WEBVTT - U.S Tech, Jobs Preview, ISM Data, Peloton Earnings 0:00:01.440 --> 0:00:05.320 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:00:05.400 --> 0:00:08.479 weekdays at ten am Eastern on Apple Car playing Android 0:00:08.520 --> 0:00:11.600 Otto with the Bloomberg Business App. Listen on demand wherever 0:00:11.680 --> 0:00:15.520 you get your podcasts, or watch us live on YouTube. 0:00:16.560 --> 0:00:19.360 Big Earnings again after the Clothes, we got Meta, we 0:00:19.480 --> 0:00:22.160 got Apple, and we got Amazon. And the way we 0:00:22.200 --> 0:00:24.280 do it at Bloomberg Intelligence. Looking at Amazon, we got 0:00:24.320 --> 0:00:26.760 to recognize that this is a huge retailer, of course 0:00:26.800 --> 0:00:29.760 global retailer, but it's also a huge technology company. It's 0:00:29.760 --> 0:00:32.400 really evolved and developed as technology over the last ten. 0:00:32.520 --> 0:00:33.400 Years or so. 0:00:33.400 --> 0:00:34.880 So the way we do it is we get bloom 0:00:34.920 --> 0:00:37.560 punamg Oil, she covers all the retailers for Bloomberg Intelligence, 0:00:38.040 --> 0:00:40.720 and we got anaag Rana who covers all the tech 0:00:40.760 --> 0:00:43.640 for Bloomberg Intelligence. We bring them together and we roundtable them, 0:00:43.640 --> 0:00:45.559 and that's how we can really get a holistic view 0:00:45.600 --> 0:00:48.680 what's happening at Amazon on rog Let's start with you here. 0:00:49.200 --> 0:00:51.320 What do you want to hear from Amazon tonight? 0:00:51.320 --> 0:00:52.000 What do you need to hear? 0:00:52.040 --> 0:00:55.760 What's the market need to hear about their cloud business? 0:00:56.800 --> 0:01:00.520 Paul, the magic would tonight is cost optimization. Not seeing 0:01:00.520 --> 0:01:03.640 any more of it that customers have started to spend back. 0:01:04.200 --> 0:01:07.080 That is going to really be magic to my ears. 0:01:08.160 --> 0:01:10.840 I think we heard some of that from Microsoft, but 0:01:11.000 --> 0:01:15.480 not entirely. I think that is the direction that is 0:01:15.520 --> 0:01:17.800 going to set the direction for cloud names for over 0:01:17.800 --> 0:01:18.920 the next ninety days. 0:01:19.400 --> 0:01:21.800 Can I ask the dem question in real terms? 0:01:21.800 --> 0:01:22.959 What is cost optimization? 0:01:23.080 --> 0:01:23.160 Like? 0:01:23.200 --> 0:01:25.640 What does that actually mean? If I'm reading through the call? 0:01:26.280 --> 0:01:29.480 So sorry about that? So that just basically means companies 0:01:29.560 --> 0:01:32.600 or corporations are not cutting costs in their cloud consumptions, 0:01:32.800 --> 0:01:35.880 that they've stabilized or started to spend back again. That 0:01:36.200 --> 0:01:38.920 is going to be the only thing that I care about. 0:01:38.959 --> 0:01:42.640 See Anonog's whole career find technology. It's always a growth industry. 0:01:42.640 --> 0:01:44.440 They didn't never have down years. It's just a question 0:01:44.520 --> 0:01:45.679 of how much growth. 0:01:45.760 --> 0:01:48.040 So the tech spending, apparently over the last couple. 0:01:47.880 --> 0:01:50.520 Years the growth rate has slowed, and that's got these 0:01:50.520 --> 0:01:53.600 tech anals all anxious, and so they want to see 0:01:53.600 --> 0:01:55.400 a reacceleration of that text spanning. 0:01:55.480 --> 0:01:56.040 That's my read. 0:01:56.760 --> 0:01:59.080 Let's get to the important stuff. And you're talking about Amazon. 0:01:59.280 --> 0:02:01.560 That's like people buying stuff and the box is showing 0:02:01.600 --> 0:02:05.200 up at my door. Put them you cover the whole 0:02:05.200 --> 0:02:07.920 retail space. You've got the best view of this. How 0:02:08.040 --> 0:02:11.359 is retail spending out there and how is Amazon competing? 0:02:11.960 --> 0:02:15.919 Amazon's taking share and retail spending overall is good, especially online, 0:02:15.960 --> 0:02:19.120 and when you shop online, Amazon is the clear winner there. 0:02:19.440 --> 0:02:22.840 So we're actually expecting good results for the fourth quarter. 0:02:22.960 --> 0:02:26.840 We know holiday was strong and Amazon likely took share there, 0:02:26.919 --> 0:02:30.120 So from an online standpoint, we think they'll do well 0:02:30.240 --> 0:02:33.480 and the results will be driven once again by gains 0:02:33.520 --> 0:02:36.760 in their third party which is the sellers that sell 0:02:36.800 --> 0:02:40.280 on Amazon versus their own first party goods, will be 0:02:40.360 --> 0:02:42.239 the reason that they outperform. 0:02:42.360 --> 0:02:45.000 To that point, aren't we sort of is an Amazon 0:02:45.080 --> 0:02:47.280 kind of looking into a world where they might now 0:02:47.320 --> 0:02:50.040 be responsible for those third party sales in terms of 0:02:50.040 --> 0:02:53.600 safety and quality, et cetera. And how dramatic could that be. 0:02:54.440 --> 0:02:57.239 That could have an impact. You know, right now, Amazon 0:02:57.400 --> 0:03:00.160 is not responsible, So if you're the seller and are 0:03:00.200 --> 0:03:04.960 selling something on Amazon, it's not Amazon's responsibility to authenticate 0:03:05.000 --> 0:03:08.640 that good or even to maintain the control over that 0:03:08.720 --> 0:03:12.760 exchange of goods. But if that changes and Amazon is 0:03:12.880 --> 0:03:15.720 going to be accountable for that and seen as a distributor, 0:03:15.800 --> 0:03:19.040 as what we're hearing. Then that could change things up, 0:03:19.080 --> 0:03:22.960 and it could make Amazon institute more best practices and 0:03:23.040 --> 0:03:25.560 also be held reliable, right because we know that there's 0:03:25.600 --> 0:03:28.640 a lot of stuff sold on Amazon that could be 0:03:28.720 --> 0:03:33.079 counterfeit and until today, Amazon has no responsibility over that 0:03:33.200 --> 0:03:33.920 and doesn't need to. 0:03:34.560 --> 0:03:36.280 Hey on, Rod, give us a sense of just kind 0:03:36.280 --> 0:03:41.320 of the landscape of cloud computing. We got Microsoft, Amazon, Google, 0:03:41.640 --> 0:03:44.200 how does it play out? And then how does Amazon 0:03:44.240 --> 0:03:45.280 position itself? 0:03:46.280 --> 0:03:48.760 Yeah, so you know in the cloud infrastructure world, which 0:03:48.800 --> 0:03:51.680 is basically the storage and the computing that you need 0:03:51.720 --> 0:03:54.600 to build any application, there are three big players. It 0:03:54.680 --> 0:03:57.440 is Amazon the number one with the biggest market share. 0:03:57.840 --> 0:04:00.400 Microsoft has done a phenomenal job over an las ten 0:04:00.480 --> 0:04:02.800 years to catch up and is the second biggest. So 0:04:03.160 --> 0:04:06.120 you know, structurally there are two big players, Amazon and Microsoft, 0:04:06.120 --> 0:04:08.200 and then Google's been catching up and Google's are very 0:04:08.480 --> 0:04:12.240 viable contender to both of them. What's really happening right now, 0:04:12.280 --> 0:04:15.400 at least in the last twelve months, is Amazon does 0:04:15.440 --> 0:04:18.760 not have an AI play as such. Now that's really 0:04:18.760 --> 0:04:21.320 not true, but that's that's the narrative in the street 0:04:21.560 --> 0:04:24.600 that Microsoft has a close relationship with open Ai. They're 0:04:24.640 --> 0:04:26.800 pretty much kind of you know, up very close to 0:04:26.960 --> 0:04:30.840 open ai and open AI's back end is everything Microsoft Azure. 0:04:31.160 --> 0:04:34.400 So open ai makes more money. Microsoft really, you know, 0:04:34.440 --> 0:04:36.320 benefits from that, which is what we saw in their 0:04:36.360 --> 0:04:38.919 results a couple of days ago. For the case of 0:04:39.000 --> 0:04:42.360 Amazon and Google, they really need to talk about what 0:04:42.480 --> 0:04:44.520 is going to be their strategy, and their strategy actually 0:04:44.600 --> 0:04:47.599 is very simple enterprises or cooperations. When they're going to 0:04:47.640 --> 0:04:49.839 go out and build those AI models, they're going to 0:04:49.920 --> 0:04:52.920 use one of those three you know, cloud vendors. I 0:04:52.920 --> 0:04:54.800 think it's going to for them. It's taking a little 0:04:54.800 --> 0:04:56.839 bit longer, maybe you know, a year down the road, 0:04:56.839 --> 0:04:59.400 six months down the road. And that's what everybody says that, oh, 0:04:59.400 --> 0:05:02.360 Microsoft is head and Amazon. I think in the long run, 0:05:02.520 --> 0:05:04.520 all three will make a lot of money. It's a 0:05:04.560 --> 0:05:05.880 matter of when it starts. 0:05:06.160 --> 0:05:08.679 And to your point, Paulo, as our cloud service sales 0:05:08.680 --> 0:05:11.840 gain thirty percent, Hello, what company wouldn't want that growth rate? 0:05:11.839 --> 0:05:14.719 But it was like just one percent more than street expected. 0:05:14.839 --> 0:05:16.120 But those are some big numbers. 0:05:16.839 --> 0:05:18.520 I gotta say, we got to turn to Apple because 0:05:18.560 --> 0:05:20.080 we just have a few minutes left. But I'm having 0:05:20.160 --> 0:05:23.080 a really hard time getting excited about Apple's quarter today. 0:05:23.440 --> 0:05:24.800 They're gonna make a lot of money, They're going to 0:05:24.839 --> 0:05:28.039 sell a lot of stuff. And then what anaag, what 0:05:28.040 --> 0:05:28.919 are you expecting? 0:05:29.920 --> 0:05:32.960 This is probably the weakest have gone in in terms 0:05:33.000 --> 0:05:36.039 of sentiments in you know, for Apple, there isn't much 0:05:36.160 --> 0:05:39.080 going in their favor at this point, you know, regulations, 0:05:39.400 --> 0:05:42.520 weakness in China, them losing share in China. Like, it's 0:05:42.600 --> 0:05:46.120 just probably the lowest expectations I've seen going into a 0:05:46.160 --> 0:05:49.200 quarter for Apple. I'm not expecting any you know, major 0:05:49.240 --> 0:05:53.320 positive surprises. But I guess what, Sometimes that's when fun happens, 0:05:53.360 --> 0:05:55.719 is when you go in with with low expectations. 0:05:55.920 --> 0:05:58.560 Hey put them as we step back here? What other 0:05:58.680 --> 0:06:02.680 I mean, how does Walmart compete against Amazon? Because it 0:06:02.720 --> 0:06:05.680 seemless like the Walmart dot com They've done a really 0:06:05.760 --> 0:06:08.919 really good job competing from my perspective, just as a user, 0:06:09.200 --> 0:06:09.839 What do you think? 0:06:10.560 --> 0:06:13.200 I think Walmart has made some strides on its dot 0:06:13.240 --> 0:06:15.960 com presence. But you know, when you think about Walmart 0:06:15.960 --> 0:06:18.120 and you think about Amazon, and I think they can 0:06:18.200 --> 0:06:21.720 both gro share together. It's not that Amazon loses if 0:06:21.720 --> 0:06:25.360 Walmart wins. But remember that Walmart's business it's still fifty 0:06:25.440 --> 0:06:28.840 percent grocery, and grocery is a low signal digit business 0:06:28.839 --> 0:06:32.480 for Amazon. So there are almost two companies that may 0:06:32.520 --> 0:06:35.240 seem alike, but they're very different in their product offerings. 0:06:35.520 --> 0:06:38.039 We think both can grow their online business. Both can 0:06:38.120 --> 0:06:41.719 drive double digit gains as the online vertical just grows 0:06:41.920 --> 0:06:45.640 as a channel, irrespectively of what happens to brick and mortars. 0:06:46.760 --> 0:06:48.359 I love that we spent one question on Apple and 0:06:48.360 --> 0:06:50.320 then we're like, yeah, Okay, let's go back to Amazon, 0:06:50.360 --> 0:06:52.800 which I think says a lot about the honor our spody. 0:06:52.960 --> 0:06:54.800 I think from what I understand talking to anarog and 0:06:54.839 --> 0:06:58.000 other tech folks, it's all China. If you get comfortable 0:06:58.000 --> 0:06:59.760 in China, you can get comfort to an Apple. If not, 0:06:59.800 --> 0:07:01.120 then you know, yeah. 0:07:00.960 --> 0:07:02.880 And they're just like the sentiments just kind of me 0:07:03.160 --> 0:07:06.200 at the end of the day, So we go to Amazon. 0:07:06.200 --> 0:07:09.560 Though for a second, what is going to be the 0:07:09.600 --> 0:07:12.440 catalyst growth driver though on the retail side or is 0:07:12.440 --> 0:07:14.560 it all just going to be focused on that cloud. 0:07:15.400 --> 0:07:17.400 I think a lot of focused on cloud, but keep 0:07:17.440 --> 0:07:21.680 in mind the retail side brings advertising revenue. The AD 0:07:21.760 --> 0:07:25.120 revenue growth is going to be a key focus area 0:07:25.280 --> 0:07:28.040 for Amazon, not just today but also for the foreseeable 0:07:28.080 --> 0:07:30.800 future as that drives very high profit margins close to 0:07:30.840 --> 0:07:34.160 fifty percent. So we think you want to see retail grow, right, 0:07:34.200 --> 0:07:38.000 because as you get those prime members shopping on Amazon, 0:07:38.040 --> 0:07:40.960 you also get more eyeballs and you get more ad revenue. 0:07:41.360 --> 0:07:41.960 Yeah, that's right. 0:07:42.000 --> 0:07:44.520 I mean this the digital advertising business for a long 0:07:44.560 --> 0:07:47.840 time was infected duopoly Google and Facebook. 0:07:47.440 --> 0:07:49.400 And then Amazon came on and in. 0:07:49.360 --> 0:07:51.960 A matter of I don't know what's it been, pun 0:07:52.040 --> 0:07:55.840 of five to six years, they've become a huge advertising platform. 0:07:56.040 --> 0:07:59.600 They are they control about ten percent of digital media advertising, 0:07:59.800 --> 0:08:02.200 and they're at a run rate of fifty billion, and 0:08:02.280 --> 0:08:05.080 we think they can get to one hundred billion over 0:08:05.120 --> 0:08:06.160 the next several years. 0:08:06.360 --> 0:08:10.040 Yeah, and that's literally from nowhere standing starts. So it's 0:08:10.080 --> 0:08:11.720 really amazing. All right, guys, thank you very much. We 0:08:11.800 --> 0:08:14.040 appreciate getting both of you together. Put them Goyle on 0:08:14.240 --> 0:08:18.120 Ragrana the both for Bloomberg Intelligence, covering both the retail 0:08:18.200 --> 0:08:20.800 side of that story, and as Putam says, that's important 0:08:20.960 --> 0:08:22.960 for a lot of reasons, including the fact that it's 0:08:23.000 --> 0:08:24.480 driving this advertising business for them. 0:08:24.560 --> 0:08:26.600 Then, of course, on the technical. 0:08:26.200 --> 0:08:29.360 Side, the cloud has really been the profit story for 0:08:29.440 --> 0:08:33.240 the company, and really probably the multiple story for the company. 0:08:33.240 --> 0:08:34.520 You get a kind of a hig multiple on that 0:08:34.600 --> 0:08:35.600 cloud stuff. 0:08:35.440 --> 0:08:38.040 Right, I mean, hence the whole If you only be 0:08:38.200 --> 0:08:40.559 by one percentage point for growth, you're kind of disappointed 0:08:40.600 --> 0:08:41.560 in terms of the valuation. 0:08:41.600 --> 0:08:43.440 I wonder if you ever, I mean, just put on 0:08:43.480 --> 0:08:45.920 my banker hat on what's I wonder if everybody has 0:08:46.040 --> 0:08:50.240 the you know, the gumption to go to Amazon and say, hey, 0:08:50.240 --> 0:08:52.199 you want to split up these companies, just spin out 0:08:52.200 --> 0:08:52.960 the cloud business. 0:08:53.160 --> 0:08:55.160 I mean, that would be kind of cool. 0:08:55.280 --> 0:08:56.480 What would be the downside to them? 0:08:56.880 --> 0:08:57.920 I don't I don't know. 0:08:58.040 --> 0:08:59.640 I mean, you know, they kind of giving up a 0:08:59.640 --> 0:09:01.600 little bit ownership of it, you know, giving it some 0:09:01.640 --> 0:09:02.160 more ownership. 0:09:02.280 --> 0:09:03.320 I don't know. It's interesting. 0:09:03.360 --> 0:09:05.240 I think it'd be kind of cool because I would 0:09:05.240 --> 0:09:07.120 think that would get a monster monster gosh. 0:09:07.160 --> 0:09:08.760 Yeah. 0:09:08.840 --> 0:09:12.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:09:12.800 --> 0:09:16.320 weekdays at ten am Eastern on applecar Play and Android 0:09:16.360 --> 0:09:19.160 Auto with the Bloomberg Business app. You can also listen 0:09:19.280 --> 0:09:22.360 live on Amazon Alexa from our flagship New York station, 0:09:22.720 --> 0:09:25.760 Just Say Alexa, playing Bloomberg eleven thirty. 0:09:26.600 --> 0:09:29.280 Tomorrow and Another Job's Day they just kind of sneak 0:09:29.360 --> 0:09:30.400 up on you every once in a while. 0:09:30.400 --> 0:09:31.800 So we've got non farm pay rolls. 0:09:32.080 --> 0:09:34.360 The consensus is for an edition of one hundred and 0:09:34.360 --> 0:09:35.480 eighty five thousand jobs. 0:09:35.520 --> 0:09:36.520 Pretty solid number. 0:09:36.600 --> 0:09:39.360 That would be down from last month of two hundred 0:09:39.360 --> 0:09:42.439 and sixteen thousand jobs, but that's certainly something that the 0:09:42.480 --> 0:09:43.680 Federal Reserve is looking at. 0:09:43.800 --> 0:09:45.080 So let's get a little bit of a preview there. 0:09:45.200 --> 0:09:48.199 Julia Pollock joins let's She's the chief economist for zip Recruiter, 0:09:48.320 --> 0:09:51.000 joining us on zoom from Los Angeles. 0:09:51.120 --> 0:09:53.040 Joey, thanks so much for joining us here. What are 0:09:53.040 --> 0:09:53.760 you looking for. 0:09:53.640 --> 0:09:55.360 In the job's data tomorrow? What do you think the 0:09:55.360 --> 0:09:57.520 Fed's looking for in the job's data tomorrow? 0:10:00.000 --> 0:10:04.720 Going to predict that job growth will continue to slow. 0:10:05.280 --> 0:10:07.280 The three month average right now is one hundred and 0:10:07.320 --> 0:10:09.320 sixty five thousand, and I think we could even fall 0:10:09.360 --> 0:10:10.920 below that, So I think the risk is very much 0:10:10.960 --> 0:10:11.920 to the downside. 0:10:12.520 --> 0:10:15.120 Job growth has been slowing and narrowing. 0:10:14.760 --> 0:10:16.040 Over the course of the year, and I think it 0:10:16.080 --> 0:10:19.199 will continue to do so as long as rates cold 0:10:19.200 --> 0:10:21.280 steady at these restrictive levels. 0:10:23.720 --> 0:10:26.840 Well, I was gonna say yes, And also I feel 0:10:26.880 --> 0:10:29.240 like headline after headline, it's like job cuts, job cuts, 0:10:29.360 --> 0:10:31.760 job cuts. So from our perspective sitting here, it can 0:10:31.760 --> 0:10:34.960 feel super dramatic, is it, or are we just like 0:10:35.040 --> 0:10:36.240 normalizing at this point? 0:10:37.679 --> 0:10:40.120 So, you know, it's always difficult to figure out the 0:10:40.200 --> 0:10:43.440 trend in layoffs is in January, and that's because December 0:10:43.480 --> 0:10:46.520 and January are layoff season. Twenty percent of all layoffs 0:10:46.559 --> 0:10:48.840 in the year take place in just those two months, 0:10:49.760 --> 0:10:52.520 So you know, it's kind of like predicting that the 0:10:52.559 --> 0:10:54.720 temperatures are going to get colder and colder and worse 0:10:54.760 --> 0:10:56.960 and worse and worse when you're sitting in January and 0:10:56.960 --> 0:11:00.480 you're sort of bossing, you know, September through January bridgers. 0:11:00.679 --> 0:11:04.120 We don't know, right, they could get worse. So far, 0:11:04.600 --> 0:11:09.120 layoff numbers, as tracked by Challenger Gray are lower this 0:11:09.320 --> 0:11:10.280 January than they. 0:11:10.160 --> 0:11:11.120 Were last January. 0:11:11.120 --> 0:11:13.600 And we know we had this huge spike in layoffs 0:11:13.640 --> 0:11:16.560 in December and January last year, but also that over 0:11:16.600 --> 0:11:18.719 the course of the whole year, according to Bureau of 0:11:18.760 --> 0:11:22.640 Labor Statistics JOLT data, layoffs were unusually low. The layoff 0:11:22.720 --> 0:11:26.640 rate lately has been one point zero percent in twenty sixteen, 0:11:26.679 --> 0:11:30.120 twenty seventeen, twenty, eighteen nineteen and average one point two percent. 0:11:30.280 --> 0:11:32.920 So it basically are having twenty percent fewer layoffs and 0:11:32.960 --> 0:11:35.880 firings now than is normal, even though it feels as 0:11:35.920 --> 0:11:37.120 though they're all the news. 0:11:37.600 --> 0:11:40.920 So I see in your notes, Julia, ninety two percent 0:11:40.960 --> 0:11:43.280 of job games over the past six months through December 0:11:43.320 --> 0:11:48.000 were just three sectors healthcare, the government, and leisure and hospitality. 0:11:48.000 --> 0:11:49.000 I did not know that. 0:11:49.000 --> 0:11:51.920 That doesn't sound like a healthy statistic for the labor market. 0:11:52.720 --> 0:11:55.760 No, it is actually quite unusual. And the previous month 0:11:55.800 --> 0:11:56.440 it was even worse. 0:11:56.440 --> 0:11:59.000 It was ninety eight percent. So last month job growth 0:11:59.200 --> 0:12:02.960 roddened a little bit. But that is the next big thing. 0:12:02.840 --> 0:12:05.360 I'm going to be looking at, not the sort of 0:12:05.480 --> 0:12:08.360 magnitude of job gains, but their breadth across the economy. 0:12:08.400 --> 0:12:11.520 If they're only happening in these non cyclical sectors, they're 0:12:11.559 --> 0:12:14.320 basically fueled by the government, healthcare and government. 0:12:15.240 --> 0:12:15.959 That isn't a. 0:12:15.920 --> 0:12:17.720 Good sign for the economy at all. 0:12:18.679 --> 0:12:24.679 It would give us reason to understand why consumers, why 0:12:24.760 --> 0:12:27.600 job seekers, why workers are still feeling a little glum 0:12:28.000 --> 0:12:30.640 about the situation, even though we have these huge GDP 0:12:30.800 --> 0:12:31.480 numbers et cetera. 0:12:31.920 --> 0:12:34.520 It's because the happiness is not sort of spread equally around. 0:12:34.679 --> 0:12:35.640 Well, here's a dumb question. 0:12:35.760 --> 0:12:39.480 Why is that a bad sign if it's mostly leisure, hospitality, government, 0:12:40.080 --> 0:12:40.800 and healthcare. 0:12:42.200 --> 0:12:44.320 Well, because lots of people aren't working in those industries, right, 0:12:44.360 --> 0:12:46.360 There are lots of us who are in tech, or 0:12:46.400 --> 0:12:48.480 in law, or in consulting or finance. 0:12:49.440 --> 0:12:52.040 It's you know, there's massive demand for nurses. 0:12:52.960 --> 0:12:57.240 Healthcare is just hiring, hiring, hiring, leveraged, and that industry 0:12:57.320 --> 0:12:59.600 shifted to workers during the pandemic and they have not 0:12:59.720 --> 0:13:03.280 lost that leverage increase. But in the rest of the 0:13:03.320 --> 0:13:06.160 economy it's different. It's not so easy for everyone to 0:13:06.280 --> 0:13:10.400 kind of move into healthcare. So when certain industries contract 0:13:10.440 --> 0:13:13.880 and the number of jobs available just keeps falling, and 0:13:13.920 --> 0:13:17.480 it's not a matter of one company doing the layoffs, 0:13:17.480 --> 0:13:18.840 so you can just go to the next one, but 0:13:18.920 --> 0:13:20.599 the entire sector contracting. 0:13:20.760 --> 0:13:22.520 Take journalism, for example. 0:13:22.120 --> 0:13:24.480 The media of the press, Well, you can end up 0:13:24.520 --> 0:13:27.040 having people who are unemployed for quite a long time 0:13:27.080 --> 0:13:28.600 because it's very hard for them to make a shift. 0:13:28.760 --> 0:13:31.560 Hey, Joey, I'm looking at the forecast for some of 0:13:31.600 --> 0:13:35.640 tomorrow's data on the Bloomberg Terminal average hourly earnings year 0:13:35.679 --> 0:13:38.840 four point one percent is the projection kind of flat 0:13:38.880 --> 0:13:41.480 with last period. That seems pretty good to me. What's 0:13:41.520 --> 0:13:44.080 the wage environment from your perspective. 0:13:44.800 --> 0:13:46.640 That is pretty good, But most of the data does 0:13:46.720 --> 0:13:50.400 show a steady slowing in wage growth. We had EASYI 0:13:50.520 --> 0:13:53.679 data yesterday that showed we've had three straight. 0:13:53.440 --> 0:13:59.400 Quarters of declines and wage growth. You know, the annualized 0:13:59.559 --> 0:14:00.880 rate of wage growth for the. 0:14:00.920 --> 0:14:03.240 Quarter was just three point seven percent, which is actually 0:14:03.720 --> 0:14:08.040 very close to what the FED would expect, is consistent 0:14:08.040 --> 0:14:11.200 with two percent inflation, so I think we could actually 0:14:11.200 --> 0:14:15.280 see a slightly lower number, but you know, we'll see. 0:14:15.480 --> 0:14:18.360 And it's also I think important not just to fixate 0:14:18.400 --> 0:14:21.160 on these year over year numbers. Right, wage growth was 0:14:21.360 --> 0:14:24.920 very very fast last year and the year before in 0:14:25.000 --> 0:14:29.520 nominal terms, inflation was higher for twenty five months, So actually, 0:14:29.600 --> 0:14:32.560 if you're looking at real earnings, weges have some catching 0:14:32.640 --> 0:14:35.200 up to do to make up for the nine percent 0:14:35.200 --> 0:14:36.000 inflation we saw. 0:14:36.600 --> 0:14:38.600 Are we seeing labor hoarding? Julia? 0:14:38.680 --> 0:14:40.760 You mentioned how I mean, I know it's seasonal, but 0:14:40.760 --> 0:14:43.000 the amount of layofs and normally see is below the 0:14:43.080 --> 0:14:45.200 norm Yeah, Are we seeing hoarding. 0:14:46.720 --> 0:14:49.560 So there are several anecdotes in the FED Beaige Book 0:14:49.800 --> 0:14:53.440 of Companies saying, you know, yeah, business activity is what 0:14:53.560 --> 0:14:57.040 we have more employees on hand than needed have given 0:14:57.160 --> 0:15:00.280 card levels of business activity, but we're keeping them because 0:15:00.280 --> 0:15:02.520 we expect conditions to improve in the back half of 0:15:02.520 --> 0:15:02.840 the year. 0:15:03.120 --> 0:15:05.240 I think that's sort of code speed for we're. 0:15:05.040 --> 0:15:07.480 Expecting I've been to cut rates and invest in to 0:15:07.560 --> 0:15:11.320 boom again and people to build, buy houses and buy 0:15:11.360 --> 0:15:14.320 refrigerators of furniture, and so we're holding on to these 0:15:14.320 --> 0:15:16.640 employees because we were burned once before and we know 0:15:16.680 --> 0:15:18.840 how hard it is to get them back. So yes, 0:15:18.880 --> 0:15:21.160 I do think that that is occurring in many industries. 0:15:21.400 --> 0:15:24.560 I can't imagine if I own a business hoarding employees, 0:15:24.560 --> 0:15:25.520 like who can afford that? 0:15:26.040 --> 0:15:28.000 Well, that's kind of the point you have to wonder, too, 0:15:28.080 --> 0:15:30.760 like how long until they are forced to either does 0:15:30.800 --> 0:15:33.160 the data deteriorate that much or do they need to 0:15:33.160 --> 0:15:35.520 see if the FED hikes get pushed out, cuts get 0:15:35.520 --> 0:15:36.400 pushed out even more? 0:15:36.480 --> 0:15:37.840 Like what's the tipping point for that one? 0:15:38.000 --> 0:15:38.480 Don't I know? 0:15:38.640 --> 0:15:41.200 And you know, Julie, I have another thing that I 0:15:41.280 --> 0:15:43.960 just can't get my head on what's this this jolts thing. 0:15:44.080 --> 0:15:46.280 It's still like nine million job openings? 0:15:46.640 --> 0:15:48.400 Where is everybody? Where are people working? 0:15:48.440 --> 0:15:50.720 That number is usually five or six million, and now 0:15:50.720 --> 0:15:53.000 we're at nine. It was as high as twelve million. 0:15:53.520 --> 0:15:56.240 Are people just hanging around Starbucks all day? 0:15:56.360 --> 0:15:59.080 So I don't put that much stock in that number. 0:15:59.240 --> 0:16:02.600 There is a c your upward time trend in the 0:16:02.760 --> 0:16:05.640 job opening series that is not evident in any other 0:16:05.720 --> 0:16:09.240 lave market data. So job openings have kind of become 0:16:09.320 --> 0:16:12.760 decoupled from hires, from quits, from the things that they 0:16:12.800 --> 0:16:15.440 typically are correlated with. And I think if you remove 0:16:15.480 --> 0:16:16.320 that time trend. 0:16:16.280 --> 0:16:18.200 Job openings are actually all the way back to normal. 0:16:18.840 --> 0:16:21.680 Our data, you know, it's on online job hostings and 0:16:21.720 --> 0:16:25.480 by our accounts of de duplicated online job postings, we 0:16:25.520 --> 0:16:27.760 are all the way back to pre pandemic levels, to 0:16:27.720 --> 0:16:29.560 twenty nineteen levels, and to. 0:16:29.560 --> 0:16:31.520 That point, Paul, you know, when I was in Florence, Italy, 0:16:31.560 --> 0:16:35.520 you know, yeah stuff, I was talking a lot of 0:16:35.560 --> 0:16:37.560 these guys who are doing you know, innovative stuff within 0:16:37.720 --> 0:16:39.920 energy technology and stuff like that, and they're trying to 0:16:39.920 --> 0:16:41.720 build all these new facilities. They're the ones who are 0:16:41.720 --> 0:16:43.800 gonna be using a lot of that IRA money. They're like, 0:16:44.080 --> 0:16:47.960 we do not have the workforce so at all, Like 0:16:48.000 --> 0:16:50.760 there's no special training program, this is all new technology. 0:16:50.800 --> 0:16:52.280 They just don't have the people and they're not going 0:16:52.320 --> 0:16:53.960 to get them anytime soon. And I do wonder how 0:16:53.960 --> 0:16:56.360 that winds up distorting. I agree, that's a lot of 0:16:56.400 --> 0:16:59.160 the data too, yep, right, And so we do. 0:16:59.160 --> 0:17:01.040 Have very low, very low unemployment. 0:17:01.080 --> 0:17:01.240 Right. 0:17:01.280 --> 0:17:04.840 The last year was like the sixth best year on 0:17:04.960 --> 0:17:07.400 record since nineteen forty when it comes to the unemployment 0:17:07.480 --> 0:17:11.359 rate after the early fifties and the late sixties, So 0:17:11.560 --> 0:17:14.520 very very low unemployment. Twenty four months of sub four 0:17:14.560 --> 0:17:16.919 percent unemployment. So it is still hard for employers to 0:17:16.960 --> 0:17:18.080 find workers. 0:17:18.119 --> 0:17:19.119 And so I don't think. 0:17:19.000 --> 0:17:24.159 It's that unrealistic or unreasonable to hang on to the 0:17:24.200 --> 0:17:24.800 work because. 0:17:24.560 --> 0:17:25.600 You've got, for dear life. 0:17:26.240 --> 0:17:28.960 Where are we in terms of productivity here? I was 0:17:29.040 --> 0:17:32.200 amazed when the pandemic hit and shut down and lockdowns 0:17:32.200 --> 0:17:34.560 and all that kind of stuff that people were still 0:17:34.560 --> 0:17:37.400 able to do their jobs pretty much from remotely. 0:17:37.440 --> 0:17:38.879 And it's just kind of amazed me. Where are we 0:17:38.920 --> 0:17:40.320 in the productivity discussion? 0:17:41.680 --> 0:17:42.120 You know that. 0:17:42.080 --> 0:17:44.000 Productivity data series is a weird one. 0:17:44.240 --> 0:17:48.240 It's shot up during the pandemic when there were massive layoffs, 0:17:48.280 --> 0:17:51.960 and those layoffs are typically concentrated among employees who are not, 0:17:52.640 --> 0:17:56.360 you know, day to day involved in generating widgets. Then 0:17:56.840 --> 0:18:00.200 measured productivity tumbles as all of those support staff, the 0:18:00.359 --> 0:18:03.959 HR people, the marketing people came back. Then it started 0:18:04.000 --> 0:18:07.359 taking up from a point above the pre pandemic trend. 0:18:07.440 --> 0:18:09.520