to disinflation. we'll cannot find a bid. shoes from that girl from bowdoin. we are live from our world headquarters in new york. friday, december 5. i'm tom keene. joining me is scarlet fu and brendan greeley. news from the white house. president obama has made it official. he's nominating ashton carter to be the next secretary of defense. more on that from peter cook in a moment. congress is one step closer to a deal on a budget bill that would push off the fight on immigration until january. one of the keys is a symbolic protest president obama's order. spoke. boehner

>> be president found his nose at the american people. the house will make clear that we are rejecting his actions are >> it would fund most of the government through september. cuttings central bank its forecast. the bundesbank says the economy will grow 1% next year. the government reported that german factory orders increased in october 5 times faster. >> hope springs eternal. spread over the eric garner case. a black man who died in new york after a white police officer used a choke hold while arresting him. the grand jury decided not to indict the officer. many police departments are rethinking the way they use force.

oil prices have resumed their slide. the price of crude fell to a four-year low. saudi arabia has offered a discount, boosting speculation that the saudis are trying to defend their market share. in the u.s., west texas intermediate is trading lower. >> tiger woods looked a little bit rusty. returned to and has tournaments after taking four months off with a back history. 77 in the first round of his own tournament. is in last place. there are only 18 players in the field. golfing. >> is tiger woods the pimco of golf? >> he had his day. quote of the day. >> a cacophony of headlines.

equities, bonds, currencies, commodities. futures up. europe, what a gyration yesterday, 1.2357. above 1.24 after the draghi comments. vix, 12.38. yen over 120. what a benchmark. let's go to the next monitor. this is the difference between two-year yields and 10 year yields. economists will go the yield curve is not indicating a recession. what are they talking about? slow down. we are up here. we come in, flatter yield curve. two year yield goes like this and the 10 year goes like this. nowhere near inverted where the two-year is higher than the 10 year.

>> we are just talking about the u.s. look at these yields anywhere else and the world and they look different. the u.s. is where there is hope. amountre a good hope from doom and gloom. in theueger joining us next hour. getting ready for the jobs report at 8:30. the politics of the moment. the president looks for new leadership. the new york times calls him independent and assertive. too earlyter cook up to discuss the new dynamics with our secretary of defense. that mr. carter will become secretary of defense? if ash carter has problems in terms of confirmation, will that hearing process exposed policy?m of obama

absolutely. i do not expect carter will have problems getting confirmed. >> for beltway insiders, what is the point we are at? >> ash carter is a guy about to take over this job that is going to be a job that involves budget skills, knowledge of the inner workings of the building. that is what ash carter has. in he crack the inner circle terms of determining national security policy. i would not count past carter out. he knows the president better than a lot of people think. he's going to want to be part of that conversation. >> nobody wanted this job. why what ash carter say yes? >> p wanted this job two years ago when it went to chuck hagel. has served his

country in the past. he do not always turn down things when the president asks. i think he thinks he can do a good job. this is someone who knows the inner workings of this building. he knows the military leadership. everybody in this building has a first name relationship with ash carter. he can hit the ground running, unlike a lot of other people. >> if the republicans object, on what grounds with a object? because they object to the president's national security policy. there is no reason in terms of background that ash carter confirmed.be he has served in almost every other job in this building. i see it being a platform for john mccain and others to take shots at the obama national security policy. thes this a time for secretary of defense to be doing quiet and boring stuff that ash carter can do. >> when he left two years ago,

we had not even heard of the islamic state. this is going to be a job that involves both. operational decisions have to be made with regard to u.s. forces in harm's way. whether or not there are boots on the ground, they are still in harm's way. a job that requires managerial skills. the sequester is looming. defense cuts outside of sequester are on the docket. ash carter will have his hands full. >> peter cook, thank you. ashton carter looks to become the secretary of defense. this is something you looked at. the sequester. >> the problem with the pentagon right now is that the boring work of procurement has to be improved. the pentagon is terrible at making long-term decisions. it needs to figure out how to budget things quickly. those changes are happening. they do not get talked about in congress. >> next year's sequester andy

in.chat of 2013 clicks >> the white house talks about his priorities and you have the secretary of defense saying we need something else. guard.hanging of the >> oil prices. brent, 69.15. continues to slide. joining us for the full hour is bloomberg economist carl. in whathis is a boon, way will it hurt the economy? >> there are risks to capital investment, pipeline projects, infrastructure, those sorts of things. importer.s a net oil so regardless it is a positive. gtecha positive for the

economies that tend to be net importers. >> what if oil prices continue to fall? >> there will be problems on the side.- on the capex businesses are facing capacity constraints. there's a need for greater investment. >> we've shown a lot of fancy charts. this is the nominal rollover from 100 down to where we are. i cannot make heads or tails of where the bid steps in. there's a certitude that we are going to move higher in price. how do you respond? >> i will believe it when i see it. saudi arabia is announcing that they are reducing prices for the first quarter of next year. there is evidence that there is no consensus among oil producing countries they are going to do something to stem this. saudinden, we're assuming

is the marginal determinant of price. >> we've become the swing barrel. it is hard to get out of the sett of looking at opec to prices. and looking at the demand side as well as the supply side. the problem with inflation in prices is it delays purchases. are we going to see that with deflation in oil prices. if we do not know where the bottom is, our businesses waiting to figure out how to respond until it hits the bottom? so. don't think airlines and industries that are sensitive to oil prices will try to lock this in. people have a sense that this could be a low point. when markets get flushed out they can go a lot further than rational thinking would dictate. the 85th anniversary edition of bloomberg businessweek. >> shameless plug. >> they had tv dinners.

secretary kissinger got up. of the 85 topics in the magazine, he picked a peck. -- opec? what is your take on the future of opec? >> there is a lot of production outside of opec. opec is going to potentially have reduced leverage going forward. >> we are seeing sovereign oil funds making new choices. >> they have to move somewhere. we continue this conversation. number 45 jordan's, in the most innovative inventions. it makes a big difference. >> we need consumer branding. >> of course it is huge. >> my cousin has dress air jordans and casual air jordans. >> jobs day. how to get america working. this is bloomberg "surveillance. "

we are on bloomberg television, your tablet, and bloomberg.com. ♪

>> good morning. bloomberg "surveillance." i am tom keene. , number 49, the euro. why did you pick the euro? >> my editor told me to write about the euro. it is number 49 because it made a huge difference. whether it worked well or not, it changed the way we think about currencies. we took a look at the euro coin and what it tells us about the euro. on the obverse you have the design, they are minted by country depending on their

contribution. coins.ority is german metaphor made real. >> even more than the adoption of the euro is everything that led up to it. taking down of trade barriers. peace on the continent of europe is incredible. that is a huge change from the prior five hundred years. >> back to jobs day. we are creating jobs. we are not the united states of europe. you perceive our job economy moving over the next 12 months? do you extrapolate out the relatively good performance of 2014? >> we can extrapolate that. possibly economists have to realize what is happening in economic data. we've seen upward revisions to q3 gdp.

q2 was revised higher. they are looking for 2.6% growth. do we think the economy is slowing? the jobs data say no. what isther debate is the natural rate of where unemployment should be? there is a dispersion among people. where is the appropriate rate for jobs? >> the unfortunate answer as we no later. 5.8% is not the right level. maybe 5.25%. my analysis suggests it is 5.25%. >> what if it gets to the mid-4% year.next >> we are stuck at 2% wage growth right now. as we get closer to the 5% rate, you will see it accelerate.

wage growth is a labor cost. it is inflation. wage inflation is a lagging indicator. >> the story has been one of divergence. going upto and everyone else going down. what did we do right? >> the bundesbank's estimate of growth or lack thereof. beferent economies tend to at different stages of the cycle. we all went into the crisis together but then europe had another round with the sovereign debt issues. >> do you think the business curve has been knowledge to little? -- nudged a little. u.s.e swings in the occurred more quickly and business adjusted more quickly. labor is a big cost. the fact that businesses cut

workers rapidly during the recession sowed the seeds of recovery. that is why it has been clicked to turn around. >> you are arguing that what needs to happen is they need to loosen up their labor market. >> there needs to be more flexibility. the biggest input cost for most industries is labor. draghi seems to be committed to keeping his cards close to his vest. the fed is looking for a transparent communication. is that the right approach when you are looking to tighten monetary policy? >> absolutely. the risk is that we have some market shock from the fed moving into a rate hiking cycle. that would be bad news for japan, europe. the set has to move gradually. the market tends to over of ratete the speed hikes. the fed pass to be clear about

what they intend to do and when they intend to execute the plan. >> jobs day. looking for a pickup and jobs and a sign that there will be eight rise in wages. our twitter question of the day reflects the bifurcated america. what is the best american luxury brand? do you buy it? his cadillac a luxury brand? >> note. >> but they want to be. >> we will be right back. tweet us at @bsurveillance. ♪

>> good morning. bloomberg "surveillance"

jobs day. oil continues to surge. xasch west te intermediate. it is fragile. she is not fragile, scarlet fu. >> mark zuckerberg spoke with emily chang. facebook spoke about the biggest challenge to getting people online. take a listen. >> the biggest hurdle is not technical or a fort ability. it is the social challenge. the majority of people are in range and can afford it but do not know why they would want to use the internet. >> i'm not sure i believe that. that sounds self-serving. >> that is ridiculous. in the u.s. if you look at the ,ate of the fcc has

there is some concern about the internet in the older population. people are frustrated with the terms of the internet. where they had users is where high-speed cables, come ashore. they're trying to create the technology that will spread the internet. pay the capital to have fiber cables and people will use the internet. >> the lack of people online, how much does that hold back economic growth? >> even as we look at the black friday sales and the cyber isday sales, cyber monday hard to gauge the health of the economy because it is growing so fast. it is a double-digit pace every year. it is a low base but it is expanding. two bankers tell

me off the record they guessed wrong the use of internet and digital by older people. older people are taking to the internet with a vengeance that was not known 24 months or 36 months ago. >> there's a huge drop-off as you look at the demographics. grandfathers and grandmothers maybe do not want to use the internet. >> right behind them as people that do. >> the baby boomers are willing convenience for the of online banking. >> my parents are latching onto the ipad. it allows them to talk to their grandchildren. >> mr. zuckerberg, this was a big theme at our business week soiree.iversary swor facebook can change the news business. they can single-handedly change the news business.

>> that ship has sailed. there are so many products choosing news. google and facebook, that is h handbag goes back three years. growthill discuss with -- wage growth. economists are looking for a .ain of .2 percent we will discuss on bloomberg "surveillance." streaming on your tablet, your smartphone, and bloomberg.com. ♪

>> good morning everyone, bloomberg "surveillance." tear over the causingk, weaker yen much of the problem and the global economy. in new york protesters gathered in times square and blocked traffic and there are still demonstrations in dallas, boston, chicago and other cities. garner is a black man who died in new york when a white police officer used a chokehold while arresting him. the canadian government is approving burger king's purchase of tim hortons but there are conditions. it will be required to accelerate the expansion of new

restaurants outside canada. inger king said in august the plan to acquire tim hortons for $11 billion. steve jobs was mighty upset when a universal executive through support behind a competitor of itunes. 2000 fourom eight e-mail shown to courts today. attorneys from consumers are trying to prove apple slot to maintain an illegal monopoly by keeping music from other platforms off the ipod. those are your top headlines and that is the point. i almost said ipad and the technology has moved on. it is an ancient litigation to say the least. the clear pleasant -- present is jobs day. i spoke with nouriel roubini yesterday and he told me that too many of the jobs are low-paying part-time and even low-paying full-time jobs. the u.s. economist at bloomberg and the wage growth is the micro

economics of job supply and demand. do we agree we are at a 2% wage growth level? >> wages have been stuck at 2%. >> three to get used to that or his or hope. 2% is reflecting a relatively weak economy to this point and 2014 it changed. that is telling us we will see stronger to come. >> brendan has the blunt instrument, this chart know the other chart. back ampensation civilian years and we are now where that green box was. remember the lake -- late 1990's with inflation adjusted as a late time for rising wages and when you look at the gdp numbers we are not where we used to be but there is a glimmer. >> can we stick with that chart for a second?

we talk about wages growing per hour but one of the real stories is computer software that has allowed wave driven businesses to manage those hours down because you cannot get the hours you want. we're looking at loft it bargaining power. >> the point you are highlighting is effectively a productivity issue. we did see high productivity gains as businesses were afraid to make the commitment to bring on new full-time employees so they used other means to do that but labor is cheap so now we are getting to a new paradigm where businesses are more confident in the outlook and so they are willing to bring those workers on. there is no bargaining power until the labor market gets tight. >> let's talk a employee confidence as well. to my great embarrassment, take this job and shove it is the job always applied to jobs that show the quit rate. this is the willingness of workers to leave doing confident

they can get a job somewhere else. does that uptick give you any hope? me hopesolutely gives and gives janet yellen hope because this is something she is watching. versus labor force participation. people are feeling confident enough to say take this job and shove it. that means probably some people who have been sitting on the sidelines are willing to jump back into the labor market. or relation and is a significant sign that labor force participation points to bottom out or trend higher next year. that is big news. the bluntget back to instrument, the word six months ago was slack. we are doing 228,000 jobs per month over the last 10 months and we are miserable. why are we miserable if we are generating 2 million jobs over 12 months? >> we are on the road to recovery but we are not there yet. so one great way to look at this is the you sex unemployment rate

-- is the u6 unemployment rate. >> seed you can find the chart of those unemployed longer than six months. it is a horrific chart. do you agree with professor rabin he that we are creating lousy jobs? they are low-paying, part-time and kind of like full-time jobs. creating a lot of lousy jobs but i don't what the ratio is but for every 10 lousy jobs they did there is one high-quality job. i would not say that is the exact ratio but there is a lot more lousy then high-quality and those of the jobs lost during the recession. unemployment rate for people with a higher degree of education did not move that much. if we look at unemployment for people with a high school education or less it skyrocketed. those are the jobs lost and those are the jobs that need to be created. >> are they lousy or than they were six years ago?

people cannot get the hours they want, they are under up lloyd -- under employed. >> there are a host of dynamics, inflation rate and these issues but as we reduce that slack in the labor market and employees find trouble finding someone to put a new roof on your house -- rages -- wages will improve. reduce that rate, or is it a two part america, one part doing well and things are better and another part that is not even participating? economic recovery and economic cycles are not fair. we cannot expect it to be fair that everyone benefits equally. people with high degrees of education or people with more attached to the labor market -- business managers have done better. >> are those unemployed later than six months is nowhere back to normal. >> that's a good point, economic recoveries are not there. you know what else is not fair,

left-handedness. whether you are left-handed or right-handed, we have research here. tom dita the fancy latin word for left-handed? look at that!? you must have an advanced degree. there is research for the journal of economic perspectives . long-termat the consequent is of left-handedness. we're this heuristic we use that we assume because the -- president obama's left-handed and bill gates's left-handed they feel overrepresented but if you look across all left-handers, they are more likely to do poorly on tests and likely to earn 10% to 12% lower over their lifetime. >> they are also more likely to die at a younger age. . >> it is a right-handed world from doorknobs to kitchen

appliances, everything is geared toward right-handers. left-handed, president obama is left-handed, oprah winfrey is left-handed and they are doing ok but it is interesting that the rate of accidents go up. we have not figured out a way around it. they have those red left handed scissors. there is no else catering to the southpaws. age whereis at that we are eagerly watching to see if there left-handed or right-handed and see if they will have an unnatural advantage but we don't know yet. they are just incompetent. >> we're looking for the next left-handed pitcher who could take the yankees somewhere. november mayke be the new december at least for car sales. onwill discuss right here "surveillance." ♪ >> good morning everyone,

bloomberg "surveillance." jobs day at 8:30 this morning. understand the american labor economy. black friday this year may have been a bust for retailers but not car dealers.

how consumers are being conditioned to shop for new cars during black friday. they out the green cars, track what used to be an increase in new car sales in december and that changed in 2013 and there is a red car that indicates a drop-down but automakers began heavy black friday marketing. that was the case this year because earlier this week we learned that auto sales rose to an annualized rate of 17.1 million last month. the bloomberg u.s. economist said this is an indicator of overall spending. >> vehicle sales are in them porton consumer sentiment gauge because we have to watch what consumers do and not what they say. >> so forget consumer confidence surveys. , carilling into the data sales are a more useful indicator for letting to other spending. you just said there is

critically important, and it goes back to an ancient question that i am honored to ask, do you believe in the manufacturing multiplier? >> absolutely. >> in another time and place i was weaned on and lived it. there is a lot of fancy pants people today who say that is wrong. you disagree? >> i disagree with fancy pants people. people say we are in an idea as an economy and there is so much criticism of obama saving the crisis, these are not just a assembly line jobs these are engineers behind jobs and a lot of high-quality jobs that go into the manufacturing. we cannot be in a facebook economy because no he works at facebook. other products are auto sales of leading indicator? >> we will see discretionary

consumer spending. sales, washers and dryers, personal care products, sporting goods, christmas shopping, holiday shopping all of these things should get a big lift. they're getting a lift because the job sector is creating more jobs with better jobs and high wages very gradually and because gasoline prices have plummeted. they are down $.50 from where they were a year ago and this is about a $50 billion stimulus for consumers. >> in the next hour we will address this theme of car sales with cadillac's chief marketing officer. elling house. our to be joining us in discuss their moved to new york city and how they plan to leverage that position. let's get the top photos. , another three photo day of protest after a second grand jury decision not to indict police officer in the

death of a black man. this is in times square and they close down the brooklyn bridge and the lincoln. thisis fascinating about is the protests are growing and when they start to grow like this it becomes a function that you cannot explain or stop so we do not know what will happen over the weekend. this grand jury decision seems to resonate nationally in a way that ferguson did not. it happened in boston and a protest in chicago, pittsburgh and st. louis. >> it was on the heels of ferguson as well so perhaps it is they 1-2 approach. >> number two, the luminary began in japan yesterday. remembering the earthquake were over 65 people lost their lives in 1995. 200,000 hand-painted lights are lit each year with electricity generated from --?

biomass. not nuclear. the festival continues until december 15. number one photo it has been one year since nelson mandela died. released,fter he was he is campaigning in 1990. -- four years after he was released, he is campaigning in 1990. >> before he became president. on that note we will continue right here on bloomberg "surveillance." >> gifts for the holidays. from luxury high heels, celebrity shoe designer ruthie davis will join us after the break. >> i demanded this. the twittergs us to question of the day, what is the best american luxury brand and do you buy it? tweet us. maybe it's ruthie davis.

♪ >> good morning everyone,

bloomberg "surveillance." we have a terrific lineup to make you smarter about the american labor economy, it is

jobs day. great labor economist, the former chairman of residence council of economic advisers. two, down futures up 21. >> the recent bad publicity that has plagued uber has a little to scare investors. another $1.2 billion in the latest round of funding. that money will be used for international expansion. is valued at $40 billion, nearly doubling the $17 million evaluation in june. fidelity up jumping -- sold one .2 million shares worth $17.5 million as of october 30 force. japan's takata at the center of a global safety cross-ice --

crisis. holiday cheer last night outside the white house as president obama gets his groove on. not bad mr. president but i think james brown's legacy is safe for now. the first lady was in the spotlight as the lights went on. were on handeople for the event which dates back to 1923. those are your top headlines. >> i think nora ephron called that dance the overbite. >> he was to appeal to the masses. midas davis has a certain touch. she turn the masses onto sheepskin boots and then creek the door open to start her own high and heels line which starts at $600 a pair. halle berry is regularly photographed wearing the creation. he joins us to kickoff our gift of holiday creations. before the first designer of and before that you had a stint at

tommy hilfiger, the masses want. why did he choose a high-end when you? that -- whyble you not start at the masses? i always study the customer and i love the trends in what is going on, so when i had my own .rand concern than myself my ultimate pinnacle three without issues i wanted to. the woman i designed women and i am a customer. this is about a 5.5 inch heel. >> 5.5 inches. i'm laughing at that. a five point five inch platform which negates the height of the heel.

what istecturally different about your shoes then say jimmy choo or manolo or louis vuitton. all wonderful shoes, made in italy and the workmanship, it is all about the last, the form and the quality. but i am a woman and i testdrive the shoes, i wear them every day and that has a lot to do with the comfort and fit. i design on foot. of beyonce weture saw earlier, she had a child on her hip while wearing heels. that is amazing. so what is it that is different. what makes it more comfortable? >> great question. there are little things, the dynamic of your foot -- i understand a woman can have a bunion, i understand they have a narrow heel. i understand you don't want your toes crunched. them three times

and then they go in the bottom of the closet? >> i like to think not. and they to manolo's have that cubbyhole store. you have to create shelf space. how do you get in and run against the big players. >> what you have to do is create your own niche and your own voice. at a department store i have to be a new customer. younger, she has more street and more modern and it is a different flavor. it could be the same woman buying for a different occasion but i have my own look and feel. >> you wore l.l. bean boots for like two years? have you done a take on the american boot? >> i am doing sneaker boots of annow and i did sort l.l. bean version of. -- of ugg.

>> ugg is right around the corner and it is packed. >> it's all about knowing the customer. when i was in school in maine l.l. bean was -- >> and you went from selling your creations and neiman marcus to opening your own store, now you are looking to expand to e-commerce. why the need for both? ini opened e-commerce january because now i can go direct to consumer. is thepening the store only channel is the future. you need the face of the brand and then you sell online and it works in conjunction with each other. it is critical to have both. >> you're talking about the future, besides e-commerce and whatnot, what is changing with shoes? is there a new direction and the next couple years? >> there are all these new categories, i do vegan shoes. >> what? >> this shoe is vegan.

there is no leather. >> should i take a bite out of it? >> know there is no leather, cruelty free. sneakers and a new category and stickers with heels and wedges. with address. we are inventing new ways for women on the go to look really newionable so new is just categories and new formulas, vegan, clear heels. >> you can see the log and that plexiglas heel. celebsreason i see that go for it is it has such an ever last field. such a boxing field. you are grabbing american heritage -- heritage. the italians cannot do that. >> you get the sport influence. i started at reebok and i love function. >> there is sturdiness.

>> thank you for joining us. euro-dollar -- >> manolo is at 1.26. stay with us. ♪ >> the state of the american

labor economy, there are millions of new jobs, but are they quality jobs? weekend the markets reacted and oil cannot find a bid. in cadillac is in search of cool. this is bloomberg "surveillance ." we are live from new york. it is jobs day, december 5. let's get right to the top headlines. making itnt obama official he is nominating ashton carter to be the next secretary of defense. or two years he was the number two civilian at the defense department and is also the chief pentagons weapons buyer. president obama will formally introduce them later on this morning. also in washington, congress is one step closer on a budget bill. thursday the symbolic vote at

the house to protest the order that blocks deportation of millions of undocumented immigrants. john boehner spoke before the vote. >> the president thumb his nose at the american people. the house will make clear today that we are rejecting his unilateral actions. fund most ofould the government through september and current funding expires thursday. >> german's central bank is cutting its forecasts. growsbank says it will just 1%, half of what it cast in june. but the factory orders grew in october 5 times faster than the median estimate. meanwhile oil prices keep falling. west texas intermediate is lower and saudi arabia has auster -- offered oil customers in asia the biggest discount on record. over theay of protests grand jury decision in the eric garner case. there were similar to

menstruation's in dallas, boston chicago and other cities. garner is the black man who died in new york after a white police officer used a choke while caressing him. the grand jury decided not to indict the officers. meanwhile the deaths of garner and michael brown are having an impact on the police departments. many are revamping their tactics and rethinking the way they use force. tiger woods looked a little rusty to say the least, mr. woods struggled on his return determine gulf after taking four months off with a back injury. shooting a five over par with 77 on his first round of his own tournament in florida. he is 11 shots behind the leader in last place, their only 88 players in the field as well. those are the top headlines. we are three minutes away right now from the launch of o'brien. this is a huge deal, this is not just another rocket launch. for those of you on radio the

scope and scale of the size of this beast you're going to see the again treat pull away from orion for radio worldwide, i will describe this at cape canaveral, this will be a short launch with a capsule on top much like apollo to hold four astronauts. >>, has been waiting for this moment like a five-year-old on christmas. it is unmanned this morning but with a capsule on board it will flightbout four hours in a number of orbits and will land in the pacific off of baja, this is eagerly awaited by those in support of manned space. scarlet what is so interesting here is that the goal is to get to mars. marse goal is to get to and there's no one in here but this is the stuff we grew up reading about. this was supposed to happen yesterday so what happened, there was a boat that got in the way and then there were wind violations as well. >> what you don't know is that it is titled the janet yellen.

[laughter] >> as we get to this launch very quickly let me bring in alan krueger who is a sworn chairman of the president's council of economic advisers. is this president genuinely behind man exploration in space? >> this president loves science. think has made science a priority. with the rekindling of this of theafter the success robot on different planets, where do we stand in our budgets between manned and unmanned? thing that has changes we can learn an enormous amount with unmanned. the technology is such that we can explore the universe with unmanned and i think -- the single biggest debate around my dining room table as a kid was manned versus unmanned. of ais an unmanned launch

20 year vision. there are two boosters him a one and the left and one in the right looking like a space shuttle. they will drop off rapidly and you may even see them drop off as we are 10 seconds away from the launch. liftoff. at dawn. and a new eraion of american space exploration. >> the first stage. passing 25 seconds. velocity 1300 feet per second. passing 31 seconds. still looking good. good engine control. good chamber pressure on all three boosters. 40 seconds in.

go to the partial thrust in the four. >> as we see the first effort here, the first orion into space, the wait is no comparison to the apollo missions some 30 years ago, a much heavier capsule needing a lot more thrust and the real effort here will be to get from a new york and l.a. up in orbit. they have to get 3600 miles into orbit to get outside the radiation. goingis a lot of science on away from the normal similarities that we see within the apollo program. that we arezing still using basic technology and ideas. story issolute key away from the science-fiction of nuclear propulsion and right back to the chemistry that we knew 50 years ago. the image for those of you on

radio from the launch, this is a camera i believe off launch, it is not a simulation, that is the actual orion live leaving florida and moving out over the ocean. we saw a can to what with alan shepard in 1961 without the astronaut in that we are just going up to check things out. >> in the upper left corner of the picture you can see tom jumping up and down. >> for those of us that live to this, i remember clearly faking sick to stay home or john glenn's three orbits. >> we allowed to watch it? >> i was i my father coming home shattered because glenn almost died. his heating shield went out of whack and they were sweating. >> this is a real generational shift. my first memory of the rum at all was the launch of the challenger. that has defined what i think of . i think it is incomparable.

>> are member the day of the loss of challenger, alan krueger has worked on many budgets and worked directly with the congressional budget office, do we need a soviet or sputnik moment to rekindle the spirit or would you suggest we can continue to draw out the budget as we are doing and get something done? making great are progress and like you i remember staying up all night to watch the apollo launch. it is wonderful now to have real-time pictures as opposed to artist renditions. >> i keep thinking of that deserves faking about my tintin books about space explorers on the moon. >> that is the real earth sliding away in real-time. >> the distinction is we have seen these images many times before but not with an amount of weight like this. this is the first test to push out one of the following test -- two years out is to go to the moon and not land.

close enough to land on the moon and close enough to get in orbit around the mood just to test out the systems. there is orion at nasa again. we are looking for those two side boosters to drop off the stage two burn start any moment here and then they have a burn cut off. there it is right now. you can see the boosters coming off now and drifting away from the main rockets. no men on board. >> or women. >> thank you. [laughter] >> would you suggest we need an international cooperation to go further into space or can it be the united states alone? thet certainly could be night since alone but i think international cooperation makes great sense. i think it is wonderful when the world has a joint project. is wayorion separation out past the philippines northeast of the philippines.

did we do enough space? >> i'm in the same camp i am relieved there is no one on that rocket. i've been conditioned to watch for disaster. >> it is very well said even with what we saw with apollo three many years ago. monitor whatnue to we see with orion at cape canaveral. john's a today at 8:30 a.m. and also if you can make it there you can make it anywhere, cadillac coming to new york city we will see if the poor kids at soho and save the brand. is twitter question, what the best american luxury brand and do you buy it? ♪ >> bloomberg "surveillance," i

am tom keene. jobs day. willovember jon's report average to 25,000 jobs each month so far. not bad and i'm sure janet yellen is transfixed by slack in the economy. alan is with us from morgan stanley and krueger from princeton. we love having you here on a job stay, what will you watch and look for it 8:30 this morning.

>> it's not going to be surprising if we get another print above 200,000. as someone who has forecasted jobs for a long time, it is hard to remember back when we had such consistent monthly job growth. the consensus is sort of better than 200,000 around with the average has been said that will not be the big deal, the big deal is do we get the pickup and wage growth we have been hoping for. >> for faster krueger are we seeing wage growth in america? >> i think we are starting to see the very beginning signs. knows how much slack there is in the labor market but we know with each passing month we're getting closer and we do believe we are on the cusp. >> cusp, today's word. >> the word in her research is tepid. it sounds like the argument you're making is that not you

know what is driving it but reversing to the mean, it has to get better. >> we look at underutilization so that broad unemployment measure, if you just take the spread between that and the narrow unemployment rate measure that is your under utilization in the labor market. that is your amount of shadow labor that we like to call, the amount of labor that become -- could become fully utilized and that has been improving. i would expected to improve further and today's report, how we measure underutilization, it is getting tighter and wage growth is reacting to that but it is our policy maker -- if i were a policymaker i would describe it is a good start. we need stronger wage growth and we are on the cusp of it, it is happening and it will be a driver of consumer spending next year. it is -- if i were a policy maker i would describe it as a good start. wait growth run 2.5% which is

what we're looking for with the employment cost index is far from historical norms but better than this year. is, somes the consent people whisper a number of 300,000, what do you think we will get? >> i think the whisper number is a guess and a complete farce. i think the low 200s is perfectly reasonable. >> ellen zener, one of our guest host for the hour.

>> this image from orion, a new era for manned exploration, the first unmanned test flight, it is a short flight but look for a difficult landing off of baja somewhere in the vicinity of a let :00 and you will note in the landing -- somewhere in the vicinity of 11:00. and you will note in the landing

-- up in orbit, many tests for the scientists and there will be later this morning. coverage to the morning worldwide on bloomberg television. we say good morning this job stay and right now we have to get to the top headlines. bad publicity a has play goober is not scaring off investors. $1.2 billionnother in its latest round of funding. uberew investment values at $40 billion, more than doubling evaluation it had in june. canada posco government approves the goober working purchase of tim hortons but there are conditions. working with have to maintain a planet levels across canada. burger king said back in august that the plan to acquire tim hortons for $11 billion. demand for duck food made by

l.l. bean is surging so customers will have to wait time next year to get there holiday purchases. the company says there is a backlog of 60,000 orders and it could grow to 100,000 by the end of this month. l.l. bean is hiring more workers but don't ask them -- >> your depressed about this? i'm deeply depressed, i was going to order boots and know i have to wait until february. what is unique about the boot it is it such a distinctly american thing. 20 years ago i wore my ll bean boots when it rained and people would look at me and my feet -- luckily, we have a german observer on with us today. newest ad features irony because cadillac is leaving detroit for new york and was to be closer to the luxury market. nghaus is with us.

what you have against detroit? >> nothing at all. and we remain a proud part of general motors. in a recent interview we said we toe no desire whatsoever develop or manufacture cars in manhattan. i read an headline that according to the cmo of cadillac there are no plans to many thatcher cars in manhattan manhattan and people were concerned about my remark, i tried to be funny but germans cannot go there. no one understood that all we do is marketing and sales into zoho. it is the natural home for global expiration. it is still the most cosmopolitan city in the world. as new yorkers you sometimes forget about it. >> it is not an accident that your german -- or that you are hired [laughter] that they hired a german for this. you're competing with audi and bmw.

the germans are winning. >> no doubt, we are strong still in many areas of this country but not as much as the coast. it's is one of the reasons they wanted to be closer to many prospective buyers. say metropolitan new york is one of the biggest luxury markets in the country. brands as wegreat all know that we need to reach out to more customers who do not have cadillac on their shopping list because the brand does not speak to them. >> you are the head of marketing sales and you work at bmw working for the many and rolls-royce brands you have a lot of extremes with luxury, what is the distinction of cadillac luxury? that it is luxury is implicitly american but we don't say american because it is not necessarily meaningful.

think is the distinctive styling, the uniqueness and the spirit of america, the optimism. >> i the great pencil here and people look at it -- alan krueger you have a question on kls and this huge design in marketing challenges. >> one of the things i'm curious about having been involved a little and the auto rescue -- how are your sales for younger people? was this cadillac identity was for older but that market is shrinking. isfirst and foremost it maybe more what we marketing people call the perception of who is driving cadillacs. our average age is just four years above the premium average that is i am large made by our german competitor. i always say yes we want to reach out -- reach out to younger customers but we have an established age of people below 35 but are new to the cadillac brand. it's not that we are not

choosing younger customers but -- >> i want to play you back one of the cadillac super bowl dads -- adds from this year. it generated a lot of controversy. i want to ask you after you play it who you were pitching to their. >> hold on there to play it. >> other countries they work and stroll home and stop by the cafe and take august off. off. why are you like that? why are we like that? because we are crazy, driven hard-working believers, that is why. >> is that a direct shot at the germans? this ad had a point of view and has a point of view and this is what i like. automotive lukewarm advertising that we have all seen. i have always said that i inherited the piece and it is not the way forward for building a global brand. >> thank you for joining us the

chief marketing officer of chrysler. -- excuse me cadillac. faux pas. our twitter question of the day what is the best luxury brand of the day and do you buy it? ♪ >> this is bloomberg

"surveillance." let's get to your top headlines, president obama making it official, he is nominating ashton carter to be the next secretary of defense. for two years he was the number two civilian at the defense department. president obama will formally introduce him as a nominee later this morning. dealing anvestments pretty hard blow to caught up. fidelity sold more than 1.2 million shares worth 15 points of a million dollars as of october 30 forced -- 31st. -- this year steve jobs was quote mighty upset when a universal music executive through its support

behind a competitor of apple itunes. that i when e-mail shown to jurors yesterday in oakland, california. attorneys trying to prove that apple saw to maintain an illegal monopoly by keeping music from other platforms off the ipad -- ipod. with princeton university and the former ofirman, he knows billions dollars of government spending and it comes down well at the defense department to the minutest of budget decisions, ashton carter tapped to be the new secretary of defense and knows this all too well. away from the accounting of it, r is not made in america in where you learn that is at walter reed hospital. you have a great story. i'm very pleased to hear that, it sounds like a nominee that i think he is the perfect person for the job right now. i got to work closely with cash when deputy secretary of defense

and i heard that he would go to walter reed hospital to meet with the troops on most weekends so i asked if i could tag along and along -- and it was a humbling experience to see our soldiers there. many of them had severe injuries and many surgeries, they don't complain of other one of the young men that have this -- both legs capitated one of them quite high. and his father was there and said, because he was wearing kevlar underwear i can be a grandfather. the unprotected him from serious injuries and cash. in big hug and i asked -- what was going on? turns out when he first of office he thought. hard to get kevlar underwear, the british were using it -- and

it had a priority because you cannot not have an american manufacturer. >> is ghost what every viewer wants witches we want a responsible defense department within this huge bureaucracy writing about it in the post today. how do we get from the sprawl of our present pentagon to an efficient use of resources as you saw at walter reed? hospital? hospital?reed part of it was to speed up payments for small contractors who could have used to get paid more quickly because they were having trouble getting credit, i think there are steps going in the right direction and of course that is a small step but we need to think about the bigger strategic picture as well to make sure that our military is aligned for that. >> will defense be as micromanaged as we hear other departments are managed or will

ashton carter have they would real responsibility to delegate. >> the white house has enormous respect for carter, they work closely with him and i think he has respect from the senate, bipartisan from the comments that i heard senator mccain and others make. i hope he has a quick confirmation hearing and is confirmed quickly. >> what is it about a cabinet office so far in a two term presidency, is it a tired administration? >> it's a great privilege to work for the american people, i worked for four years for president obama -- >> you didn't age, how did you do that? >> believe me i age. it is a big sacrifice and when you meet the troops you realize how small a sacrifice it is compared what they are doing. i think the problem is they have not been able to get their plans through congress. >> scarlet?

>> let's get you a data check before the 830 number comes out. up by almost two points and the 10 year yield moving a bit up to 2.6%. this is bloomberg "surveillance ." over theare spreading grand jury decision in the eric garner case. >> how do you spell murderer? nypd. >> phil mattingly joins us from washington dc. decision and this ruling had people up in arms and now the department of justice is proceeding with a civil rights investigation as well can you give us the latest? >> what we know basically right

now is the grand jury decided not to indict the police officer in new york but what happens in these cases and you have seen it with the trayvon martin shooting in florida and you seen it in ferguson with the shooting of michael brown and now with the eric garner death, the justice department keeps a close eye on the situation specifically the civil rights division. what eric holder announced two days ago is that they will's now start a full-blown probe into the killing of eric garner through the civil rights division. so what we know right now is through the eastern district new york prosecutors plus the ones in d.c., there is going to be a federal look trying to figure out if federal charges can be brought. there is a hired are and it is different to bring them for federal prosecutors but with these protests going on what i hear regularly is be patient, we have something going on and there is a chance charges could come. the prosecutor picking this up will be letter read up --

loretto lynch. what do we expect her to do? >> there been a couple different angles to look at, one, will this have impact on her confirmation hearings? or her ability to oversee this case? on the second one, she put up a statement last night saying she will look very closely at this and it is her prosecutors working with the civil rights division in washington dc. she personally will not be in the weeds, she will be in the oversight capacity. , the trayvon martin federal investigation is still ongoing some of the time this comes to a conclusion loretto lynch will likely be the attorney general of the united states and will not be in that position anymore. on the confirmation side i spoke someone today, if this comes up during the hearing she cannot talk about it so it should not have any impact at all.

there are a couple ways to look at it and it is an interesting wrinkle but it should not have any impact. >> i wonder what the upshot is from the president's meeting with cabinet members in recent days following the grand jury decision in ferguson. >> what was interesting on that same day he met with law enforcement and civil rights from some of the protesters and ferguson and what we heard he is serious about trying to pursue change. everybody talks about a lame-duck president and what can you get done? this is a personal areas have a lot of meeting for the president that he will push for. he saw they already allocated $75 million for chest cameras for police to where. i think they're trying to figure out ways to go through and get something done whether a so many other options that are not coming through. is this the same debate in

washington across the massive political divide or is there something different about blacks and whites in america that could actually bring washington together? >> ferguson was as polarizing as you could possibly get. if you listen to lawmakers and watch on social media there was a republican democrats split. that was very frustrating and it was disconcerting to watch, eric garner is different, when you listen to lawmakers on capitol hill yesterday it was on video and so vivid. lawmakers on both sides of the aisle think there should be hearing. "the washington post" made very clear there is a potential for federal charges. there is support on the republican side for eric holder

pursuing a federal investigation that's how you know there is confluence. >> phil mattingly with the very latest. so as itummeting turned into a collapse? ♪

>> this is bloomberg

"surveillance." falling prices of oil a boon for that consumer but not so much for the creators. it could be the greatest threat to the financial sector since the crisis. he cautions people to have respect for the disproportionate power of the energy is this. do you believe that, is it that dyer? -- dire? >> the way we are looking at the drop in energy prices people tend to forget that on net, lower oil price is good for the economy, but it will be good for some areas and bad for others, macroeconomists care about it on net because -- you can say take some of the fog out of mining and exploration particularly national gas is no longer competitive, you can take that giveaccount, will you

businesses and consumers such a huge discount on their gas bill the activity that comes after that always works with whatever industries -- >> you're always focused on the real economy, is -- itoing to bring people cost too much for them to work. will see more people coming back in? >> i think will help a little bit for not all that much. that will help banks because consumers will be in a stronger position, alan what you think the flat -- fed is considering. what it means for the fed is you get a bigger forecast to grow, then you have to mark down thisinflation expectation, affects headline inflation that includes food and energy and the

fed likes to look through that and say it is transitory because we know oil prices never stay low forever and never stay high forever. prices stay low, it does become more pervasive and feed through into core inflation and it meets the fed does not get to its 2% core inflation goal. with your great work with vince reinhardt, is this going to be fed changing? in 1986pec collapse or redux? does it change the action of janet yellen, stanley fischer, bill dudley and company? >> i don't think it will change all that much, i think they view it as positive for the u.s. economy as it is helping households and if inflation stays low because of oil -- >> will you and vince change are called because of $60 per barrel oil? >> i'm glad you bring that up because we had a call for a 2016

rate hike for more than year, so we have not push it out even further. i believe with alan the fed will probably not change their tone on when they like to raise rates because of oil because it is a net positive for the economy, but by the time it starts to hit cap ask that year that is the time they were hoping to raise? >> thank you for joining us today, go see the morgan stanley dartboard. >> alexander of morgan stanley, we will be right back. ♪ >> we welcome you on jobs day,

less than an hour away from that port -- important report. monday on the program -- i will butere tomorrow working, monday on television and radio from morgan stanley we will speak to mr. parker about his enthusiasm on equities into 2015. here is scarlet with our top headline. >> it is jobs day in the u.s. and at 8:30 a.m. according to the median estimate, employers added 230,000 jobs last month. november would mark the 10th straight month of gains of more

than 200,000 jobs that would year2000 14 the strongest for payroll growth since 1999. associates for bernie madoff made millions for his 17.5 million ponzi scheme. now five of his colleagues we sentenced next week. the three men and two women have been freed on jail since a federal jury convicted them of security fraud and other charges in may. the government says their crimes warrant sentences ranging from eight to 20 years. the leader of the free world getting his groove on and try to spread holiday cheer outside the white house. the first family was in the spotlight. 17,000 people were on hand for the event which dates back to 1923, those are your top headlines and brendan, are you doing your impression of president obama. me?he obama with >> their echoes, thumbs up. you had an occasion

where you and the president are in the same room and there's been dancing and celebrating? >> i will go into much detail but i was fortunately invited to the and not reporting after the election. >> we've invited to the after party? >> it was a late night. have a morning must-read. bill gross returns to his investor letters quoting punch and judy for his first note. pre-much exposes the early 20th century for a what it was. watch out dagwood, here comes .landly -- blondie classic bill gross you do not know what he is talking about until three pages in. luckily i read three pages in. we will look back and the 21st century believe what we did. he writes, how could they? we will think in the future, how can they allow so much debt to be great in the first place up

and they think some of money printing can create wealth instead of more debt and how could fiscal authorities have stood by and attempted to balance budgets instead of borrowing cheaply. alan krueger, how could they? >> is not entirely clear which country he is talking about. [laughter] the euro zone still has a lot of problems that it is working and to me it has always been more of a political union than an economic union and that's what we are seeing, the good news is they have showed tremendous commitment to keeping the eurozone together, the bad news is a seem to wait to the very last moment and then a little bit longer to do whatever it takes to hold it together. >> is that and low merkel's approach writ large6? >> here is the question we hear every morning what will it take to hear the words fiscal and germany in the same sentence? wayery different views the

the economy works in your countries with different business cycles and positions all in the same union. >> i wonder bill gross is sounding off at that way because his fund at pimco did not do very well and he made a couple of wrong calls. >> back to the u.s. this is jobs day, are we going to learn how to do fiscal policy in the u.s., we can say at this table that it never happens. >> it did happen, and 2009 we had the recovery act -- >> five years ago. >> that's one of the reasons we are tarred -- recovering more strongly. no need targeted. if you look at the fixed scheme the u.s. economy is continuing to heal and i think we will get back to full employment. >> had you get that compromise? targeted spending on infrastructure seems like a huge small thing to ask and a huge task to carry out. >> is a tremendous missed opportunity that congress has

not invested more in infrastructure when interest rates -- interest rates are so low and a great need for infrastructure investments. >> had a know when we get to full employment? >> that is an excellent question, there will be some signs like wages growing more strongly, they are growing above inflation but i think we would like to see real wages grow even more i think we will see strains in terms of companies having difficulty filling positions. the unemployment rate will be down close to 5% or maybe lower. in the meantime that's get to our twitter question of the day, what is the best american luxury brand and do you buy it? onph lauren, based adjustability alone, is ralph lauren a luxury? >> it's a disaster they have like eight levels -- >> polo? rl? ultimate luxury

u.s. brand but the paradox is widespread use by the masses and i buy it. >> i'm starting to understand that apple is a luxury brand and not a technology band. >> the dirty little secret reported is that their net profit is factors larger. >> thank you notecards, i buy them when i require them. >> a bachelor who writes thank you notes, i am intrigued. on the wrong person to ask, i where joseph a banks suits so that's what i'm going with. and're a great wonder amazed in the control room at a bachelor who writes thank you notes. >> history made with new unmanned spaceflight, orion with a huge successful launch, this is much like 1961, take it up

and bring it down, they will make a number of orbits and land off the side in the 11:00 hour, eight parachutes will be involved to get this thing down, it is unmanned with a capsule on top i don't have it exactly but in the next 30 minutes you will see a burn to push this thing 3600 miles in deep orbit, part of the idea of getting to the moon and getting on brendan greeley to mars. this is science fiction happening. >> the idea that we will again see the dark side of the mood is fascinating. -- a redux oframa what we saw in the 60's as we look forward out many decades. >> when for astronauts? 2021? >> the idea that he might go to

mars felt like a joke for so long and now this is a small first step. >> let's bring it back to alan krueger, part of your great work visas tolity was the keep smart people in america, once again with this immigration debate. >> we educate the best and the brightest and we see them go back to their home countries and compete with us. i've seen that happen to my students at princeton. the president's executive order is partly going to address that in one of the aspects that has been underreported is there are steps to make it easier for highly educated immigrants to stay in the u.s. and have more contact with the university after continuing education. >> when did you notice that change with your own students? seen that for the full time i've been teaching at princeton for 25 years, and it

is a tragedy because they would like to stay here and and they go back to their home countries and they are very successful but they often create companies that take jobs from americans. >> there is that great statistic about how most of the small business -- the majority is founded by eric rates. -- immigrants. >> you should be clear on what you said earlier, the natural rate of unemployment -- you are suggesting it is at 5% or even lower? we havef the things seen is the national rate moves around, it is not a fixed concept and it changes in part because of demographics and because of the size of new entries to the labor force and the cart -- partly because of external shocks like oil. the 5.5% less is range but it might be lower. numbers missing this

morning, thank you so much as always. >> currently the unemployment rate is 5.8%, we will get an update at 8:30 a.m. "in the loop" with betty liu is up next. . .

>> good morning. day, decemberjobs fifth. the last jobs report of 2014.

we are moments away. we are going to end the note -- year on a strong note, perhaps. we have a strong lineup for you over the next two hours. pimco ceo mohamed el-erian, labor secretary thomas perez, mike turner, alice rivlin, and alan krueger. congressman mike turner will be weighing in on ashton carter. he sits on the house oversight committees. we are left-hand half an hour away from the november labor reports. -- less than a half an hour away november labor reports. if estimates are correct, the economy has added 200,000 jobs.