want to 0:11:15.320 --> 0:11:18.679 have a bus towards small caps away from multicamp multinational 0:11:18.720 --> 0:11:19.320 big caps. 0:11:21.679 --> 0:11:25.640 I mean you could, you could eventually see, uh, see that. 0:11:24.960 --> 0:11:26.400 That logic playing out. 0:11:26.520 --> 0:11:29.320 I think for now, we still think that, you know, 0:11:29.480 --> 0:11:32.320 more from a tactical basis, uh, that you would need 0:11:32.360 --> 0:11:34.880 to have a more conviction on on you know, a 0:11:34.920 --> 0:11:38.080 growth spur that is lasting more than a few months 0:11:38.440 --> 0:11:40.840 to start to broaden your views on small caps. I 0:11:40.840 --> 0:11:42.280 think there's going to be more of a story about 0:11:42.280 --> 0:11:44.400 the near term growth than it is about fermentation. 0:11:44.880 --> 0:11:46.560 But if you think on a ten year basis, then 0:11:46.559 --> 0:11:46.960 I can. 0:11:46.880 --> 0:11:49.280 Very well see, uh, you know, a story where you 0:11:49.320 --> 0:11:55.000 see more localized companies, smaller caps, small caps being beneficiaries 0:11:55.000 --> 0:11:56.680 of this geo poltical mega force. 0:11:56.760 --> 0:11:58.400 I just want to watch John, You're one of the best. 0:11:58.760 --> 0:12:10.280 Thank you, Jean Bavan there of black Croft. Now to 0:12:10.320 --> 0:12:13.600 discuss the labor market is Becky Frankowitz, the chief commercial 0:12:13.600 --> 0:12:17.959 Officer and North America President Manpower Group. Becky, wonder FOROO 0:12:17.960 --> 0:12:19.840 to catch up with you. One thing we love to 0:12:19.840 --> 0:12:22.320 do with you is talk about what's happening with temp workers, 0:12:22.360 --> 0:12:25.640 the shift between temp workers and permanent hires. Can you 0:12:25.679 --> 0:12:27.880 talk us through how that's evolved as the year is progressed. 0:12:28.720 --> 0:12:31.960 Yes, So normally coming out of a recovery or into 0:12:31.960 --> 0:12:35.079 a recovery out of recession, you would see employers want 0:12:35.160 --> 0:12:38.120 the flexibility of temp workers, so that's a measure called 0:12:38.160 --> 0:12:41.440 temp penetration. We would see that increase. We have seen 0:12:41.480 --> 0:12:44.959 that below two percent, which two percent is the average, consistently, 0:12:45.280 --> 0:12:48.840 and we're starting to see even further declines in tent penetration. However, 0:12:48.880 --> 0:12:51.840 the offset of that is we're seeing permanent hiring continue 0:12:51.880 --> 0:12:54.800 to be strong, which definitely reinforces two things. 0:12:55.040 --> 0:12:56.959 One employers are still hiring. 0:12:56.880 --> 0:13:00.400 And two there's a bit of post pandemic hangover where 0:13:00.400 --> 0:13:02.760 employers couldn't find the talent that they want, and so 0:13:02.800 --> 0:13:05.319 they're scared not to grab them and make them permit employees, 0:13:05.360 --> 0:13:07.480 and so that will be a number I'm watching tomorrow 0:13:07.720 --> 0:13:11.160 what's happening in tent penetration, but perm will definitely be strong. 0:13:11.320 --> 0:13:13.960 Becky, did that make it difficult to read into where 0:13:13.960 --> 0:13:17.120 we are in the cycle? Those traditional indicator is broken 0:13:17.240 --> 0:13:18.920 because of this approach post pandemic. 0:13:20.080 --> 0:13:22.480 Yes, I would say the human behavior has now come 0:13:22.520 --> 0:13:26.000 into the algorithms that everyone is using, and it's very 0:13:26.000 --> 0:13:30.160 difficult to predict where we are in a cycle given that. However, again, 0:13:30.280 --> 0:13:33.359 the resilience of this labor market, John is just amazing. 0:13:33.640 --> 0:13:35.640 We continue to see strong numbers. If we see a 0:13:35.679 --> 0:13:39.040 two thirteen or a two fifty tomorrow, I wouldn't be 0:13:39.080 --> 0:13:43.080 surprised anywhere in between, which definitely demonstrates a very resilient 0:13:43.200 --> 0:13:43.800 labor market. 0:13:43.920 --> 0:13:47.040 It also highlights the sort of rolling recovery and rolling 0:13:47.040 --> 0:13:49.560 recessions to the labor market as well as in the 0:13:49.559 --> 0:13:52.520 broader economy. Where are you expecting the jobs to be added? 0:13:52.559 --> 0:13:54.960 For a while, it was more focused in the services 0:13:55.000 --> 0:13:58.280 sectors and the sort of people facing areas that had 0:13:58.280 --> 0:14:00.880 gotten hardest hit during the pandemic. Are we seeing that 0:14:01.000 --> 0:14:02.960 shift to some of the areas that have been left 0:14:02.960 --> 0:14:06.520 behind of late, in particular middle managers and other types 0:14:06.559 --> 0:14:07.439 of professionals. 0:14:08.400 --> 0:14:11.520 Yeah, so bls the jobs numbers. Look in the rearview mirror. 0:14:11.559 --> 0:14:14.040 We're looking at real time data every day in terms 0:14:14.040 --> 0:14:16.880 of demand for jobs in the country, and we're seeing 0:14:17.040 --> 0:14:20.200 increased demand in affordable experiences. I like to call it that. 0:14:20.760 --> 0:14:23.360 Think hospitality and leisure is where it shows up. But 0:14:23.440 --> 0:14:27.000 the biggest hires in the country today, The biggest employers 0:14:27.080 --> 0:14:32.680 looking for labor are Walgreens, Family Dollar, grape Clips, the 0:14:32.720 --> 0:14:37.120 Haircliff franchise. So consumers seeking affordable experiences and companies then 0:14:37.200 --> 0:14:40.640 needing to hire. So that's one. Another is tech continues 0:14:40.680 --> 0:14:44.280 to be strong. Software developers with a number two job 0:14:44.520 --> 0:14:47.720 most in demand in the country, and AI machine learning, 0:14:47.760 --> 0:14:49.920 which you spoke about a bit earlier on the show, 0:14:50.320 --> 0:14:53.720 continues to set records week over week, month over month 0:14:53.760 --> 0:14:56.360 in terms of demand, So big demand for AI machine 0:14:56.440 --> 0:14:59.000 learning engineers specifically. 0:14:58.720 --> 0:15:01.040 Becky, is there anything that you're see on the ground 0:15:01.320 --> 0:15:03.800 that coheres with this idea of a sudden falloff in 0:15:03.840 --> 0:15:07.000 demand for workers that could happen within the next six months. 0:15:08.040 --> 0:15:09.680 Yeah, I don't think we're going to see a sudden 0:15:09.800 --> 0:15:12.080 fall off. If anything, I think the word of the 0:15:12.160 --> 0:15:15.800 year is stabilization. We're seeing a bit of rebalancing from 0:15:15.880 --> 0:15:19.280 the post pandemic highs and lows. Employers are taking a 0:15:19.320 --> 0:15:22.160 more measured approach in terms of who they're hiring again, 0:15:22.400 --> 0:15:26.080 tending towards perm and employees are staying put. I mean, 0:15:26.080 --> 0:15:29.080 we're seeing the quit rate really level off, and as 0:15:29.120 --> 0:15:31.840 you alluded to in the jobless claims today, we're not 0:15:31.880 --> 0:15:33.479 seeing layoff spike either. 0:15:33.360 --> 0:15:36.160 And so people are staying put. Companies are holding. 0:15:35.840 --> 0:15:38.560 Onto their workers for the most part, and we're starting 0:15:38.560 --> 0:15:41.840 to see some evenness in terms of demand, some stabilization, I. 0:15:41.760 --> 0:15:43.680 Would call it. I don't anticipate to drop off. 0:15:43.840 --> 0:15:47.120 If anything, the PMI going above fifty, I'm hoping to 0:15:47.160 --> 0:15:50.760 see some expansion, particularly in skilled trades in manufacturing. 0:15:51.160 --> 0:15:54.040 I want to lean into that AI competition that you're 0:15:54.040 --> 0:15:56.280 seeing in the labor market because Elon Musk, as we 0:15:56.280 --> 0:15:58.880 said earlier, called it the craziest he's ever seen. How 0:15:58.960 --> 0:16:02.880 difficult actually is to attract that talent that can fill 0:16:02.920 --> 0:16:05.200 this industry that's fueling the stock market. 0:16:06.040 --> 0:16:08.600 Well, I think First, the question is is the talent available. 0:16:08.760 --> 0:16:11.800 So attracting the talent is incredibly difficult because we don't 0:16:11.840 --> 0:16:15.640 have enough AI machine learning engineers. The population of skill 0:16:15.720 --> 0:16:18.600 isn't large enough, so we have to upskill and reskill 0:16:18.680 --> 0:16:21.800 people into those jobs. But it is a very, very 0:16:21.800 --> 0:16:24.080 hot market. And let's just take a minute to define 0:16:24.120 --> 0:16:26.600 what in the world is an AI machine learning engineer. 0:16:27.040 --> 0:16:29.480 They're the people that write the algorithms. They do the 0:16:29.560 --> 0:16:32.240 user interface so that we as users can log in 0:16:32.240 --> 0:16:36.560 a chat GPT and it's a usable platform. So that's 0:16:36.560 --> 0:16:38.920 the kind of skill we're looking for a lot of 0:16:39.040 --> 0:16:42.680 data analytics, programming experience. That's what you need to have 0:16:42.760 --> 0:16:46.560 adjacent skills to upskill into the AI machine learning engineers. 0:16:46.800 --> 0:16:49.080 Becky, not to weigh into the political sphere, but I 0:16:49.120 --> 0:16:51.280 am curious what you make of what jero and Powell 0:16:51.360 --> 0:16:55.400 said yesterday about immigration and how much that has contributed 0:16:55.440 --> 0:16:58.640 to a robust labor market without sort of commensurate inflation. 0:16:59.040 --> 0:17:01.720 How much are you seeing that within your world in 0:17:01.800 --> 0:17:05.920 terms of new immigrants, legal or not taking up jobs 0:17:06.160 --> 0:17:10.560 that then really keep wages more reasonable, I guess for 0:17:10.600 --> 0:17:13.879 the work for the employers and potentially not rising as 0:17:13.960 --> 0:17:15.000 much for the workers. 0:17:15.960 --> 0:17:18.040 Yeah, I thought it was a very provocative point of view. 0:17:18.480 --> 0:17:20.520 I'm not sure we're you know, we're not seeing that. 0:17:20.760 --> 0:17:22.960 We only hire people who you know, are are legal 0:17:23.040 --> 0:17:25.399 able to work in the country. But we do believe 0:17:25.440 --> 0:17:29.119 in immigration because we see that the structural economy has changed. 0:17:29.320 --> 0:17:31.640 We don't have enough workers and so we don't enough 0:17:31.640 --> 0:17:32.200 skilled workers. 0:17:32.200 --> 0:17:34.320 But we don't have enough workers, and so that would 0:17:34.320 --> 0:17:36.159 be our point of view is we would support you know, 0:17:36.200 --> 0:17:37.080 anybody who can work. 0:17:37.119 --> 0:17:38.720 We want to have them access to work. 0:17:39.119 --> 0:17:41.119 But in terms of what is that got, you know, 0:17:41.240 --> 0:17:44.040 hiding in the numbers, I think it goes back to 0:17:44.440 --> 0:17:47.760 the old algorithms aren't holding in this recovery. And it's 0:17:47.800 --> 0:17:49.399 one of the reasons that I would push on the 0:17:49.400 --> 0:17:51.639 FED when we say they're waiting for the labor market 0:17:51.680 --> 0:17:55.080 to decline in order to cut rates. The old algorithms 0:17:55.080 --> 0:17:57.280 aren't holding, and I think we probably should explore that 0:17:57.320 --> 0:17:57.560 a bit. 0:17:57.800 --> 0:18:00.040 Hey, Becky, wonderful to explore it. Whether you thank you, 0:18:00.200 --> 0:18:05.400 Becky Frankowitzlair of Manpower Group. This is the Bloomberg Surveillance podcast, 0:18:05.520 --> 0:18:09.439 bringing you the best in markets, economics, and geopolitics. You 0:18:09.480 --> 0:18:12.240 can watch the show live on Bloomberg TV weekday mornings 0:18:12.240 --> 0:18:15.199 from six am to nine am Eastern. Subscribe to the 0:18:15.240 --> 0:18:18.720 podcast on Apple, Spotify, or anywhere else you listen, and 0:18:18.800 --> 0:18:21.880 as always, on the Bloomberg Terminal and the Bloomberg Business app.