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what we're speaking to Bloomberg. I'm Any Morris in Washington. This midterm election is unusually hard to hold. That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven three, on New York, Bloomberg one, Washington d C, Bloomberg one oh six one Boston, Bloomberg nine sixties, San Francisco, d A B Digital Radio, London, Sirius XM one nine and around the world on Bloomberg Radio dot com and via

the Bloomberg Business App. Hi, everybody, I'm John Tucker, and let's try today's program with a look ahead to the coming jobs report. Joining me for more, Bloomberg reporter Matt Bosler Matt in the introduction, I called it the mother of all economic reports? Is it still or we are firmly focused on inflation reports instead of the job's report these days? Well, it's definitely competing a lot more with inflation these days, but I would say it probably still

is the mother of all economic reports. It's pretty critical over the next several months and into the next year for determining the trajectory for the Federal Reserve and therefore for financial markets more broadly. Yeah, And a big component of that is if the job's market is strong, the wages companies are paying their workers more, and that feeds into the whole inflation picture. Right. That's the thing. We have very high inflation right now. It's it's north of

eight percent, it's the highest in four decades. But a lot of that is presumed to be due to supply chain problems, supply side factors that are expected to dissipate and resolve over the next several months and into next year. So the big question is, once all of that stuff goes away, what is sort of the underlying rate of inflation?

Setting all of that aside, economists and forecasters, policymakers at the Federal Reserve, for example, tend to think that wage growth is really the underlying factor, uh that determines where inflation is headed. And so wage growth is still very high right now at around six and so set officials are really looking for, you know, that to moderate in order to feel more confident that inflation is going to come all the way back down to two once those

supply side facts take care of themselves. Okay, So, how strong is the labor market in the US and are there going to be signs of some cracks in the labor market going forward, especially with this coming report. You know, the labor market is just looking incredibly strong right now, and it's a bit of a puzzle for economists who would have expected to see more softening there as the Fed has raised rates over the last six months. You know, we just got the latest reading on initial jobless claims

on Thursday. For last week it fell, uh, you know, weekly initial claims fell below two hundred thousand again for the first time in several months. Are now near the lowest levels of this expansion. Yeah, that was you know, that's that's one of these good news bad news scenarios. You get a really good labor market report and then stocks you know, sort of go off a cliff. So it's that's what we're contending with. Explain that to everybody why that happens, Well, I mean, that really speaks to

where we're at right now with Federal Reserve policy. You know, the Fed is looking for the economy to soften. It's not softening, which means they're probably going to be inclined to raise interest rates even higher than they're already saying, which is you know, quite high already. So the question is does the Federal Reserve it has a dual mandate, by the way, as everybody knows, uh, price control, price pressures, easing price pressures, lowering the rate of inflation, and full employment.

So do they have with that dual mandate, do they have to torpedo the labor market to bring prices down? This is a really interesting thing because you know, they're projecting a higher unemployment right next year. They see it rising a four point four at the end of next year from the current levels around three point seven percent,

and they think that's necessary to bring inflation down. They need to see some softening in the labor market to moderate that wage growth, and then to bring inflation down, So, you know, you kind of scratch your head, is that

really consistent with their full employment mandate. What they say is that price stability is a precursor to full employment, and so that's kind of how they swear that circle that you know, we need to get inflation down because that will set the stage for a healthy labor market over the longer run. Now that's a contexted notion, but that's what they're saying at the moment. So what's the prediction right now from economist ahead of the release of

the report. So economists expect the unemployment rate to stay unchanged at three point seven in September from last month. The other big number to watch is labor force participation. That was sixty two point four percent last month, but it picked up quite a bit from the month before, and that's something that we've really been waiting to see

and hadn't really seen until just last month. If that continues, that's going to be really important because that's one way that um, you know, some of that labor supply could return and take some pressure off of wages and prices without necessarily having to see um, you know, weaker labor demand. Uh, so that's a big one to watch for sure. Okay, the Federalserve officials have been tightening, and we have to

remind everybody that their policy acts with a lag. So is it possible we've already passed the point of where the policy starts to take effect. And maybe there's an indication that the Federal Reserve officials have gone too far given how long they've been raising rates. Now, they started in March, but they were obviously signaling rate hikes even before then, which worked its way into longer term interest rates. We haven't really seen that showing up in the economic

data yet. Economists would expect it to start showing up around now. And so the big question going forward is do we start to see that having a fact or is it possible that the economy is just, for whatever reason less sensitive to interest rates then it used to be. One big thing that did happen during the pandemic is all of the money that the government pumped into the economy allowed a lot of people to pay down debt.

And so maybe, uh, you know, consumers and businesses are just not as interest sensitive as they used to be. In that case, the Fed may have to raise rates higher in order to gain traction and and really starts closing down. Matt. Always a pleasure. Thanks for explaining things to Bloomberg reporter Matt Bosler. And just to hit on bloom Break Daybreak Weekend, some big weeks coming for China's

economy and the political scene. There, I'm John Tucker and busm This is Bloomberg Daybreak Weekend, a global look ahead of the top stories from investors in the coming week. I'm John Tucker in New York. Up later in the program here comes the World Aviation Festival in Amsterdam. But first China's economy and political leadership and focus this coming week and for more, let's head to Hong Kong and

Bloomberg Daybreak Asia host Brian Curtis John. Over the next couple of weeks, we'll be taking a close look at the Communist Party Congress in China coming up later this month. In this segment, we'll focus on two specific areas. One a possible overhaul of the Chinese economy and secondly, future leaders, including who might eventually succeed Shijin Ping as Secretary General. We have Premier Lika Chong as well as the economics are Leo Hu PBOC Governor Ye Young and others likely

to step down early next year. Now that's based on retirement age and term limits for senior officials. New leadership might lead to new direction, though President She himself is expected to secure a third term as party chief. Joining us for discussion is Marvin Chen, China and North Asia equity strategist at Bloomberg Intelligence, and Crystal chap who's China assignment reporter on finance at Bloomberg News. So Marvin, let's go to you first. Plenty of big issues to be

discussed at the Congress. Confidence is low among both households and businesses, and of course there's a certain degree of external attention with with the West. We spoke earlier with Leland Miller, CEO at China Beije Book, and he told us China is actually facing increasing risks from deflation. We're not in deflation yet, but you know, we're heading into the winter. And a lot of people say, oh, this will bring economic stimulus after the Party Congress, it will

bring an end to COVID zero lockdowns. I don't think that's the case. And moreover, if you have more COVID and more COVID zero lockdowns, You're really going to have a problem with the threat of deflation looming. So again Leland Miller there China base book. So Marvin, what might we expect on COVID policy out of the Congress? Yeah,

thank you, Brian. Well, first I just want to emphasize that the Party Congress is largely a political event, so we shouldn't expect any immediately policy changes coming from the Congress, but we can get signals on the policy direction in the coming months once the leadership transition is in place. For COVID um, you know, cases have been coming down in recent weeks and the last major city, chanin Do

that was under lockdown is now reopening. So the Congress could be an opportune time for the Party to declare small victory and the effectiveness of the current COVID policies. But we think the changes will be gradual, perhaps another reduction in the in bound quarantine requirements, and the gradual reduction may be similar to what we saw in Hong Kong, but the semi lockdowns when cases rise may still be

looming and lasting into two thousand three. Is there a sense that Hong Kong might be an experiment that they're watching to see how it might be applied to China. Yeah, definitely. You know, Hong Kong will be closely watched how the reopening of Hong Kong affects cases. But you know, we we think that the Hong Kong reopening is uh more significant because they want to keep Hong Kong as a international finance hub. As you mentioned, the party Congress will

deal with leadership issues. So I'm just curious. So who might be tapped to become the next premier? Um, well, I mean we we do know that the Ka Chang is going to retire, but you know there's a speculation on a few names. Um, you know, I don't want to uh go, and I mean it's hard to speculating guests, but it's Leo Hu's name. Per ups in that circle. We think Leo ja is reaching the retirement age and he may be may be stepping down, and so no exception made on that. Okay, let's talk a little bit

about housing. I know that it's not so much economic policy, but this is a this is a story that runs right through society in China. Are we expected to see some measures at least in the next month or two to shore up housing. Yeah, there's not going to be a quick fix to China's property issues at the moment, and it'll take some time to restore the market sentiment. Many of these measures will be uh will vary from

city to city and left up to local government discrestion. Okay, for part two in our discussion, we wanted to talk a little bit about future leadership. You're we mentioned that we know that elites will take up the key leadership positions, but there's another group that will also advance, and these are being called the luckiest generation. They were born back in the nineteen seventies. They missed both the chaotic era

of Mount ze Dong, particularly towards the end. They got their education and grounding before the troubles of this most recent period. They had a brief window of Internet freedom wto membership and all that that meant, as well as global mobility, and those freedoms have now been somewhat restricted by censorship, trade actions and COVID border closure. Let's bring in Crystal for a little bit of insight on this

wonderful story. So give us one name, Crystal, that you think kind of stands out as the future high flyer. So I think arguably the most high profile leader in this cohort of politicians born in the nineteen seventies. Um It's step the deputy party secretary in Shanghaim. His name is to So he's been known as a right hand man to the current Shanghai Party chief Letia, who is a longtime associate of presidency and the financial hub of

Shanghai is traditionally a springboard to higher office. Seizing pay himself as a former Shaghai party secretary. Many probably the observers have noticed Jugo is one of the most promising younger politicians to sporn in the nineteen seventies. And broadly speaking, why is this generation important? So it's likely that Seizing things success so will emerge from this generation. They will rise to power just as he gets very very old.

So current age limits and norms meant that those born in the nineteen sixties will have to retire over the next decade. So that would clear a path for those born in the nineteen seventies to join the Politburo. So the idea and the logic is that they will first join UM the Central Committee this month as alternate members become full members in the next Congress and then right to the Politburo in the Congress. I'm also curious about whether or not these leaders will be more globalist in nature.

I mean, might they be looking externally as much as internally for the development of China. One thing that stands out from the shared experience of this cohort of positition s born in the nineteen seventies is that they have witnessed and in fact experienced the benefits of China's startling

economic rights. So that gives rise to two arguments. One is that because that they have enjoyed the benefits and they have had possibly a more international education, so they will open up China at just potentially the right time. On the other hand, we could also argue that because you have only experienced the so called good times, it is much easier for them to internalize the idea that the party enrich our society, and that would um help them to enforce the seaters co. Yeah, so a lot

needs to unfold over the next many years. Crystal, thanks so much for joining us. Chrystal China assignment reporter on finance at Bloomberg News, and Marvin Chen thank you as well. China and North Asia, equity strategist at Bloomberg Intelligence. I'm Brian Curtis along with Doug Chrisner. You can catch us every weekday here for Bloomberg Daybreak Asia, beginning at six am in Hong Kong and six pm on Wall Street.

John Brian, thanks a lot. Just ahead on Bloomberg day Break Weekend, the High Flying World Aviation Festival in Amsterdam. I'm John Tucker On. This is Bloomberg broadcasting live from the Bloomberg Interactive Broker Studio in New York. Bloomberg evon Freo to Washington, d C, Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg NIXT to the country Sirius XM Channel one nine to London d A B Digital Radio, and around the globe the Bloomberg Business

app and Bloomberg Radio dot Com. This is Bloomberg Daybreak Weekend. I'm John Tuckery New York with your love log stories for investors in the coming week. The World that Idiot and festival happens next week in Amsterdam. For more Land, Said to London, bringing Bloomberg Daybreak Europe anchor Caroline Hepger, John sawing dollar denominated fuel costs, a chaotic post COVID summer travel season, and sustainable aviation. The airline industry certainly

has some challenges. Jo, what I mean now is Bloomberg anchor Guy Johnson, who is off to Amsterdam. Then in the coming few days, Well, we hope you're going to be off term. What is the biggest issue then in your view for the industry? Is it production? Is it the passenger fuel costs? What do you think? It's all of the current It's all of the above. This is an industry that shut down during the pandemic, which was unprecedented. It has then had to completely readjust to a summer

that has been much stronger than anticipated. The capacity has not been there. We've all read the stories about the chaos that has ensued as a result of that. It has been a European problem, it's been a problem over in the United States, it's been a problem down in Australia. All of the airlines have been suffering from the same issue. But then, but the challenge now comes in. As much as they've they've ramped up capacity once again to meet this demand. But when now we're going into a cost

of living crisis. A lot of people book their summer leisure trips as they came out of the pandemic. Let me go anywhere. I don't care where, I just want to go on holiday. But now energy prices are rising, mortgage costs are rising. Are people going to continue to book? And if they're not going to book, will business travel make up the game? Yeah? I mean I was really just the other day. I don't know whether you've seen this the October half term here in the UK where

people might go and grab some summer son. Apparently airline ticket prices have gone up something like for travel to places like tenor Reef and elsewhere. Look, you cover all the kind of global aviation industry Shindix, what do you think the atmosphere is actually going to be like? Then sort of paints a picture and really importantly, who are you going to be speaking to for blue bo TV

and radio? I think it's going to be called So if you're an airline boss, you are, from a d N A point of view, an optimistic person you have to be. If you want to run an airline, you have got to be an optimistic person. But I would say even the most optimistic airline CEO at the moment, it's probably feeling fairly cautious. Um, there's a lot going on. There's a lot of non unknowns that they have to deal with, so so I think there will be certainly

a note of caution. We're going to be speaking to a whole range of carriers from around the world, and that's what's great about these things. Airline CEOs are actually prepared to get on an airplane and come to these kinds of events. So we've got Willie Walsh is going to be there. He'll give us the sort of top down picture from my art. That's the industry body. We're being hosted by the new KLM ceo. UM. There are many female CEOs in this industry, so it's great that

she is. She is kind of hosting this event effectively for us. She's just been in the job for a hundred days. It's gonna be really interesting to get her take Marion Riddler of what is happening with the airline. Then we've got some of the big kind of global carriers. So Tim Clark is going to be there from Emirates,

be injurged to get his take. He has a pretty global picture of what is going on quantas is CEO Alan Joyce is going to be there, so you're getting you're getting the kind of the whole range um and I think actually I'm quite curious to hear from from some of the long haul carriers because you mentioned tenn a Reef. I think that's quite interesting. People are shortening the length they're going to be prepared to fly for winter sun and it's going to be interesting. You mentioned

tenner Reef. Tenner Reef has quite a good winter sun. But normally people will be going to Australia, they'd be going to the Caribbean, they'd be going to quite far flung places to reach that wind sun. My understanding is that they're going to be flying shorter distances to get that little that little rare. There you go. You can you can tell that I was looking it up on me on the internet, can't you. Well. The October rises are looking like look interesting that you mentioned i Ata

and great stuff. Really excited to hear about all the CEOs that you're going to be able to listen to on on radio and of course watch on tv UM. Iata says that they are optimistic that governments will sign up to the target of net zero emissions for the sector by twenty fifty. There's a critical meeting coming up in Canada de Carbonization, the road to de carbonization for these airline industries. It's really challenging, it is. It is

a huge challenge. It is interesting. Easy Jet has just moved away from its offset scheme which didn't work, so they're trying all kinds of different things trying to make this work. The biggest, the biggest thing that that the industry needs from governments is a policy pledge to make sustainable aviation fuel in quantities, So that needs that needs a tax reset to be able to allow that to happen. Joe Biden, just over in the United States has started

down this down this road. It's going to be intrigued to hear from Quantus. They're very keen for the Australian government to to actually step in and deliver significant policy around this kind of area that will allow the sustainable aviation industry to grow. Guy, thanks so much for being with us, Wishing you all the best of luck. Will be tuning in of course to get all of those CEO interviews from the World Aviation Festival that takes place in the coming days in Amsterdam. Thanks so much to

Guy Johnson. I'm Caroline Hedge in London. You can catch us every weekday morning for Bloomberg Daybreak, beginning at six am in London. That's what I am on More Street, John, Caroline, thanks a lot. Just ahead on Bloomberg Daybreak Weekend, watch for more mud slinging as the mid term elections near. I'm John Tucker, and this is Bloomberg. This is Bloomberg Daybreak Weekend Global, looking ahead of the top stories for investors in the coming week. I'm John Tucker in New York.

The mid term election season shifting in the high gear this coming week, with the November eighth elections getting closer evermore. Let's head to our Bloomberg ninety one newsroom in Washington and Amy Morris, Thank you, John. President Biden has been ramping up the rhetoric as the mid terms near, and he steps up the campaign appearances and other public speeches. You can't claim to be a party of law in or and call the people to attack the police in

January six patriots. Now, as President Biden and other Democrats continue to try to use issues surrounding January six to their advantage. Republicans are trying to use a lot of hot button issues as well to their advantage. One of the issues they may try to turn to their political advantage the January six riots, including some people who are actually there. We talk about this now, Bloomberg political reporter Ryan tigue beckwith Ryan. It is a pleasure as always,

Thanks so much for joining us. All right. So, former President Trump has not yet announced his bid for the White House, but he has been pushing back at President Biden's claims of success. Uh. Here is the former president now at a rally in Ohio just recently. It's been one of the worst years for stops in history. How are you, for a one case doing not too good? All right? So, Ryan, how powerful an argument is this for Republicans? Is this something that can maybe move the

needle or sway independence? You know, I've never really understood Trump's focus on for one case, because a lot of the people who really vote based on the economy don't have forewarn case. I think the broader point here is our employment doing doing and so I think that the broader argument there about the economy is is still probably in the Republicans. Uh, you know, on their ledger on

the positive side, giving them a boost. Um, I think that there's a question, a real open question of how much other issues like abortion may counter the countervailing forces there for Democrats this time around. But I still feel like the economy is just is too uncertain and for it to be a boost to Biden at this point. So we're coming up now on a busy week at the Supreme Court, shifting gears just a bit. The political

world still reverberating from the rollback of abortion rights. If the economy isn't necessarily going to move the needle for everyone, how is the abortion you're going to play out for

the GOP specifically? Yeah, I mean I think that there was a long for a long time, there was an advantage here for the Republicans in that the status quo was sort of assumed by supporters of abortion rights to be, you know, not changing, and if you're a Republican, you could go out there and campaign on how you're going to abortion or you're going to you know, things like partial birth abortion or a parent notifications or things like that, where they could kind of find the wedge issues that

would sway a number of people. Since the Dobb's decision. We really seem like a reversal in the pool. But there's a lot more people who are concerned about this who are abortion right supporters than opponents. And there's a lot of people who say in the past, what it said that they were pro life, and now we're saying but you know, I would sort of like the standard that there was during reversus a way to be with the law. I do think that that is a factor.

I don't know how much of a factor. I mean, it could be a thing where it cuts into the Republican margin, but not enough to prevent Republicans from prevailing in the House and picking up some sentences. So it could be a factor but not enough of a factor. Or it could completely change the electorate. I mean, we have seen some evidence that voter registriations about young women especially are unusually high. It's a real hard one to pull. It's a real hard nitt term to pull. I don't

think we've seen one like this. The other flip side of that coin is that maybe people who supported Republicans are who supported Donald Trump before aren't as motivated to go to the polls because abortion perhaps was their wedge issue, and now it has been resolved, the Supreme Court has had that handed down that decision, right, it does drain

a little bit of the energy there. And I think that you saw like Trump was very effectively able to get people back into his corner who were maybe skeptical of him. But we're republic against them, We're um anti

abortion rights, those folks. We're swayed kind of at the last minute by his argument that like you got to come home, you know, I can quit juststicism the Supreme Court, And that was basically to feel that he made with them, I can go to the justices and not in like a five four situation, but like feeling a pretty confident six three conservative majority in the screen courts, Like I think that really becomes much less of an effective argument if there are other things that are sort of depressing

them or keeping them from wanting to turn out. You would mentioned Ryan that this particular mid term is hard to pull. Why is that? What is the perfect storm that we're witnessing that makes this one so unusual? You know, there is just a there. You could do a whole hour on what's up with pulling lately? And the real problem with pulling is not so much figuring out what people think, because we can easily pull and tell you

what what people think. Um. The problem is whether those are the people who are going to show up to vote, and it's Pulsters have different ways of doing this. Sometimes they will just pull people that they know voted in previous elections. Sometimes they will ask people they do vote. Of course, you know, everyone says yeah, I voted, because no one wants to say that they're like a bad citizens um. Or you know, they may say you intended to vote. You know, if the election were helped today,

how would you vote? And the composes are all very inexact, and there's also some noise in the data. It appears that maybe some Trump supporters have just run so skeptical of institutions in general that they don't respond to poll or that they don't tell polsters that they're going to vote, or maybe just that they're off the grid enough that it's hard to get ahold of them and so they're

not being captured by that. So we do see that there's some potential here that the pools are understating Republicans in sowing Democrats ahead, and some of the Senate races, and we may wake up the day after the election and find that Republicans actually did quite well in those races that they were cast of movies, like in Georgia and Pennsylvania, or you know, it may not be the case when we may find that there's another group of people that we've missed, like him, women that were you know,

under stampling. So I really take polls with much more solt than your doctor would recommend. Right now, Well, we are talking with Bloomberg political reporter Ryan tigue beckwith about the unusual nature of this mid term election. Ryan, lets shift gears a bit to Pennsylvania. Democratic sending candidate John Fetterman was at a rally this past week, and he promised to quantify Roe v. Wade if the state sends

him to Washington. My name is John feder Woman. His Republican opponent, mem and Oz has agreed to release his medical records. He also continues to pressure Federman to release his following that stroke that Federman had back in May. I don't know if he's medically fit. Holdough, I'm a doctor and I probably should have an opinion on it. But the fact is that nobody knows because none of us have had access to his medical records, and Frantny

that's his decision what records he wants to provide. Okay, So Ryan, where do we stand on this race and what are you looking for as far as the two of them in the coming weeks? Okay? Now, I am one of those people who will tell you that debate do not matter. M Everyone always gets all excited about debates and makes a big deal about debate um and generally speaking, like most debates doesn't really have an effect. There's a handful of cases that you could point to

where they did. This is one of those. I think if if Sedderman and are needing a debate, and Sederman is able to put on a pretty normal performance for a politician, then I think that that will put to bed the questions about, you know, his stroke and whether he needs a further job. If if he has a halting performance or has a moment on stage, or he appears lost or isn't able to parry effectively an attack, and I think there's medical concerns would really be forefronted

by that. So there's a lot of states in the two of them leading at a debate and out of a very smart guy and a very quick guy, and I think this would also be an opportunity for him. He's been really flatsported on on social media and some

of his remarks and interviews and things like that. If he can manage to get through a debate without saying something about crude detas or or no some of the things that he said that where he's started trying to attack betterman and ends up making him sound cool, Uh, then I think that would also could actually move the needle a little bit. It's a very close race, much closer than I think Democrats were hoping it would be at this point, speaking of moving the needle, will immigration issues,

border issues move the needle? It seems to be getting more intense by the day. Where's the traction when it comes to immigration. I don't it necessarily enough of a crisis to become like an issue for swing voters or depress Democrats on the issue or something like that. And there's some reason to believe that that the aspensive focused on immigration in vers when it really wasn't an issue.

Is why Donald Trump did better in among Hispanics than he did in It may be that there's a cost to talking about immigration, because the way that Republicans talk

about it tends to turn off some people. The other reason why this is a weird mid term is that it does feel like there's like two separate elections going on where Republicans are kind of over in this corner talking about immigration and inflation, crime, and Democrats over in this corner talking about abortion rights and you know, Biden's record and prescription drug prices and whatnot, and and they're the public seems to be kind of in their two

universes too, like there's this isn't really a thing where there's an issue and you know, here's what I do about it. It's like each has kind of its own set of issues. And I think that's the other thing is that it's hard to know which motivating enough to get the turnout. Okay, we're gonna keep watching it with you, Ryan, Thank you so much, Bloomberg political correspondent Ryan tigue beckwith

and that's what's going on in the nation's capital. For more of our political news coverage, tune into Balance of Power with David Weston weekdays at noon Wall Street Time, and Sound On with Joe Matthew weekday afternoons at five right here on Bloomberg Radio. I'm Amy Morris and this is Bloomberg John. Amy Morris reporting from our Bloomberg ninety one newsroom in Washington. Thanks Tommy, and that does it

for this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at five am Wall Street Time for the latest on markets overseas and the news you need to start your day. I'm John Tucker at this is Bloomberg.