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We're gonna go ahead and go over to Tom Gimble.
Now, he's the founder and CEO of Lesalm Network and he this is a hiring firm, so he is going to be able to give us a fantastic outlook of those jobs numbers that we got yesterday and of course the numbers that we got today.
Tom.
Great to speak with you, and thanks so much for chatting with us on this Friday. Talk me through the totality of the data here and what it tells you about the jobs market. Is it the bad news that we should be listening to or the good news?
I think an economist can spend in any way they want to. However, anytime an economy adds over two hundred thousand jobs, I'd say, thank you, let's move on to the next month. I mean, there's nothing here that we should be depressed about. I think what the layman needs to realize is there's really two messages. One is the economy good for me today? And number two is what are economists and the Fed looking at for interest rates, which is a longer ballgame at a higher macro level.
And what this says right now is that because of two hundred and nine thousand versus roughly a quarter million, which is what the economists were estimating, is that the Fed won't raise interest rates again, that people think it's slowing down, which is actually an even better thing for the economy. So we missed the number by a smidge. We still add over two hundred thousand jobs. The Fed
won't raise interest rate, the party continues. Everybody's happy, but let's paint it is really sad and depressing right now.
Well, there was a time when if I could fond a mirror, I could get a job. Is that still the case?
It's not too far off from that, to be quite frank. We're looking at a situation where companies are still hiring. Obviously, we added over two hundred thousand jobs, and the difference is is they're not hiring in bulk. So you might not be able to get a job at any company you want to, as you could have in twenty twenty one. However, there are more than enough jobs for people who are looking okay.
But when you look at the ADP data specifically, leisure was the biggest growth area. But leisure, I mean, you can tell me this, Tom, It feels like a little bit of a concerning area because it can those jobs can go away so fast, and we obviously saw that in March.
Seasonality No, no, I disagree because it's seasonality. So compare June over June and look at the summer, and we know those are coming. So that was built into the estimate that the economists had that they've been doing this for forever. And when they predict two hundred and forty thousand or two hundred and fifty thousand, they're figuring in for the summer hospitality jobs too. This is a good report. Anything other is chicken little, as I say every month on this show.
But is it potentially a final gasp for air before the economy starts to slow?
No, I really don't think so, because what's gonna end up My guess is I haven't what's the market doing right?
Now, oh, with a stock market, I'm gonna call it mixed.
Yeah, it's a little unch very much.
It's unchanged, right, So what that message sends. If it were a bad number, the market would be down. It's a number that says we're still adding jobs. And once the Fed doesn't raise rates at the next go around, this thing is gonna shoot. The market's gonna shoot up even more. We added over two hundred thousand jobs. It's funny how quickly we forget the spring of twenty twenty. It's funny how quickly we forget two thousand and eight and two thousand and nine. Those were bad. This is good.
We got to keep things in.
Perspective, Tom Doo, Who has the leverage is that the mixed starting to change is still the employee, like, hey, you can give me a raise or else I'm gonna go find another job. But we're with the employer.
We've gotten away from that. The leverage is back on the employer side, and I think that's what the changes that we're seeing. And if there's a little bit of not desperation in the air, but fear around, it's people bringing employee companies bringing employees back to the office. And the employees can't quit and go get another job working fully remote anymore because a lot of companies are bringing
people back to the office. So my feeling is a year from now, we're not going to be talking oh, post pandemic and who's working in the office and who's working not Almost every company will be three days a week, if not four days a week a year from now.
And where are you seeing the most demand for workers.
It's always going to be in technology right now because we have well, we have this intersection right now where it's technology is growing so fast and we're having so Now we have AI, which is what dot Com was twenty years ago. Right twenty years ago, you put dot com in your company's name and you'd go public. Can you'd be worth a billion dollars? Just wait until every
company has it being less sound network AI. Everything is going to be AI AI AI, and we're going to see this be a self fulfilling prophecy that it's going to balloon a new market and it's going to be the driver of jobs through AI and cybersecurity.
Well, what's go over average pay for me in the different industries that you are familiar with.
Well, I think average pay is a really interesting issue, and the reason is is because it figures in salaried and hourly, and we have hourlyas that have been en that have rose over the past three years due to number one COVID pandemic, pay, number two social unrest, number three municipalities wanting to with more liberal aldermen so to speak, and mayors and officials running it. So we've seen the municipal minimum wage rise that used to be ten dollars
an hour. In some cities it's fifteen to seventeen dollars an hour. And we've seen hourly factory workers and hourly warehouse workers go from ten to twelve dollars an hour to eighteen to twenty to twenty five dollars an hour. So you have that aspect of the business which is still healthy, but we'll see how that gets affected. It's
usually the first area. The interesting thing is on the white collar jobs, where people were getting counteroffers from their employer when they leave for huge amounts to get them to stay. We're not seeing that as much anymore. We're seeing companies toe the line and say we're not going to screw up our whole salary structure. Because the economy's good, not unbelievable.
But we're seeing also a decline to your point in weekly hours worked. Is that a key indicator to you of something that's to come and is that something that you're seeing in your day to day now.
I think you see a decline in weekly hours work because of the increase in the hospitality sector. And so when you've got people that are hiring in those phases, it sometimes leverages down the amount of hours work by each employee. And so the thing that makes it good is that more people are getting jobs in that space. The thing that makes it bad is some people who are working over time and doing things like that. It's not leveraged into the average hours, so you see a
natural decline in that way. You also see more people taking time off in the summer, which lowers the average hours worked. I don't think that's as big a deal as a lot of economists do.
Can you give me an update on the gig economy? Where does where does that stand?
Yeah?
I think the gig economy was a gig. I think that it was something that we're seeing that people in good times. It's awesome. I don't need my boss. I can get a job whenever I want, so, I'll go uber, I'll do door dash, I'll be a dog walker, I'll do all these things. And that's why it didn't show into the jobs numbers. Now we see those people saying, hey, wait a second, I can't keep up with the cost
of living doing that. I need to get benefits. I want to have a four to oh one k. People start to settle in as gen Z becomes in their thirties, right, So you have this cyclical nature. That's something that happened with MILLENNI and they don't want to be doing gig economy.
Work really quickly. Thirty seconds here, Tom, If J. Powell calls you and says, what do I need to know about the jobs market that the economists aren't telling me?
What are you saying, I tell him.
The same thing I told him this morning when we were talking. No, I'm kidding. I would tell him keep things flat for the next cycle, don't do a thing.
All right, Well, we'll see if the market agrees with you there. Tom, thank you so much for joining us this morning to break down that job's data for us.
That was Tom Gimble. He is CEO at LaSalle Network.
That's a hiring firm, so John, he's got a great outlook on what's really going on on the ground when it comes to hiring and wages.
There you're listening to the team Ken's are Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot Com, the iHeartRadio app and the Bloomberg Business App, or listen on demand wherever you get your podcast.
We were easing some of those declines earlier today and now it's looking like we're back in the red for the S and p NASDAC relatively unchanged. So we're going to talk about what to make of the day's trade with Ben Emmons. He is the principal, senior portfolio manager and head of fixed income and Macro at New Edge Wealth.
Got a laundry.
List of previous work in the finance industry that we're going to talk to him about. Ben, thanks for being in studio with us. Helped me make sense of what's going on in markets today. How are they digesting the data here?
Still digesting medisine, But I think it's about you know, the ADP number took a lot of the gas out of the market. Because I was a real surprise. So it's this headline from non fan patals comes in a little softer, you get some muted reaction, but the reaction is the same as yesterday. I yields a little bit lower stocks because the market's trying to digeste This is a job market that doesn't really cool off. If anything, it just really underlines that the FED has to pull
forward here. It has to probably hike maybe more than two times because the resiliency of the economy, you know, there's too much strength underneath. And I know these reporters that didn't show any significant weakness in any area. So I think markets are looking at like we're going to have to start factoring in a higher terminal rate that may be beyond what the FED is factoring it in for the end of the year.
You know, little history. One of the former FED chairman, Paul Volker, used to carry in his breast pocket a readout of the latest labor agreements, wage agreements with the unions. Presumably how sticky are wages right now, because that seems to be the key for all of us who follow interest rates.
Yeah, the the every average hourly earnings of four point four percent year on year. There was another I think sign of that if you have labor being this strong consistent job gains, you're going to get higher wages. And every wage striking from the Atlanta FAT shows an upward momentum. The ones that stand out to me are construction and leisured as well. I think the biggest wage gains are happening.
There's maybe less of unionized area then if you think about ups as an example right of what's happening there. But to that point of Vocar, if you're getting consistent gains of labor and wages pick up, yeah, there's some level of let's say, prices drive to higher wages and vice versa. So it is happening in the economy. Not the same as in the seventies, but it's definitely a trend of higher wages.
I'll go back to my ques. Is that sticky? Is that going to remain?
It looks like.
It's sticky because if you think of the core pce exer, core services, pce X housing you plot out against those wage trackers from the Atlanta FAT, it's exactly the same trend, almost identical, just on top of each other. That looks like very sticky to me.
How sticky then, Okay, I've been dying to ask this question.
John, You're gonna love this. On a scale of peanut butter to super glue, how sticky?
Oh not super glue. I don't compares that probably is not because it is a competitive labor market. So I do think that if you get layoffs, so you get like, you know, some adjustment of wages in certain areas, it's just more stickier in terms of the demand for labors. Is sticky that or drives up wages. I think that's the issue. The Commerce Department put out of a board about a month ago highlighting all the labor shortages across
the economy. There's a lot of it still there that keeps those wages like peing a butter.
Okay, well you you well, there you go. You do a great job.
Though, ben of looking at this from a global perspective, and when you look at the inflation picture in the UK, it makes me glad that I'm in the US, even though inflation here is pretty bleak for me when I'm being a consumer outside of the desk here, talk to me about to what extent the inflation picture in the UK and the credit tight ning we're seeing there could impact what the FED has to do here in the States.
Yeah, there's a bit of that. That's the idea of butterfly fact. Yeah, you know, I think is more risk of that rage price spiral part of it. There is more unionized economy, but it's also it's showing the signs of it. And you know, the UK obviously is really suffering from the supply shock in Europe, the food supply
shock that's compounded by the Brexit. You know, that's now really showing up in their data and they're you know, the Bank of England didn't go so far as to feted with a number of rate hikes really quickly after one of not like large rate hikes, and this is why the market is pricing in six and a half percent of a bank rate that's on the base points more than the where the FAT is projected at. I
think the food price inflation is where they're struggling. They can't really cool that off because of the Brexit effect. That's really the key issue.
Does the market now believe the Fed?
They do, John, I mean it has actually been there way for a while. Sounds odd, but that transitory discussion that where the fat apparently lost so much credibility, you know, the bomb market early on, except like, well, Fat, you started raising rates, You're going to get your inflation back to two percent over time. That's what the inflation lik bonb market has been very consistent in and that's I
think where we currently are today. It hasn't really changed even though you're getting these good, you know, payroll numbers and you see it continuing strength in the economy. There's another side of it that the energy markets have really cooled off from last year and commodity market students. That helps. I mean, it's part of that calculation in these inflation expectations. But I do think that market has been at the side of the Fat saying you're going to succeed in
this mission. You're going to bring that inflation right down. It may take a number of years, but you're going together, all.
Right, the obligatory questions. July that is twenty five basis points. Again, what happens after that? Is it a higher rate regime six months from now? You got forty five seconds.
Yeah, so July that's now of course confirmed by this data at CPI next week, so that probably he's going to fully cement it to one hundred percent probability. You know it will remain data dependent. That's how the market is trying to price it. So the September and November meetings all still in play. But the probabilities do show that you'd like you have an honor rate high extra. The federal match is median forecast plus. The probability of a six percent rate in November has notched up a
little bit. It's about ten percent. So let's keep an eye on that because that is not impossible to see a six percent rate.
Yeah, and it seems like if you're listening to j.
Powell, he's just going to continue to look at the totality of the data when deciding what he is going to do next. Ben Emmons, thank you so much for joining us as always, great to see you in the studio with us as well. That was Ben Emmons's principal, senior portfolio manager and head of fixed income at New Edge Wealth, joining to talk about those jobs numbers and of course what the Fed is going to do next?
Our favorite question here at Bloomberg.
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No, you're all loving our FED Speak analysis here, but we've got a great guest in to talk with us about the jobs data and how it's going to impact FED mooves moving forward.
We've got Julia Pollock here.
She is a chief economist at zip Recruiter, joining us on zoom to talk through some of these jobs numbers. Julia, thank you so much for coming on this morning with us. Talk to me about what your take is on the current jobs market. I mean, if we're listening to gooules By, it sounds like it's strong but cooling.
Would you agree with that description?
Absolutely strong, solid, robust, But there are clear signs of cooling in today's jobs report, not just the slowest job growth number since decem for twenty twenty, but also rise in the number of people working part time for economic reasons. Those are people who've had their hours cut or who can't find full time work but want to be working full time.
You guys, a ZIP recruiter must generate its own proprietary data. What does that tell you, if anything?
Absolutely so, that has shown a large decline in online job hostings than even in BLS reported jobs data, but a rebound in June. So we also saw a pretty strong June, but even clearer signs that the lave market is cooling down and that the Fed's interest rate hikes are starting to bite. That they are reducing private investment and causing companies, even those that would like to be hiring more, to be a bit more cautious and concerned.
What about wages? What does your data show?
So wage growth in job hostings has also slowed In twenty twenty two, the share of job titles that saw average wage increases over the year was three times higher than the share that saw declines. This time around, we're actually seeing more job titles show lower average posted wages in job hostings than games.
Yeah, it's so important to watch. And our Bloomberg Economics team puts it really well that they still anticipate a recession coming in the second half of twenty twenty three.
So anytime now.
And they say that you start to see those cracks in the labor market about two to three quarters after recession officially begins. So, Julia, I wonder if when you're looking at the data, does it feel to you like this is just the beginning of the title wave of recessionary impacts on the jobs market, or is it something less intense than that.
Well, I think it's something less intense than that. I think we're now at a place where the labor market is at as steady sustainable pace. We could keep this up for months and months and months. Employment levels are still well below their pre pandemic trend, and so there's still a lot of catch up hiring that could take place in the coming months. Industries that were hardest hit in the recession are sort of finally playing catch up, like the government, not an industry, but you know what
I mean, a sector that was far behind. So I think there are lots of reasons to be bullish on this labor market still. And then we also just had an almost fifteen percent return in the stock market year to date and a rebound and consumer confidence. All of those things could bode well for job growth in the future. There are huge risks, don't get me wrong, but I don't think we necessarily are in a bad place.
I put this question just about every guest we had today. I'll put it to you who's in the driver's seat, the employers have the leverage or the employees.
It very much depends on the industry. Talking about goods related industries like retail, transportation, and warehousing, workers there have seen a large decline in their leverage, and that's because consumers are shifting their spending back from goods to services. Tech is still a glaring weak spot in this economy, with far fewer quits than before the pandemic and more layoffs than before the pandemic.
Can I talk to you a little bit about your new higher survey that you include in your note here. I love talking about employees ghosting their employers.
Do you know about this, John?
All the time there's an increase.
I'm sure you do, increase in employees ghosting potential employers after getting job offers. Julia, what do you make of that? And how widespread is this starting to get?
So?
In this survey of two thousand recently hired Americans, I mean, there's still plenty of sign that workers are confident and that they are they have a lot of leverage so much so that they don't need to behave well necessarily they are, yes, exactly. They're still getting pretty big wage increases, they're still getting attractive offers, and they're still finding jobs very quickly. And the other thing that they're seeing is that companies have made huge improvements in their recruiting and
hiring processes since the pandemic. They have made those far more mobile friendly. They've also adopted more automated tools. That's the likely explanation for the increase in the share of workers who are getting very quick responses to their applications. I think many companies have automated that system and tell people right away whether they're likely to get a job real quick.
Can they still work from home or is that changing.
Work from home has stabilized it? Around twenty eight percent of all worked days in America, up from five percent before the pandemic. There are industries where you are seeing a bit of a pullback now, but on the whole it's still very very steady.
Yeah, And really I just want to mention, because we have to leave it. Their job seekers look like in your survey, they're becoming more pessimistic across the board about current labor market conditions and the medium term economic outlook, which is certainly something that I feel myself and amongst my friends here. Julia Pollock, thank you so much for joining us.
That was a great conversation. Oh my god, of course I am.
You're listening to the Team Can't Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
We are going to get back to some of that job's data from today, and on the line, we've got a really fantastic voice on this. We've got Jeffrey Cleveland here to discuss the jobs market numbers and also what we're seeing in terms of moves from the bond market off of that news as well. Jeffrey, thank you so much for joining us to talk about what.
We're seeing here in the market.
I mean, when you look at this June jobs report, it feels like some good news this morning. If you're the Fed, bad news yesterday when it came to that ie popping ADP number. Talk to me about where you think our economy sits when you're looking at the totality of that job's data.
Well, I think the context matters, you know, when you look at each report that comes out every month, and if you I talked to a lot of economic bears, they're my favorite species of market participants in you know, they were telling me last month, Hey, you have to look at the household survey it was negative. You have to look at ours worked. You know, it had ticked down, and you know, so lo and behold, we had I think a decent non farm payroll number, two hundred and
nine thousand. We had the household survey component of that bouncing back, so that was up two hundred and seventy three thousand, hours worked ticked up, and then average hourly earnings another point four month to month print. So I think you have to look at that full context and it's it's a pretty solid report in my view. It doesn't tell us, you know, maybe the job growth is slowing a bit, bought nothing close to a recession, and
I even hesitate to call slow. And I mean, we're still adding over two hundred thousand jobs in the latest number. That three month average of non farm payroll still two forty two fifty k. It's really solid. We only need like one hundred thousand jobs per month just to keep the unemployment rate where it is, So if you're getting over two hundred thousand, it's a it's pretty good.
All right. So what does it tell us about the stickiness of inflation.
Well, I think if you're a policy maker, you're going to look at two things here. You're gonna look at that three point six percent unemployment rate, and you're going to conclude that the risks are still toward inflation pressure. That's an unemployment rate that's very low. So we have very tight labor markets. I think you heard Powell last week he said the goal for the Fed was to
get the labor market in better supply demand balance. And three point six percent on employer rate, it's really tight conditions. And then the second thing you'd look at, I think would be average hourly earnings again zero point four percent month to month. So I've been hearing from the lot of the bears they oh, job growth is going to roll over, and also ways growth is going to roll over any second now, and that's just not happening. It's
not playing out here. So I think this keeps the FED on track to hike we think they will hike in July at the July meeting, and we think they're on in every other meeting hiking pace right now, So that would imply skipping September and hiking again in November. So we get the five fifty by year end on FED funds.
What's so interesting to me is that the data and the FED moves and the market moves are all over the place, but also the vibes of us regular folks out in the world. We just talked with an economist from Zip Recruiter who talk to us about how the majority of job seekers are feeling this pinch of market conditions and they feel that they should take the first job that they're offered because they're so concerned with the economy.
From where you sit, Jeffrey, does that square with what's actually going.
To happen in the economy?
And what do you make of the feeling of anxiety with American workers given that we continue to get these great jobs numbers.
Well, just talking to friends and family, we're being constantly told that the recession is going to start imminently, right, It's going to be dead next week, next month. We've been hearing that for a better part of a year now really since last June. So if that is what the average person is hearing, I can understand a little bit of consternation. The data, though the macro data doesn't
really bear that out. I mean, in terms of labor demand, still very very high job openings hanging out around ten million, so we're still seeing pretty good labor demand. Now. It's down from the peak where we had extreme amount of labor demand, but it's still high relative to other cycles, so I still think it's a pretty good time to be in the market looking for a job. I think we also saw that the quits data tick back up. Yeah for May. Yeah, we saw that that was the
paidon and regal chart of the week. If anyone was interested in checking that out. We just compared quits you know, this cycle are still well above what we saw at any point really in the twenty tenths. So I still think it's a better environment now, and that's good news for someone who's looking for a job or was in the labor market. It's better environments than it was for much of the twenty tenths, so that's good.
I don't want to get too geeky, but there was an account of as Rudy dorm Bush. Among other things, he said that when things turn, they turn pretty quickly. Do you get a sense of that.
Yeah. We always say, like the unemployment rate is a good example of this. It falls like a feather and it rises like a rocket. So you can see looking at the unemployment rate chart that exact story. So that's why we're always on guard looking at things just for the early hints, in the early signs, you know, initial claims for unemployment. That weekly data that comes out tends to be a pretty good but you know sign an indicator of that. It ticked up recently, but it's been
hanging out. I would say for the last three or four months, around two hundred and forty thousand in the weekly claims data.
So it's moved up.
It's indicative of a slower job growth, but it's it's nothing worrisome. I don't I don't think. I also think payrolls. He gets a lot of pushback and people say, oh, it's a lagging indicator. But in real time, we're getting data for last month, for June, we're getting it released here,
you know, seven days into the month. It's pretty good real time indicator from me from a bond market economist perspective, always have relied on that, and as I started this segment, two hundred and forty four thousand, the three month moving average of non payroll growth, it's a pretty good indicator of where we are. It's it's slowed down, so growth has slowed from a year ago, six months ago, but still very solid job growth.
So you're a bond market he's a bond market economist. So that means you are a pessimist, is it not.
I'm supposed to be. Yeah, I'm supposed to be out here telling you that, you know, inflation is rolling over, it's time to buy bonds, you know, exten duration. But I would like to think that I'm objective. I'm just looking at the data here. Yeah, we're very far from the Fed's target on inflation. Yeah, the unemployment rate is very low, and I think their bias from policy makers is going to be to keep hiking, So that's going to keep putting pressure on front end yields. So you're too.
You know, yesterday we did see two year yields creep above five percent, which makes sense to me. We're back below this morning. I think we'll move back above. At some point, the Fed's got two more rate hikes.
That's the gott.
To face the facts here. So that's what bond market participants have to face those facts. Don't fight the Fed.
Okay, well, since you brought it up, I got to talk to you about the yield curve because we are seeing a little bit of a moderation when it comes to the twos tens inversion. Are you thinking that the bond market is seeing something that the Fed isn't when it comes to where this economy is going.
Go talk to our traders on the trading floor. They would tell you, yes, the bond market, bond investors are smart. Maybe they are, But you think about the yield curve. I've always I've always loved looking at the yeld curve, but it can have long lags to when it actually signals a downturn. So I remember this very well. If you go back to say the two thousand and six era, if you're looking at the yield curve, you started to get concerned, but the recession didn't begin until end of seven.
So people tend to go early if they just focus on the yield curve. So that's the thing. It could be long lags. Not to ignore the yield curve. You got to look at there's information there, but it could be long lags. I also think there's some unique features this time. I mean, inflation is higher than it has been at any time really in the last forty years. So in typical business cycles, you haven't really had to think about, well, what's going on in the front end.
Why is the front end so high? The front end is high and yield because the FED is trying to stamp out inflation. I think the bond market has a bit different forecast for inflation than we do. The bond market has been perpetually expecting inflation to come down much more quickly, and so maybe that's the reason why five year yels and ten year yields have been a bit lower.
So as you, as you pointed out in the last day or so, the long end even moved up, and I think, yeah, yeah, I think that's a recognition of the fact that, hey, things are you know, the economy is in better shape. We're not getting that recession everyone advertised. Inflation is a bit more sticky. The FED is going to be higher and maybe higher for longer, and that does tend to have some impact on five intentions and.
Maybe a soft landing.
You think, yeah, you know, this morning, one of my colleagues ping me. He said, oh, this is goldilocks, this is this is a soft landing report. We've got a very low unemployment, we've got a little bit of a slowdown in job growth, so it's possible. We wrote a piece at the beginning of the year, you know, we said we said it's the case for a soft landing. It may not be the base case, but something everyone
should think about. So we're we're leaning towards that. What in this I don't think was really a soft landing was probably the average early earnings because that's still coming in a little bit hot. But remember the unemployment rate stays low as job openings come down, that's your soft landing. That's your You think about the the beverage curve kind of relationship. You get, you get an easing of labor demand and the unemployment rate doesn't rise, that's your soft landing.
So it's it's possible. With a three point six unemployment rate, we're on we're on track for it. I wouldn't rule it out.
Keep in mind, Madison, the Goldilocks story that had three bears in it. Wow, where are you? Because we got like twenty seconds left. Because I'm interested in anecdotal you know, what's the local economy there? I'm looking out the window. Where are you?
This is downtown LA. I don't know. If you can see the background, you can probably see the Hollywood signs. So we are where paid in Rigel is located. That Actually, if you want to be bearish, if you want to be bearish, the story that I would tell is I would say, hey, look at the un the plot on your Bloomberg terminal, the California and unemployment rate. It's bottomed
out about a year ago at three point nine. It's at four point five right now, so it's risen point six percentage points, while you know, the unemployment rate nationwide is low.
Got to run.
California's a big economy, so that's all.
That's the best fourth largest there.
Jeffrey Cleveland, director and chief economist at Pagan Regal, Thank.
You so much.
You're listening to the tape. Catch are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot com, and the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
This is very exciting stuff. Me and my friends are all really pumped. I know that you'll you'll be joining us at the theater John, for the new Barbie movie. One of the reasons we're so pumped is because of the amount of money getting poured into branding for the film.
So we're going to talk about all of this.
It's today's big Take story, and we've got Kelly Gilblam on the line, our Bloomberg News editor out in LA, to discuss it with us.
Kelly, thanks for being patient with us as we Is this.
A kid movie or an adult I mean for older people adult?
Yeah, thank you for your interest in Barbie. It's actually not really a kid movie. It's rated PG thirteen. If you've seen the trailer, you can see that it has a lot of sexual innuindow and.
So it's not creepy. If Charlie goes to see it.
By himself, John, it's it's for adults.
It's for adults well, and it was very expensive to make and so it's it's a big bet on those adults coming in to buy tickets, right, Kelly.
Yeah, it was very expensive to make. It was one hundred million dollars. Mattel, which owns the Barbie brand, didn't actually pay for the budget. It licensed the brand to Warner Brothers, which covered the budget. But Mattel is definitely taking a big bet for itself on the overall perception of the brand. If you, you know, recall hearing about Barbie dolls at any point in your life, they can
be pretty controversial. So so they're really hoping that people are more endeared to them after this movie comes out.
Yeah. Well, and also it's interesting.
Because they have a tough challenge with the Barbie kind of stereotype that they have to sort of rebrand as like a new age feminist character.
What can you tell us, Kelly about the likelihood of Warner Brothers being able to do that?
It seems like from the response so far, they've mostly managed to pull it off. It's gone Everything about it has gone viral. People are so excited. The box office tracking figures keep going higher and higher and higher, and it's one of the rare movies that's actually targeted toward women. You know, we calculated only like six percent of movies
with this type of budget are for women. So I do think it will it will make a big impact and could possibly pull off this reputational move that they're trying to make.
The story is great, I mean, it's the history of this is fascinating, well to the extent that it can be fascinating to somebody like me. But there's actually the Barbie and Ken are actually named for the founders of Mattel, their kids.
Right, that's right. Yeah, Ruth Handler was the inventor of Barbie and one of the founders of Mattel. It's a long time chief executive officer, control of operations, in control of operations there. And yeah, she saw a German doll that was actually for adults.
Oh, let's be clear. This is a German sex doll on which Barbie is based, right.
Do I have? I mean it was for bachelor parties people, you know, sent it around as a gag gift, and she thought it would be great for you know, if she kind of remade it more targeted for kids, would be great for her daughter, Barbara. And then a few years later Ken rolled out.
Yeah, and Ken her brother either way, right right, right, very you always bring us the fun facts here, John. I also feel like Kelly Greta Gerwig as the director here is an important choice because she has kind of a history of making these inclusive films that center female characters as the main subject.
Yeah.
I think she's one of the pre eminent female you know, coming of age genre directors writers. She's come to prominence in recent years, especially with Little Women her remake, and with Lady Bird, both Oscar nominated films. I think one actually won an Oscar, so that was a big, a big get for them, and that was it was actually Margot Robbie who's playing Barbie, who was able to make that connection and recommended her as a screenwriter.
Oh cool, I didn't know that. That's really cool.
Now is Barbie? What does this do for Barbie? This film? If it's a flop, does Mattil get crushed? Is Barbie even relevant anymore?
I think that's the big question for Mattel is how relevant is Barbie gonna be? It really went through a crisis, the whole company did, because Barbie fell out a step with society. They remade The Doll in twenty sixteen and made it more inclusive with different body types and that sort of thing. So this is trying to showcase that work, but it doesn't really. I mean, analysts aren't really seeing
a big Toy sail bump in twenty twenty three. It could be more long term, and I think the real value for Mattel would come if they can turn it into a broader franchise, like a Marvel type of franchise, you know, where you have a Ken movie spin off and a Skipper TV series and a you know, roller coaster and that sort of thing.
I was traumatized by Barbie. My sisters had it, and they used to take the legs and they'd hit me with it. So I had these like two little bruises where Barbie's breasts hit me in the you know.
It's just like sorry to hear that, John. Hopefully you can you can go watch this movie and get a little bit.
Has anybody seen it yet or is it you're waiting for reviews and all that stuff.
It's it's coming out in July, right, Kelly later later, Yeah, a couple of weeks.
That's right. Some people have seen it. They're all critics. Their reviews should start coming on the thirteenth, and then it's world premiere is on Sunday, but it's released wide on the play first.
Thank you, Kelly for those listening on radio not seeing us. My hand is physically out in front of John to kind of control the commentary here when it comes to.
Barbie, because you're going to hit me with your Barnbach.
All right, Kelly, thank you so much for joining us.
Sorry, things are getting a little crazy as we wrap up our show, but it's an incredible story.
It's Today's Big Take.
You can find it on Bloomberg dot com or on the terminal wherever you get your Bloomberg News. It's also the Big Take podcast, which you can download wherever you get your podcasts as well. It's incredibly well researched. They go through everything when it comes to Mattel and the Barbie movie. Highly recommend giving it a read or listen over the weekend.
Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three, and I'm fall Sweeney.
I'm on Twitter at Ptsweeney Before the podcast, you can always catch us worldwide at Bloomberg Radio