Bloomberg Audio Studios, Podcasts, radio news.
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and a Marie Hortern. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business App.
Have you received a callback from mister Musk.
Yes, Look, Elon's a good friend. We texted late last night. We're going to talk this morning. I just want to make sure that he understands what I think everybody on Capitol Hill understands. This is not a spending bill, of my friends, this is a budget reconciliation bill. And what we're doing here is delivering the America First agenda. This is all the President's priority and all the priorities of
the Republican Party. Everything we promise the American people, that is what we are delivering with this piece of legislation. And the reason we're using the reconciliation process is because that is the only way to get around the sixty vote threshold in the Senate. Everybody probably recognizes Chuck Schumer and the Democrats are in no mood and not going to be helpful in delivering President Trump's agenda for the people.
We have to do it this way.
We can do it with fifty one votes in the Senate only, and that's the urgency of the hour, and we have to do it quickly.
For all the reasons we can discuss this morning.
So did you get a sentence from Elon Muster in those tex exchange that he was going to stop his insistence on this bill that he thinks needs to be killed.
He seems pretty dug in right now, and I can't quite understand the motivation behind it. But I would tell you that what we're delivering in this bill is not only historic tax cuts, but historic savings as well.
He seems to miss that.
I mean, the projection is that this legislation is going to save us one point six trillion dollars with a t. Now, there's never been a piece of legislation ever delivered in the history of government on the face of the earth.
That saves that much money. So this is truly historic. Now, is it enough?
No, because all three of us understand that we have a large federal debt. We've had deficits for some time, and it's a serious concern. In fact, it's the number one threat to our national security. But this is the biggest step in addressing that problem that Congress has ever delivered, and we must do it.
And I will hasten to say this.
I've told Elon and tell everyone this is the first of a series of steps that we will.
Take to bring that debt under control. But you can't turn it on a dime.
It took us decades to get into this situation, so we have to we have to do it incrementally, and this is a huge step forward in that endeavor.
What's the driving force behind Elon Musk's problems with this bill? Has he asked you directly to potentially keep the electric vehicle benefits we saw under the Inflation Reduction Act of the Biden error into the bill.
Look, I'll let everybody draw their own conclusions about Elon's motivations. I'll tell you that I mean, obviously, the EV mandate going away. I'm sure a concern for the leader of Tesla and other things as well. But I think there's a lot of confusion out there about what the legislation is. There's certainly a lot of misinformation. I mean, the Democrats have been engaged in this effort, this strategy for many, many weeks and many months. But remember it took us
over a year to develop this piece of legislation. We have eleven different committees in the House, all the areas of jurisdiction that worked on the reconciliation effort to reconcile the budget. And what we're going to deliver her again is historic tax relief and savings. At the same time, if we do not get this bill done, the tax cuts of twenty seventeen, the tax cuts and JOBZAC will expire at the end of December. Every American will receive the largest tax increase in US history, all at once.
It would be devastating for the economy. So we've addressed that here. The tax cuts permanent, and we've infused it with a pro growth series of policies that will get the economy going again. It will be jet fueled to the economy because we're going to reduce wasteful spending. We're going to reduce taxes, and we're going to reduce regulations as well, and that is what will allow job creators in the energy sector and everyone else to get going again.
And your version of the bill, of course, increases the salt deduction cap, which yesterday Senate Majority Leader John Thune said, quote, there isn't a single Republican senator who cares much about the salt issue. You and I both know you cannot pass this bill without increasing the salt deduction cap. How do you envision that deduction changing given the fact that no senator Republican senator wants a vote for this.
Well, I appreciate that they don't.
They all come from red states, right as do I, and we have very different perspective on salt than our colleagues in the Blue states, for example, in California and New New York, in New Jersey. But that is the reality in the House. Remembering they have to remember my senate friends and colleagues have to remember I have to deliver two hundred and seventeen votes to get that thing
across the line if they modify it. So I had lunch with my senate friends Tuesday, last two weeks ago before we passed the bill in the House on that Thursday, and I encouraged them to modify it as little as possible, right because I gave a metaphor. I said, my friends, I am crossing the Grand Canyon on a piece of dental flaws. Okay, the equilibrium that we reached here took quite a bit of time to get to where we are,
and you can't load me up on either side. And if you go and slash the salt cap that we negotiated carefully for over a year, it's going to make it very difficult for me to deliver the necessary number of votes. Remembering I can only lose three in the House. They can only lose three in the Senate to get this done.
So we're all working together.
It's one team, House and Senate together, united in this effort. They understand that, and I think they understand certainly Leader Thun and the leaders over their understand the complexity of what we're having to deal.
With here, Spiky Johnson.
Just to sort of put a bow on it, so forty thousands still likely to remain the cap.
That's what we negotiated here, and I'm certainly trying to hold to that number, and look, we've paid for it. I think we've got it worked out and all the math and the legislation, and I think it's something that I know they don't they're not in love with it, but I certainly hope they'll tolerated so we can maintain our vote tally.
Over here, Speaker Johnson, as you walk that piece of dentalfloss over the Grand Canyon. There is this question of how the bill is currently being used, whether it's for budget negotiations and budget reconciliation over the next decade, or
whether it's to negotiate trade agreements. There is two point eight trillion dollars of revenue that is being penciled in by the Congressional Budget Office from tariffs that might be used as a negotiating tactic might not be How do you understand the way that tariffs are looked at as part of this budget balancing Act?
Well, it hasn't been included in the calculations, and that's because groups like the CBO, the Congressional Budget Office, as you noted, won't give us any credit for that.
But it is very real.
I mean, the revenue is real, and it is realized and it's not included in the calculation that we've made or they've made, but obviously it's a big factor. We believe that we're going to bring about a roaring economy again, and it's not based on conjecture or ground list optimism. I mean, this is based on the history. We did this in twenty seventeen, after the first two years of the Trump administration, when we passed the tax cuts and Jobs ac We reduce taxes, we reduced regulations, and the
economy was raringw I mean you all remember it. Before COVID, we had the greatest economy in the history of the world. I mean, everybody was doing better every demographic wages were up, the job participation numbers where at record highs, inflation was down, and manageable things were going great.
And then COVID hit. So we're going to do that same.
Series of policies, implement that same philosophy, but this time, as I say, on steroids, and.
It's going to make a major difference for every and everybody's life.
Speaker John said, a lot of people in Marcus are concerned about a number of provisions here and actually don't think they will spur growth. One of them being Section eight ninety nine, which talks about taxing foreign investment in the United States from specific countries that have non tariff barriers like the VAT tax and other things that have been contentious during negotiations of trade deals.
How much do you see that dampening?
I mean, is that a concern for you, because right now around the world there are people wondering whether they can still invest in the United States without getting penalized for it.
Yes, Look, there's a complexity to the tariff negotiations. I mean, we tip our hat to the White House, and President's strategy is working. As you know, there's more than seventy five countries renegotiating their trade agreements right now, finalizing that even as we speak, that's going to be better for America.
Because it will be more fair. You know.
I'm always liking myself to be a Reagan Republican and free trade is one of our core principles that we've all supported over the years. And every time I would say that over the last several years to President Trump, he would say, yes, free and fair trade, and he's right. I mean, this is a disparity that must have needed to be addressed and it has been, so we think in total, this is going to be good when it's all, when all the dust settles on the tariff negotiations and
the new trade agreement. So it's going to be good for America and good for the world. And so we're factoring that in. We're working in tandem with the White House, and it's it's part of going to stay in calculation in the la.
Laker Johnson, just to be clear that provision will stay in that is important to you.
Look, I think it is.
I mean, obviously the bill is still a live instrument that's being worked on in the Senate, so we'll see if they modify those provisions. But I think for now, I think that's good policy for US. And I want to say to foreign investors, you're in good stead to invest in America. This is the time to do it, because the American economy is about to take off again and it's going to be good for you and good.
For the world.
We're the largest trading partner for most other nations. They need America, and a strong America is good for the whole world. And that is what we are going to bring about with these sound policies and pro growth initiatives.
Speaking, Johnson, you and your colleagues have a self imposed July fourth deadline. Partially that is because you have to raise the debt ceiling. Are you considering raising the debt limit if this deal isn't finished by July fourth with a different measure, Well.
It'd be very difficult to do it.
I mean, it would require a bipartisan measure in that regard, and I would like to believe that Chuck Schumer and the Democrats and the Senate would do the right thing. But I wouldn't count on that. That debt cliff, as we're regarding it, is coming soon, and that's why Secretary Besson has said we've got to get this done by Independence Day, and I think it'd be a great celebration for all of us. But it's not just because of
the debt ceiling. It's also because we need to get tax relief in this new roaring economy to the American people as quickly as possible. They're owed that and this is going to be a great thing for everyone. And you know, I have to also think about the politics of it. Right, we have a midterm election coming up in twenty twenty six. If we get this done soon and quickly this summer, then everyone will feel those effects before they have to go vote again in that midterm election.
We want to keep the House majority and keep this going for four years for President Trump and not two. And if we lost the majority, there's no doubt that the House Democrats would try to impeach the president and everything would be truly chaotic for investors and job creators and consumers. So we have to keep this going, keep the momentum going. The timeline's very important, and that's why
I put this on a very aggressive schedule. I said back in the early part of this year that we would pass the big, beautiful bill out of the House before Memorial Day, and people laughed, they mocked me when I said that. But we beat it by four days. We're going to stay on track and we're going to deliver for the American people.
Well, you have exactly twenty nine days to hit that deadline. Are you saying there's no plan B for raising the debt ceiling if this bill is not done between House Republicans and House Senators.
Look, Republicans in a House and Senate will deliver and we'll take care of our business one way or the other.
But I'm just telling you.
The smartest and most efficacious way to do this is to stay on this schedule and deliver for the people. And that's what we're dog determined to do or laser focused on it. And if we take our focus off of that, then the strategy doesn't work. So I'm telling you that we are working on that.
Regard.
Leader Thuon and I are in constant communication. He understands that deadline as well. The Secretary of the Treasury and the NEEC and all the leaders in the White House and the administration understand that.
So we're going to get it done.
Speaker Johnson, how closely are you watching the bond markets right now, given the fact that we've seen a real sense of concern, particularly in longer duration US treasuries.
We watch it closely.
Look, I really do believe that delivering this historic legislation is going to be critically important for a lot of reasons, not the least of which is that Congress can send a very important signal to the bond markets, to the stock market, to investors everywhere that we're very serious about this, not only in getting the US economy roaring again, but also in addressing the long term debt, and I think
that's an important thing for everyone to understand. We have a strategy that's some multiple steps, as I said, multiple steps rategy to address this over the next year, two years, three years, and we're going to get the US economy back on sound footing. We're the party of fiscal responsibility, and you'll see that demonstrated day after day.
Here President Trump's slamming FED cher J.
Powell once again saying.
Quote too late, Powell must lower interest rates after a week ADP data. Krishna Guha of Evercore writing it would take a large and rapid increase in unemployment driven by increasing layoffs to cut in July. It is easy for the FED to justify remaining and await and see mode.
Krishna joins us.
Now, Trisha, thank you so much for being with us.
A lot of people agree with you.
At the same time, a September rate cut is pretty much baked in. Does that seem appropriate to you based on the economic data that has been weakening over the past couple of days.
Look, I have a base case of a September cut, but I don't think it's anything close to a slam dump. I think right now, the question is does the labor market weaken enough over the next several months for the FED to judge that it makes sense to lean against that weakening where the cuts in September, I think to get that you need unemployment moving out to something like four and a half percent by September. I think it's a close call, to be honest.
And this is the reason why I think a lot of people are looking at whether it is just going to be one print, whether it's going to be a collection of prints.
Something that caught my eye yesterday.
We all are so data dependent, and yet this Bureau.
Of Labor Statistics put out.
In a dendum talking about how they collected fewer data points in the April CPI survey because of a lack of staff. And there's been this speculation about the accuracy of some of these surveys as employment has gone down and frankly, as responses have gone down. Cretence, do you give to some of the data that we get? Do you think that it still has the same integrity?
So in order to make good judgments, you have to have good data. It's as simple as that. Now, I still think that the US government official statistics ba bls are still the gold standard, but we have to be careful because, as you say, some response rates have been coming down, and now we're starting to worry about staffing cutbacks and other funding cutbacks potentially weakening the quality of
these data series going forward. So in any moment in time, you want to look at the holistic picture of the data, all the private sector data, including very much on the employments, challenger layoffs, indeed, job postings and so on, as a crosscheck against the official data, and sometimes getting ahead of
the official data. But I'll tell you, having seen for instance, how problematic it has become in the UK, where some of that core official government labor data just hasn't been reliable for some time, it can be very, very damaging.
And that's a much smaller economy.
So if you're not one hundred if you're not one hundred percent trusting the data, you don't have policy uncertainty.
In Washington, DC.
What's your north start of these days?
Well, I think, look, I think we know from first principles that tariffs are going to slow growth and push up prices. Right, what we're trying to understand is the relative balance of those effects. I think that we're going to learn a fair amount over the next several months on both of these counts. But my hunches that will learn more on the labor side than we will about what really matters on inflation, which is not the first round price impact, but whether it starts to get embedded
into underlying inflation dynamics. So I'm going to be looking at everything official and private sector company level data and earnings calls and so on. But what I'm really trying to understand at this point is do those inflation expectations stay anchored A, because that's the precondition for even considering cuts, And then B do we get a material enough weakening in the labor market for the FED to want to
cut to lean against that gathering any momentum. I think it may still be a little while before we really get visibility on this. My hunch is that will have a feel for that how much the labor market is deteriorating by September, which makes it the logical moment to call the next move on rates.
Hi christ nat Lori Calvasina from RBC. I've been getting the good to see you. I've been getting a lot of questions on small caps which are related to rate cuts, And I'm wondering in your conversations, are you starting to see expectations that the Fed is actually going to do something in September? Are those moving up? Are those moving down? There's been a lot of dispersion, There's been a lot of shifts in kind of the vibe on the ground. What's your read of the tea leaves right now?
So the market has has with this most recent sort of patch of week of data with ADP and with ISM services, markets move to price in more conviction, high conviction around a September move, and you know, and more than two cuts discounted through the end of the year. And you know, obviously, if we get more rate cuts, provided that's not in the context of a recession, and that's a modern weekning that the Fed's leaning against, that
can potentially help your small caps and other stocks. But I think we've got to be a little careful interpreting this. I don't think we should interpret market pricing is saying September is anything close to certain, and I say there's somebody who has it as a narrow base case. I think the reality is that there is still very much a pathway here where we end up with no cuts
because the labor market doesn't weaken all that much. There's a pathway where we get two or three cuts, and that the intermediate case, where there's some softening and the FEDS leaning against that as it emerges, but not before it goes, and then it is still the recession case, you know, is that twenty five thirty percent is it a bit more, a bit less, And if we do break into a session this year, benefit will be cutting
very very aggressively. So remember that the you know, the market pricing is essentially the mean average weighted average of those three different parts.
Krishna Kuhoe Evercoren, thank you so much as always for joining us today. Joining us now, Jordan Rochester of Mizuho, Jordan.
Your first take on.
This, well, it's a dubbish outcome in terms of the inflation forecast, a point three version for the next two years.
In terms of the numbers for twenty five and twenty six.
However, the elephant in the room is what's not in this statement, which is their view on the impact of trade Tarists will get that at two forty five. That release that for us will be the scenario analysis. Do they double the impact that they expect from taris? What about the fifty percent from Donald Trump? So a lot of this will have to come out in the press conference.
So far the moves are quite small though FX euro slightly higher and in the front tend you only had a two base two basis point rally, so nothing too big.
We wait to see what regards says later.
On and those forecasts and those scenarios that come out late this afternoon.
Well some notice we have when it comes to trade that the ECB statement says trade escalation would lead to lower growth and inflation. Jordan, how do you start thinking about if the European Union doesn't get a deal with the US by July ninth?
And Marie, I think the EU is probably at the bottom of the list in terms of the major partners if you think about it, Japan, India, Vietnam. There's much more focus on those negotiations when it comes to the EU. There's a lot of lobbying to go hard on the EU to reform some of the non tariff barriers they have, such as the digital services tax with the US and various other sort of non tariff measures. That's something that's
very difficult to agree to by July the ninth. So what might happen is a stop gap, another delay Essentially, that's the best that you could hope for. We saw that when Trump ramped up the tariff to fifty percent, we saw an immediate delay. Really, it happened within a day or two to one phone call with Verst them
on the land. So I expect that the worst case scenario is the taffs come in at the reciprocal levels, which are around the twenty to twenty five percent level, and the EU will be facing a summer of weaker data as a result and a more dubbish ECB.
So we're looking for more rate cuts from the ECBs. In the market's pricing.
We like receiving the front end for September, for example, we expect rates to get down to one point five.
This market's pricing around one point seven.
Now, if there is a deal done, it's still going to be a ten percent minimum, So it's we're picking between bad and worse scenarios for the ECB.
Is there a scenario though, where you do think the ECB goes on pause and this is.
A meeting, there is if you see PMIS continuously surprises. If you have an upside surprise and the PMIS on the next release. The difficult thing about that is the PMI comes the morning of the ECB meeting, so it could.
Be really difficult to trade around that event.
It could be if you have strong CPI, but if you look at the CPI data, we just had a big downside surprise in services CPI and the curve in terms of what the linker market is pricing has inflation below two percent for the rest of the year.
So it's really hard to get a hawkish meeting.
But a Marie, I've got to be honest, some of the ECB hawks really have surprised me with their comments suggesting we should have a slower pace.
They are the hawks, so hawks have to be hawkish.
I think the core unit of the ECB and overall still vote for a rate cut in July and not enough priced. But we need to see how this press conference goes.
Hi Jordan, I understood that there's a lot of attention to the upside risk of inflation coming from care policy, but I want to ask a question in the opposite direction. If inflation in the EU continues to undershoot the ECB's two percent target. Is there a risk that real interest rates actually turn closer to that zero bound or even negative in the next two or three years.
I don't think the risk of that is too high, actually, because what we're seeing is inflation is coming down. The eastb's forecast today have it below two percent for the next two years. Really, when it comes to the real yield you got to think about the nominal side as well.
So we're dubbish on the ECB in the short term.
But actually, kind of linking to the question Amory mentioned, the German fiscal stimulus will make it difficult for real yields to be materially weak, because what we're going to see in Q four is the budget is passed in Germany and will have much larger amounts of issuance in twenty twenty six. The hawks of the ECB might be able to hang on to that, but that is over six months away and quite difficult for this market to trade every single day.
But that for the long term, I find it.
Very difficult to see real yields and performing in Europe because of higher nominal yields. I expect to see with the German tenure bun getting to three point three percent.
How much of a sea change A game changer is German issuance for the ECV.
It's a massive game change. We've had many years where the weak growth in Europe was underpinned by the lack of or the fiscal austerity we saw in Germany for the past two decades. Roughly speaking, compared to what others should have done, the Germans have a lot of fiscal firepower debt to GDP in the sixty percent level sort of range, and the infrastructure alone that package is five hundred billion euros over ten years, so that's at least one percent to one point two five percent of GDP
from next year onwards. We don't yet know what the numbers will be on the fence. We don't yet know the numbers. We've got a sense of what it will be on tax cuts. We had the forty two billion to forty seven billion from the headlines this week for corporation tax cuts, so the numbers will be large. Generally starts from a very strong position and that's why you're going to see the fiscal five power matter quite a lot next year.
It's a great question Joan that Neil is raising at a time when potentially the ECB is looking at sub par inflation, inflation below that two percent level. How inflationary are some of these fiscal packages that Germany has floated.
Well, it depends on if you're going with tax cuts, that's immediately more inflationary. Then it comes to infrastructure spending, So we have to know the sizes of these numbers. So if the tax cuts we've taken, let's say it's fifty billion, that's pretty sizeable number for that or that that's something that will have to be reflected in their forecast.
But it is just a German number.
And you've also got the problem with the rest of the Eurozone is you don't have the same fiscal fire powers. The ECB can't get too optim mystic from Germany alone. You have France which is fiscally constrained. You've got Italy and Spain not really able to move the needle on
things either. But then when it comes to the infrastructure spending from Germany, that is a big positive that markets like, improves productivity and expected growth, but it won't translate to high inflation on day one because building bridges and so forth. It will boost commodity prices, and it'll raise the price of building services, but it won't affect everything else in the main.
Jordan Rochester with a zoo.
Thank you so much as always for the insights. Joining us now, Christna Mamani of La fay At College, Krishna, thank you so much for being here.
Great to see you.
How do you use data like this that isn't bad enough to cause the Fed to make a move, isn't good enough to give you confidence. It just sort of is sort of maybe a trend that we maybe can ignore, maybe need to pay attention.
To well, so if we ignore it, we ignore it at our peril. That is, I think the economy has wall or I think rightly articulated the economy is slowing. It's not slowing at the precipitous pace, but it is definitely slowing. And you can see that it used to be in the soft data. Now the soft data improved, but the hard data is softening. So I think there
is a substantial trend for slowing in the economy. It's again not precipitous, but gives the FED the path to cut rates, not today but in the later half of the year.
In your opinion, what would it take to see that cut. What would it take in terms of whether it's jobless claims or continuing claims, or the unemployment.
Rate, the mix of it all.
How dire does the labor market data have to be to challenge the fact that the economy is fine and can continue to grow.
I think the FED on that count has kind of been very clear. That is, at the end of the day, what they're focused on for cutting rates is really the employment picture. If the employment picture deteriorates meaningfully, not one month, but on a couple of months in sequence, I think that's what gets them there. Again, I think even if we get a soft employment report tomorrow.
That is just not enough.
However, if we see that in the third quarter and on a consistent basis, I think they have the pathway to cut.
Rates, even a data dependent FED that keeps saying that they need certainty and they're very unclear at the moment where trade policy might mean for inflation.
Well, so, I think from the FEDS perspective, the tariff is really a wild card because they don't know, they don't have enough of an empirical framework to kind of
figure that out. And for that they will wait. On the other hand, if simultaneously, if the markets, if the employment markets are deteriorating quite substantially, I think they have the headroom in terms of where policy rates are today relative to where inflation is, for them to be able to cut on a proactive basis as opposed to just on a reactive basis.
Falling up on Neilla's point quite substantially. What is that four point five percent unemployment in the sand?
I don't think it's the unemployment number itself, it's really the trend in employment growth that on a consistent basis several months comes in significantly lower than what the trend rate has been so last.
Year when they got exactly.
But it raises a question about how much it would matter, right how much we're kind of talking about the wrong issue. Is the issue really how much will take the FED to cut?
Or is the issue? Are we slowing or are we stalling out?
And I think that that's the bigger question, maybe for both bond markets and for the FED. It's not just do you have to adjust things on the margins, it's longer term how much heat is left in an economy that has a lot of question marks around it.
Well, that's a really good observation in the sense that even if the FED cuts let's say in the third quarter or early part of fourth quarter this year, the light impact of that on the markets, at least equity markets is probably not going to be as positive as people are expecting it to be, because I think in the throes of a tariff situation, if they are cutting rates, then they are really really worried that's bad news that will end up being bad news for the equity market.
So that's why I think equity markets at this point the only upside is really going to come from productivity growth, earnings growth, things like that, and that is not looking very likely at the moment.
I want to follow up on Matt Steven and Lisa's question, and I realize we're asking you to pingpong between the real economy and the markets right now, But what are the growth drivers that you see in the second half of the year that really catapults the economy for that raises those productivity numbers. Is there something that we're waiting for to happen that could really trigger that growth.
I don't think there's really anything substantial in the pipeline that can get you there. I think the fiscal impetus, that is, but fiscal impulse that has been in the place because of deficit financing, is really what is carrying us through. In that mix, tariffs are basically a contractionary policy,
so I think we are trying to balance. There's really no stimulus, significant stimulus coming into the economy until the tax package passes, and then we see the implications of that in terms of further deficit increase.
Michael McKee is still with us and he's been parsing through the data. Mike, in addition to a job, was claimed some really interesting trade data.
As you pass through it, what are you seeing?
Well, basically what we saw these it was a pull forward in imports. Imports dropped by sixteen point three percent, and that pushed the overall trade deficit down by fifty five and a half percent, and the Census Buro says those are the two largest declines in those categories ever. Now it's all statistical noise in the sense that we didn't make a big deal out of the rise in the trade balance in January February because we knew it was the pull forward of sorts. But it does have
an effect on the overall data. We'll see a bigger rise in second quarter growth. Then we saw the big fall of course in first quarter growth. And the one thing to point out about jobless claims is this is the biggest jump, or the highest level rather in eight months, and it's the highest two week in a row level in more than a year, So we do see some
weakness here. Neil Dna writing in that you have about a two hundred and sixty thousand level would be the break even for jobless claims, and if we get above that, we're going to see week payroll numbers.
So we'll see what.
We get tomorrow. But of course we're starting to see the numbers come in Procter and Gamble today saying it's going to lay off seven thousand people. So it's starting to weaken out there.
Mike, before you go, just a quick note, how much are you getting people questioning the integrity of some of this data, as we got reports yesterday from the Bureau of Labor Statistics that they didn't collect data for CPI in certain regions in April due to budget cuts.
CPI is the one that's being affected most and first, but there are also concerns about the labor data as well. What's happening is the government has cut funding and not kept up funding for years, and then we have the DOGE cuts, so they're behind the eight ball. They can't
really collect all the data that they have. Now, the data that they do collect is going to be used as well as it possibly can be, but just because you have fewer people collecting it and less data, you're going to have a wider margin of error.
Michael mckae, thank you so much, Krishna. What exactly do you do with this the idea that the granular data shows some degree of weakening, and yet there's a question about just how accurate it is on any given week.
Well, so it's kind of a sad state of affairs that the best statistical data collecting agency in the world is struggling to kind of do the surveys that we desperately need at this time of transition.
But it is what it is.
However, I think they do enough data collection for it not to be kind of disturbed in a significant way, and you can probably derive the basic trends out of the data that they're collecting. But I think again I would reatterate my point. It's a very sad state of affairs.
But does the data even matter when the policy is changing so quickly?
Well, so data does matter, because how would you expect the policy maker whose one mandate is employment to kind of react to it if they don't have accurate data and a really clear clear picture of what the impact of the various policies are on the economy. Without that, we are kind of we are blind, and that would be a terrible state of affairs.
I mean, most of the market's not the real economy.
It is just so I think to some extent, markets do react to policy, and for the policy to be commensurate with the state of the economy, we need that data.
Christian Momoni of La Fair College don't be a stranger.
Great to see you. Thank you so much for being here.
This is the Bloomberg Seventans podcast, bringing you the best in markets, economics, angiot politics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app.