remove half a brain. wait a minute, there is no debate. the domain was that the debate was smart. the governor of ohio scored points. in the elephant in the room's global deflation. good morning, everyone. "bloomberg surveillance this is -- good morning, everyone. this is "bloomberg surveillance ." i did not watch the debate. vonnie quinn did not watch the debate. brendan greeley watched every second away from it. brendan: i'm going to vote for john kasich. they went for everybody's jugular, but i am completely in the tank for john kasich. he seems to have paid attention to what ronald reagan actually said and did, which is he showed optimism and he was capable of compromise. it was amazing to listen to that. tom: we thank you for staying up and watching every minute of it. she did not watch it, but she has top headlines. report the monthly jobs

this morning could be more crucial than most. the federal reserve will decide whether to raise interest rates. no change is expected in the unemployment rate, now 5.3%. we will break down the numbers on bloomberg tv as soon as they are released. the first republican presidential debate could be revealed, that the party is a house divided. the top 10 candidates in the latest polls skirmished last night for a national tv audience on fox. is there anyone on stage who is unwilling tonight to pledge your support to the eventual nominee of the republican party, and pledge to not run an independent campaign against that person?

we are looking for you to raise her head now if you will not make that pledge tonight. mr. trump? tom: was that fair? he set him up so bad for that. vonnie: pretty amazing. brendan: all three moderators really went at donald trump. vonnie: i have to read out his answer later on. it is hilarious. the first of 12 presidential debates. brendan: it is going to be a long year. vonnie: cnn will hold the next one on september 16. carl icahn is living in 8.2% stake in a gas company. the investor thinks the company's shares are undervalued. he might seek board seats. shares of shin near energy -- of cheiere energy are down 8%.

i know you are not asking for this, but on behalf of so many people whose lives you changed over the past 16 years -- thank you. and now i believe your line -- correct me if i am wrong -- is, "we will be right back." john stewart: we will be right back. [applause] 'snnie: stephen colbert interview was one of the high points. jon stewart did not hint about his plans but told viewers he will not fade away. those are your top headlines. tom: he changed the game. brendan: absolutely, in so many different ways. how sad is he that he does not get to come back monday and talk about the debate? tom: you have to have a huge withdrawal from the news cycle.

we have a busy day. let's go to a data check. futures negative three. the euro, after sterling 1.0923.ies yesterday, green on the american oil screen. let's go to the next panel, please. the german two-year. -0.25. that is a big deal. the deflationary trend -- we will talk about brent crude, cannot find the bid this morning. thanks to brendan greeley for all of his work on brazil in the last month. this is a huge deal in the financial industry. it has become instantly something to talk about in the last 48 hours. line -- the real -- we

adjust to dollars, and it ain't pretty, this depreciation. brendan: but when we look at currency movements for brazil, the one thing to pay attention to is their foreign exchange reserves. i am looking on the ims website. $366 billion just for some comparison. russia has $361 billion. they are not bereft of options right now. tom: if you are in u.s. dollars -50%, -60%.our that is a lot of pain. brendan: there is a change of sentiment in brazil. tom: john is joining us from bloomberg politics. with all due respect. us on the debate as well. it is jobs day. that is front and center. first we need some nuts and bolts analysis of what to expect that 8:30.

critically, what matters in today's report for chair yellen. he has been dead on on the resiliency of the american economic experience -- of the american economic experiment. what matters this morning? >> there are three things that matter most. the unemployment rate, the payrolls, and what happens to average hourly earnings. thatdoes janet yellen put front and center, the so-called wage growth? or is it a secondary issue for the fed? maury: what is more important is what happens to core inflation. it gives gradually in the second quarter -- it didn't gradually in the second quarter. have lowtives are to unemployment and some objective in core inflation. tom: i'm going back to the core

headline. there isn't any. brendan: what information coming out of the labor department would change your assumptions bout janet yellen? say hours -- let's say average hourly earnings are flat again. i do not think they will be, but if they were -- keep in mind that these are the july data. we are going to have august data before the september meeting. these data are also subject to big revisions, so a month from now, we think -- we have today is critical. a month from now we will really think those august numbers are critical. tom: this is a 3% economy. jeb bush last night talking about a 2% economy. is this a 3% economy right now? isry: for the time being it

because we have a boom in autos and a booming housing. i do not know if it will stay at a 3% economy. then candidate bush is talking about a 4% economy. tom: bring that chart up again. critical in the nairu debate. he seems to sort of play down the wages part of it for this month and play up the unemployment rate. when you agree that perhaps this month's wages may not be the most important thing, but that chart is the most important thing this month? maury: unemployment is very important. again, wages are not as important as unemployment because wages are one of the turn determinants -- one of the

determinants of core inflation. they want to see this unemployment rate stayed down or go lower. brendan: a lot of different moves this week that seem to be tied back to dennis lockhart's statement that he did not see any reason to move in september. is that what we're watching this week? i think so. that will continue to be priced in. left,e the payrolls unemployment coming down another attempt to 5.2%. if we are right about that, the market increasingly starts to price in a september hike. harris -- maury harris with us. let's look at our twitter question. he goes right to the third rail of the american labor experiment. how long should parental leave

the? i know that is a raging question. this is a big topic for all of america. we need your adult answers on twitter. @bsurveillance. stay with us. announcer♪

tom: good morning, everyone. "bloomberg surveillance." let's get the top headlines of vonnie quinn. vonnie: the next leader of the senate democrats says he will not vote for the iran deal. chuck schumer is breaking with president obama on the issue. he does not think iran will keep its promise to not build a new their bomb. apple watches are available starting today at 100 best buy stores. buys will stock it

by the end of the year. a new discount website is reportedly getting the cold shoulder from retailers. "the wall street journal" says macy's, amazon, home depot, and others are complaining about jet.com. companies are withdrawing their products. those are top headlines. interesting how that is working their products. i guess they want a few to go directly to their websites. brendan: moving to ohio. josh green is on his second cup of coffee. last night.at arena did foxnews bring up the long knives for donald trump? josh: absolutely. the fight last night, the real fight was not the one we were expecting, which was supposed to be between donald trump and jeb bush. the fight was between the -- between donald trump and the fox

moderators, especially megan kelly, who went at him with claws bared. they came out the winner. the new is megan kelly republican candidate for president? josh: she would get my vote. and credit to foxnews news, the fear coming into this debate, the concern you heard from pundits and reporters, fox news, that is the home crowd. the are not going to ask tough questions. they did ask the tough questions, not just of trump but of everybody. it was a fantastically entertaining debate. it sure was fun to watch. in just the second we are talking about my new crush, john kasich, but first i want to talk about the one person not in the room, hillary clinton. what did we learn about their plans to attack her in the primary?

josh: i do not think we learned anything new. it is the same plans you have seen. you knock her for ben ghazi cover for being a creature of washington. you knock her for her e-mails, for being dishonest. scott walker probably had the best zinger of the night. he said the governments of china and russia probably knew more about hillary clinton's e-mails than members of congress. that is pretty good. we have known for years what the attack on hillary clinton would be. they only got emphasize last -- that only got emphasized last night. moneyhat is the incoming flow off of the performance last night? josh: i think marco rubio is going to do really well with donors going forward. he is a guy who had a lot of excitement over the last two months, and in the last few weeks he had begun to fade.

there is talk that he had fallen from the pack. he looked really crisp and poised and prepared. things will look up for him. the other guy, brendan's favorite, is john kasich, who squeaked into the debate in 10th place. he really looked poised and sharp. he looked exactly like what he popular sitting, reelected governor who was on top of his game and had a story to tell. brendan: you said that so i did not have to. i know you have a long history with rick perry. who made it out of that debate alive? : the only person who made it out alive was carly fiorina. debates, and the two do not even compare. carly fiorina was the one who got the biggest press scrum afterwards.

was thehought she winner. i disagreed, but there was nowhere near the energy or the excitement in the first debate that there was among almost every candidate in the second debate. i do not think rick santorum or rick perry are going to move up. or bobby jindal. carly fiorina was the only one who helped herself in the jr. debate. thate: there is talk donald trump is alienating everybody. will he run as an independent? he said he would. josh: i do not think he will. the first question trump got last night was, will you raise her hands and pledge to support the republican nominee, and he said, no, i won't. if it is somebody i like i will support him. do awise i will third-party bid. he did more of what he does last night. as much as he struggled at

times, if you are a trump supporter and you watched, i do not see any reason to abandon now. he did just fine. endie: with the gop put an to a run from donald trump if he does not get the nomination? josh: how could they? they have no control over donald trump. if the gop had any control whatsoever, he would not be in cleveland this week. he certainly would not be center stage of the republican debate. the real danger for the republican party is that ordinary voters tuned in to see what was going on in the republican field, and the impression they got of republicans going into 2016 was an impression of donald trump. and what he does, what he says, calling people stupid, saying we need to build the wall, insulting chinese, mexicans, and everybody under the sun -- if the is a -- if that is impression people get of the republican party, it is a real favor to hillary and the democrats. tom: josh green, thank you very

much, from cleveland. it is jobs day. bill gross and jim glass are joining us later. maury harris is here with us from ubs. krueger, one of ,merica's giants in economics will be with us at 7:00. it is jobs day. when wide and across america, "bloomberg surveillance." ♪

tom: good morning, everyone. maury harris is with us from ubs. the heat is broken in new york. it is a perfect august morning

to confront any number of things, including a smart "morning must-read." his -- here is vonnie quinn. rights,a frequent guest writes it is interesting in the context of schumer dissenting. it was stunning looking what it would do from the west village all the way up into midtown manhattan. it also at the risk of pakistan destabilizing -- people who understand game theory get scared about this. it could be us and the soviet union, and that at least you can control with a red phone. you cannot do that multilaterally.

actually breaking out into nuclear war, using the minimally with the u.s. and russia. we need to worry about other -- tom: where is the iran debate as schumer puts out his view on -- brendan: i have read on twitter this does not change the ultimate outcome. but that is not something i have been -- charles schumer did say he is not going to whip, but i do not know what that means. he says i have come out against the deal and he did it quietly during the republican debate, also not an accident. he said i will not drag anyone else into this, but his opinion matters. he may be the leader of the democrats in the senate. tom: there is a long relationship with the middle east at your bank. are you optimistic that we can find a path to where we allow

the iranians to prosper, to get back to that middle-class of normal society that they once knew? maury: i think it will be difficult for them to turn the clock back. i say that because it is still a very ideological regime with very ambitious goals in the middle east. that affects how we interact with iran and the rest of the world interacts, and i think it will be very hard to turn the clock back. tom: you look at the haase piece as well. vonnie: when sanctions are lifted, is there any evidence to suggest how long it takes for a country to get back on its feet again? maury: know, and this is really a special case. you are gradually putting $150 billion back into the economy, and part of what it does to that

economy is a function of how that money is spent. is it going to be immediately put back into the military? are they going to use it to enhance their drilling activities? it is hard to say how it is used. tom: very good. maury harris with us from ubs. coming up, we will talk about the minimum wage. this is a nuanced debate. alan krueger in the next hour, more harris with us now. stay with us. coast-to-coast, "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." jobs day. let's get to our top headlines. , weie: about two hours now would hear the government

possibly this reading on the job market. it will be more crucial than most because it will be must reading when the federal reserve eats next month to discuss -- when the federal reserve meets next month to discuss raising interest rates. no changes expected in the unemployment rate. that is now 5.3%. we will have the numbers for you on bloomberg tv as soon as they are released at 8:30 eastern. national security is traditionally a bedrock issue for republican presidential candidates, but at least two of the party's 17 hopefuls disagree about how best to keep the country safe. chris christie slammed rand paul last night for opposing the collection of americans' phone records. when you aree: sitting in a subcommittee blowing hot air about this, you can say things like that. when you are responsible for protecting the lives of the american people, you need to make sure that it is working the

way it is supposed to work. forum was held earlier about the candidates who did not qualify for prime time. the next debate is set for september 16 at the reagan library in california. bank of america is planning $1.2 billion of mostly delinquent home loans. the bank is selling five pools of nonperforming debt, loans that have been modified and on, and soment that have not defaulted. and do you have the correct time? it is usually a noncontroversial question. not in north korea. the state is getting its own time zone a week from tomorrow. clocks will permanently be moved back a half hour. that will make pyongyang time different from its rivals, japan and south korea. tom: can they do that?

brendan: they can do whatever they want. this is a moving commemoration of the war. it is an anti-japan move, not an anti-u.s. move. it will make those cooperation zones between north and south slightly more difficult because you have factory workers arriving at different times. that is the slight hitch in that arrangement. vonnie: it is unusual. you were saying india is a half hour -- brendan: india is also a half hour. there are some countries that do that. vonnie: you can do what you want, i guess. brendan: if you have sovereign authority, you also control the time. we should have a five hour time delay on "surveillance." mean time.ich let's get back to the labor economy. it could have been a topic and last night's debate, the political football that is the minimum wage. and at $15 an hour.

they screen outrage. it is enough to make an economist gray. -- it wasis with ubs a standard of eight years ago but is not anymore. what has changed? maury: unemployment has come down, so there probably is not people atncern about the lower end because there are more of those people who simply have jobs. tom: i want to bring up a chart that stunned me. this is what you do on the bloomberg terminal. employment full-time , population adjusted. the bottom line is full-time employment has come back, but when you just -- when you adjust over 60 years to the population growth, it is still not there. do you perceive we will get back to the rosy colored, full time economy that supports minimum wage and others, or is there a

new new for the economy? maury: what happens over time is that businesses' need for far time -- for part-time and full-time change. the affordable care act has created incentives for business to use more part-time or so they will not have to pick up the insurance. there is an issue with the demand for labor and not just the supply of labor. brendan: i am struck by two articles, one about walmart and one about gravity payments in seattle, a $70,000 a year floor on salaries. people nowroblem for above the minimum salary, which what does research say about that? maury: there are spread effects when the minimum wage goes up.

the tinythat by fraction of the population making the minimum wage, and you can say it does not make much difference for inflation. but it does move up the whole hierarchy of wages. brendan: we will have to see those affecting companies as well. vonnie: will we be able to versusuish the -- because there is less slack in the economy? maury: i think the common factor will be less slack in the economy because there are a number of companies that simply cannot afford to pay the higher minimum wage and less business is better. tom: i am imagining you on stage last night in cleveland. you would have been next to governor kasich. when republicans spout off their theory, their theme, their belief about minimum wage, how do you respond on stage to mr. rubio or mr. bush, and for that

matter, mr. trump? maury: if i were a republican candidate and i was on the stage with them, my argument would be that we can do better than the minimum wage if we do the right things to stimulate the economy. tom: where is the investment? that has been the big failure, hasn't it. maury: that is right. you can have more investment, productivity, higher wages, if you change the tax system and the regulatory system. if i were a republican candidate, that is what i would have said. tom: u.s. crackdown on tax cut m&a, that is part of the tax policy as we see a resurgence this week in foreign transactions. brendan: one of the smartest wasts i saw last night about the complete lack of economic discussion on the stage last night. that is indicative there is a general assumption that things --

vonnie: policies in general. thatan: yes, was a sign voter sentiment on the economy is good enough that no one wanted to take it on. maury: the sentiment that there is about income and equality is more a sentiment on the democratic side rather than the republican side, so the audience they are playing to is not as concerned about the minimum wage issue. tom: we will address this in the next hour. brendan notes governor bush's comments on a 2% global economy. that will be one of our themes in the next hour. our theme now is our loaded twitter question. a big change coming, perhaps. how long should parental leave be in the united states? i was going to say 17 years, then it gets worse. stay with us. @bsurveillance good morning. ♪

tom: good morning, everyone. ."loomberg surveillance we can focus this morning on a good single best chart. here is brendan greeley. brendan: the bank of england dropped its 2015 inflation report. this is what it sounds like when that document hits the desk.

[it's desk] ,hat we're looking at here options to get the market to a sign -- to assign a probability of deflation. they are well underneath 10%, a 10% likelihood that the market sees deflation at all. mario draghi, at 20%. maury harris is with us from ubs. when you try to compare these economies, is it more worthwhile to compare its economy to the u.s.'s economy or to the european economy echo maury: you have to compare closer to the european economy. as you said, through the trade pact. our economy is more independent. we are not nearly as trade ,riented, and this country inflation expectations have been very steady on the part of the

public. 2.75%ontinue to be about 7/8% and i do not think they ever got the deflation bug. brendan: let's bring this chart back up again. when you look at how much higher those expectations are for the eurozone, more harris, do you see the possibility of destabilization there? is that it what is driving that, or is it underlying factors of ?he economy echo maury: they're certainly could be more concerned about deflation in the economy. brendan: what is the fix for that? that is what mario draghi has been trying to do, to stimulate investment. what is going to make that change?

governmentibly more reforms in places like france. vonnie: what about the more moderate economies like australia and canada? will we see deflation in those countries? they are the extent heavily dependent on commodities, that could feedback on wages on those countries. that is what you keep an eye on, on wages, to see if you will have more broad-based deflation. that when their currencies are depreciating, that is going to add somewhat to inflation of imported goods. tom: in the currency gyration, the money question to september 17 is the global deflation brendan is talking about, filtering over the central bank analysis. effectong dollar has an on what chair yellen will do, right? it has in effect, but i

do not think it is the dominant variable. it is an input for looking at the economy. no doubt about it, if you held other things constant and sent the dollar is strong, that is a strike against the u.s. economy in terms of growth. but at the same time, you have a booming housing sector and auto sector. we have to get the photos. i was taken by mark carney's first headline yesterday. he went right to it, there is no inflation. we have a new photo editor. is she any good? vonnie: yeah, she is really great. she will not be lexi, but -- elizabeth is going to be with us for a long time. it is on twitter. here are the top three photos for the day. planetary nebula is called

the southern owl nebula. it was captured by the european space observatory in chile. almost fourmeter of light years. tom: what does that mean? brendan: you know what it means, tom. four years for light to reach from one end to the other. vonnie: exactly. it is the setting you would have to put on the explorer or whatever it is. light yearss four for the air conditioner switch at home to turn the air conditioning off. vonnie: one billion gallons of orange colored wastewater was released in colorado. it contains settlement and metals, and health officials told users to avoid the water until it passes.

i cannot imagine there are no prospectors down there. brendan: do you really need to be told to avoid that water? tom: exactly. they are not recreational types. those are scientists trying to figure it out? vonnie: yes, but i bet they have some metal detectors. tom: why do i think matt miller is the one on the left? caviar the jewelry maker has released three russia-themed apple watches. putin, costing 3100 u.s. dollars. brendan: that says so much about russian history. if the three of them are so casually lumped together as great russians, despite all of their differences -- the western

, theare -- the westernizer communist, and whatever vladimir putin is -- that they are all similarly great? vonnie: they are all similarly oligarch friendly. tom: i do not believe i have seen anybody in the street using the toy, the apple watch. apple watch commemorating vladimir lenin, whatsoever.irony tom: on monday we will turn to the central bank discussion. we have some wonderful guests in washington. one of them, alan greenspan, will watch -- will join me in washington. this will be a sharp, poignant conversation on the global deflation issues, and of course what is going on in janet yellen's fan. "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." alan kruegerour, from princeton university.

the jobs report and eight: 30, and the new debate about america and parental leave. now top headlines with vonnie quinn. vonnie: instead of shedding the light on the malaysian airline mystery, the discovery of a plane part is adding to the confusion. the wing section was found on an island. but french officials dispute that. say they have still not proved that the wing flap is from the jet that vanish last year. vladimir putin's feud with the west is turning into a food fight. he ordered tons of cheese and produce. russia was sanctioned for seizing crimea last year. president obama and his family are starting their vacation one day early, at martha's vineyard this evening. they are planning 17 days. for the president, lots of golf. is there six visit there since

2009. beautiful golfing. tom: i have been there when they shut down the presidential roads. it is a little difficult, those two-lane roads on the vineyard. it is great. i saw a robert wolf, one of the president's close friends, on fifth avenue here. somehow i think mr. wolf can get some golf time out at the vineyard. vonnie: 34? 68? actually good that our president takes time off, unlike -- rendon co. you -- brendan: you. tom: mark carney and janet yellin will focus on their domestic economies, but surrounding them is the most interesting soup of disinflation, commodities claps, -- commodities collapse.

maury harris among many at ubs to sort through this. it is never boring, is it? it is fascinating. maury: it is fascinating because people look at commodities as leading indicators. tom: why is that? that is an important statement. maury: it is supposed to tell you something about demand, and that if commodities prices are going down, it is telling you there is a demand slowdown during the problem with all that is that commodities represent most demand with supply. the problem we have in the oil market is too much supply. it, i lookou look at at tree shape us comments about the rate of change. trichet's comments about the rate of change. crude,i think that with what you had to argue is that

the possibility that you are going to have this sanctions removed is really starting to have an impact on crude. the other thing that impacts look at hown you much is being produced in this have fewer --may they do have many fewer rigs up they have a giddy year ago, but those are much more productive. we are not really cutting back on the output yet. when the oilet, market was going up and we were back over 60, people were looking at the rig count, and the number of rigs every single week, and those were coming down. recently they stabilized, and now we are seeing stories that the output for existing rigs is decreasing. i would point out that these are supply-side problems. they are not telling me that much about the demand of the global economy. when you look at metals

as well, would you call that a supply side problem, that the minors cannot stop mining? maury: the margin in china was an important buyer of metals products, and china is definitely slowing down. asnie: if you look at him leading indicators, commodities prices, then why are the federal reserve and janet yellen looking at impact being transitory for commodity prices? at the u.s.you look economy and the role of commodity prices and overall inflation, it is not that big. we are still very much a service economy, and what is more important for inflation will be wages. mix, yellen and carney may be overwhelmed. in the last 48 hours, the song has changed. ae brazilian real, it is

massively quadratic chart showing that brazilian angst. froman: there is a report the imf last year that says the weaker in the more susceptible that country is to decisions made by the u.s. fed. is that what we're seeing now? how do you explain it? maury: you can explain it by a combination of the type of stagflation they had in that country. i do not know if stagflation is the best name for it because they are in a recession, yet they still have the inflation. thinkn: so you do not they are just responding to the fed right now? maury: there is more than the fed going on in that country. brendan: -- september or december? maury: september. tom: let's look at our forex

report as we get ready for alan krueger, jim glassman and bill gross. sterling, a little bit of strength this morning. look at the brazilian real and the ruble. those are while statistics. stay with us. ♪

announcer: this is "bloomberg

surveillance." america.s job stay in can it help janet yellen escape the great distortion? there is no debate. the debate last night -- it was smart, it was entertaining. of ohioe governor scored major points. the elephant in the 2015 room affecting all his global deflation. good morning, everyone. this is "bloomberg surveillance ," live from our world headquarters in new york. i'm tom keene. theatched every minute of debate -- brendan greeley -- and you came away loving what you saw from the governor of the buckeye state. brendan: everybody is trying to claim the mantle of reagan. but he really spoke with optimism. john kasich poke about the compromise he pulled off when he was in the house. he was more reaganesque than any republican candidate we have seen. tom: john heilemann will join us

from "all due respect." asndan: the media take away well was that if anybody made it out of the undercard and into the title bout, it was carly fiorina. tom: let's get to our top headlines with vonnie quinn. vonnie: the government possible monthly jobs report is always -- the government's monthly jobs report. it could tip the scales when the federal reserve decides to raise interest rates. no change expected in the unemployment rate, now at 5.3%. numbersbreak down the on bloomberg tv as soon as they are released at 8:30 eastern. the first republican presidential debate quickly revealed that the party is a house divided. the top 10 candidates in the latest polls skirmished last

night for a national tv audience on fox. bretbrett there -- host question revealed a fault line. >> is there anyone on stage last night who will pledge to not run an independent campaign against the person who receives the republican nomination? raise your head now if you will not make that that razor hands now if you will not make that pledge tonight. hand now if you will not make that pledge tonight. mr. trump. vonnie: cnn will hold the next battle since over 16 at the reagan library in california. carl icahn is raising a 2.6 -- estate in a natural gas company. he wants talks with company management and might seek a board seat. niere energy are

down 8%. and helping john stewart say goodbye. >> on behalf of so many people whose lives you changed in the past 16 years, thank you. now i believe your line -- correct me if i am wrong -- is "we will be right back." [applause] . stephen colbert's cameo was one of the highlights of his farewell on comedy central. promised viewers he would not fade away. -- john stuart promised viewers he would not fade away. very cool. brendan: my favorite part of his last week was when he looked at

all of the targets he had taken on and how utterly he failed to change anything -- isis, fox news -- and he finally said after years of complaining about the mets, they are in the pennant race this time. that is all he achieved. tom: jon stewart, best of luck on new endeavors. let's do a data check. i want to look at the non-news today, which is oil -- stable, gold, stable. deflationary whispers something we will address through all of "bloomberg surveillance" today. this morning, we will have a report on the nation's economy. -- johnill glassman and glassman and bill gross will join us. created the cottage industry of minimum wage analysis, and those who created millions of jobs. a lot of them -- maybe they are not so good. are we creating good jobs in this jobs success?

alan: not enough. we are creating jobs, but we need to see wage growth across the board. tom: why? the mystery of this is all of the smart coverage of a lack of productivity. the one word that comes up is mystery. -- youch that at present teach that at princeton. alan: it was a puzzle to me last week that the employment cost index rose higher than we have seen in decades. that was a normal, but -- that was anomalous, but that is what the numbers showed. tom: tied into the debate last night, republicans will suggest harmful effects of globalization full been to this. is there a new globalization that is part of the mystery of why so many americans are miserable? china entere saw the world economy, it had an impact on manufacturing in the west, in the u.s., and other

sectors that competed with china . but that is largely behind us now. wages in china have increased. their capacity and infrastructure are stressed. now we compete on more equal footing. there was shockingly little discussion of economics in the debate last night. brendan: there was. i wanted to pick up on something that more a harris said in the last hour, that as you raise the minimum wage there are ripple effect at higher income levels as well. there are some articles i have read on walmart, that when they raise their minimum wage, there was a cultural problem with people just above it. what does raising the minimum wage due to salaries and incomes just above the minimum wage? alan: there does tend to be a ripple effect. it is voluntary. it comes about because of morale. making $12 an hour when

the minimum wage goes up to $10 people care about where they stand in the hierarchy. brendan: economists forget about the route important when you talk about wages. alan: absolutely. the labor market is a social institution as well as a market. that is why wages can get stuck too low. one of the reasons i think the minimum wage can help it move better. tom: i brought up this chart on nairu. i will put this out on bloomberg radio plus. the answer is we do not know where we are. we are supposed to get to some level of good unemployment or appropriate unemployment, this .hing called nairu we simply do not know where we are. vonnie: looking at the eci, growth at .2%. will -- does it matter that employment keeps dropping as

wages are rising? alan: i think it does matter. prices are so weak, we are so weak, where seeing wage growth. that is consistent with the level of unemployment that we have. airu hasther hand, n moved. i think we're pretty close. my guess is that it is around 5% when it comes to price inflation. bendan: you are going to hanging out on this network until we get the jobs number. we have been seeing it tick up at this pace. are we going to get above 225,000 in a month? will we ever see it move up, our -- or are we seeing this ok pace for the immediate future? alan: given the growth in population, working age population, and the world economy, 225,000 jobs is quite a strong number. out,an: i have to point set your expectations appropriately is what your boss

says before he declines to give you a raise. tom: why are we so miserable as a nation if we are generating a great number of jobs? alan: i think there is a big hangover from the great recession. we went through a financial crisis like none other since the great depression. there were important policy taken, otherwise we would have been in another great depression. brendan: i think that might have been a shameless plug. alan: the federal reserve did a great job in that administration. i expected the big windfall that we had from the gas price drop to be spent, and maybe half of it is being spent. so people are going through an adjustment period. people are cautious. create do we still service jobs, or will better jobs being created in the years ahead? alan: it is important to note

that service jobs are important jobs. workers started to get better benefits, and the same thing can happen with service jobs. vonnie: unionization? inn: i think unionization the current environment is very difficult, but we will go through a process where jobs that we do not think pay all that well will become better jobs in the future. being withyou for us. alan krueger is with princeton university. our twitter question of the day -- already a huge response. how long should parental leave the? -- how long should parental leave be? stay with us. it is jobs day. "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." we welcome you to jobs day, here in a beautiful new york city this morning. let's start with the morning must-read, this from bloomberg view with thoughtful coverage of the debate away from the usual hysteria. jonathan bernstein writing up a storm --

tom: alan krueger, he is with us this morning. i am fascinated by the distance of these politicians -- you mentioned earlier, little economic debate last night. yet they are republican identified economists, republican john stanford, advocate policy prescriptions as you do. so far the economists away from the republican candidates? alan: it is a mystery to me. tom: and a mystery to john taylor. alan: i would like to see the republicans have more of a theme. moreld like them to be positive about where to take the country in terms of policy. tom: but it is a sentiment of antigovernment, which by definition says there is too

much government. are we doing too much? alan: i served at an a usual time, in the midst of a crisis, were a failure to regulate helped to feed the financial crisis. always on my mind was getting a balance right. you need the government to set the rules so the economy operates well. you need to make sure that people have opportunities and they tremendous growth -- and that the tremendous growth and opportunity -- it, brendan: you nailed that the governor of ohio is a sitting executive, somebody actually doing something, which many people on that stage, including mr. trump, cannot say. brendan: that is possibly in this environment the best achievement you can point to, but of course i have a huge crush on john kasich now. the other thing that came out of the debate for me was the idea bush's dissatisfied

with 2%. can we get better than that? alan: growth is a real challenge for us. we need better policy coming out of congress, in terms of tax policy, research and development, support for education. tom: alan krueger with us on this jobs day. monday, a conversation with alan greenspan. i think we could talk for three or four hours. alan greenspan on "bloomberg surveillance" this monday. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance" on this jobs day. let's get to top headlines with vonnie quinn. vonnie: chuck schumer says he will not vote for the iran nuclear deal, breaking with president on the controversial accord. iran willes not think keep its promise not to build a nuclear bomb. on theed his position web during the republican

presidential debate. apple watches are available today at 100 best buy stores. it is the first time they have been offered outside apple stores. will stockst buys them by the end of the year. month's sales fell the most in seven years for apple watches. toshiba is getting booted from a stock index that showcases the penthouse best companies. his removal from the jb x decay index 400 follows that the jb x nikkei index follows a scandal. it aims to showcase japan's best comedies and shame excluded firms into boosting profits and shareholder returns. those are the top headlines. brendan: dr. alan krueger is with us from princeton. i want to pick up on something we talked about in the last tom iswhich is something

almost single-handedly obsessed with, the new normal. here is a quote from jeb bush last night. brendan: professor krueger, is that the right prescription for getting past 2% growth? alan: i think we need to do a lot to get past 2% growth. we need to invest more in infrastructure, in research and development. we need to change our immigration policy. our population is growing more slowly and we are getting older, and that will affect our roads rate. brendan: let's assume that we can actually get to income tax, personal and corporate income tax reform. anywhere near the growth that jeb bush says? alan: i do not believe it is

anywhere near that. if you look at simulations economists have done, tax reform will not raise growth from 2% up to 4%. growth is not sufficient. we have had growth. we have not had the growth shared with the bottom 99% of the u.s. population, so growth certainly helps, but it is not sufficient. that is something we have learned over the past three decades. tom: this is critical. summers onnd harry the permanent unemployment -- that is the bottom 50% or 60% -- they are not participating, are they? labor force participation is around 60%. a lot of the people not participating are retired. i do not think you can think of them as being part of the set you are interested in. but there is a group that became long-term unemployed from the great recession and then left the labor force, who i think are

unlikely to come back. that is 1% of the labor force. tom: you would put it that small? alan: yes. that is what we saw in the 1980's, labor force participation about one point lower than it would been that then it -- that it would have been. what is the defense of regulation? they are necessary in a developed economy. how do you respond to this concept, refeeding -- repeating the phrase, job killing regulations? alan: we had job growth that was much faster than under president bush, under president obama and president clinton. the affordable care act is not perfect, but it is difficult to say it has had any adverse effect on jobs when you see job

growth take off after it passed. agreeepublicans would with you, but they would say there are different jobs being formed because of the affordable care act. are we shifting from full-time benefited jobs because republican businesses cannot afford that to a part-time america? alan: we are not seeing that. most of the job growth since the afford will care act has been in full-time jobs. maybe over time the incentives i do not think incentives are pushing in that direction. on top of that, virtually all of the job growth has been in full-time decisions. vonnie: what are the major structural changes we are seeing to the labor market? alan: technology has been driving changes. we are seeing a gradual rise of workers working in the gig economy. that a structural change, or is it a temporary phase? as thingsill continue

evolve. tom: we need to stop the show and do a jargon alert. what is a gate economy? and a lot of hipsters are saying what is he talking about. economy as a gate technology -- it is a gig economy as technology people -- some uber drivers do it part-time, some do it full-time. vonnie: so you could have a couple of gigs going on. alan krueger is about as hip as you can be if you are a fester of economics. than so much hipper krueger. -- he is so much hipper than krugman. quinnhe economist vonnie

with straight talk that is necessary. coming up, the conversation with bloomberg politics, john ohio,ann from cleveland, on the new american debate. stay with us. "bloomberg surveillance." ♪

tom: good jobs day, everyone. "bloomberg surveillance." we welcome all of you. -- 8:30 on bloomberg television this morning. vonnie: we hear the government has latest reading on the

government -- on the jobs market. it could be more crucial than used byause it would be the federal reserve next month when they discuss interest rates. we go to julie hyman in d.c. julie: it is the most important jobs report before the next jobs report, the last one before the federal reserve makes its decision. economistss is what who we surveyed estimate that the u.s. economy added last month. we are talking about an unemployment rate of 5.3%, holding steady at that seven year low and matching what we had seen last month. the other important numbers -- these are the hourly average earnings number. the underemployment number, those folks working part-time who would like to work full-time, 10.5%. those are the numbers we will be watching. vonnie: it will be particularly important because it will be a good read on the second quarter

as well. julie: definitely. people are looking at the indications for what this means for the federal reserve. my favorite quote was from "the economist." "this is a question of show me why i should not, not why i should." there was anything in this report that would derail the idea of a rate increase this september,bly in people will be looking for any signs of more weakness than we have seen previously. julie, thank you so much. we had the numbers for you -- we will have the numbers as soon as they are released. national security -- a bedrock issue for republican candidates, two of the parties candidates disagree on how to keep the country safe.

chris christie slant-in rand paul's -- lamp rand paul's -- >> when you're blowing hot air about this, you can say things like that, when you are responsible for protecting the lives of the american people, what you need to do is make sure you use the way it is supposed to work. vonnie: a form was held earlier in the day for the candidates who did not qualify for prime time. cnn -- tom: john heilemann will be on talking to carly fiorina. vonnie: he was saying she was one that might move up. it is not a controversial question, but in north korea it is, it is getting its own time zone, it will be permanently moved back. it will make their time

different from japan and south korea. more of a symbolic thing. brendan: a rejection of imperial japanese rule when they oppose the old time zone and it will be a problem coordinating with south korea in joint economic zones. tom: alan krueger with us this morning from princeton. this is the brazilian stock market, simple from a three years ago, in brea's -- brazilian reality, when you factor in weakness and u.s. dollar strength, we are down 60%. this is wealth destruction. alan krueger, is this the kind of shock that gets everybody's attention? all linked together, oil comes down, equities come down and pretty soon you have an all-american 1998. that is driven by the exchange rate, driven by the fact that the u.s. economy is getting stronger and almost wrong enough for monetary policy

to start normalizing. that will raise interest rates and cause the dollar to suffer further. i think it is being driven by developments taking place largely in the u.s. economy. brendan: i actually agree with the professor. this is related to watching what is happening with the fed, the closer we get to the rates change, the capital price will move. tom: i agree we are gaining the fed, but the first headline from governor carney yesterday, was on inflation. we will continue this discussion in a bit. the important thing is this inflation, a reality is not the expectation. our expectation, data check, to help you quiet this morning, although oil getting my attention. think about the number versus 80, 90 or $100 a barrel. not long ago.

bring me out -- the german two-year gets my attention, -0.25, whatever you say german interest rates cannot move higher right now. real 3.53 this morning. brendan: this is "bloomberg surveillance." lengthennd microsoft their parental leave policy this weekend for netflix as much as a year for moms and dads. this is a subject i care a great deal about. alan krueger is here with us from princeton, you asked us to bring this up this morning. not just a feel-good policy, explain what this has to do with the economy. important for several reasons -- it is a sign of the u.s. job market getting tighter. i think we have not done a very good job retaining women in the workplace. we have gone from being at the top of the away cd in terms of the labor partition --

participation rate for women to the bottom. other countries have become more friendly towards family when it comes to work, making it easier for workers to take time off to take care of children and newborns and sick parents. thedan: i want to get to labor force participation in a second, what you said is a .ightening of a labor market the xm microsoft, their wages are higher than the median, now to go shooting on conditions, not just salary. alan: if you look at the u.s. demographics, we are heading over the next five years to a labor shortage economy. i think it will be in the company's interest to think of ways to make work more hospitable. there agree with you that is a massive polarization between america and everybody else on this issue. i want you, a public servant, to a democrat president, to speak to republican small business people why they should be leave

alan krueger. what does the right get wrong on this debate? than justs broader economics, we care about the quality of life in america. the economy is supposed to support that, making sure families are intact, children are well cared for. tom: why do so many disagree with what you are saying? alan: those who profess to be concerned about families should support this. tom: you bread -- you blame everything they can, herbert hoover, dwight d. eisenhower? alan: it is just shortsightedness. we do not do a very good job representing worker interest in the u.s., unions are weaker than they used to be, we have not had a new organizational form fill the void created by the decline in unions. vonnie: how are scandinavian countries getting it so right? alan: i think their politics

tend to work better. they have a long history of providing a strong social benefits, and their economies have done very well. even with those policies. they have supported stronger families in those countries. brendan: we measure progress in this country through gdp growth, the benchmark against which all presidents are judged, but gdp is an indicator of the possibility of quality of life, one indicator, there is a huge generational divide, millennial's ending for wanting a higher quality of life, but the difference in millennial's is that they are much more likely, both genders, much more likely to be married to someone who also has a full-time, demanding job. there is no such thing as saying, the mom gets time off and the dead can do it. both are juggling the same problem. tom: how did we get here? i am fascinated by what you say, brendan, where there's everybody

else, including the scandinavians, in america we are alone, how did we get here, professor? alan: we stalled out, we provided a strong safety net at work in the u.s. we were behind some other countries in terms of providing workers compensation insurance, that we did that. we were behind in unemployment insurance, and we have stalled out here in tom: what do germans think about this? you have lived the parental leave life. brendan: sweden, you see moms and dads on the streets. tom: first child one year off, second child, two years off. brendan: i always max out maternity leave. my wife had a funny conversation with one of my german friends, the german friend, said what are you doing with your mother money? you get money for being a mom in germany. tom: alan krueger's next much --

next book. our twitter discussion continues -- how long should parental leave be? a great american debate. they you for watching and listening this morning. ♪

♪ tom: good morning, everyone.

alan krueger, he is a brutal teacher, we will get to him in a moment. coming up, a conversation with bill gross after the jobs report , you will hear this on bloomberg radio and bloomberg tv, worldwide. vonnie: the jobs report will break during market makers and we have the anchor, erik schatzker is with us, who will you be speaking to? kruger will be kind enough to stick around and joining us will be tim kaine of the hoover institution and tom just mentioned bill gross will be simulcasting his radio interview. the mayor of elected will be along -- atlanta will be along. as well as the chief information officer of kaiser permanente, the health care giant, the reason is that they are hiring and where are they putting those i.t. jobs in atlanta. rick reader, the chief

investment officer at black rock's place for $700 billion. tom: tim kaine is great. it is great to have him. erik: absolutely, you should make a guest appearance. tom: we have mr. gross and jim glassman. alan krueger, what will you look for? --er you told the program president, i cannot do it, you are in the white house, what do you look for? what will be the item to date that matters? alan: i tended to take a longer heizon, not so much -- started posting five takeaways from the report, about an hour after the report, i find it informative. he put in there every month, the 12 month change, it smooths out the fluctuation. when i was working for the president, we were having ups and downs month to month, if you

look at the 12 month picture, it was pretty smooth. it gives you a good read on where the economy is going. vonnie: talking about here too. lending. p --eer to peer lending. vonnie: they are not taking the credit creation out of the banking system, they are intermediaries. -- they arey are raising money directly from investors and those investors are using that equity to create loans voia peer-to-peer lenders. lending club is an intermediary. brendan: the banks are interested in this. do you see this as shifting the pieces of the pie, the credit supply -- or the overall credit supply? alan: both i worry about

accreting a new shadow banking sector. tom: twitter loving alan krueger. when did sweden and finland become our economic ideal? have you gone mad! [laughter] alan krueger and brendan greeley, a lot to talk about an "market makers" after the job report. stay with us, worldwide, "bloomberg surveillance." ♪

♪ tom: good job stay, everyone. "bloomberg surveillance." vonnie: it is job stake, the government's job data closely watched, but this morning's report could be more crucial than most, because it could tip the scales next month when the fed decides whether to raise interest rates or not. an average it forecast of economic surveyed by bloomberg voiced a gain of 225,000 jobs last month, no change expected in the unemployment rate, it is now at 5.3%. break down the numbers on bloomberg tv as soon as they are released at a: 30 eastern. vladimir putin turning into a food fight, the russian

president ordered tons of cheese and produce destroyed. eta? malvina -- velve vonnie: after russia was sanctioned for seizing crimea. rnr type or president obama, they are starting their vacation early, they will be in martha's vineyard by this evening, planning 17 days of the sun and sand and for the president, lots of golf. his six vineyard visit since 2009. sharks.ch out for the it is a big year for sharks. maybe they will send the secret service being shark bait. brendan: they are moving closer into sharks. tom: the secret service will be protecting the ladies of the obama. we did the instant analysis of last night's debate, sanity required, john heilemann was the

adult in the room with bloomberg politics. he suggested the debate will advance carly fiorina, he suggests that fox redefined what a debate should be last night. have given a rave review to what the moderators bid. is what we saw last night the new american debate? john: i think there is a challenge that all of the debates are going to have as long as this field is as large as it is. you get 10 people on stage and into ours you are talking about short, fast, not very -- you can i get deep into substance. they did pretty well within those parameters. the main thing they did, all three of the hosts and megan -- mainly megan kelly, was asked tough, pointed questions that .ere not gotcha questions

they were able to do that because they are fox news and no one will accuse them of being biased against the republican party. by: discuss carly fiorina, allah claims she won the early debate, does she advance to the larger sphere? john: it depends on what the rules are for inclusion. the republican party would like to have a woman on the stage in prime time. carly fiorina as a political performer is better than some of the guys who are on the stage in prime time last night. the problem is she is pulling at close to zero. it is hard to figure out what inclusion criteria would allow her to get on the stage. there will be a lot of people in the republican hierarchy and at cnn over the course of the next month trying to figure out how you can get her on the main stage. brendan: restaurant voice while i ask you a completely sober

journalistic question. how often -- awesome was john kasich last night? john: i am rarely ever sober or dry. at this moment, i am not sober or dry. john kasich had a very good night, he was in ohio, playing to a home state crowd. he was himself. authenticity matters a lot. he was optimistic, more optimistic than anybody on stage, and reaganesque. his stances do not help with the base, but he did himself a lot of good on that debate stage. tom: on television and radio, here is john heilemann writing up last night's debate, the debate was not quite spectacular but a wild ride, anyone who expected a gentle soothing entry into the forensic stage of the gop nomination was quickly

disabused of such fantasies and he went to the reagan point. brendan: he channeled optimism. that stage gets smaller, when there are five participants, who is not there? knows.ho we have a long way to go. the feel-good state this large for a long time. you have this new world of super pac's, money is often a reason why candidates drop out. getting see this field appreciably smaller till votes start getting cast in iowa and a hampshire. after that, i lot of candidates who might have ordinarily dropped out will have enough money to stay in. we could be looking at big debate stages for many months. tom: john heilemann, thank you so much. i move forward to monday, alan

greenspan and i will have a conversation in washington on monday, look for that in the 7:00 hour on radio and television worldwide. i will try to give him hard-hitting questions about the global slowdown wrapped around an audit and strange fed policy. vonnie: nobody better to answer that questions. -- fed questions. my agenda will be jobs. we are looking for an identical report from last month am a 225,000. tom, you have to go to radio. here onbreak numbers bloomberg television at 8:30. perhaps, hopefully an increase -- brendan: we have seen gradual improvements, when does that turn into a real shocking improvement? vonnie: does it need to?

as long as we keep at this base and not slow down. what do you think of the numbers, -- is a those are noisy, adp noisy projector, i am hoping for another boring report, that means we -- the economy is continuing to heal. and this has been a resilient recovery and is continuing. vonnie: time to answer our twitter question of the day. how long should parental leave be? got many answers -- one of them inflammatory, some were delightful. first answer -- it is a question of who pays. brendan: that is very fair, i feel strongly on the subject, but as with so many other policies, the smaller the business the bigger the burden -- how do we square that? alan: lots of different ways, also, in thepport,

longer run, most benefits come out of wages or they raise productivity and i think family leave has potential to do both. -- it should very on circumstances. the health of the baby, whether it is a single parent or nuclear family -- is that there --fair? alan: i think it should be universal. one of theve this country is high infant mortality . countries that have parental leave have lower infant mortality than we have. brendan: it invites gaming. can you prove that you do not have a healthy child to extend your parental leave? vonnie: gets really, gated. -- gets really complicated. alan krueger, who is championing this idea?

what politician is picking this up? alan: hillary clinton has supported it. any big economic speech he gave in new york a few weeks ago, it was one of the main new proposals she had. brendan: do you see this becoming an actual issue in this election? alan: i hope it becomes an issue , i hope that economic policy becomes a focus of the debates, because it is important for the public to know where the candidates stand. vonnie: does the fed move in a september or december? alan: probably. brendan: it will be interesting to see, what economic policy we start discussing in the future. largely in economics-free debate about -- except this discussion of the new normal. alan krueger, thank you

for being with us, he will be with us all morning, "bloomberg surveillance" continues on radio, "market makers" up next on bloomberg television. this is the parental leave report, we all know where i stand, have a good weekend. ♪

♪ from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. erik: it is a friday, shortly you know that, it happens to be

jobs day on market makers. matt: stephanie ruhle is off today. erik: the labor department will release the jobs report and here is what you need to know. surprise we see on these numbers. economists are expecting when he numbers drop, 225,000 on the jobs number, that is the average in our survey. 5.3 percent, unchanged unemployment rate and 62.6%, the labor force participation rate is what we are looking for. these are the consensus numbers that have been published on wall street, we all have our own independent. erik: a veritable job stay extravaganza, a cornucopia. here is a preview of -- and react, alan krueger, rick reader, and