Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at seven am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Claudia Sam with us right now.
And the squishing of the numbers, Claudia, are they squishy now because of the pandemic or because of immigration trends or do we just need to get used to this at the turn of the year.
Today's data. There's a lot of moving pieces with today's data, just because we had large revisions to both the payroll employment and the household employment, and you know, and some things aren't as comparable from December to January and household so this is just a really tricky one to get down into the details of it.
So I wouldn't So it's kind of.
More of a January effect with like bringing a lot of data in.
But it brought brush. I mean, I agree with your characterization the payrolls.
You got to take that, you know, a set of them together, not focus on just this latest number, because again, hitting consensus with all these moving pieces was going to be tricky today. And those payrolls look good.
I think it is.
You know, that's kind of a warm average hourly earnings number on the wages. But the other wage data that we've gotten has has looked more moderate, So you know, there's plenty here to pour through.
I'm struggling for news here, Paul. I got d x Y back to one away, so I got a stronger dollar, stronger dollars. Claudia Simon is saying, nobody cares.
But you know we SMP futures down just thirteen points, nasnack down fifty six and to your treasure yield. Iss Chonnis is reporting for basis points four and a quarter percent right here, Claudia, So what's the next data point here? If you have a sense that the labor markets remains solid, what's the next data point that you will be looking for? And you think the Fed will be looking at.
Right?
Well, this very much continues the Feds. You know, the labor market's in a good place. We have the luxury of time we can wait and see. So what are they waiting to see? They're waiting to see what happens with inflation? Right, So the next most important data are with the CPI and to see if we continue to make progress and everything they've got here today kind of lets them stay in that, you know, on that trajectory.
Okay, Claudia, thank you so much. Claudiam just love having you with us. Honored around this job's report with New Century Advisors. Ellen Zenner's ad a little time to ponder the data. I'm going to go back to what the hitters are doing. Like in late winter, you don't go to Patagonia for fly fishing. You go to the Trinity River in California, or the you know, Schinunck or Salmon or whatever in Oregon or that. Ellen Zenner. Morgan Stanley
joins us on the wealth effect. This is where I met you years ago was a consumer effect, which is now a wealth effect supporting this GDP in this labor economy.
Have you ever seen a wealth effect like this?
It's pretty large, it's pretty large.
I agree.
Do you want to venture to say how long ago.
It was that we met three or four years ago? Okay?
But I'll tell you what I love most about the report this morning is listening to the dulcet tones of John Tucker read off the numbers I mean, I want him to read me payroll numbers each night so that I can go to bed like a lullaby.
Yes, he puts us to sleep here too.
What do you see in the jobs report around this misgust on growth and the wealth effect that we're living.
Well, the thing is, look, we've been really surprised at just how strong the economy has remained even through all the FED hikes. And yes, they cut rates one hundred basis points, but then you have this tremendous and yields which would tighten financial conditions, and you'd think we'd get some slowing.
Out of that.
And so now you get these revisions and you look at the second half of twenty twenty four and it looks even stronger in the labor market than what we had thought, and looks a bit more in line with the strong GDP growth that we were getting. So there's just there's just no slowing here. And you know, I have to give props to my former team, the US economics team at Morgan Stanley Research, because they had one
forty on. Okay, now, if they were way off, I wouldn't mention that, of course, but they had one forty because of wild fires.
And you could definitely, I mean I would be at a higher number.
On Oh I'm sure I would have been way off, thanks Tom. But but the you know, these these numbers even have the weather effects in there. I mean, you can look at the number of people that were right the fire that's and the and so you look at the number of people that were not at work due to natural disaster, weather or that sort of thing, and it was outside. So you know that this would have been a stronger number without it. And we've just got a great trajectory on the labor market. Now. The FED,
I believe, took a hard pause last year. They used boilerplate language that was basically, we'll let you know when we're going to move again. And clearly there's no consensus on the FED to do anything but sit here, and so that's going to make it even difficult, more difficult, or raise the bar for them to see the kind of data that would mean they need to cut. So I completely agree with Claudia. They're just going to hang out here. They're looking golden for making that decision to stop.
And do we get to the point where I've heard some people suggest that the longer they do wait, the odds actually go up that the next move would be a rate hike. Are you in that camp or I have a hard time thinking about hiking rates.
Well, there's an odd there's odds on it. I don't know that they're very high. But you know, think about back in the mid nineties, we had a mid cycle growth correction and the Fed cut rates and then held steady at that time about seventy five basis point cut and rates we cut rates one hundred basis points this time.
Then they held steady, the economy started strengthening again, and rates increased again at some point, right, And so I don't know that it raises the odds, Like just pausing for this long means we're going to get a reacceleration in the economy. But that is that's a plausible outcome. I would put a lower probability than the next move being a cut. And we still have a tremendous amount of policy uncertainty.
Right, is the unemployment rate four point one percent down a tick to four point zero percent, I mean three point nine is a lot lower from four than four point one to four point zero.
Does that matter to you that you know it's going in the way nobody expected.
Now, I think what matters is looking at the underlying details and saying what caused the drop and the unemployment rate? Is it lower labor force participation? People just left the labor Is it because more people joined and were able to find jobs?
Right?
So that comes down to that household employment.
Report and a lot of deeper data.
Yeah, a lot of deeper data. Unemployment rates one of the hardest things to parse. It takes a lot of time because there's a lot of undercurrents and what drives.
Okay, I want to go back to wealth effect because this is something the American consumer, folks, is what Ellen Zentner knows. For those of you on YouTube and across this nation in your commute, Ellen Zenner and Morgan Stanley with us right now, Christiana cat Many.
Scheduled to be with us.
Thrilled to Rebecca Patterson with this as well, but right now Zentner of Thematic Macro Investing at Morgan Stanley. Okay, just suggesting seven nights, six days, single occupancy boat package, Belize fly fishing. You sell some shares of Nvidia and for eight and twenty five dollars you're fishing in belize, which I'm sure you've done. I mean, the answer here is the wealth effect to me is enormous right now when I look at the idiocy of some of these stock.
Books, yea, and believe you can do uh, you could do fishing from the beach for rooster fish.
Look that up? See what that crazy looking skillet?
No, you slap them and send them back on their way. So look, the wealth effect is, as you said.
It's really strong.
Now the the it's much stronger than it's been in my memory of practicing as an economist to get it.
And so there are a couple of things here.
Is it so one we have created a tremendous amount of wealth, and so one are we spending the same amount out of that wealth that we normally do?
It's just wealth?
Is that high? That is one possibility? Or is the still some lingering effects of COVID which taught us we're all going to die tomorrow and so spend it?
If you got it?
Interesting?
So is it that the marginal propensit you consume.
That's a great economist term, tom You like that marginal propension to consume out of wealth may just be higher? And so does that fade the further we get away from COVID further it's in the rear view mirror. Or does it just stay that high because now we've had some structural shift.
You've seen research on this. I mean, you're in a casperg seat to see research.
We have done this research.
Well do you see that? To me, it's it's an unspoken huge deal. Am I wrong?
Yeah? So what what I see, what I what I believe I.
See in the numbers is that it's just the amount of wealth that has been created has just been that large. I think that, well, we're seeing we're in the midst of seeing the data is quite lagged on this, that that the marginal propensity you consume out of wealth is returning back to normal, but that the wealth we've created is.
Just that high.
Yeah, it's just I mean, and it kind of goes back to that issue in this US consumer. If this consumer owns assets, stocks by on real estate, feeling very good about the world. Yeah, and think about it, don't that inflation kick has been even more pronounced.
Exactly exactly, And well, we're a service's economy. Sixty percent of all spending as services. So you slap tariffs on goods, and you're going to deepen that trend that good spending has been slowing and that services spending has been taking share, and we're going to still go out and spend on all the services we can.
So how do you think about over there? Morgan standing this whole terariff discussion over the last couple of months.
So I think it's it creates an extremely uncertain backdrop. We are just starting to see a lot of the business surveys show sentiment damage from the uncertain around tariffs. It's awfully hard to make business decisions in this environment.
And so as this.
Volatility around tariffs, do we or don't we put them on continues? I think even if you're not, if your bottom line isn't hit from tarrafs, you're going to start You're going to start building precaution.
Every time you're on I learned something. A rooster fish is four feet lawn, sometimes one hundred pounds.
Have you caught one?
Now?
I haven't caught one hundred pounds four foot rooster fish?
Are they like barracuda?
They're just one hell of an ugly looking fish.
But you're in belieze, so who cares?
Yeah, you're in belieze.
That's the wealth effect. With Ellen Zender, thank you so much.
With Morgan Stanley, just absolutely extraordinary. I've got a little Zenner driving the market higher. We were reading the screen and now a little bit of green. Critically, the VIX comes in fifteen point zero zero on the Vicks you gotta I'll tell you a fourteen. I don't see a fourteen yet. Maybe we're there and I missed it. Yields higher three basis points in the ten year yield four point four to six percent. And yes I followed the ten year really yield fraction on two point zero two
out to two point zero four. We had some dollar strength off of this. What a treat to go from Claudia sam and Ellen Zenner over to the wonderful efforts of Rebecca Patterson tying it all together and particularly with her expertise on foreign exchange. She's a senior fellow at the Consul on Foreign Relations and had parchment out at Bridgewater and at Best in her trust as well.
Rebecca, good morning, the prost morning, the prosperous America.
That is the backdrop for this four point zero percent on employment rate.
Does it continue?
Do you have a sustaining nature to our real GDP.
Well, you know, when I think about the economy, and we know that consumption is the majority of what drives our growth. To understand what the consumer does, you have to think about their ability to spend. Do they have the money and the job, which today underscored that they do, and do they have the confidence to spend. They might have money, but they don't want to spend it. That's what we've seen in China. In the case of the US, I think we do still have both confidence and ability.
The latest confidence surveys, although very bifurcated by political affiliation, still trending higher. So for the short term at least, I think that the consumer continues to drive this, and that's clearly very positive for the stock market broadly speaking. That said, what we know has driven the wealth effect
housing equities primarily. Anything that happens that really spokes the stock market could cause this higher income consumer to pause as well quickly, and we know there's risks to that from possible policy announcements from the new administration or even things like we saw in the last week or so. A deep seek you it doesn't take much at these valuations to cause equities to get a little bit skittish.
So, Rebecca, if you step back here and think about it, put the jobs number in context. It's what we're seeing from some of the policy decisions of this Trump administration. The economy right now is in pretty good shape on it as which to the labor market inflation. Yet to talk about tariffs continues to be an uncertainty. And what do you make of some of the economic policies and rhetoric we're hearing out of Washington.
Well, there's four that I think we're all focused on in terms of the economy and markets, and that is trade, taxes, immigration, regulation, And at the end of the day, what happens to these markets and to our economy will depend on the timing of those and the magnitude. And unfortunately we don't have a lot of clarity.
Regulation.
We probably have a little more I think that will becoming deregulation, But the problem with it is it doesn't happen overnight. There is a process that this administration will have to follow and it'll take a couple of quarters to actually be felt in the economy. On immigration, we know the trend, but we don't know the magnitude, and the magnitude will matter for the labor force and for wages.
Trade.
I mean again, I don't know, No one knows. My gut is we are going to see more tariffs and it's a matter of time. I think once we get those April reports back to the President's desk, that'll give him the green light.
To take his next step on tariffs.
And I would expect we will see tariffs on Europe and very likely some.
More on China, Canada, Mexico. We'll see Tea live.
The Bloomberg Terminal Folks has great analysis leading the charge today end Ocurr and Chris Ansey as well in IRA Jersey helping out on the unemployment report. Rebecca, here's the first line this from end Ocurr in our Global Economy Reporter. The annual revisions now showed job growth averaged one hundred and sixty six thousand a month. That would be a slowdown from an initially report at one hundred and eighty
six thousand pace. To me, that's pretty much quiescent. I mean, they're down, but they weren't the gloom that many people were modeling.
Yeah, I would guess the federal Reserve today is very happy and we're seeing a moderation in the pace of job growth, but very very resilient labor market data showing us that this economy can continue to grow at above its potential long term rate. So maybe no rate cuts forthcoming in the near term. That's already priced in that
we don't get a rate cut probably till midyear. But at the same time, the normalization of the labor market also means they don't need to be too worried at this moment about having to go the other way in titan.
I mean, we're going to have Anna wan on with this later. She'll be expert in that, Paul.
But basically the revision was what Mike McKee talked about was, Yeah, it's a revision, but get over it.
It's just that a revision.
Yes, agreed, we have them every year.
Soa.
We heard from the Secretary of the Treasury, Thank you very much, Rebecca. We heard from the Secretary and Treasury in an interview saying love to talk down the ten year yields. I know you have some thoughts on this. How do you think the administration thinks about interest rates?
Yeah, it was really striking to me. That Treasury Secretary best highlighted that they're focused on not letting the ten year yield rise too much. I don't remember in my career focus on the ten year yield via Treasury Secretary.
Given the size of our debt, the.
Increase in our borrowing costs, the interest we have to pay on our debt, it makes sense.
But then how does he do it right?
If you can't the treasury market is twenty seven trillion dollars, It's not that easy to manipulate. And when I think, what can he do If they can limit the unfunded increase in our deficit so you get lots of pay for us and maybe it doesn't go up as much as some of the estimates, that would probably provide some relief that we're not going to have to increase bond supply a huge amount. He could try, and this is something to keep an eye on and we should talk
more about it in a future date. Stable Coins stable coins right now on a decent amount of short term treasury securities as their reserves to keep their peg to the dollar. And this administration is very focused on increasing the use of stable coins around the world, in part because they know that's going to be a good source
of treasury demand. We're on the front end of the long end, but still, you know, I think he can also look at treasury issuance and even though he posed yelling for this, he could issue more debt as needed shorter maturity than longer maturity. So he has a few tools. It's interesting to see which levers he pulls in the coming months and quarters to do this. But if we have strong growth like we had today, that's a benign reason for the yield to go up, but it will go up.
It's tacking of me, Rebecca, to get out to March seven and the next unemployment rate. That's when your beach season clicks in. Right, we're getting close to forty fifty, Rebecca. I look at March seven, and you mentioned the fiscal structure and pegging the tenure yield. I mean we rolled into March. Is it correct to say with the nearest fiscal crisis.
That we owe you mean with the debt ceiling or just the size of the days?
Yeah, just as general for our listeners and YouTube viewers.
The bottom line is we get out thirty days and it's a whole new world.
After all, A fiscal stress.
Yeah.
I mean we are facing some major debt related fiscal challenges this year. We're going to have to see an increase or an abolition of the debt ceiling that's being discussed in Congress. I think we will get through that. I'm not sure which path they'll take, but I don't think we're going to have a crisis this time with the Republican controlled Congress. What's more important to me is how the reconciliation goes for the budget that they're going to try to pass this year.
They have to pass this year.
What kind of shenanigans are used to make the math look better? Both parties do this, so I'm not pointing a finger, but there are going to be some shenanigans.
And then how much is that increase?
And what is the market going to tolerate If we're putting tariffs on our biggest buyers from overseas of treasuries, are they going to be looking more towards gold and we're going to keep seeing new all time hyes for gold.
There I'm not going to get a gold call from Christina KATMANI Rebecca Patterson, can you print through three thousand gold for US?
I wouldn't rule it out.
I learned when I left the cell side you don't have to give numbers and dates anymore. That is the hardest part of a cell side analyst. Since I don't have to, I'm not going to Tom, but good try with.
A cell side firm. The Console of Foreign Relations.
Rebecca Patterson, thank you so much, and now we turn for this is just a kids say this commercial for this is just brilliant intellectual.
Content on YouTube on radio.
And we finished strong, strong, strong with Invesco Senior portfolio manager. That doesn't even describe our abilities Christina Kamani as well.
When you make a prediction, do you avoid level and the time frame? Is that something you've learned to do?
You can only choose so many time, level, direction, hard to get all three right at the same time.
Help me here with the yield? Now, is it normal? That's some question Sweeny would ask.
Is it normal?
Is it normal like the here or what?
Oh? We had this four year window of negati of yields and wicked low rates and now we're back here and we better get used to it after this job's report.
Should we get used to where yields are? Right? Now? Look?
I think we've kind of been in this consistent thesis for the last couple of months that four twenty five, four to seventy five are probably reasonable bounds for the tenure. And I think there's going to be a lot of noise within there, and we sit and say, our only certainty here is uncertainty. We have all of this this information flow coming from DC. What are the priorities of the administration? How do we get them? What's the order,
what's the magnitude? And I think that's going to cause noise out the back end, and where there's a lot more stability is in the front end, because I think the FED is very comfortably on hold as they wait for kind of more clarity on what the path is for real econ data.
All right, So then it becomes like we answer kind of the duration question a little bit. How about the credit quality question, because again, somebody can sit there at a two year treasury at four and a quarter percent, that's not a bad living.
Do I do that?
Or do I take some credit risk? Do I go high yield leverage loans?
How do you guys?
Yeah, So when we think about that, I think we're really happy to say we think that the front end is a great anchor in the market and you no longer have negative carry to where policy rates are, and then you can build interesting portfolios around front end assets. And that's where we're willing to take some credit risk and look at mortgages that inherently have some selling fall
component to them. So credit as a whole, i'd say, again, like we have our credit specialists within Invesco, but the way we're looking at it, certainly short duration double b's look really interesting. There's mortgages, there's mortgages in Europe and the UK that look interesting.
Where are you un duration? I mean to me, it's just absolutely fascinating. We mentioned earlier.
Should John Tucker get the two year CD or the five year CD? That's a really important question right now, isn't it.
It is absolutely And you take a step back and we live back in a world of babs, right, bonds are back and that's there is definitely value there. However, you look in the last year, were the best performing asset out there?
Right?
Because you've had this negative an inverted yield curve and whatnot. So when we think about duration and where we want to be in the curve, I think there needs to be more turn premium built in a bit for depending on what we get fiscal wise, And it's really around the front ends that there is value.
So again, if I'm in the FED a reserve, I look at today's data, I think I have a little bit more conviction, like I don't have to do anything. I mean, how long do I just take a few months off here or what do I do?
Our base case, I think is that the FED can comfortably or right. One data point doesn't change the FED thesis. Two, maybe they start to get worried in one direction or the next. And three is really when they can start to react. And if you think of we have a new administration, we have a massive amount of different policies coming down the pike. Even if you go through the list tariffs, will it have a bigger negative growth, negative confidence impact or will it be an inflation impact?
Is it a right?
Which one of these things?
Is it going to be? So I think that that.
That tells you the FED says we need right a series of data to have comfort.
But to that wonderful summer you just gave, do you then pull in your maturity your duration? Yeah?
I think you do by two weeks.
Look, we're kind of again you can tactically be playing duration out the curve. I think we're getting Will we probably test five percent tens again or at some point this year?
Sure?
Are we there yet?
Do we need to be massively short?
No?
I don't think so.
I think you can tactically play out the curve where you want to own and there's value is two's and fives and kind of anchoring some assets there.
What's the excitement out there right now into the spring of this year in bonds?
Is there a lot of new issuance? Are you getting called up all the time?
There is definitely is sending you on junket stable.
There's definitely a lot of issuance coming down the pike. And I think again, as the US market and the kind of that dominance in the world, there will there's always money that's going into there. I think when we look across the markets that we look at, which are rates and em and credit, what's interesting to us is really FX from here, like there's a lot of potentials.
Yen can be a real mover from here. You have a lot of commentary from the administration about a strong dollar, but does that really play out for a strong dollar or do we have some like weaker dollar tendencies kind of in the next six months.
Mergery markets tell us where you see opportunity or is everything tied to China.
I don't know how to look at it.
I think it's really idiosyncratic from here. So I think if you talk to em specialists, they will. But I think like some of the focuses are these like Egypt people are excited about, and Turkey, and there's like Argentina is a great story, right like there are these, but like Argentina is a hard asset story, or right like they're where people are concerned. Are China terrorists? Mexico there's so much noise. Brazil has its own idios and growth
and politics and what's going on there. So it's really I don't think you can say latantly.
Do your work. Yeah. A woman of Villanova.
Eagles, Oh, I don't know.
I'm gonna go.
I grew up outside of Boston. My husband would tell me that I'm supposed to be a Giants fan, but I'm gonna go Taylor Swift fan.
So cheerous the.
Last Power, Okay, the Power, Well, Christina's how they get to one hundred and fifty.
Thank you.
Just always brilliant to have Claudia Simon, ellen Zett or Rebecca Patterson so Christina. Just incredible set of academics there to get you through this job day.
You're listening to the Bloomberg Surveillance podcast. Catch us Live weekday afternoons from seven to ten a m.
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Listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us Live on YouTube.
I did a great job on this in technology yesterday, and I got to rip up the script forget about Amazon.
I got to go to the headline tech giant. Work Day lays off.
One thousand, seven hundred and fifty employees and shift AI.
Is this Paul Sweeney and Tom Keen and jam Tucker's future?
No, no, no, not at all. I know Workday has laid off some people, but I don't think it has to do with AI. The Really what happening is when you look at most companies, the headcount growth on the white collared area is not as much. So what's happening is for Workday, the seat count growth is not getting there. But that doesn't mean that they are now growing. They're still going to grow subscription sales north of fifteen percent.
So one of the things the company did last year was change their focus to talk about you know, seventeen eighteen percent growth right on the top line to around fifteen percent with a lot of margin expansion. So what you're seeing right now is, you know, basically they are giving margin back to the to the invent.
So Amazon last night an a rock. Its kind of sounds a little bit similar to Microsoft saying that they can't keep up with a demand for their AI products. Can you explain what we're seeing in the industry, what are the constraints?
This is really you know, a rush towards doing land crab right now. You've got to have the infrastructure ready when clients want to deploy more of the products. So one of the things that you will see is companies are experimenting with AI. So they are starting with a small project, then they are expanding it, but they need
an infrastructure around it. This is something that we have been saying for several years that the best way to do that is on a cloud infrastructure rather than doing it in house, because first of all, it's scalable, it's cheaper, and more importantly, the cost for you is variable. You're not going to be able to, you know, come up with buying those AI service and GPUs in house yourself.
You just go and rent it out. So that's what everybody is doing right now, ensuring that they don't left they don't get left behind when you see a surge of demand coming in.
So how do you stack up kind of the competitive landscape for AI am thinking of the big players Amazon, you know, Microsoft or Google. How is it shaping up here?
Yeah, let's talk about the fold companies. For sure, Microsoft absolutely in the lead, but that is because of the chat, GPT and open AI relationship. Bulk of the revenue that they are generating is from consumer apps. For the other three companies, which is Google, Amazon, and even Meta, they don't have consumers app that they can monetize that way. Meta actually doesn't even have a cloud business, so we don't know how they can monetize it. So let's look
at Google and Amazon. Bulk of their AI revenues come going to come from enterprises, and enterprises are slow in embracing it, and even if they have paid an application, the contribution to the bottom line of cloud is very small compared to a consumer app. So all three are working with enterprises. Microsoft has the luxury of getting all the you know tokens when you are searching on JACKGBT, on your foe.
On this job stay commercial free within this half hour, will do the same at eight thirty as well. Michael McKee scheduled to be with us on the confusion of the revisions. Michael Barrow will darken the door, and also a bit of the Secretary of Treasury conversation from yesterday.
Right now, we do better with the aniog rana of Bloomberg Intelligence anerog If you need to do a log linear extrapolation of the aniog rana world down the income statement, which line correlates most with your future guess of what these AI giants will do? Is it operating income, is ITITA? Is it free cash flow? Or is it just simply revenues.
Yeah, so this twenty twenty five is going to be a year off capital expenditure and margin compression. When you look at somebody like an AWS, for example, they improve their margins in twenty twenty four by ten percentage points. So in twenty three the operating margin was twenty seven pers and in twenty four it was thirty seven percent. That's a big jump for AWS and now next year we think it's going to compress at least by one hundred to two hundred basis points, if not more because
of the investments. Longer term, this is one of the most amazing business models of all times. You can see margins north of forty percent, but for at least for the near term, we're going to see compression. So that's the most important KPI right now. In terms of the cloud growth rate, as supply comes into online, we should see cloud growth rate improve, but most likely in the second half of this year.
On our one of the I guess themes of the last quarter or so is these big tech companies just ramping up their capex like materially not just a billion to here or billionaire, but tens of billions.
Do we like that?
See?
Again, depends on your time horizon if you're going to trade till you know, the Super Bowl, but perhaps not. But when you think about this business model in the long run, you really are creating such a massive mode
around the businesses with high fixed costs right now. But at the end of the day, these had very strong unit economics that once you get up your scale, you know, you will see a lot of that fall to the bottom line, and that creates a bigger barrier for somebody to break into this market.
You know the thing about it, you thinking about an Runa, it's great. I mean, you know, you look at his energy. You look at all that's going on out there, the whole slang thing that Lisa is talking about.
I mean, he's high energy.
I mean he's he's like, you know, there's like slang within tech for these people that are high strung, wound up and all that.
That's Interact Runna, Interact. Thank you.
This is really I learned a lot there, really really really good. Appreciate it. Interuct Runa on the cloud with Bloomberg Intelligence.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also listen on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty over.
In tee Live.
The Bloomberg terminal service for all of our members worldwide, and the Kerrn is in charge and he reports to us. Now and I'm confused over what was the number revision of eight hundred, I'm guessing eighteen thousand. I believe Kevin Hassett just told John Farrow it was a million. What was the revision statistic?
Do we know?
Well? The one that we're running with, Tom, is that the revisions show that Joe's market averaged about one hundred and sixty thousand jobs a month last year, which is below the initially reported one hundred and eighty six thousand. So that's the number that we're running with. And I also I did hear mister House to make the point it was he's counted up to I think he said a million odd. But so you know, you can look at this two as of course the President Rum's administration.
You're saying this makes the point that Joe's market was weaker than that. Yeah, it looked, and clearly clearly it was as a Generald revision. But of course there are others who are saying revision it wasn't as material as expected, and it still shows overall the jobs marketers has held up.
Okay, how important getting to March seventh is the fiscal state of Endocurrens Washington, We've had a bit of chaos here, or I should say a lack of clarity or noise in this January report. Is the February report going to be even crazier?
Well, if we are at such early stages of a major new policy rollout by this new administration, come that it's going to become clear. I mean, it's interesting the January figures. There had been some expectation that maybe the wildfires or the severe winter weather would have impacted, but there was no discernible impact. Now we go into February, you look around, what are the variables with one of the big talking points of courses, what's happening with the
federal workforce. We have reported tens of thousands making that buyout offer from the government, But will that surface? When will that surface and in which month of the data for example? So you know, I think for now, the jobs data is probably, as you wore, will carry on this particular path, subject to what's going on in the economy. But when these big policy changes start to impact one way or another, that's probably going to take time. I mean,
can think about it as deportation. There is the trade and Tireff's policy, and then there is the what's happening with the public workforce. President Trump's team will say that will drive investment. You just heard mister has to make the same point, it will drive invest in the create jobs. Some economists are more cautious on outcomes, so it's like a few months become clear, I think.
And mister has also made the point to a question from John Pharaoh, that it was not a trade war with Canada and Mexico, it was a drug war. And then John followed up with Okay, well, how are you going to have these discussions with Europe? What's the view from Europe about trade United States?
Ye?
Well, I mean it's very interesting because on paper, clearly President Trump came along and threatened these tariffs on Canada and Mexico at the beginning, at least over the Fenstal, the a litle drugs trade and on illegally immigration, that was using tariffs as a tool in a space beyond
the merchandise goods. But I think also as the commentary proceeded from the White House progressed, there was also several references to the goods deficit with both and particular Canada came in for a swing there and at one point. There was a reference to Canadian defense spending as well. So it's interesting that mister Hassett said, why would you have a trade war with your neighbors because it looked like they're riding that way last weekend. But he's he has narrow the focus back down.
The Fentanel and the current of our global had a global economics and of course all of his work in Asia during the pandemic. And I think you've got a wonderful prism coming from the Pacific rim over to Washington. How Barbell is the American la economy the way we describe it, and as the haves the have nots, some of us have a certain persuasion.
Go back to John.
Edwards on a lawn in Louisiana a million years ago talking about two Americas.
From where where you sit with your team.
How too much to Americas are we?
Well, I think there's clearly that is an issue, Tom. I mean the headline the I agreate that it does point to a strong economy. It's holding up the jobs market as we see today holding up okay, and companies are hiring, wages going up, and unemployment rate actually fell. But clearly, you know there are plenty of people who don't necessarily feel like they're experiencing any kind of an upswinging the economy. You look at the condoms and how's the market, the cost of a mortgage credit.
Tourists, the recent article the Creid Tourist was absolutely magnificent on food lines across this nation.
That's right, Tom. So there is you know, that chunk of the sorry who clearly aren't really any economic uplift, And we saw it in the election results. You know, on paper, a strong economy going into last year's election, but of course we now know that people are very upset about the price and the cost of living. So clearly this new administration has an opportunity to address a lot of that, and they have identified living costs and inflation as one of their key priorities for example. But
of course the question is the balancing act. Can they pull off all of these big believers that they want to pull without also hurting the economy. That's going to be the big drink.
And the Chiefs are eagles, I.
Think probably as a grateful guest here tell them. I'll go with the Chiefs. But I'm no expert on NFL apps.
We can't many with the Chiefs, currents going with the Chiefs there and the current thank you so much, t Live just precious, can't say enough about it at Christansian and the current out on Tea Live with really good analysis.
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