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All right, time to talk about the world of technology because this as we had kind of an amazing visual yesterday at the White House Meta platforms, Mark Zuckerberg, Apples Tim Cook joining tech industry leaders in touting their pledges to boot spending in the United States and artificial intelligence. It was all during a dater hosted by President Donald
Trump that highlighted his deepening relationship with Silicon Valley. The execs making comments at the dinner, among them Apple's Cook here in exchange with President Trump.
We are all different in some ways, but we all believe in the power.
Of technology to improve people's lives, and that that is the thing that binds us all together.
And Tim, how much money will Apple will be investing in the United States? Because I know it's a very loud and it's you know, you were elsewhere and now you're really coming home in a big way. How much money will you be invested? Six hundred billion, six hundred billion. We're very proud to do it. That's great, Thank you very much, appreciate you, sir.
All Right, Apple CEO Tim Cook last night at a dinner at the White House along with other big tech leaders. Of course you heard President Trump there and Tim that eye popping image of those CEOs at the dinner. We also had eye popping story about Elon Musk as well.
There's like a lot going on here.
Yeah.
Okay, so let's talk about this and with somebody who knows all about it. We've got Ed lud Though with us. He's co host of Bloomberg Technology on Bloomberg Television and Monday through Friday eleven am Wall Street Time check it out. Ed joins us from the Bloomberg News bureau in San Francisco.
First up, add that meeting of tech CEOs. You had Tim Cook there, you had Mark Zuckerberg there, Sam Altman, Sunder Pachai, Sergei Brin, Satinadella, Bill Gates, even members of the Trump administration who previously worked in technology or in venture capital David Sachs, for example, what was the image that this portrayed of the relationship that Silicon Valley or technology or the biggest companies in the world has with the White House.
Well, there was another piece of news that came out with it, which is an almost another quid pro quo, right, which that in that clip, you heard President Trump asking Tim Cook, the Apple CEO.
How much are you going to invest?
Tim?
Oh, six hundred billion, And the same was put to Mark Zuckerberg, who also said six hundred billion. But the background comment the President had made is that tariffs for semiconductors specifically are coming, and it's those that have pledged to in in the country that will be spared from them. That's why we look at it a little bit like a quid pro quo. But AI is at the heart of this administration's platform, right, deregulating to allow for faster
building your data centers. And those people around the table, bar a few exceptions, are missing people. You know, those are the names they're leading on that front.
Yeah, it's interesting. You know, it's funny.
Tim and I were talking kind of before going because it's it's kind of a little bit remarkable to see these images, and I think there's a time has been a love hate relationship between the White House and Silicon Valley.
What I'm just I was surprised to see Jared Isaacman on the list ed because he was supposed to be administrator of NASA. He's a shift for appointments, of course, somebody you've talked to and you know pretty well, yes, what's good?
You think?
You know the President pulled his name from the list and pulled his nomination. Well, why was he there?
I think it's important to tell the truth. I don't know why he was there, you know, in Changu Jerry recently. I don't know that he's worked out what his next thing is going to be on social media, which is a dangerous place sometimes a lot of people would have observed that Elon Musk was not at the table, but they would say, oh, who was there representing Elon Musk? Surely it was not Jared Isaacman because of the situation. He just explained, and there were other people there at
the table who also have connections to mask. But yeah, I promise you that when next I speak to him, I will ask him specifically, how'd you end up at that table. Given the president's recent handling of your nomination on the.
On the Elon Musk thing. He was asked about this on social media. He replied to somebody and said, I'm not able to make I'm not able to make it, but I will have somebody represent me.
That's what I'm alluding to, is I mean, I'm looking.
At the list right now, is that it I don't see a representative from Tesla or from SpaceX there.
Yep.
I think that we're just going to have to let the reporting be done and if we still care, we will confirm who Elon's representative at that table was on the night, but we don't.
Know does he really care? Because I don't know. You might get a compensation package worth about a trillion dollars.
So isn't it really that important anymore? What do you know about this?
Yeah?
I think it's been a very long day reading a three hundred page document and there's so much detail in it. The simplest way of putting it is, it is one trillion dollars after ten years. If a very large number and sequenced series of events take place, Tesla and Musk have to meet many operational and financial milestones for the full.
Trillion to be realized.
And there are many other safeguards and securities from Tesla and Tessa shareholder standpoint baked into the proposal that would keep Musk focused on the task at hand. We can get into them, but for example, in order to access the last two trunches of stock, Mosk a has to pay for them up front, almost like an options being exercised at the price that the shares closed September first.
But he also has to participate and sign off on the succession plan, so he has to like work on his own successor in year eight, nine and ten in order to get to not just the reward from money, right, we're not talking just about conversation, but in his case, he wanted the voting rights as well, and they're staggered over that ten years.
So who is this a win win for? And I only asked because Tom Maloney has also put out a story at Bloomberg News and says that Elon Musk got this one trillion dollars with genuine threats to quit Tesla. So was the company really worried about losing Elon?
So was he in the driver's seat on this?
Because this package sounds like there are some guardrails around Elon in a big way.
Yes.
Tom Maloney has reported it beautifully. If you don't read the full three hundred page proxy, read Tom's report. The representing the board met with Elon Musk ten times in negotiation of this package. They delayed the annual shareholder meeting as they negotiated this package. They hired a number of outside firms and advisors to get the package at least over line. I say over the line, it still has
to be voted on by shareholders in November. Musk's point was, if you do not give me this voting power of twenty five percent or greater, I will go and do the things that I'm interested in elsewhere XAI SpaceX et cetera. What did the board get in return Section A fifty one or page A fifty one of the proxy? Point number two, We have got reassurances from Elon Musk that he will wind down his political activity. So it's not
a sort of blanket all going to Elon. You know, the board has made including with the operational goals they've set forlong like these are really hard. They've got things to protect them in making sure Elon Musk is focused at the same time.
Eight point five trillion dollars in market cap from one point one trillion dollars today. Ed, how does Tesla get there over the next ten years.
Yes, so Tesla has a market cap today of about trillion, and one of the financial milestones for Elon to realize the full trillion of comp is for it to get to eight point five trillion dollars. It's very interesting when you set that against the operational goals. The operational goals are very much in line with AI. Grow a robotaxi fleet to one million units, robotaxis, one million, taking people on ride hail, ride sharing platform, one million humanoid robots.
But the board also tucked in there a goal for Elon Musk to sell twenty million Tesla vehicles total and deliver them to consumers. And it shows that the board fought to keep Elon Musk focused on Tesla's bread and butter business, even in the likelihood that that eight point five trillion dollar value in the long run is more closely aligned to the big robotics and AI stuff than it is in the sort of now, sort of archaic
business of building vehicles and selling them to comensumers. You know, that's kind of how I think the market looks at it.
Ah, that's massive.
Are we even crazy to think about an eight and a half trillion dollar market cap for Tesla?
When I first moved to California in twenty eighteen, which ain't that long ago, right in video was a company that made GPUs that for video game developers and went into high end consoles and computers for video games. It was a few one hundred billion dollars. It's now a four trillion dollar market cap company. It's the easiest example for me to cite over a period of less than ten years of a company dumping in trillions of dollar of value.
Can I just ask you why all this stuff about Elon's compensation is happening now? Is it just that they were having meetings and it's all coming out?
Is there anything at the time or what?
Well, a proxy needs to be filed in advance of an annual shareholder meeting, right, and the annual shareholder meeting has to happen at some point. It's happening in November, so there's a chronology to it, and the auditors have to prepare it.
That's quite boring.
But that's part of the answer.
One of the things we need to ask too, is that the shareholders are going to decide to if Tesla should invest in his AI startup, XAI significant. I mean, it does feel like Eland's rolling everything into one or wants to.
This is a shareholder initiated proposal. Many shareholders tried to get the proposal on the docket. In the end they went with just one by a single retail shareholder, Xai.
You could use GROC.
I used it this morning, a voice assistant based chatbot in Tesla vehicles. Bigger picture, Xai has a very different model to say Anthropic and open Ai. Despite all the headlines about all the money those two AI startups have open Ion and Fropic, they basically lease the data center capacity. They don't own the assets outright. Xai does. It's committing tens of billions of dollars to buy the GPUs and
put them in a data center. So you know, the rationale is that their synergy, that the work Xai is doing on software can benefit Tesla owners and Tesla vehicles. But it's also a bit of a lifeline. And if you allow me to do the plug, I'm going to write about this in my newsletter and column on Monday, because you know, that's the thing that shareholders also have to face. You know, does Xai on paper have the ability to stand on its own two feet? Or is
this going beyond an investment by Tesla? Is it a bailout of one Elon must company of another?
And just in the last forty seconds to push back on this a little bit, as Mark Germers told us, some of the lms and the tech there's a concern that this could be a bit of a commodity.
Correct, and also the benchmarking figures for GROCK four are very good. But again it's a business model based thing. Elon Musk is committed to moving super quick, committing capital to buying GPUs and the models completely different. Again, it is not a binding proposal. It is a shareholder initiated one. If it successfully passed in November, then the board needs to look at it and decide if it is a prudent and beneficial thing to Tesla to make that investment.
But as I reported earlier in the year, SpaceX has put two billion into Xai, right, so why not Tesla?
Oh and by the way, ed, you can promote anything you want on our air. You're ed Ludlow.
All right, we're looking forward to the newsletters. Shehars a Tesla by the way, up almost four percent. Edla the co host of Bloomberg Technology.
Stay with us. More from Bloomberg Business Week Daily coming up after this.
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All right, we want to get to what is really our top story on this Friday, and there's a lot going on, but we have seen some coolness in the US labor market as a result of that data point we got at eight thirty one.
It depends.
I think we were pretty on time with it. We got a notice though, just ahead of that number that there were some technical difficulties. That's something that is kind of new to me.
It's definitely new to me as well.
It's not the only time, but I think this was on the government side, by the way, not on the note.
Not on the Blueberg side of ironic.
It definitely, though, did mean a new narrative and reset when it comes to US rates.
Let's get to that part of the story.
Bloomberg Intelligence GUS interest rate strategist Ira Jersey with us from New Jersey. Ira, just the whole morning and how it played out unusual, Yeah, like was top of mind for you there.
Well, what's kind of funny, right, we got all those that information that around ten minutes after eight that hey, the number might be delayed. You know, that's happened before. It's been a long time, but it has happened before that You've had delayed numbers because websites break things like that. So I think they were teeing us up for it being late, and then we ultimately got it right on time, which was a little interesting. But yeah, week numbers across
the board. You look at the revisions June, we actually had job losses in the non farm payroll series, right, We haven't had one of those for quite a long time. And you know, and you just see job momentum has slowed so significantly over the last four or five months that it's a foregone conclusion at this point that the Fed's going to cut Now. The question is, and you know, I keep on reminding myself, you know, last year we
said the same thing. I said, the Fed's gonna cut rates, are probably going to cut one hundred basis points, but it's going to be over four meetings wound up. They did a fifty basis point cut in September. That's some of the talk that I'm hearing from investors right now that you know, they're wondering, Hey, is the Fed going to cut fifty? I do think personally the bar is pretty high for the Fed to cut fifty in September. But you know, we will get a week, we get
a week CPI report, and maybe they do. The chances they think of a week CPI reported pretty low though. So twenty five base points is done, and now the question is October, December, January, March, and then do they go more? And that's where I think we need to start focusing on. Is that terminal rate? How far are they going to cut two? Are they going to go to only three percent? Or are they going to go to like two and a half percent.
The criticism from the Trump administration for months on J. Powell has been that he has been too late, that the Federal Reserve has been too late. Is the President vindicated with a report such as this.
Well, maybe one meeting quite frankly, because if you look at the preponderance of data that was coming in the first half of the year, right through through the May numbers altogether, they really weren't bad, right, and so, and inflation still remains stubbornly high and above the fed's two percent target. So you know, the question always becomes the FED has a dual mandate. Do they care more about the employment part of their mandate or do they care
more about the inflation part of their mandate? And I think at this point they can say employment's what's important. Because if the employment situation stays where it is so very weak but not not disastrous, or weekends further, right, so you start to get negative payroll prints, wages start to come down. You did see wages. That what worries me about this report more than even the payroll number was the fact that wages started to moderate. That's been
that's super important. But the you know, now you're at the point where, okay, look, if the job market gets really bad, we don't have to worry about inflation because prices are going to come down anyway, because consumption is going to go down. So I think that the you know, now it's clear and obvious that they have to start cutting interest rates. Wasn't so clear in June August, you know,
or the July meeting. You could you could argue maybe they could have cut, but I think that that you know, if I'm a FED governor, if I were in their seat, you know June, I probably wouldn't have been cutting personally.
Well, one thing they certainly want to avoid is any kind of stagflation.
Constant Hunter is with us as well, chief economists at Yeah, you the Economist Intelligence Unit here in our studio, going to join in on this. Gout shoud I saw you not in your head a couple of times jump in on what we got this morning.
So, I mean, if we look at that headline number, twenty two thousand looks really weak when we think about what would be replacement rate historically, however, as Powell talked about in his Jackson Hole speech, right, we have a decline in supply, that is, the decline in the amount of people that are in the labor force and a decline in demand. So that decline in the supply, which is now growing at like two tens of up percent year over year, if we sort of smooth it a
little bit for three months, right. That is the denominator in the unemployment rate, and this is really really important. We could keep growing at this pace, unemployment rate's going to stay about where it is. So the but as Ira was saying, consumption's going to weaken because if you think about jobs growth, that's one of the things things that feeds consumption growth. So there's a feedback loop where
this slows consumption, slows demand, slows growth. And they're going to need to cut just to me, that four point two four point three percent unemployment rate, but they probably need to cut a lot less than the market is thinking, given this shrinkage and supply. And if you ask me, that's what caused the big turnaround inequities today. People dug into the details of this number and realized, wait a minute, because of this shrinking supply, they might not need to cut as much.
So what does that mean to you? Twenty five basis points in September and then that's it until twenty twenty six.
Oh, I think it's hard to know the exact timing. We think at least another three cuts over the next six months. It's going to depend on how sticky inflation is what we've seen in core services that's been remarkably sticky. So we're not even talking about the goods sector where we're seeing price increases, but everybody anticipates.
Dare I say it?
It is going to be transitory but the dirty word in economics. But it's that core good stickiness that I think if I were a Fed governor or a voter on the FOMC, that would keep me up at night.
Arah, I mean, is J Powell the feeling incredible pressure right now?
I don't, you know, I don't know. I'm not sure if he you know, I can't get into his head, right. You know, I've met Chair Powell a couple of times, but you know, mostly in passing at events. But I would imagine that the Federal Reserve is trying to be as you know, neutral as they can and trying to look past a lot of the rhetoric coming out of
the White House. I mean, you can't completely ignore it, right for sure, But you know, you look at Secretary Besson and if you look at his Wall Street Journal ed which Mike just talked about with Austin Golsby with Austin, yeah,
they you know they were talking about in there. There's some I think legitimate criticisms of what the Federal Reserve has done over the past fifteen years, but it also misses some of the reasons why the FED did some of those things over the last fifteen years, Like you know, like, yes, the government should be you know, doing things from the fiscal side that you know, back during two thousand and seven, two thousand and eight, we were waiting for Congress to
do something. Congress didn't do anything, so the FED had to step in because there was no action out of Washington. Right So, and you know, should the Treasury Secretary be
more involved? Sure, yeah, absolutely, Congress should maybe give the Treasury Secretary additional powers in times of financial emergencies and financial shocks to try and stabilize those so the FED doesn't have to right So there, and and some of those were built into some of the reforms that have happened over the last few years.
So it's not.
Exactly so I agree with some of what Secretary best And said, and then other parts I think are much more nuanced. But nonetheless, like FED reform, the Federal Reserve has not been seriously reformed for many decades. At this point, and the world's changed, right, the financial world's changed, the markets have changed, So maybe there needs to be some type of you know, a shift now. Should it be a complete overhaul? I don't think so, but could there
be you know, nuanced changes that Congress considers. Sure?
All right, One thing I want to get to you mentioned Secretary Beston. Another member, a key member of the President's cabinet, joined Bloomberg Surveillance this morning. We're talking about the Commerce Secretary, Howard Lutnik. He addressed reliability of the data coming out of the Labor Department. Here's what he had to say to our team.
It makes it grist clear. You should have fired the person who was running that group, right. Because it didn't fire them two weeks ago, you sure would be firing them today. So they need new leadership in BLS, that's for sure. They need new tech and BLS, that's for sure. And Donald Trump needs to rely upon the numbers. America needs to rely upon the numbers. You can't have these bent former administration people who have a view and who want to harm the president. We need accurate numbers coming
from BLS. And finally, we'll have new leadership to deliver, you fire the person.
What do you learn?
You learn that their technology is just a bully, But we'll fix.
It, right.
That was of course.
You have Commerce Secretary Howard Neck this morning on Bloomberg Surveillance. Mind you, he does not oversee the labor department. He is head of the Commerce department. But what we care about, constance is US data. Economic data has been the gold standard. Is the data coming out of these departments still reliable?
Yes, I think it is. I think it's going to take Yes, it's still reliable. And the person, by the way, who is the acting Secretary, Bill wou Rotowski, He has been acting secretary in the past. He has been there a number of times. This glitch that we had, while worrisome and concerning, but is not unusual in a world of technology. Who amongst us has not experienced technology glitches. I'm not saying it's acceptable or that we need to not have a very high standard, but I think that
is the wrong thing to attach to. And if we look at the individual who's currently leading BLS, he has had this role in past and there have been no problems or complaints. So it is a very robust system of the way we collect data. It's very robust in how we follow up with revisions and what the reason we have the revisions we have is because we want a timely read. That timely read is ninety percent directionally correct, right, and so it's valuable.
Yeah, well, and I'm glad you went your revisions. I villain got about thirty forty seconds left here. I mean, we are going to get a bunch of revisions next week, which will what maybe show.
What about vieus labor market? Will our narrative change again just quickly?
No, it's still going to show some probably some weakness because a lot of these revisions tend to be pro cyclical. So as as the market turns and the economy turns and gets weaker than you wind up with weaker revisions, and then vice versus. Well, right, where you get upward revisions when the market's turned upward. But I agree, like I think, generally speaking, the data that we receive as
a reasonably high quality. The challenge is is that the way that we collect data now has to be different, because again the world's changed, and mister Latinik does produce his agency does produce a significant amount of data, like the Bureau Economic Analysis, GENDE Data, the PC Report. All of those types of numbers come out of commerce.
Let's not forget that, folks. Thank you so much.
Great great analysis on what we got early this morning and still continues to impact the trade.
Our Jersey chief US Interest.
Rates Strateges at Bloomberg Intelligence and Constance Hunter joining us right here in studio. She, of course, is chief economist at the EIU.
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Of course, a lot of focus on the jobs print. It's been a lot about the big miss when it comes to non farm payrolls increasing just twenty two thousand in August. Revisions also showing on the unemployment shrank in June for the first time since twenty twenty. Yet a deeper look into the stats show that women's participation in the labor forces also declining. In fact, as of last month heading the lowest since December of twenty twenty three.
Misty Hageness watches these stats and one's not from the BLS very closely. She's Associate professor and Associate Research Science Scientist at the Institute for Policy and Social Research at the University of Kansas. She's also a former Principal economist at the US Census Bureau. She's the author of a forthcoming book it's out in January called Swifty Nomics, How Women Mastermind and Redefine Our Economy. Professor, good to have
you on the program. I know you weren't surprised to does the participation fall for women, because, as you found, working moms with kids are leaving their jobs in this economy. It's something we talked a lot about during the pandemic, but that seemed to be to reverse in recent years. Why is this happening again now?
Yeah, thanks so much for having me, Tim. You know, there's a lot of reasons why it might be happening now. I was just looking at the numbers that came out in August for women age twenty plus and this you know, past August we had two million fewer women age twenty plus in the labor force compared to August of the previous year. So there's a lot going on with women where it's becoming very challenging for them to stay engaged
in the labor market, to continue working. When you think about the environment that we're in in twenty twenty five, you know, all of the return to office, all of the federal government riffs, all of those types of policy decisions that we made early on in twenty twenty five appear to be negatively affecting women.
Why is this happening now?
Yeah, I mean it's a great question.
And you know, again, I think we need to think just about policies in general, you know, across is institutions. We need to look at how employers are engaging with employees, the type of you know, protections out they're offering employees.
When you know, the environment at work becomes really inhospitable to the way in which we live our lives today, there are a lot of caregivers who are just going to leave the labor market, either out of force because they can't make it work, or out of choice because it's just too exhausting.
What are the specific policies that are pushing women out of the labor force. Is it policies at offices like return five days a week for example, or clamp down on hybrid work, or is it coming from the government. What can you cite specifically here?
Well, I mean, the one thing that I'll say is the government is a leader generally, and so businesses usually look to the way in which the government is structuring it's policies around you know, it's hr policies and policies
around employment. And so when the government requires everybody to come back to work five days a week, you know, private business employers follow suit, and you know, a lot of the rhetoric in early twenty twenty five was really focused on telling employees that they were going to have to return to office. There's still a lot of businesses
who haven't actually fully started that process. But just the fear of knowing that it's coming and your employer telling you that it's coming, you know, means that there's a lot of women out there and a lot of caregivers who are going to adjust even before it actually comes into full effect.
The sad part is, well, we did feel like we had some gains coming off of COVID. We did have some gains coming off of COVID. It does feel like these are problems that we have been talking about for a really long time.
Misty and I.
Just I don't know, it's a bigger rethink in our society to value women childcare.
There's like a bigger thing that it feels like needs to be at play here.
One hundred percent.
You know, one of the things that gives me hope in all of this environment is we actually know now what it takes to really, you know, get women back into the labor market. I think the pandemic really showed us that when we do you know that employers, you know, it is possible for employers to allow for flexibility and you know the roof is going to cave in. They will still be productive, they will still be able to produce, you know, the goods and services that they're they're producing, and.
Now it's just a matter of choice.
So we intentionally in early twenty twenty five made a choice that we were going to restrict a lot of these flexibilities and we have seen now what has happened. And you know, the flip side of that, which maybe could give us some sort of positive reframing is that we know how to fix it.
So if we want women's.
You know, labor first participation to go up again, we need to look seriously at, you know, providing a work environment that isn't hostile to family life.
So yeah, well, I'm wondering about the book that you have coming out in a few months and the research that you did for the book, specifically the type of work that's not necessarily measured by official data, the stuff that does disproportionately fall on women. I mean we're talking childcare, household work oftentimes falling on women in the house. How do you quantify that?
Yeah, So, you know, the book is coming out in January.
And also I've developed a dashboard of statistics of economic statistics all around care and caregiving's you can find it at thecareboard dot org. And the statistics that we've developed there, we basically said, okay, if we went back to nineteen forties and instead of having you know, older white men who tend to have lots of care privilege, and by care privilege, I mean they have other people cooking their
meals for them, ironing their clothes, et cetera. If instead, in nineteen forties economic statistics had been developed by caregivers, what would they look like. And that's what the careboard is, and it's incorporating the amount of time caregivers spend in unpaid domestic load and domestic activities for their families. So cooking meals, washing clothes, all of these type of activities.
We count up all the hours that caregivers spend in those activities and then we put a price tag on it, and then we fold that in to some of the economic statistics that we all are very familiar with, like labor force participation.
Right, I mean, it's etc.
It's so funny.
I was talking to somebody about the growth of economics and business news and just like this concept that there really is a monetary value to everything that goes on in our world and it's how we value things. And it just shows how much we don't really necessary value caregivers.
And so on and so forth.
And until that changes and we put a value on it, it's hard to get policy to change. Listen, I don't know what's the government's role that needs to be maybe more aggressive in this to help us out.
Yeah, I mean I think it would be great if you know, the government were to you know, create some sort of official statistics around economic productivity and growth that incorporated the value of.
Some of these activities.
You know, the the VEA does produce a satellite GDP estimate which incorporates household production like cooking meals at home. So we're moving in the right direction, but we still, uh, there needs to be more awareness. We need to you know, really start thinking seriously about this. And one of the other reasons why we need to start thinking seriously about this is just because of the high levels of educational
attainment that women have these days. High levels of education of education, I mean that women are focused more on having a career versus having a job, and that you know, ties in more strongly to personal identity. It makes it more difficult when women are trying to think about, you know, do I start a family or do I continue down my career path. And if we can't figure this out of how to make the work force is less you know, hostile to this idea of wanting to have a career
and having a family. You know, it's only employers, it's only the economy. It's only all of us at large who are going to lose out from that.
We're just not going to get married and have kids.
That's it, guy, that's bad for that's that's bad for the just in ten seconds. Is there a country that's doing this really well around the world in your view?
Well, I think a lot of the Scandinavian countries do actually have quite a robust system of social policies that you know, provide affordable and high quality daycare. You know that encouraged fathers to also take you know, parental leave. So there are there are examples in some of the Nordic countries.
All right, gotta run, Misty, Thanks so much.
Misty Higginess Associate Professor and Associate Research Scientist, Institute for Policy and Social Research at the University of Kansas. She's got a new book coming out comes out in January, Swiftynomics.
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Mac.
How about you let me drive? Oh no, no, no, no, this is not a toy.
Alright, please, I'll travel.
Excuse great, I want to drive. It's a good question.
Good.
This is the drive to the clothes punks.
The music well.
On Bloomberg Radio. All right, everybody TikTok.
Just about eighteen minutes ago until we wrap up the trade for the Friday session, also.
The week overall, it was a short holiday week. I didn't feel that way I did it.
No, it wasn't yet a shortened holiday week. It is still a sure and holiday week because we are still here my Friday.
We are we are all right.
So too is Louis Navalier back with us chairman, founder, CEO of Navalier and associates joining us from Manhalapan, Florida.
How are you good? Good, short and sweet.
That's it.
That's all the time we have for you today, Louis.
Listen, we saw stocks actually moving up earlier, but they've been down for most of the day. Our investors more worried about an economic slow down rather than being enthused, perhaps about rate cuts.
No, I just think it's a Friday and people like to clean out their inventory before the weekend. You know, Fridays are seasonally weak, especially in the late hours, especially if the weather's gout, everybody else to go to the US Open or something like that.
You know, get it?
Is it that simple?
Really?
You're thinking that it's just that it's just clearing out on a Friday, pretty much.
Alcaraz is up two to one over Djokovic, but Djokovic is up advantage all.
No, I knewhere your focal points are.
I'm just hey, Louis brought it up. I got to mention the score.
Well, Louis, to some extent, would you not be making any big bets until we get through the FED meeting or do the jobs report? Did that kind of clinch it for you? Help help me out here.
Oh, it more than clinched it.
I mean it's obviously the vega to cut in June and that downward revision to genda a negative number for the first time in four years was a big deal. Unemployment being at the highest rate in four years is a big deal, even though I think four hundred and twenty six of the workforce. So yeah, it was. It was a week payroll. We were all rooting for a week payroll because we want the Fed to cut and hurry up and catch up with market rates. Market rates,
of course, have come down dramatically this week. Of course, they spiked longbond spiked early in the week. But yeah, we're going to get a right cut. I guess the only question next week is inflation. Now PPI I'm sure will be fun. The month before it wasn't because of higher wholesale diesel costs. That was a freak thing, mostly do to the West Coast. And you know, I spent a lot of time in California. They want green diesel out there. They don't like diesel from oil, so it's
very complicated. They're shutting a couple of refineries down, so that's California's problem. But it showed up in the numbers, and then of course the CPI. We just hope and pray that all the weak real estate and everything finally shows up in owner's equivalent rent even though it only shows up in rentolds, but there is a lot of rentals, and hopefully we'll get some relief and we'll be boarding on deflation because we've got falling crude oil prices.
I want to hit on the data, specifically the BLS data we did hear from Commerce Secretary Howard Lutnik on Bloomberg surveillance earlier today, and a reminder he runs commerce not so he's you know, so he's not running labor here. But he did weigh in on the data. He said, Donald Trump needs to rely on number of the numbers. America needs to rely on the numbers. We need accurate numbers coming from BLS. Do we have accurate numbers from BLS?
Not?
When they do the wild seasonal adjustments. I mean, I think the worst month is January where they automatically increase in six hundred thousand or seasonal adjustment. I hope they're going to stop doing that because that was you know, the holiday shopping and all that stuff. So I really hope they start just giving us the real numbers, not the seasonally adjusted numbers.
But you can, but do you have any reason to believe that the numbers that are provided to us by the government right now when it comes to non farm payrolls in this country are incorrect in some way that they weren't during a previous administration, as has been alleged.
I don't think it has anything to do with administrations.
I think it has to do with the seasonal adjustments, and I think we just have to get have fewer seasonal adjustments and then we'll go on. But yeah, I mean, I remember when the June payroll came out. We were suspicious because they were all teaching jobs. But teachers get laid off in the summer months. Maybe it was just a line number, but we were all suspicious of it, like, no, that's not right. Those people get laid off for a couple of months. So that's the kind of thing that
freaks us out. We just want raw data, you know. We get it from ADP. I don't know why we can't get it from the labor One of.
The things I want to ask you because you think it's already the Fed has been too late in terms of cutting rates, and you talk about what we're seeing in the labor market. Having said that, at the end of the month, you know, Bloomberg reporting others how US consumer spending rose in July by the most in four months, and so we were seeing resilient demand still among consumers
in the face of stubborn inflation. And then there's the concern that the President's tariffs, that that is ultimately going to impact something. It's either going to be a mayor is paying more for things or companies continuing to kind of eat it, and that's going to buy into you know, kind of eat into their earnings.
So I'm just I'm just.
Curious how you factor that in the resiliency that we've seen in consumers and that maybe the economy isn't as bad as everybody thinks.
No, it's not as bad as everybody thinks.
But there's no doubt that the trade numbers are distorting the GDP numbers, and we got to get rid of those distortions. Obviously, we had a preliminary trade number this week that that's going to impact GDP and.
To the downside actually, So.
I just think that the dollars should be appreciating here sooner than later. We hope the dollars appreciation is going to largely offset the baseline ten percent tariffs. As far as they were simplical tit for tat tariffs, there's no doubt that they're still haggling as a dollar going.
To appreciate, Louis if we're cutting rates.
Because we've were the last Europe's cut eight times last I look, the other thing is America is not shrinking like Northern Europe is or Asia is because of a lack of household formation. You know, Japan has the highest birth rate in Asia and they're still shrinking. Okay, and so we're still pro family in the South, We're still pro family. In the Mountain West. We're still younger than everybody else. And we do assimilator immigrants. I realize that
President Trump is wants, you know, the legal ones. The rate on the battery factory I think is pretty controversial. Those people were working. You think they could just get extensions, so you know, I think, you know, it creates an interesting tone. But the bottom line is we assimilate immigrants in America and we welcome them.
We need them.
Yeah, so.
We're just going to grow faster than everybody else, but our rates are going to be higher than they are in Europe and worthy waste that you don't want to go to China. I mean, I'm gonnas the rachel below Japan, and they're going to have a currency devaluation soon.
So yeah, we're in the plate.
We're going to wrap it up on that one, all right, Louis, thanks so much.
Louis Navalier, chairman, founder CIO of Navalier and Associates joining us from Florida.
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