00:00:02 · Kristina Campmany, Paul Sweeney, S2, Tom Keene, S4, Claudia Sahm
[00:00:02] S0: Bloomberg Audio Studios. [00:00:04] S1: Podcasts. [00:00:05] S2: Radio. News. [00:00:09] S3: This is a breaking news update from Bloomberg. [00:00:12] S0: Instant reaction and analysis from our 3,000 journalists and analysts around the world. [00:00:19] S4: The October job numbers are crossing the Bloomberg terminal and they show improvement from September. [00:00:25] S5: The U.S. [00:00:25] S4: Economy adding 165,000 jobs in October, more than double what Wall Street was estimating at 70,000 and much more than the 29,000 we saw in September. And we also saw the jobless rate now slipping to 4.1% versus estimates for 4.2%. It was at 4.2% the prior month. Now, this jobs number, this gain of 165,000 in line with the highest estimates and above what most see. As the so-called break-even rate, that's the pace of job gains needed every month to keep the unemployment rate stable. Taking a look at the inflation component of this report, we are talking workers' wages, average hourly earnings month over month up four-tenths of a percent, about a tenth of a percent better than expected and much better. Then the tenth of a percent rise we saw in September. Year over year, average hourly earnings up better than expected. 3.1% versus the 3% we saw in September and the 2.9% estimate. The labor force participation rate also improving a bit. 61.9% versus estimates for 61.8%. The underemployment rate increasing. [00:01:35] S1: At 7.9%.
00:01:35 · Paul Sweeney, S4, Tom Keene, S6, Claudia Sahm, Claudia Sahm
[00:01:35] S1: At 7.9%. [00:01:35] S4: Estimates were for 7.6%. Just want to point out today's report follows recent jobless claims data showing companies are holding on to workers. So it appears this is still a low fire, but maybe a more higher environment. Once again, the unemployment rate At 4.1% for the month of October, we added a much more than expected 165,000 jobs. That is a look at the October jobs report. [00:01:59] S1: Back over to you guys. [00:02:00] S3: She just like lights out. [00:02:02] S1: Nailed it. [00:02:02] S6: You have no idea the skill of what Karen Moscow and Alexis Christophers does. This gives Dr. Sahm time to look at this data. Claudia, I see two Americas. I see a boom with revisions 249,000. boom number on nonfarm payrolls, and I see the green span underemployment rate going from a 7.6% up to 7.9%. Is this a fully employed America? [00:02:35] S7: The labor market has had this really uncomfortable, curious balance of the low hiring, but the low firing, right? So it really still is a difficult environment if you are looking for a job or a better job to get that. But people are holding on to their jobs, which is a good thing, right? The layoff rate is low. It's very unusual. So I think it does give this view of like there's two two Americas in the labor market. [00:03:01] S5: And there's some truth to that. [00:03:04] S7: But we do like to see, I mean, the payroll numbers surprise to the upside. [00:03:08] S5: As I said before, we've.
00:03:08 · Claudia Sahm, Claudia Sahm, Tom Keene, Paul Sweeney, S6
[00:03:08] S5: As I said before, we've. [00:03:09] S7: Seen some big surprises like this earlier in the year, and then they ebb away. So I've got to see some months of this before I'm really convinced we're seeing an acceleration of the labor market. [00:03:20] S5: But good news is good news. [00:03:21] S7: And the unemployment rate The overall unemployment rate did tick down with participation going up. [00:03:27] S5: So, like, that's a good setup. So we're going to take the good where we have it. But we have been head faked. [00:03:33] S7: By this labor market in terms of acceleration several times this year. [00:03:37] S3: Paul, am I right? Kevin Hassett of the White House will. [00:03:40] S1: Be with Bloomberg? [00:03:41] S3: Yes. Nine-ish? Yes. [00:03:43] S1: We're going to have him. [00:03:43] S6: Okay. [00:03:44] S1: Get his thoughts here. [00:03:45] S3: Paul Sweeney with Claudia Sahm. [00:03:46] S1: Average hourly earnings on a year-over-year basis, Claudia Sahm, came in a little bit better than expected at 3.1%. Are you surprised that number's not even higher given how tight the labor market is? Why can't I walk into my boss and say I need 10% increase if you want to keep me? [00:04:00] S7: Well, I think the boss will be like, good luck in that job. I mean, that's the thing right now. And I watch really. [00:04:06] S5: Carefully the quit rate. So we did get an update on Jolt's this week. [00:04:09] S7: And there was a little tick up, but it's still pretty low. [00:04:12] S5: And that's a good sign of the bargaining power.
00:04:12 · Claudia Sahm, Claudia Sahm, S6
[00:04:12] S5: And that's a good sign of the bargaining power. [00:04:15] S7: If workers are out there quitting to get better jobs, that's when they have the leverage for the higher wages. [00:04:20] S5: It just does— it' s just not there right now. [00:04:23] S7: If you don't have hiring being strong, the workers just don't have that ability to bargain. [00:04:28] S6: Can we like do like— there' s no recession talk, but can we do like Claudia Sahm wheelhouse here? Sure. Claudia Sahm wheelhouse, folks. She's famed for looking at how an economy slows. Let's go to the opposite way, Claudia. So when you studied at Michigan, you never, never thought about a sustained 6% or more nominal GDP. How do you presume with our new politics that we will bring in this boom economy constructively? [00:05:01] S7: So, you know, there's a lot of pieces to that. I do think going back to the question about immigration policy, labor force policy, like I'm less looking at, you know, the downturn in the labor market, but I am worried about some of the structural pieces of the labor market. And I think without a growing labor force, it's going to be hard to to really consistently have. [00:05:22] S5: Those GDP gains.
00:05:22 · Claudia Sahm, Claudia Sahm, Paul Sweeney, Tom Keene
[00:05:22] S5: Those GDP gains. [00:05:23] S7: I mean, I am optimistic about some of our technology improvements on the horizon, but that is really tough to string together quarter after quarter, year after year, improvements in productivity growth, right? And so I think you've got to have a multi-prompt approach in terms of the policy. Hanging our hats on AI is not the way forward. to go in terms of really wanting to keep those strong growth numbers. I think there are some structural pieces on the labor market that deserve attention and may very well get some attention given the election results this week. [00:05:54] S1: Labor force participation rate, again, a little bit better, 61.9%. Where's a healthy number? Like, what should we be looking for? Is that a good number, 61.9? Should it be higher or lower? [00:06:04] S5: Yeah, I mean, it is hard. [00:06:06] S7: You know, work is onerous, right? We don't want 100. People should have a choice as to what they do. I think given the fact that we have so much aging of the workforce. probably keeping a focus on. [00:06:17] S3: The prime age. [00:06:18] S5: So yeah, no, I'd say, well. [00:06:20] S7: You know, people should get to retire at some point if they want to. But I think looking at the prime age statistics, which have been really pretty solid, but there's always, you know, there's the separation of like, we look month to month, quarter to quarter at the labor market. [00:06:37] S5: And then there's the big picture.
00:06:37 · Claudia Sahm, Claudia Sahm, Tom Keene, S6, S2
[00:06:37] S5: And then there's the big picture. [00:06:38] S7: I mean, we've had some demographic groups that for decades have been puzzling, like men, prime age working, used to all work, and there's been declines over many decades. So then there's questions about why is that happening? But that's not this near-term discussion. So I don't have a ready answer of what's the right number because it depends on people and their lives. [00:06:59] S3: Spearheading our labor coverage, I should say. Claudia's with us. Thank you. Thank you so much this morning. [00:07:08] S6: Look for her publications and, of course, wonderful out on Twitter and particularly on LinkedIn as well. With a bigger, broader picture, futures up 10, NASDAQ up where it was pretty much level 1.3%, but yields higher today, 10-year yield by a solid four basis points as well. Constance Hunter joins us, Chief Economist, EIU and her work with Julia Coronado, Macro Policy Perspectives as well. Constance, I look at this and it's clearly a fully employed America, Link it to what we observed in the election. I see two Americas, and there's an America that isn't in the jobs report this morning. [00:07:49] S2: Well, if we look at the voter turnout, a lot of the voters probably had jobs, right? So I wouldn't say that this was an election determined by the unemployed. We have a very low unemployment rate. And of course, remember that 33% of the population are made up of independents, and those are the swing votes. [00:08:09] S5: That put the sort of moderate.