our thanks to mike mckee and liz mccormick. this is bloomberg. ♪ (♪♪) (♪♪) sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals. say aloha to olukai golf. waterproof leather. breathable fabrics. hey, nice putt. spikeless traction. the most comfortable golf shoe in the game. grab your pair today at olukai.com. thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh all-day energy starts with clean hydration. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty. sonali: during has testimony, powell said regulators are close to agreeing to change their plan to force big banks to hold significantly more capital. it is a move that can mark a major win for wall street banks because we know those rules are in the process of

let's go to mike mckee. michael: we are looking at a disappointing number, a surprising number for the jolts. a lot of economists thought we would see a decline in job openings. instead is an increase. the april number revised down the 7 million -- 7,919,000. these numbers are delayed by a month. i'm trying to pull of the overall numbers. the other number people care about is the quit rate. a little changed. 2.2%, the seventh month in a row. there was some thought we would see that going down because of fewer job openings and people would get worried. overall the number tells us the labor market still is a bit tight. i would be curious if jay powell gets asked about it to hear what he thinks. the fed made a big deal out of jolts telling them the labor market was tight. katie: let's get right back to that fed chair jerome powell ecb president christine lagarde in brazil's central bank governors speaking on a panel in portugal. >> it doesn't seem like the president will reappoint you. do you worry about the in

mike mckee is with us.more time to go through the data. what jumps out at you now? mike: a number of numbers that jump out with the overall thing that is very interesting is how calm so many categories are. it shows a normal inflation and normal inflation that we had prior to the pandemic. a lot of things up a 10th or down a 10th. the biggest thing is rent because it is 30% of the cpi and the owners equivalent rent up 3/10. that is low from the fall of 2021. real progress. the fed finally seeing what it wants to see. food prices up just a tad -- just a 10th. airfares are down 5%. you can see delta getting a head of the cpi with the release it put out that -- put out. used cars were down a lot, car prices down. the one thing that rebounded from last drop. it is basically a benign inflation report and because it is a broadly benign, it gives the fed more confidence that inflation is going to remain under control because it is the whole process coming out as it used to. jonathan: the bond market rallying hard,

with the economic data, mike mckee.n anticipated in terms of personal income and spending comes in s forecast. personal income up euro .2%. the numbers everyone wants to see, the pce price index comes in spot on. 0.1 percent for the increase in june. the same as forecast. the pce year-over-year 2.5 percent. that is as forecasted down 1/10 from last month. then the core comes in 0.2% as forecast at 2.6% which is a little bit higher than the core forecast for the year-over-year which is 2.5. that is probably where that rounding error comes in a little bit. income spending, we are also revised a little bit lower. income was revised lower for the month of may and spending revised higher for the month of may. at this point you have reasonable incomes, good spending numbers and prices continuing to inch down. they are not going very fast as people are hoping for but maybe this is enough to get the fit going. jonathan: if we take a look at the last 24 hours before economic data yesterday and the decent jobless claims relative

mike mckee will stick with us.dudley, who made the case for cutting interest rates in july. you are making the case for cutting in december. we've got additional information. why does this picture validate your start? michelle: let me begin by saying that we backed off or pushed off the call for a fed rate cut consistently over the last year. we expect the economy to cut sooner because the economy would be weaker. we had this forecast in for a while, although the data and the rhetoric have mounted to suggest it could come sooner. we have just got a lot of information this morning as the numbers suggest. i think that things really need to fall into line before we could confidently say we should move from december to december, having been burned many times before. i think that what mike said was exactly right, the numbers this morning take away the risk of a july surprise and it removes the urgency for the fed to have to act. next week the employment data will be important, claims numbers this morning are again compl

let's get to mike mckee for the latest. mike: the narrative has been the economy is slowing. the ism numbers suggests that narrative is still in place. we get a reading down from 48.7 in may. other than a brief peak above 50 in march of this year, you have to go back to september of 2022 before you get an extended period above 50. the slowdown in manufacturing continues. that is what you see in the sub indexes. new orders are up but still under 50. production slips a bit, 48.5%. employment slips to 49.3%. men tories are lower. -- inventories are lower. prices down from 57.0. that would suggest more room for the fed in terms of when it might want to lower rates and suggests perhaps we will see lower numbers in the cpi next week. katie: we do have a jobs report on friday. a little bit of a weird week the way the schedule worked out with the july 4 holiday. what are we expecting to see? mike: we are expecting to see a lot of traders on the beach. but the junior traders they leave behind are expecting 188,000 jobs. that may change during the week as we get more labor market data.

let's break it down with mike mckee. michael: a big miss for ism services.t plunged the most in four years. 48.8. business activity and production absolutely falls off a cliff. 49.6. contraction. last month it was 61.2. that was a big jump from the 50's before in april. it is quite the plunge this month. you have to ask, what happened? new orders. employment, 46 .1 from 47.1. inventories, 42.9 from 52.1. prices paid does fall, 56.3 from 58.1. it is not a significant drop compared with what else we had seen here. a real fall off, especially in those indexes. the sub indexes. the new orders, employment and particularly business activity prices received as well. everything slows down. along with the narrative that we have had from jobless claims and from adp, what we are looking for is more of a chance of a september rate cut. that's exactly what we've got. we have gone to a 73% chance of a september rate cut in the ois trading after this was released. we were heading that direction after jobless claims this morning but now we are really looking at the odds of

the data starting to come in and geared mike mckee joins us.0 jobs created in the month of june, much higher than the 190 anticipated. we talked before the data came out about potential surprises. the unemployment rate is another surprise, rising to 4.1% from 4%. the forecast was only for 4%. interesting number for the two month net payroll provision. down $111,000. on the one hand we get stronger growth and two prior months, a significant drop. put it together, you have a slug economy story. hourly earnings, no change in hours worked. 34.3. the labor force participation rate, 62.6, up from the prior month and 7.4% for the u6 number, the underemployment number as they like to call it. let me take a quick look at the number of people who were reported hired in the household survey. 116,000 plus so it is lower than the establishment survey but we don't have that big gap that we saw last month. dani: let me show you how the markets are stacking up. it is the unemployment number at 4.1% and the revisions we appear to be trading on. a rally that is

tim: mike mckee said that also.ent, unwilling to go beyond pricing in two cuts. we began the year with six cuts priced. the market has been very disciplined. it's been burned pretty hard in the past by trying to anticipate fed pivots. they want to see inflation numbers. if inflation numbers are cooperating, moving in the right direction it will give the fed is the ability to go in september. it is live, but not fully priced. ira: mike makes a good point. the fed needs cover at some level. some indicators suggest the economy is running pretty quickly. and if they cut interest rates people are worried. a lot of investors i talk to are worried about re-acceleration of inflation if the fed does cut too early. you need to see inflation numbers come down. this will continue to be key. it will give them the cover to be able to cut interest rates, especially if they cut as early as september. vonnie: you probably know i was going to ask about the sam rule. we will speak with claudia later about exceptions to the rule and so

jonathan: mike mckee in the room next week. will be a rate cut in september also struggling with some of those flights. check out the airlines in the premarket. down across the board once again. even if you push the tech outage friday to one side, this started with delta coming out and saying q2 has been tough, down another 1%. united followed up with the same story and then earlier this morning in europe, almost exactly the same thing in a different market from a different airline, this time it was ryanair. lisa: this is basically a one-two punch. on one hand they are not able to charge customers and endlessly increasing airfare, but also you are seeing expenses increase. think about how expensive it was for the likes of delta and others that had to deal with painful rights. they had to give people refocused flights. they had to talk about perks, potentially even put people up and hotels. this is an expense at the same time that they cannot offset it in the same way they've been able to in the past. jonathan: ryanair over in e

let's cross over to mike mckee.ort time ago as adp reports just 122,000 jobs created in june, at least according to their methodology. in july, rather. they say most of the jobs were in the construction area along with some in retail but very disappointing service industry numbers, only 88,000. 85,000 in service industry jobs. payroll, 4.8% for those in the st. john's, the lowest level in years. to the extent that adp is seen as any kind of indicator it is going to push down on estimates for what we are going to get on i-8, and it gives the fed something to think about. jonathan: i know we are going to touch base with you in about 12 minutes. 122 on adp. looking ahead to friday, a sneak peek, a preview of estimates. 175 for friday payrolls, the previous number 206. let's start with equity futures on the s&p 500, on the nasdaq, on the russell. up by something like 1%. the nasdaq 100 now higher by almost 2%, up by 1.8%. at the equity market. first off, downgrading mcdonald's to hold. the analyst noting disappointing e

mike mckee is not bothering to focus on what is happening at the house because mike mckee is somewhereon, d.c.? >> well, because it is a lot nicer out here i think than in washington these days. washington is a tough place to be. jay powell has to be there. but his testimony is going to be the same this morning. nothing new in his prepared remarks. but when they get to q&a, perhaps a little more of a focus both on when they might cut rates, even while keeping wall street hopes alive, and other politics of it, as annmarie knows very well. the house is much more political than it's questioning them the senate is. annmarie: it seems like we got the sense that he is recognizing the weakening and the labor market that a lot of people have been talking about. he's talking about this is not a frothy economy, you are seeing a balance and elevated lesion is not the only risk we face if they don't cut rates soon enough or deeply enough. that could be a problem longer-term for the labor market. i am paraphrasing that. how much are people saying that this is a shift in tone that is paving the way

let us cry so -- crossover to mike mckee. pop in jobless claims that might worry people and thanks that he gives the fed more incentive to cut rates. 243,000. 249 was the expectation. continuing claims also jumped a little bit up 108,067,000. the initial claims were revised to 223. here is the interesting part, jobless claims for this week's numbering is based on last week's filings which was the reference week for the july payrolls. this might see a little weakness and get people interested. we also have the philadelphia fed much higher than anticipated. prices received at 24.2 from 13.7 and the new orders index at 20.7 versus -2.2. the price is paid, 19.8 versus 22.5. we have seen some negative employment news but positive price news which will add up to thinking that the fed will cut. dani: -- jonathan: it is really important to process what we saw. cpi came in beneath expectations with jobless claims that have dropped. i think that has restored confidence. with this number this morning and it is one data point, but do you

mike mckee working so we don't need to. thank you for everything you do. us. i want to come to you first. this is something you said, attributed to you. i said someone says this. you look at the jobless rate on friday, just walk us through that. >> i think the range of payrolls will be pretty wide that could set aside the gradual normalization rather than dissertation in the labor market. we could see payrolls as low as 150 or as high as 250. that will be just fine. what is really important is the unemployment rate. it increased in the last two reports. again it could potentially trigger it. if it goes to 4.2 percent, that could trigger the sound rule. that is a big question and could spooked the market. the change on the unemployment rate because the previous number was driven higher by young adults. i don't think that is sustainable. jonathan: let's bring you into the conversation, would you agree? steve: the unemployment rate is clearly an indicator. people understand what it means. it does have importance in terms of the dynamics. it is still a very lo

mike mckee dropped by to give us his thoughts on the week ahead.> the economy is in pretty good shape, it is slowing down and it hasn't crashed. inflation is coming down according to all the latest data and fed officials say that people are still relatively optimistic. we are probably set up for the fed to hint at a rate increase -- rate decrease ahead. i was thinking it is like one of those gender reveal parties were maybe we give jay powell a piÑata and instead of boy or girl, it comes out as september or november and we see which one they are actually going to do. jonathan: are you going to get that the chairman pal? >> the ratings would go up. a lot of people would watch. jonathan: i lisa: imagine they would. lisa:between the bachelorette that is going on with vice president, gender reveal for the federal reserve, what kind of country are we coming to? jonathan: i would have payrolls on a wednesday and the fed decision on friday. >> but that is a problem for the fed because they don't know what is going to happen. if we do get a 1/10 percent ri

mike mckee, thank you, sir. coming up tomorrow, brian levitt of invesco.e on political noise. which debt? -- dip? what they think is noise and what they don't. >> we did the week ahead but i think you missed the biggest event which is biden and the need for him to perform thursday evening. he needs to be like the biden of early 2022 when he did that record nearly two hour long news conference and took questions from everyone in the room, things he wasn't even prepared for. he cannot just come out and take two to four questions, that's not going to cut it. jonathan: will this be a news conference on a nato or on the president's health? annmarie: the questions will start with something about nato and the u.s. looking strong and how can we look strong if blood questioning your ability. jonathan: the week ahead. look ahead for that on thursday. all of that still to come this week. kicks off her chairman powell later this morning. then in front of the house tomorrow, then we get cpi data on thursday morning. then on friday we started earnings. we can talk about

mike mckee is with us around the table.powell probably not afraid a whole lot of ground today because there is still dated to come. he's speaking a lot this month so he will have other opportunities including the week after next when he goes up to capitol hill. he's probably going to keep it fairly generic instinct to the idea has more to do and we will make our decisions at the data comes in. 10:00, the number is going to be interesting because it has been something the fed has focused on. the fact that the labor market is very tight and now it is loosening up and i've got a chart here that shows what most of the endless notes i've been getting are focused on, and that is the ratio of job openings the number of unemployed people. to see how the unemployment rate goes down when the number of job openings is up. that is very logical, basically the beverage curve. you can see the number of job openings is just about at the level it was before the pandemic. people are saying that will signal if we get another drop, that will s

let's get to michael mckee.e american consumer than anticipated though not great retail sales coming in flat for the month of june after being up .1%. the forecast was for a 3/10 dropped so good news there. autos is a .4% gain. the retail control group was up 0.9%. i want to check when i get a chance to see what happened with autos because there was the computer outage for a lot of the auto dealers. auto sales suffered and that might be one reason we were only flat. import prices come in flat. petroleum up .2 on a year-over-year basis. input prices up one point 6%, going in the opposite direction of what we anticipated but overall it looks like a relatively good retail sales report. i will check the details now. jonathan: the control group of 0.9 was a big upside. the estimate was 0.2 and you put that together with jobless claims from last week better than expected and you get the impression that maybe just the shaky period was a head fake but we will see. it supports the idea that this economy and consumer are

there's a roadside fire just around mckee.e checking on that, but so far, typical slowing there and a little bit of a build at the bay bridge. back up. back to you. all right. thanks so much mike. well happening now. crews are mopping up the overnight fire. this is a home in sausalito. it happened a little before 230 this morning along atwood avenue. this is near southview park. marin firefighters say that they arrived and they did not find any flames. however, several lithium ion batteries were found smoldering in the garage. no one was hurt. yikes. our coverage of saturday's assassination attempt continues at 6:00. we'll take you live to the republican national convention as it starts today. plus, scott peterson's attorneys return to court in their bid for a new trial. one expert's take on why the expected ruling over a key piece of evidence might be critical. but first, a quick reminder nbc bay area is streaming 24/7. you can catch us whenever you want on roku and oth streaming platfoerrm (♪♪) named 2024 world car of the ye

it happened early saturday when a car slammed into a home on salazar park place off mckee road. investigators now arrested the driver and say she was under the influence. no one inside the home was injured. as soon as tonight, we may know the results of a special recall election involving two members of an embattled school board. at 8 p.m. tonight. the polls close in the election to recall, sunol school district board president ryan jergenson and trustee linda hurley. each of them voted to ban the flying of the pride flag on campus last year, the decision made national headlines. the district superintendent also recently announced her plans to retire if the recall is successful. the board would be left with one trustee. fish and wildlife teams are now awaiting rabies test results on one of three coyotes killed in san francisco over the weekend, following an attack on a young girl. the coyote bit the girl after she fell friday afternoon while she was playing with a group of friends in golden gate park's botanical gardens. the girl suffered puncture wounds. is expected to fully re