Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside my co host Matt Miller.
Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moven news.
Find the Bloomberg Markets Podcast on Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot Com, slash podcastle Scaleup Talk. Dan Eyes he knows all this stuff because he's a tech analyst. He does that stuff for web Bush Securities. He joins his via Zoom sporting his Penn State regalia there, which we appreciate as always. Hey Dan, thanks so much for joining us. I got to start with Tesla. I mean, Elon changes prices on his cars
like most people change socks. I thought this was a little bit more to the downside, a little bit more scientific, because I want to go to the issue which I asked Matt. I'd love to get your thoughts, Dan, how do you model out like real demand for electric vehicles?
Look, I mean if you look at the price cards, no doubt this one. I think surprise the street. I mean it surprises us a bit right in terms of we believe about ninety five percent of the price cards in the rearview mirror. Now, from an elasticity perspective, growth is sort of steady state. What I really view in that sort of thirty to forty percent ban so in
terms of year of year of growth. But when you look at some of these cuts, look, it's from an inventory perspective in the US they need to right now focus on volumes over just holding the line on prices. And that's really what we're seeing in terms of this Yin Yang play out.
So they're basically trying to take or hold as much market share as they can, imagine as these UAW strikes kind of free customers out. Yesterday, I was talking to a dealer who said, and he owns Ford GM as well as Delantis stores, and he said, even if they had inventory of say you're looking for a Ford Ranger and they have one, customers are already worried about the strike affecting parts, about the strike affecting build quality, and they're already looking, you know, let's go look at a
Nissan Frontier or a Toyota Tacoma instead. So do you do you see the strike already having effects on Tesla competitors definitely.
I mean we've seen it even as of the last even two weeks ago. I mean because the worry here and look that's always say it's such a debacle in Detroit in terms of this UAW strike because it was doing for consumers looking at alternatives. And when I believe if this lasts another two three weeks, this starts to have a pretty massive ripple effect even twenty twenty four
from the EV lineup. And who benefits there. It's Tessa, it's Ridian, it's far and auto makers, and I think that's the frustration right now for a bar and Farling.
Yep.
Interesting. I mean I just bought the bmw X three met and I just went to look and see what the the EV offerings are.
There.
Huge premiums they wanted over and I'm like, I'm not paying a premium just to say.
Massive premiums to make a purchase now. And then on the other on the other side of that, you do get a seventy five dollars yeah, tax credit credit, and and then you'll get another one for probably two grand from New Jersey, so all in about ten grand back.
That's the math doesn't work right now, all right? Hey, So let's step back, Dan, you cover you know, a big swath of the tech space here. We got interest rates to my friend, continuing to go higher. That's got to be tough on the valuation call. How do you put some of your your tech bullishness in the context of these rising these rising rates rates we haven't seen since two thousand and seven.
Yeah, I mean, look, no doubt it's caused white knuckles, and we've seen it with tax stocks on the pressure I mean, Paul Matt, I just kind of view it all all of our checks. Fundamentally speaking, I think we go into a three cure earning the season. That's going to be pretty significant surprise at the upside across cloud, software, digital advertising, I think on the chip side as well. So you'll you'll see this and maybe a bit overshadow
on the near term. But I believe we go into the next three to six months and this is more of a golden opportunity to buy tech rather than time to fear it on sort of macro worries, I mean that that continues to be We're handholding clients through this.
I will say that tech so uh, I've just charted out the Nasdaq YEP, and if you put that up against the US tenure, you'll see that as rates rise, even though the Nasdaq wants to rally, still it's pulling down.
Those tech stocks.
So you know, if rates continue to climb, that's no bueno for for stocks. And if inflation comes down. You know when it was on its way up and that was fattening margins. When inflation comes down, do margins get under pressure?
Look, I mean theory from a high level, you could say that, but if what's actually happening is, you know, supply chains normalizing. You look at AI and we talked as the biggest transformation from a tech perspective in the last thirty is it's a huge talent and you're actually now starting to see just more and more efficiencies throughout these software companies and supply chains. So I actually think
this is a talent. And look in a lot of these companies, they have more cash than some countries right in terms of they don't need to rely on the debt markets. I think M and A is going to continue to accelerate. And I just view this as sort of the time where I think tech gets stronger despite maybe macro clouding it, as many of the Bears, right, I mean they've they've called ten of the last two downturns the last twenty years.
Hey, Dan, let's let's switch gears to another name. I know you do a lot of work on Apple. What can you tell us about this early rollout of the Apple iPhone fifteen? How's it going as a meeting expectations? What are your thoughts?
I mean I can tell you even as of checks this week in Asia, right now ahead of plan it's about ten to ten eleven twelve percent above iPhone fourteen. China has actually been strong if you could sell through, is there? And despite what'll call it the too hot to handle those situations terms the iPhone and fifteen the software rollout, which will which will fix that? Look, it comes down to just if you get the promotions and carriers,
it's a no brain. I mean a lot of customers right now they're essentially trading in again iPhone fifteens for free.
What are you telling? What are you telling clients here? This is kind of the best trade here in tech? From your list, I.
Think the best trade is probably Microsoft into earnings.
You know that.
I think software? If I look at Microsoft, Google, an Amazon, those three because of what's happened on cloud and these hyperscale buildouts. I think that continues to really be the trade here. And even though look, I mean the New York City cab drivers barish on tech and earning. So I think that sets up for what I view is just a very strong rally into year end, despite opposite Macro ten year Jitters All right, Dan.
Well, actually real quick, I'm just looking at the background of his little zoom set up there. I see a lot in your sports paraphernalia. With the Giants. I got asked a question, do the Giants have a quarterback?
Look?
I mean that's they have a running back, right, and I think the Achilles heel. It's just I just don't know if Jones is that quarterback that's gonna get us there. And also you have an offensive line that is like Swiss Jeeves.
But we've got a quarterback. We've got to get him back on the field. That is, of course Aaron Rodgers. Oh excuse him, Dan, excuse me? So that's the Jets. Yeah, that's the Jets. That's sorry, Well, nobody in.
New York has a quarterback then, right.
You're exactly, well, we don't know about it doesn't matter. Let's let that go. He's got a job to do. Dan i'ves web Bush Security Senior analys He covers all the tech. We appreciate getting a few minutes of this time. Big Penn State fan.
You're listening to the team Ken's are live program Bloomberg Markets weekdays at ten am eastering on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
You know, we had a big revision to last month's jobs number. Yeah, and you put the revising a bigger beat and then a huge beat today. So that's five. I'm doing a math. Five hundred and sixty three thousand jobs added to the US pay roll over the last couple of months. Who are these people and who's hiring all them? So let's talk to somebody who does this stuff for real. Julia Pollock, chief economists at ZIP Recruiter. Boy, they're going to know what's happening. Julia, thanks so much
for joining us. Number one. Who's hiring all these people? Well?
This report shows job growth pretty much across the board. Leisure, hospitality, healthcare remains very strong. Vasional business services were strong. There's almost no area where there's weakness except the information sector. That sector has lost two point five percent of its employees over the past year. It's the glaring exception.
Wait, what's the information Are we in the information sector?
We are all the information sector. Yes, it's tech broadcasters, et cetera.
Boy, John Tucker, you're looking at me for so, Julia, you know one hundred and fifty I guess one hundred and seventy thousand was the or one hundred and sixty one hundred thousand was the estimate. Why were the economists so wrong? What are the economists getting wrong?
Well, you know, there's something called the surprise index, and it has been showing that we've been wrong for over a year. The economy keeps surprising to the upside. And that's because our traditional understanding of gravity of you know, forces in the economy is that when the FED raises interest rates, that's going to slow economic activity down. And I mean, what doesn't need to explain it. Any ordinary
American can understand this. When rates go up, you think twice about borrowing to open a business or build a home or whatever.
It is.
The issue here is that well, activity has cooled in some areas, but there have been offsetting sources of strength that have caused the overall picture to remain very very rosy.
So does this mean that the Fed has to raise rates again? Julia?
I mean, you know, you're an economist.
That seems to be their goal raised race, slow down businesses, slow down hiring, slow down spending.
Is that is that going to happen?
So for the last three months, those PCE inflation reports have been very encouraging, and they precore PC inflation at just two percent over the past three months. And so if we are really within kind of you know, Stone's throw of the Fed's inflation target, looking at the numbers that it cares about most, perhaps they won't need to raise rates again. You know, it's not their goal here. Isn't to reduce employment. It isn't to raise unemployment. It's
to cool inflation. And if that can happen without pain in the live market, so much the better.
So, Julia, what are the employers that you guys talked to a ZIP recruiter? What are they telling you about their ability to hire people? Are they finding the people they want? Do they have to pay up to get them. What are the key drivers for the employers?
So we are about to release an employer survey, our new annual Employer Survey, and our pain is a very very clear picture that employers are still struggling. It is not easy out there to recruit and retain talent. Their biggest difficulty is not not being able to find qualified candidates, but over forty percent say they can't find candidates at all. And then once they do find candidates, they're having a
really tough time making connections with those candidates. You know, it was thirty seven percent of the time candidates are ghosting their interviews.
Wow, So what are the kids today? Are just the people that are looking for jobs today? How important is that whole hybrid model where I'm going to wear to work from home? How important is that today?
Well, the five day in office work week is effectively dead.
Only sixty nobody told us.
Well in our survey, employers say that only sixteen percent of their office jobs are being done in office all the time five days a week. So most employers are providing some form of flexibility at least one two three days when workers can work from home. Hybrid is the new normal.
Everyone has told us by Yes, every day someone.
Tells us that, So don't worry.
Paul's just pushing back against it. I look at while in the terminal we have E can Go, which is a pretty cool function, and you can choose non farm payrolls from the drop down menu. Highly recommend it and look at the breakdown. So it's as you said, Julia, leisure and hospitality a huge driver of this last report. And then also government is a big driver in terms of adding jobs. Where do you see this going. Construction
kind of shrank a little bit. Where do you see this going as we head into the holiday season.
Well, you know, that's a good news story, not a bad news story. I think some people are interpreting that as the economy only creating low paying jobs and leasion hospitality. That's not true. With today's report, every major sector has now recovered to pre pandemic levels except leisure hospitality, which thank goodness, is at least catching up and moving in the right direction.
You know, the.
Government, local government school rules have been short staffed. They started the last school year with lots of vacancies. They had to do the same thing again this year, so it's good to see them finally making some headway, and the private sector still posted the lion's dare of the jobs.
So we had average hourly earnings grow four point two percent year every year. You can make the argument that number should actually be higher if there's so many, if it's so hard to find, people want to just pay more.
Yes, So on average wages have grown eighteen percent now since the pandemic. Prices have also grown eighteen percent since the pandemic. So from the perspective of most workers, it's been a wash. They're just treading water and they got used to real wage growths between twenty thirteen and twenty nineteen, when they actually saw their wages grow about one point four percent faster than inflation each year. So they're wondering why they're not managing to get a little bit more
each year. I think that wages could still do some catching up over the coming years, given how tight the slave market is.
All right, Julia, thanks so much. We appreciate that as always, Julia Pollock from Zip Recruiter.
You're listening to the tape cans 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.
Let's break down this job's number because it deserves some more attention. Here. Tom Gimble, he is with us. He knows a thing or two about this market. He's the CEO of LaSalle Network, and Tom, I'm just going to say, you know, here's my analysis.
Wow, I would agree. And just before we get rolling on this, for the record, I went to University of Colorado and coach Prime. I'm just so we're going to talk football. Let's just talk about who's really on the upside.
That's right.
No, this number is fantastic. I think a lot of it's propped up by the government quite frankly, which gives me a little cause for concern of when that's bigot finally gets turned off. But it's definitely a good sign that we're not ready to land this economy just yet.
So where's all the impetus coming from? We were talking yesterday about the Inflation Reduction Act, and of course we had the Chips Act. Is that money flowing? Is that money hiring people.
I think it's the initial infrastructure package. I was talking to group down in Texas, that construction company, and that a couple of years ago, seventy percent of their business was I had followed up on a story that I had read and talked to them that seventy percent of their business used to be private and now seventy percent is public sector and working for the government. And so I think that the infrastructure is really bearing this thing down. It's getting a little crazy.
Can you explain what I guess labor hoarding is. I think it's really a what is it? Indeed, do you think it's a thing.
Well, I think the concept of hiring people and not necessarily needing to use them because the talent may come and play at a later date. If that's what you're referring to. And I think that the situation with what big Tech used to do in that capacity of hiring people and not yet needing them, I don't think that it was in wide abundance. I think it's happened from
time to time. The real challenge that we have if you look at the Jold's report and if you look at the openings versus the number of people in the
market and looking and that discrepancy. What it really says is, and we've talked about this before on Jobs Friday, is the skills gap and where we're missing it, and we're missing it in two areas, technology and blue collar labor, and we've got it's all coming at a time that people are picking political fights instead of doing what's necessary for the economy, and that's immigration, both on legal and illegal immigration south of the border, which affects the blue
collar and European immigration, which really affects the technological gap that we have. And we need both of those areas if we want to continue our dominance as a political and capitalistic leader.
So wait, you're not saying you're not railing against immigration complaining that our jobs get stolen, but saying we need that immigration to fuel our growth.
One hundred percent. I mean, look at everyone wants to compare what we have going on with infrastructure to the New Deal. And when we had the New Deal, who did that? Immigrants? And so you know, when you have that and the people willing to throw a hammer and do the blue collar work, and we don't have those people now. Do I think that immigration south of the border and letting you illegal. No, I'm not propoting. I'm
not a proponent of that. What I do think we need to do is come to a conclusive agreement on what's the best way to get people in to keep the economy fueled, which goes to payroll taxes, which goes to companies being able to accomplish things, which leads to trickle down economics where you have more suppliers to what's going on. We've just got this intersection that everybody thinks that the economy is going to keep going forever. We've got the UAW talking about thirty two hours of work
for forty hours of pay. You know that's entitlement talk. That's not capitalistic talk.
You know.
Well, I just wanted to pull up he can he Can Go, which is a function that I've been playing with on the Bloomberg terminal. It's a very cool way to chart job games, and Eca n go is the way you can pull it up if can look at a number of data points with it. But I can see tom that we added a lot more jobs in leisure and hospitality in the last month than we have in previous months. We added more jobs well, government workers. We added more government workers than we did last month.
We had more trade, transportation and utilities workers than we did last month. What do you think about the trends about the sectors that you've seen move and how do you see it going forward into the holiday shopping season.
Well, I think that the consumer spending, I think is going to be decent, and I think when and I know that there's talk about where the individual credit problems are and what we're looking at, but what we've got is, you know, what's the expression that he who knows, he who knows only his own generation remains always a child.
And I think that we're looking at people that don't want to study history and don't want to look back, and we've got a couple of generations of people that think that if if we overspend, are what we have, the government's going to take care of us. And I think we're going to see that through the holiday season. And I haven't seen any information to tell me otherwise. I see the travel and hospitality, like you said, continues
to hire. There's a shortage, and I'm in Chicago. I was in Denver last week and Charlotte and I saw signs in every restaurant that they're looking for people and hiring, and and you have situations where people companies still want to you know, look at California, they want to raise the hourly rate for ret They are raising the hourly rate for restaurant workers and simultaneously complaining about inflation and
what we can do about it. It's like the left hand doesn't know what the right hand is doing.
Look at the fiscal stimulus that we get and the FED trying to raise rates. So you know, as the as the federal government is stimulating economic growth, the FED is trying to slow it down.
Yep, Hey Tom, Yeah, Well I think that that's because the Fed, the FED isn't worrying about votes.
That's probably true, right, Tom. Talk to us about, you know, kind of some of the trades out there where you see a lot of reporting that employers can't find people, you know, whether it's electricians or plumbers or things like that. And you know a lot of folks probably are weighing whether to get a college education and all that student debt versus maybe going to a trade school. Talk to us about kind of the supplying demand of trade men and women out there in the economy.
Oh, there's a huge there's a huge shortage of the blue collar trades. And what ends up happening is you see it during during housing bubbles and and when new construction numbers are going up and they can't find enough
people to do that. And we're seeing it with infrastructure too, but just on a local level of somebody to come and fix your plumbing or your lawn sprinklers or cut the grass and doing that is that there's a there's a shortage of labor, which comes from twofold number one, the immigration problem that we talked about a few moments ago. And then secondarily, you've got people that are going to college for one year, two year, three years because they
think that's what they're supposed to do. Societies leading them down that path. They're incurring the debt, although I think the President just eliminated about nine billion dollars of it. And then what do they do And what we moved into is people working at the Verizon store to sell phones and they're not happy and the service level isn't great, or going in and learning a trade, and which is really you know, the true middle class. If we're going to look back over the past seventy years, all.
Right, Tom, thanks as always for chiming in on this Job's Friday. Tom Gimble, CEO at LaSalle Network.
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Let's go to somebody who actually knows where they're talking about. I they get paid to know what they're talking about, as opposed to the three of us. Ellis Pfeiffer. He's a managing director in fixed income research at Raymond James Raymond James. By the way, if people don't know, it is a very very good regional investment bank prograch firm ray j as we let to call it in the biz. I competed against them a lot. They have a lot of good ana. There's a lot of good bankers down there,
and what they do they do well. Ellis, thanks so much for joining us here. Explain to us why you know we got this print on the employment and then people said, oh, you know, this gives more ammunition to the Fed to maybe hike rates. And but now the stock market's up and yields are coming back in. What do you make of today's print maybe how it might impact the Fed?
Well, I think, you know, it's not going to slow down the Fed as far as you know their rhetoric, and it's not going to make them change course by any stretch because the job market is obviously continued to
be relatively strong. Now the issue becomes, you know, when you look at the underlying data, there was some some not discrepancies, I guess, but some differences between the non farm peril data that came out this morning, some of the data earlier in the week, and then the household employment numbers is you know, household survey this morning that's
responsible for the unemployment rate. So you know, the earlier in the week we learned that, you know, Joelt's data told us there were a lot of professional jobs, high paying jobs, and we're opening yet today's survey on the household survey tells us that, well, you know, most of the jobs came in lower paying jobs, such as you know, the services industry, and that the part time work has
actually increased, whereas full time workers actually decreased. So those things kind of coldbined to help the abrgality earning stops. I think that's where the market's kind of looking at this going well, you know, the the survey the households are there is really more closely tied to the ADP jobs number, so maybe not quite as strong, you know, the headline data versus the true underlying data. And I think that's why the market turned around to that.
So what do you think is driving this, uh, this this labor market. At the same time as indust rates have risen to you know, levels we haven't seen since two thousand and seven, companies continue to hirelight crazy.
Why, Well, I think a lot of you know, a lot of the hiring has come in, you know, the the services industry, and you know, when when things are tough, we were hoping we'd see this big rotation into the services industry away from the goods industry and that, and we've been getting it of late. We've had you know, had a lot of savings still tent up from from
pandemic stimulus. Uh that that has been drawn down a lot, but a lot of that spending went moved away from the goods day the goods type of purchases into the services type purchases and that's you know, frankly, while the FED has been so focused on you know, services inflation less housing because in our house it's very sticky, So they've been they've been focused there. That's where the growth has been. It's been it's really in the services, uh industry.
So what do you take from the rates picture then, ellis? I mean, you know, we had for a long time and inverted a very inverted yield curve wherever you looked, and typically you know that has signaled a recession. Now we have have a bear steepening, which is I suppose rarer than a bowl steepening, and correct me if I'm wrong with these terms, but basically it doesn't happen as often,
but that always leads into a recession. So how does the future look to you considering what the curve is telling us?
Yeah? Absolutely, and you're absolutely right, it's a little bit different this time. You know, back in two thousand and seven we saw a little bit of a bear steepening ahead of the recession, but so it is fairly rare for that to happen as far as the recession, and a resteepening of the U curve is definitely a better predictor than an inversion, and at least a more timely predicted. So but you know, I think the resteepening has occurred
from two factors. One has been that rise in oil prices, which has since come off quite a bit, and so that that hasn't barely been reflecting the bomb market. I think we're kind of nervous about today. And then the other is the higher for longer kind of makes you know, the bond market tend to reprice, you know, that term premium that that tends to you know, keep rates a
little bit more elevated for the time. So I think it's going to have to obviously similar more data prints, but I think that's kind of why we're sitting at these highs. And and frankly, there's a there's a lot of speculative interest on the short side or bond market. So the sentiment from you know, the speculative market is quite dramatic at this point. And they are a very good sentiment indicator, they're not a very good timing indicator.
Similar instances were you know, twenty eighteen, uh and then once you know, the common began to show some weakness and some some other issues, you know bond market actually started.
Rallying them els thirty seconds left. What's the what's the typical conversation you're having these days with your clients?
It is, why would I invest further out of the curve when I can get more in the shorter term?
And you know, we've gone through the numbers and we're told clients, you know, if you if you just simply, for instance, by a two year at this level and give up X number of basis points over the two year cycle which you expect things to change in the market and Bonsta Valley, you would you would become you do well way better off by standing out of the eel kurt today, capturing some of that longer term yield and then instead of trying to trying to keep up
with money market rates, email rights things like that.
All right, Alis, I really appreciate you taking the time. Ellis Pfeiffer, he is at Raymond James. He's a managing your director in fixing, come Research.
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One challenge is in one headwood headwinds is commercial real estate and that could be a big, big issue. It already is for a lot of investors, for a lot of owners of real estate. But we wanted to dig into it a little bit on the back of this labor data and talk about commercial real estate. John Fish is the CEO of Suffolk Construction and he's chair of
the Real Estate Roundtable. And John, thanks so much for joining us here, and you're kind enough to provide some notes here, and you break it down between bad news as it relates to the state of the commercial real estate business and good news, And boy, you list a lot more bad news type of issues than good news. How concerned should we be about the commercial real estate business from a perspective that not everybody's going back to work yet, there are big loans tied to these things,
there's a lot of vacant office space around. Help us frame the state of the commercial real estate business today in America.
First, Paul and Matt, thank you the privilege to be with you this afternoon. I would say that the commercial real estate business in a very very tough situation this particular point in time, and some multitude of reasons that you've been reporting on over the last few months on it. You know, first, you get vacancy rates running anywhere from twenty to forty percent in the You get the hollowing out of our urban areas of our communities with the Chicago, Boston,
San Francisco. You get also one hundred one point five trillion dollars or commercial loans coming to in the next couple of years, which is a significant amount of money coup with the fact that there is no capital available right now. Banks are not lending, especially the commercial banks this particular point in time, and when they do lend, the cost of this capital is significantly high than it
was before in the past. And I think one of the biggest issues that I think this revolves around commercial real estate today is price discovery. People don't understand what value is today. We don't understand what building's are worth. And therefore, because there's no history over the last few months, a few quarters about how things have traded, people cannot
understand valuation. And once you get in that type of doom loop situation, it really really doesn't speak well for the future of real estates, especially commercial estate over the next I would say four or five quarters my senses, at the end of the day, things will settle down, we will end up with a high degree of price discovery, and we will have more of a consistency and prictability
going forward. But at the end of the day, it's a challenging time, and I think what we need to be focusing on, how do we just take this one day to time and realize what the fed's actions that are on a going four basis have a very very deleterious impact on the solution to real estate's problems today.
So it does look like the FED could lean towards another hike here after we got such a strong jobs number this morning, as Paul has been saying, does that concern you? I mean, we're looking at you know, yields climbing across the curve and that's just got to be even more bad news for commercial real estate and probably building in general.
Yeah, no doubt. I mean the ten year today is sort of a harbring dull where we're going. There's no doubt in my mind about that, and I think the FED raising the interest rates in November by twenty five basis points is not really material. It's psychological. It's more or less, you know, charming out the fact that we're going to continue to raise interest rates, we continue to put stress on capital across the board, We're going to continue to create create a sense of instability in the
financial markets. When you ever have instability and lack of predictability, you get problems at the end of the day. And I think what we need to do, We just need to take a deep breath, slow down, and give the real estate developers and the lenders out there time to solve these problems, because if they don't, these issues will become the taxpayers problems, not the real estate developers problems.
And today that the real estate developers problems, the private equities problems, the shadow banking problems, but they're not the taxpayers and if we move too quickly, they will become the taxpayers problems. In addition, just to comment on what Joe Biden spoke about the three hundred thirty six thousand jobs, I think that was a very very powerful strong estimate. I mean, you know it blew past expectations of maybe one seventy out there. But at the end of the day,
I think it's good news. But also there's I think concerning news behind all that. Okay, going forward, we've got a serious immigration problem in this country. I think everybody acknowledge it. My industry, real estate construction, we're in zero one on a point right now. We're not a three point six or three point seven percent. So if we don't solve for the immigration issue, okay, we don't bring more people into this country, it's going to be very
difficult to grow our economy. And so to me, I stand firm and the fact that we need to focus on today how to put forth a solid immigration policy to prevent continuing escalation of wages which were seen across the board right now. And I think this wage escalation issue, unfortunately is not going to subside. And when you take a UAW, you take over the pilots, you take good healthcare. Right now at the Kaiser, this is systemic in our
society today. In this health in this labor issue is going to continue to drive inflation higher over the next I think four or five quarters.
How bad is that going to be? Commercial real estate loans.
I think it's gonna be very, very challenging. As I talked about this idea of price discovery, people don't know what assets are worth it at this particular point in time. I just think is a point out we need time to allow people to get accustomed to the current economic and financial environment and give these banks and lenders and it borrows more time to work these things out. If we don't, I think at the end of the day, it could be very very material to overall economy on a going for a basis.
All right, John, thanks so much for if you mention. Really appreciate getting your perspective there. John Fish, he's the CEO of Suffolk Construction. He's also the chair of the Real Estate round Table talking about commercial real estate. It's going to be some challenging. As John said, next four to five quarters, price discovery is going to be a big thing. What is that building that's for sale on forty six Street and third app We know what it sold for, you know ten years ago, what's it going
to sell for today? And what that means? Who knows? And what's the mean for the lenders and the equity holders there? That's a big issue.
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Eleven thirty jobs number came in today, three hundred and thirty six thousand new jobs. You're heard from President Biden. One of the questions is who's getting these jobs? What types of industries? Is it evenly distributed across this economy. Let's check in with our next guest, Javier Paulo Mades. He is the president and CEO of US Hispanic Business Council, and we appreciate Jabier spending a couple of minutes with us.
Talk to us about the Hispanic community out there. Javier, how are they participating in what is in a remarkably strong labor market.
Yeah, it's been great, you know, you know, what a pleasant surprise, nearly three hundred and forty thousand jobs. You know, in August we saw what I thought were kind of pre pandemic growth rates at it, you know, but it proved this month proved that, you know, certainly we're still adding jobs and there's some real bright spots as you mentioned, not only for the American small business community, but specifically for the Hispanic community and the Hispanic small business community.
The growth, as you mentioned, in the private sector was led by leisure and hospitality, healthcare, professional services. I think leisure and hospitality added some ninety six thousand jobs. Hispanics are about twenty five percent of that workforce. Professional services added about thirty thousand jobs, Hispanics for about twenty percent of that workforce, and then healthcare added about forty thousand jobs,
and Hispanics are about fifty percent of that workforce. So for the American small business community, great for the Hispanic business community, Suffice it to say, you know, Hispanics had had a role to play, and you know, I'm delighted at the news.
So according to the Small Business Association, five million, there are five million or near that Hispanic owned businesses in the US, and according to Stanford, Hispanics have created eighty percent of all the net new businesses in basically the last decade.
Actually it was twenty eleven to twenty twenty one.
So there's some four point five million Hispanic owned firms in the country that collectively contribute just north of eight hundred billion dollars to the American economy. They run the gamut, you know, from every industry in size and business model. You can imagine. And yeah, about eighty percent of the net new businesses that were created were created by a Latino in this country over the last decade. So you know, we're creating new businesses at a rate of three to
one when compared to the general market. And you know, I I think we're at the beginning of this thing. It's only getting better, it's only getting stronger. According to the Department of Labor between the years twenty twenty and twenty thirty, So we're in it now. According to Labor, between twenty twenty and twenty thirty, some seventy eight percent of new entrants, net new entrance into the workforce will
be Hispanic. Imagine that seventy eight percent of the net new entrance into the American workforce will be Hispanic.
Well, and we were talking earlier with Tom Gimble, who runs the LaSalle Staffing Network out of Chicago, and he was saying, one of the biggest problems in the labor market these days is that we don't have enough immigration, that we need more immigration, you know, from.
All of our borders. How do you stop that.
Issue from being conflated with the illegal immigration that we see rugs coming in, people dying in the desert, like that whole negative story. How do you separate out, you know, the positive from the negative.
You know, certainly you know it is a contentious issue, no no, no question, Administration after administration, Republican Democrat has kick this can down the road, which is why we find are some of the situation we're in now. Clearly there is a crisis on the border. We need to deal with that, We need to keep the bad actors out. But to pretend that America doesn't need immigrant labor is
disingenuous at best. I think our elected officials have a responsibility to parse this thing out and look at it from an economic perspective. At the United States Hispanic Business Council, and we're the leading advocate for America's small Hispanic small business community, and we have always believed that immigration reform is an economic imperative. I mean, if you look at the agricultural sector alone, the last time I was on BLUEMBERG. I think it was I mentioned that that sector is
seventy three percent immigrant labor. And in that sector alone last year we basically destroyed ten million tons, not ten million pounds, ten million tons of fruits and vegetables and unharvested fields because we simply didn't have the immigrant labor to work the industry. So it is an important issue, important enough for the continued well being of the American economy that we should deal with it honestly.
So let me ask you, Javier, as the CEO of the US Hispanic Business Council, what do you believe is proper immigation policy? And you've got it full thirty seconds.
You know, we need to start with worker visas right off the bat. We need to increase the worker visas both from the you know, the high tech sector all the way down to skilled labor. The Dignity Act is a very good start. We should look at that as a starter, and we need to frankly come to together both both parties, both sides of the aisle, to find a workable solution for the American people, the American economy.
All right, Javier, thank you so much. We appreciate it certainly, certainly a very contentious issue as we speak right now in Washington and on the borders. But again, you put that in the context of a very well and I think they're two separate issues, right.
I mean, you have the illegal immigration story, and then you've got the legal immigration. We need to bring in more legal immigrants to do work in this country, and a lot of them obviously are Hispanic, a lot of them are going to be German, a lot of them are going to be French. Maybe not French, but a lot of different countries, you know.
Yep, absolutely a big issue. Javier Palomeris, he is a president and CEO of the US Hispanic Business Council, join us to give us his unique perspective.
Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast plans form you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three.
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