the finance cancels and un-cancels his meeting -- the brazilian finance minister cancels and un-cancels his meeting. it is friday, september 4. i'm tom keene. with me, vonnie quinn and brendan greeley with as many trips to brazil. brendan: it is a political crisis. foreign investors of always looking at -- are always looking at the finance minister. his government does not have a government majority. his approach does not have the political support to do what he is planning to do. is: i noticed the president polling at 8% in brazil. ourill touch on this with guest. here is vonnie quinn with top headlines.

vonnie: there is fuel over the debate of whether the debate -- whether the fed should raise interest rates this month. a survey by bloomberg, the economy added 217,000 jobs last month, and the jobless rate fell .1 of a percentage point, to 5.2%. interest rates have not been raised in nine years. while, the world's largest ies ca fed interest -- see a fed interest rate hike as a threat. a fed hike could cause -- one more sign of china's economic was, the measure of private sector business conditions in hong kong have fallen to a 60 year low. the pmi gauge fell below 50, meaning activity in business is shrinking. hong kong has been cutting down at the fastest rate since 2003. the republicans have got donald trump on board.

trump has signed a pledge agreeing not to run as a third-party candidate if he does not win the presidential nomination. he explained why at a news conference in new york. donald trump: the best way for the republicans to win is if i win the nomination and go directly against whoever they happen to put up, and for that reason, i have signed the pledge. [applause] vice president joe biden is unsure whether he will run for president. he says it will depend on whether his family has the emotional energy to do it so soon after the death of his son. at the u.s. open, number three seed andy murray rally to make it to the third round. he lost the first two sets. meanwhile, second-seeded roger inerer one his match

second straight sets. tom: and the weather broke. it will be cooler. i think the republican party will come to regret making him sign that place because he is playing havoc with their platform. now that they have gotten him to sign the pledge, whatever his platform is, it will hang around their neck. york, thiss in new press conference. very cool. , a abelson with a story cover article for "bloomberg businessweek tom: really interesting on the donald trump from decades ago from the present incarnation. let's do an incarnation of the data check on the job state. equities, bonds, currencies, commodities. willnternational story fold into jobs today. the euro weaker, up. dovish call. oil is not the story this

morning, although we will touch on it. futures quite negative. jobs day, second screen as well. dollar, 1.047. let's go to the jobs report. labor participation rate, here is the boom, 10, 20 years. off we go into the 1980's. massive stable participation, and then we drift away. about 5.8 million jobs. do not hold me to that, but this is the backdrop to the immediacy of today's report. brendan: you can do the demographics by age and also by gender. -- number becomes the work that is the workforce, and then men are leaving. i have been talking about this number for so long, but the trend did not change.

it is flat instead of continuing to drop. when you run it all the way back and look what is happened since 2014 -- 1970's,e back to the 1980's. you wonder where this is going to be. let's look at the immediacy of the jobs report. it is a most interesting friday. internationally, flat out grim news on the hong kong china economy. australia is weaker, but the main news is from brazil. we will touch on that with sri-kumar, president of sri-kumar global strategies. phil mattingly, what do you do in a labor department lockup? the: hope you do not get number wrong when you get on the air at 8:30. that is the key part of it, tom, across the board. you are goingonth

in with the same metrics, looking at the key components that probably federal policymakers are looking at. you are looking at the top line numbers, then you want to get into the anticipation way -- the wage participation rate and the platform. it is a number that economists are looking at right now, 5.2, the rate. but .2% earnings growth month over month, 2.1% year over year for wage growth, that has been a real big concern. that has been a real lag. if you see it jump when you're in the lockup, that is the number you will point to immediately when you come out at 8:30. brendan: is there a magic number, 2.25, 2.35, that changes the narrative for the white house? phil: i think the white house would be thrilled by those numbers. i have been talking to people all week about this. you would be surprised. the day before labor day weekend, people in washington are not only around but are

paying attention to this, which is shocking at the end of a recess. when you talk to capitol hill aides and people at the white house, they are wary about getting in front of the fed, not just publicly but privately. they do not know what the fed is going to do. what you know from the white house now is they want positive numbers to keep rolling out. whatever the fed decides to do come they will deal with after the fact. tom: phil mattingly, thank you so much. international events crowding into today's jobs report, sri-kumar joins us from sri-kumar global advisors. we are going to talk about india later, but right now, there is a sequence of china, brazil, may be manifested in australia. the troubles in china and brazil -- are they linked? you also see it taking place with australia and one other country, canada, which is in recession. commodity exposing

countries. tom: did i learned yesterday that mario draghi is affected by the commodity producing nations? ai-kumar: he indicated as press conference that the chinese economic slowdown was a major reason why the numbers were not looking good in terms of inflation and growth in the eurozone. he did. are affected because germany is a big exporting nation, and china is a big importer. ofyou have the benefit chinese economic growth coming to all these countries, and at the same time the slowdown is affecting germany, canada, brazil, and australia. brendan: when we talk about a commodities super cycle, has this been a china super cycle? sri-kumar: the commodities super cycle was propelled in a big way by chinese growth. if you look at when the

commodity price boom began, it was 2002, 2003 and coincided brazil inresident in the 2002 election. the expectation was that the real reached four to the dollar, lowest level, since it happened overnight. happening almost at the same time is the brazilian news of the finance minister. it is like it is joined at the hip. vonnie: tourism is slowing down as well. brendan: it sounds like what you're saying is that brazil went through a super cycle. there is the hope that dylan a we do the right -- that dilma we do the right thing. sri-kumar: the commodities super cycle alone would not have helped, if he had defaulted on

the brazilian debt soon after he 2003.ffice in january much our weaker currencies offsetting the impact of fewer exports when it comes to commodities? germany is benefiting from the euro to some extent. sri-kumar: you are absolutely right. to thekness of the real dollar does not help brazil as much as it would have helped it years ago. the major difference is manufactured at -- manufactured exports were 55% of the brazilian exports in the middle of the 2000s. now it is down. tom: brendan greeley has a huge attachment to what is going on in the brazilian experiment. you have said this is a physical

issue, not like the united states. the brazilian fiscal picture has been destroyed over the last two years. can i ask why he echo brendan: -- can i ask why? brendan: it is impossible to make policy in the country. i will give you one example. benefits for government employees are so extraordinary that there are academies that will teach you how to get a government job in brazil. there are kids who go to school specifically to get a government job. that deadlock, in terms of what you can pay for, is impossible chicago professor parachute in. he wants to do austerity in the brazilian culture, is that been? brendan: we have talking about fiscal reform, which is important. but they also have the chance to do structural reform to get things done in brazil. waskumar: what was going on

before the october elections last year, the public-sector were all kept at lower levels. they were all being -- they are all being r raised to high levels. wristers scissorhands is doing the right thing, but as brendan said before, the political headwind is only so much. us: alan krueger will join in the next hour. our twitter question of the day, to get you ready for the jobs report -- we need your answer. we are having a lot of fun with our twitter questions. are you kidding me? i did not write this. is this the most important jobs report ever? ♪

tom: we welcome you worldwide. one of the statistics that matters off the 8:30 report, two point 71 has come in -- 2.71 has come in risk off. we will be with bill gross and jim glassman as the numbers come out this morning. right now, and incredibly busy morning. top headlines with vonnie quinn. vonnie: amazon is expanding its portfolio of cloud computing services, buying elemental technologies, which distributes videos through web connected devices. amazon is saying -- is saving $500 million for -- is paying $500 million for elemental. jury intment by a grand chicago. in three weeks, the u.s. will try to have him extradited from london. and a long holiday weekend

traditionally includes barbecuing, but americans are not as thrilled with the grill as they used to be. ites of the barbecue grill in 2007. tom: the greeley household. vonnie: diet trends and demographic shifts have affected the sales. tom: this is new york city, 10036. there i am, grilling. the line out the door is hilarious. the line out the door -- business insider did a compare with shake shack and in out burgers. will be in annapolis, maryland, where i hope to be spending the day eating crabcakes. cannot grill them, and it is a religion for i will readily share -- i will gladly share this.

tom: are we off on monday? let's go to oil. vonnie: last two weeks, we have seen oil market volatility on par with 1990 when iraq invaded kuwait. the persian gulf war. peter pulikkan joins us now. it is pretty amazing that it is back on par with 1998 is it a short-term repricing, one-time? go throughhe markets restructuring, this kind of volatility will unfortunately be the new normal. we saw oil prices go down to 6.5 year lows to jump all the way back up, 25% in the span of three days. it is the kind of move you see in 1990 when in iraq invaded kuwait. it is the volatility you kind -- -- we relatively you see will expect this volatility going forward. vonnie: do you mean six months, a year? that was a war. peter: when you think about

restructuring in the oil market, people tend to like to think in weeks and months, but the reality is these kinds of macro shifts take longer than that. they take years. we are talking about 2017 until we see some real stabilization and real stability in the oil market. brendan: what i am wondering is we have been talking about swing butucers and rig count, this is psychology of the market, ages we do not know what the market in spirit we will see volatility until we see the new dynamic. sri-kumar: i think so. when iranne more -- join the production and the circuit, and if the iran deal goes through congress, you will have iranian oil as well. that is also causing volatility in anticipation of that. so there are a lot of global factors at work, and the u.s. factor at work also.

tom: you had in your research is counting production differently than they used to do. we are in this massive resistance line on oil. do we even know what the numbers are? peter: we do not have a handle on it. the eia is responsible for america. previously what they have done is they used data from state agencies as well as tax information to figure out where oil production has been. now they are incorporating serving data from u.s. in p's. the hope is that the leg time is shortened and accuracy is improved. tom: do you buy it? oil production in a massive countries like the u.s. is guesswork at best, but they are doing a good job. tom: peter pulikkan from bloomberg intelligence with us

this morning on oil. he reaffirms lower oil prices. hour, up in our next sri-kumar in this hour. next hour, the former chairman of the council of economic , alan krueger. stay with us. worldwide, this is "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." there are futures, -22. we need some jobs day math. can we do that, brendan, on labor day? brendan: i am already working

through that. the answer is 42. [tom last] -- [tom laughs] sri-kumar is going to explain this in a bit. first let's go to the nobel laureate. paul krugman with a smart article, and truly his wheelhouse today of international economics. what is important on capital in trade is whether or not your economy offers good investment opportunities under an umbrella of legal and political stability. whether you control and international currency is a trivial concern." this goes to the heart of the matter. it is just about rule of law and having healthy economy, isn't it? sri-kumar: yes. the question is, what is an orderly economy at this time when you are talking about the labor market and where we are headed? if you have 218,000 jobs getting

created and you have a further drop in the labor force if thepation rate, and wage increase is 2% over the month,ar, .2% over the it is not a great deal of success. finally, talking about the rule of law and what impact it is going to have on the market, you do not yet have all the global developments done before the september 17 -- tom: and that it is what we have seen over the last 24 hours, the immediacy of the jobs report being heightened. sri-kumar: i would say in particular on september 8, morning in beijing, september 7, late evening in new york and washington, you will get the china exports for the month of august. the july figure, which came out on august 10, prompted the to be a violation -- prompted the devaluation in china. so you will have something on

the chinese working day september 8. before we leave for labor day weekend ourselves here, we will know what that is and how our markets will open on tuesday morning. i think this time, even more important than to the jobs report coming out. tom: sri-kumar is with us as we look at the jobs report against the backdrop of economics. our twitter question -- is this the most important jobs report ever? we will do that and eight: 30 with bill gross and jim glassman. alan krueger in the next hour. stay with us. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20.

it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. tom: it is jobs day, but we are focused on markets, and over 30 hours have moved rapidly. 2.12, in byudden

four solid basis points. futures deteriorating negative. right now, top headlines with vonnie quinn. vonnie: investors are anxious about this more in jobs report, but it is less of a make or break moment for the fed. the economy added 217,000 jobs last month. .1 of aess rate fell percentage point. the survey was taken before the recent turmoil in financial markets, so it may not have much of an impact on whether the fed raised in two weeks. a standoff between hundreds of migrants and hungarian authorities is now in its second day. the refugees refused to leave the train that stalled outside budapest. hungary has five-plus camps. most of them say they are bound for germany. kentucky county clerk kim davis

is in jail after being cited for contempt of court after not issuing marriage licenses to same-sex couples. five of six deputies say they will issue the licenses. the one who will not is davis' son. whether hes not sure will run for president. joseph biden: the most relevant factor in my decision is whether or not my family and i have the emotional energy to run. some might think that is not appropriate. son died earlier this year. donald trump has taken the pledge, promising not to run as a third-party candidate if he does not win the republican nomination. and tim tebow makes the case for a spot on the nfl roster. tom: are you kidding me?

two touchdownew passes. he has been out of football for two years per why not? go for it, that is what i say. tom: i am speechless. a fundamental was part of losing to the jets. that is his case right now. tom: how about those phillies? ford string quarterback philadelphia. it is a paycheck, right? let's get back on track. not on jobs day, but on really interesting international events. in0 finance ministers meet and cara, turkey. -- in ankara, turkey. was --ance minister canceled -- the brazilian finance minister canceled his trip to turkey. ankara.lcote is in

turkey aboutsay in brazil this morning? this has become immediate in the last 12 hours. understand that joachim leavy is on his way here around midnight. be a significant contingent of reporters looking for him when he get here -- when he gets here. but the conversation here is china, china, china, and maybe a little bit of the united states. i have been here since the beginning and have yet to hear one g 20 participant mention the word brazil. tom: do they link the action they would like to see to their own nations, or do they link it to the three or four most powerful central bankers in the world? it is the latter of those two. they are very concerned about

what china is going to do. they are watching chinese currency, the slowdown. today we heard from the deputy governor of the central bank of china saying the fundamentals are just fine, the currency is more or less stable. that will maybe give some of them pause, but they also want to your from the fed. they are very concerned about the prospect of rates in the united states going up. they will probably not be cheering for a positive jobs report because they do not want g20 rate hike, at least the policy makers do not want to see that too soon because they are concerned about their own currencies and their own economies. brendan: one thing we have heard from policymakers in the u.s. is a request that the people's bank of china be more transparent, that it communicate instead of just moving things. what are they asking of china and the g20 right now? ryan: that is interesting. when you ask people what they are telling the chinese or what they are asking the chinese to do, they are deferential.

what they are really looking for is a little bit of clarity on, will there be any more devaluation of the chinese currency, and what to make of the slowdown that we have seen thus far. i think that is one of the reasons why the deputy governor, who has been jetting around and not talking and to anybody, stops to talk to us today -- they want a vantage point on what is going on in china because the whole commodities story, the emerging markets story that once was the engine for global growth is based on china, and it is really rattled by china right now. vonnie: away from the economic environment, how much of the talk is on the refugee crisis and the mushrooming camps in hungary? ryan: this is a gathering of central bankers. they tend to keep it pretty straightforward on monetary

policy, economics, but there are also finance ministers in the room, and they are politicians. so you know at least in the corridor, a lot of them are talking about migration. we had the finance ministry of australia on the air earlier in the day. he is an interesting guy, he is the son of the refuge -- of a refugee from palestine. he talked about how the issue needs to be addressed, but he says you should take the australian approach, which is really tough, do not let them onto your shores. the turkish president yesterday just blast of the european union, saying the eu needs to get on top of this, and blaming them for every single death in the middle east. it will be an issue, but by its very nature it will be one in the corridors. tom: thank you so much. as we looks with us at the mixture of international systems -- not ecb, not fed, not boj -- you look at the china central bank.

shriek out i do, and i would not fault them for what their -- sri-kumar: i do, and i would not fault them for what they are going to do. you see it in exports, in electricity consumption, sales and so on. when that happens, that was the reason why they made the small devaluation of the renminbi. that was mimicked widely by developing countries since august 11. so i think you have a second round effect taking place on china. tom: is the second round effect a currency war that everybody denies, including brazil? three kumar, -- sri-kumar: it is spreading worldwide. the chinese development is a completely new round, but it is -- brendan: the point i was just talking about with ryan chilcote -- does the pboc need to communicate better?

sri-kumar: the pboc probably needs to communicate better, but it is hard to communicate. what are you going to say? we will not devalue unless we are pushed by other countries? fourbrendan, what does a real do? brendan: at that point we are no longer talking about currency war and trade, we are talking about a confidence loss in brazil. trico i agree with brendan. goes to four, it will probably exceed the lows it -- the in the fall southern hemisphere, in the spring of 2002. if you go beyond that and look at the other countries -- the vietnam dong and the korean won, the japanese yen -- what mr. druggie did yesterday is suggest

aghi didt mr. dr yesterday, that is a currency war. tom: is jenny yellen in a currency war? sri-kumar: she is not. tom: we could go for six hours. we should do a nonstop show. we are stopping all commercials to go to 12 noon with sri-kumar. brendan: today is friday, which means if you do not already know, sales are starting of "star wars" gear. that is happening right now, right now! we are going to talk about that in our single best chart next. tom: the world is imploding and we are looking at consolo? -- at han solo? ♪

tom: there are two stories this morning, international economics and jobs day. we are going to blend them here. the single best chart with brendan greeley. brendan: new star wars merchandise goes on sale. that means when you are 10 and you had a friend who had an at-at walker and you did not,

that means you had money that you could buy things. vonnie: are you ok, brendan? brendan: i am great. the disney share price, not much movement. not much movement even when they acquire marvel. leonard ofth devin "business week." disney bought marvel, but it was not completely clear how they were going to use this whole universe. then when they realized you're not just buying a movie, not just the rights to a character, you are buying a galaxy. when they finally bought lucasfilm, they bought a brand-new galaxy. vonnie: harry potter was the phenomenon that may people realize that we are looking at fantastical environments. brendan: disney could do amazing things with harry potter. tom: may i point out that the cinderella redux that they just did was fabulous.

tacky.smart, it was not this movie is going to be the same way. they are not screwing this up. they are executing it beautifully. brendan: i have one caveat. i think that it will be smart and it will be not tacky. i do not think that star wars will be european. vonnie: they learned things from the previous ones. jar jar binks did not go down so well. there are a whole array of products going on sale today, including furbacca. it is four times the price of a regular furbie. guess how much it costs. tom: $80. i have no idea what that is. that is looking like chewbacca? the rollout -- brendan: the rollout of this movie has been masterful.

they have had a year-long plan because they know that people like me are waiting for it. they have given out a little information at a time. tom: the old characters are in the movie, right? brendan: they realized they have to take the old characters and introduce them to a whole new generation. they know exactly what they are doing. vonnie: we are going to have a "surveillance" screening. brendan: i like that idea. vonnie: let's look at top photos. number three, we are to london and queen elizabeth. cleanerear-old former is your portrait artist. he had 10 minutes to show her his sketches. the portrait shows are celebrating becoming the longest reigning monarch. he set for two hours watching the queen from a distance and could only see her for about 10 minutes of that time for what is

amazing is the critics are saying this photograph is one of the most realistic likenesses of the queen, and this is the first paid portrait he ever painted. to try to payg his way through school, and he made this portrait. number two top photo -- a british artist installed something called the rising tide, a sculpture at the river thames. they symbolize the importance of the river thames to london, and climate change effects. the horse pothead is replaced with an oil well pump. tom: this is down the river from our new world headquarters in london. i say world headquarters because the city is so important investment and finance. i walked down the construction site to the edge of the river. now it is a bunch of fancy wall street types jogging by. brendan: we are at the point with climate change where it is

no longer an economic argument. it has become a cultural argument because all these democracies have to get together and come to some agreement. you saw what barack obama was doing in alaska. he is trying to change the cultural conversation, and this is part of that. tom: i will go with it. a lot of pushback, to say the least. vonnie: let's go on to our top for the rest. pope francis ran an errand in rome yesterday, creating a spectacle. he left the vatican to go to an optician to try on new glasses. -- an enormous crowd gathered while he was there. it is hilarious. the optician offered to go to the mannequin -- to the vatican, and he said, no, no. tom: continent to continent is the way to do it. security people must be loving it. that is very cool.

maybe he will stop by lenscrafters here in new york. we have a twitter question. we have had a fabulous response. we need your serious response to our important question. is this the most important jobs report ever? sri-kumar is with us. alan krueger and jim glassman and bill gross, to make you smarter on the american labor economy. from new york city this friday, "bloomberg surveillance." ♪

tom: good morning, everyone. it happened yesterday. the dollar has been a nonstory, a weak dollar for 4, 5, 6 days. 96.30 on the blended indicator, the dx why index. -- the dxy index. let's get to headlines of vonnie quinn. irane: the passage of the nuclear deal is assured. the obama administration is stepping up efforts to reassure persian gulf allies. the president is meeting with saudi king salman. the king took power eight months ago.

to the u.s. a visit in may because of tensions with the iran talks. bridgewater associates -- bloomberg news reports it fell more than 4% in august. fund tries the dalia to protect against market turmoil. slump -- arket hall expects the u.s. oil output will fall 6%. brendan: went investors in emerging markets panicked in august, the india equity index dropped about 5%. comparatively, not all that much. mike mckee and i talked to raghuram rajan. we asked him is india immune to

the slowdown in china. : nobody isjan immune. we import amount of finished products, so if the chinese economy grows more slowly than anticipated, it is less of an effect for us. we benefit hugely from lower commodity prices, which would be another effect on slower chinese growth. brendan: sri-kumar is with us. and you raghuram rajan, know that country very well. is india moving according to its own dynamics right now? is-kumar: the benefit it has that largely uncorrelated with the rest of the world, exports are not a big part of gdp. as raghuram rajan said -- a great interview, by the way -- they do not depend on exports to china either. they just suffer from the overall emerging-market fallout, but it is not china related. the other development that is

helping is that unlike china, with the median age of 36, india has a meeting aged -- a median age of 26. it is a much younger country. it will stay with a median age of 26, whereas china's median age is going to rise. we are describing a population bulge as an advantage. mightpossible that it have missed the window of growth the way china and korea did? sri-kumar: they have not missed the window. the appearance to socialism has been a big negative. it was similar to what dilma rousseff has done. the intervention in private businesses, telling them what to do -- what does a government bureaucrat know in terms of advising? those with a negative

factors that they went through. they did not miss the bus. they are late to the party, though, but they can continue. tom: let's pick up from raghuram rajan's classic book, "fault lines." you have been cautious on the economic experiment. where is the fault line for jenny yellen within the american -- for janet yellen within the american economy? sri-kumar: in 2005 he talked about what is going to happen. there it was the case of excessive debt, particularly on the market side. tom: we have a part of the american economy booming, and the rest of it, as you have correctly and consistently stated, it is not happening for a large part of america, right? sri-kumar: that is right. the second fault line is that this is being viewed to an

extraordinary growth in monetary aggregates like we have never seen before in u.s. history, and you have had a disconnect, tom, not only between the rich and the poor, but a disconnect between monetary expansion and economic growth. now we are going to have a new problem, and that is, i think the central bank is going to lose control even over the stock market, which it used to -- tom: mr. bill dudley does not agree with you. what does he get wrong? he ismar: the fact that continuing with zero interest rates. that is when the disconnect takes place. tom: sri-kumar, thank you so much. alan krueger in the next hour, then on to bill gross and jim glassman. 3.80,the brazilian real, at one point a little bit of a managed improvement. but it will be fascinating to see where brazilian real opens this morning after the

cancellation and reapplication of a trip by their finance minister to ankara, turkey. we are in the middle of jobs day. common krueger is next. stay with us. "bloomberg surveillance ♪." surveillance." ♪

announcer: this is "bloomberg surveillance." jobs report this

morning, 13 days before a critical fed meeting. will a data dependent janet markets move with today's jobs report. brazil faces immediate crisis as the finance minister cancels, then on cancels his trip to the turkey g20 meeting. in this hour, alan krueger of princeton on the permanent unemployment of millions of americans. that morning, everyone. this is "bloomberg surveillance ," live from our world headquarters in new york. it is friday, september 20 4 -- how about the fourth? i'm tom keene. with me, brendan greeley and vonnie quinn. brendan: things are changing in brazil by the day, particularly sri-kumaroverning -- in the last hour said the more important number than jobs day is the chinese export numbers we will see on september 8. tom: and tough china data

overnight. here is vonnie quinn. vonnie: the jobs report will be studied more closely than usual because the fed pozner meeting is less and than two weeks away. it will be pivotal -- because the fed's next meeting is less than two weeks away. economists expect the jobless rate to fall .1 of a percentage point, to 5.2%. the fed has not raised interest rates in nine years. you as soon it for as the jobs report is released. the world's largest economies see the u.s. rate increase as a risk to global markets. finance ministers are meeting in turkey. focuses on as potential disruption that a fed increase could trigger.

the nikkei market pmi gauge fell below 50, which means business activity is shrinking in hong kong. hong kong companies have been cutting jobs at the fastest rate since 2003. donald trump says he is on board with the republican party, deciding not to run as a third-party candidate if he does not win the nomination. he explain why yesterday in new york. donald trump: the best way for the republicans to win is if i win the nomination and go directly against whoever they happen to put up. for that reason, i have signed the pledge. [applause] and he says there are no circumstances under which he would tear up the pledge. joe biden is still unsure whether he will run for president. he says it will depend on whether his family has the emotional energy to do it so soon after the death of his son.

third-seeded andy murray needed a rally to reach the third round of the u.s. open. he came back to beat adrian mannarino inside sets. those are the top headlines. you have to take a trip out to flushing meadows, tom. it is two weeks, right? they are just getting going. vonnie: some of the early matches -- are 12 people in the audience because they are just getting going. then it gets to be a big deal, like a week from now. let me do a data check. overnight was fascinating. we could do three screens. futures, -20. a little bit worse earlier, but we have seen a lot of movement in international markets. this morning is jobs day. we are thrilled to bring you

alan krueger, the former chairman of the president's council of economic advisers. first, michael mckee the backdrop to this report. after seeing the mario draghi press conference yesterday, you cannot tell me that china and brazil will not affect janet yellen's decision-making off today's report. only to the extent that it would impact the u.s. economy. markets hate uncertainty, and there are two big uncertainties in the world -- how much will china slow, and what will happen when the fed raises interest rates? until that happens, you will see volatility continue. .628 yield, that is a tea leaf out there. michael: that is today's t leaf. the markets go up in the markets go down and the fed knows that, and they will not respond to each twist and turn in the market. today, raghuram rajan in the g20 meeting, if you get back to a more normal reaction function,

ordinary way of making monetary policy, that could calm volatility because markets know what to expect. vonnie: the other problem is that august is a terrible month on which to base any kind of reaction. michael: that is an interesting point. augusts, thet 27 number has come in lower. row,ast four years in a the number comes in lower than the consensus forecast, then it gets revised up. --: there are whispers here i do not want to make a direct linkage to 1998. stan fischer has a little bit of experience with that as well. overnight, brazil, overnight, the hong kong pmi, these are whispers of global instability. you're telling me washington can ignore that? alan: washington only pays attention to the if it -- to the respect that it affects our

economy. the dual mandate is that stable prices and maximum economic activity, to the rest of the world their ability to achieve that mandate, certainly pays attention to that. -- is it justide trade? channel,de is a big also the financial markets. when you do chain multiplication, we do not have that much exposure to china or to brazil. we are much more exposed to what goes on in brazil or canada. we talk about a fed move, there are two reasons to do it. one is because it is time, the other argument is that we do not know what is going to happen and what will happen in the real economy. which for you is more compelling? alan: i think monetary policy affects lang's. it is harder to predict. i think we are at a point now where it is a hard decision. it wasn't -- if it were an easy

decision, the fed would not wait so long. billie jean king had a famous line that feeling pressure is a privilege. in a way, it is a privilege to be in this position. our economy is shaking off problems from the great recession, and we have this difficulty normalizing. tom: as we go to the jobs report, what will you look for a: 30? look at people want to average hourly earnings. do they pick up at 0.2% forever? one of the argan is that has been made -- with the number -- one of the arguments that has been made -- with the number of people declining the pressure and the number of people in the shadow labor force, the pressure on wages may not be as great as we think. alan: that is certainly a view out there. that is not my view. my view is that the labor force

will decline largely because of demographics. because of the aging of the baby boom. also, many of the long-term unemployed who have exited the workforce have done other things -- taking care of the house, retiring early. you do not see much of a return to the labor force from people who have left it because of cyclical reasons. i do not see much participation, and i expect to see wages grow more strongly. real wages have been doing relatively well. i would like to see that strength, and that will pick up wage growth as well. : why aren't we seeing people get more of a raise since unemployment is going down? alan: partly because we had some positive shocks to inflation, negative shocks to inflation. because price inflation has been low, it is easy for employers to maintain nominal wage increases.

then there are other factors. productivity growth has been low. there is a historical trend of workers having read his -- of workers having weaker bargaining power in the u.s. michael: you talked about how august numbers traditionally come in lower. the median is 217,000, but there are a lot of numbers, a lot of estimates in the 20's. is there a reason why that is skewed higher this time around? particular reason, other than the trend has been in that direction. question.nteresting a lot of people say it is asymmetric and you will get a bigger reaction if the number is high because people will price in the fed, then if the number is low. what does low mean? anything from 200,000 to 150,000. brendan: at what time does the white house schedule a hasty press conference? ofn: when i was there in may 2013, we had a very weak jobs

report. the previous couple of months were revised down, and still we remained cool in the numbers were eventually revised up. teachs elizabeth going to phillips curve, or will that be thrown out of the curricula? alan: i think the phillips curve is alive and well, it is just a little bit flatter than we thought. tom: very good. we look at the american labor economy. vonnie quinn and i are humbled by your responses. is this the most important jobs report ever? alan krueger is with us. "bloomberg surveillance." ♪

tom: good morning, everyone. .he euro was at 1.12 mario draghi fix that. the german two-year, lower morning, an this interesting european calculus. here is the morning must-read with brendan greeley. brendan: we have spent all year protecting central-bank moves. this is about central-bank attitudes.

brendan: dr. alan krueger is with us from princeton. mark gilbert is looking at the 2% target that many central banks have adopted for inflation and saying it is not working, we are not getting there, and it is not a problem we are getting there. do we need to change the 2% target? alan: once you have set the target, you should change it reluctantly. it was a mistake to set a specific target. i think a range would have made a lot more sense, a range of 1% to 3%. hitting a target is like hitting a hole in one on a golf course. the central banks have tied their hands in that sense. the big problem we face is deflation, so anything which is safely away from deflation i would say is a sensible target. vonnie: what would be the point of a range of 1% to 3%?

that would be saying that as long as there is any flechette -- any inflation at all, we can do what we want. alan: it is hard to precisely hit your target, and the numbers are noisy. then you get shocks like the oil price shock like we just had. economic policy, we have learned that if you try to refine too much, we can overreact and make the government policy reaction to bank sensitive to noisy data. brendan: milton friedman said the second you get too high, you have to adjust the hot in the shower back down. with this idea that employers cannot change real wages -- or rather they cannot change nominal wages, they have to change real wages -- do we need a little bit inflation to allow them that room? alan: i think inflation allows them to grease the wheels of the labor market.

take social security benefits. if you have prices decline, which we may have because of the drop in oil prices, social security benefits are held constant. they are not reduced. then you wait at the constant level until inflation gets back to where it was. then you raise benefits. that can be very confusing for the retired. mario draghi talking about the yesterday in his press conference about inflation. stay with us. "bloomberg surveillance." ♪

the the miskick of ricks -- mix of risk off. we begin this job stay with a stronger japanese yen as we get some nervousness in international markets. let's get to our job stay top headlines with vonnie quinn. vonnie: u.s. prosecutors are spelling b against the british trader they blame against the flash crash.

u.s. will try the to have him extradited from london. invest you to say he made many of the trades that led to the years's flash crash five ago. amazon is expanding cloud computing services, buying a video processing company, elemental technologies. 500deal is worth about million dollars. elemental produces software for web-based mobile video applications. a long holiday weekend traditionally includes barbecuing, but surveys show americans are not as thrilled as the grill as they used to be. barbecues peaked at 2007. marketers say it is because of diet trends, high beef prices, and demographic shifts. those are top headlines. brendan: i'm sorry. room, they arel saying in my ear, the real barbecue is in memphis. we will all convene next week for a special "surveillance."

moving on -- jackson hole this year was about the fed's decision in september. like everything is about the fed's decision in september. i would love to get to october so we could talk about something else. the nominal subject of the conference was inflation. dr. alan krueger was in the presentations. we just talked about that 2% target. what did you learn at jackson hole about inflation? terrifichink it was a meeting. the academic presentations were excellent this year. study, presented a presenting new work. what we call exchange rate pass-through, when you have big movements in the exchange rate, how much gets past through toward crisis? tend to invoice in dollars, as we do in the u.s., there is very little exchange rate pass-through. brendan: this is directly tied to news we are watching every

day, which is when we look at currency drops, trade wars, they do not create the trade, the value that we seem to think they do. alan: i think it expects our exporters -- i think it affects our exporters, but we will not be deporting inflation. she also found most of the impact happens right away. given the big movements we have seen in the dollar, we probably absorbed that into our inflation data. tom: in the world away from the academic subjects in whole, there was a headline by mark carney that said "there is no inflation i cannot act." barclays and others moved the call from the bank of england well out into 2016. why is the same thing not happening here? alan: we do have core prices growing. month annualized is better, granted. alan: there is the belief that some of the shocks we have seen are transitory, and it is related to the point i made

before -- so much invoicing takes place in dollars, we are less accessible. tom: i agree with you. this is the single distinction, isn't it, professor? alan: we have many distinctions in our economy, and it is because of those distinctions that the dollar has such a special place in the world of currency. brendan: we have been asking on china going to export deflation to us? the answer is no, because international trade is still invoiced in dollars. alan: that is right, and also we are a mainly domestic economy. from china, it is probably about 2% of our gdp. vonnie: bring those inclusions over to europe, alan. alan: they are more likely to import some inflation from us, so i think a weaker euro will help to boost their prices. but they are facing so many

headwinds. tom: president obama, president trump, president clinton, whoever is down the road, they will sit with a guy like you on a couch in the oval office and want to know what to do to put americans to work. is this jobs report today that big of a deal? or are we overweighting it? weights theody over jobs report. it is not unique to do. it comesher hand, when to jobs policy, you want to take a longer run perspective. 5%, so we moved to 10% to and no one is taking a victory lap. why? alan: because we lost so many jobs during the great recession, and so many families are still hurting from the millions of jobs lost in 2008 and 2009. brendan: i would argue that you can have a job and not be thriving. saysis the number that

people are thriving or not? alan: that is absolutely right. the first one, get a job, then a job that is a living wage. of median wages per that is affecting people in the middle of the distribution of income. vonnie: is the quality of jobs we are creating on the up trend or the downtrend? brendan: we continue to create jobs on the top end and the bottom end. tom: are those the middle jobs, the union jobs, blue-collar, high paid, high skilled manufacturing jobs that are forever going? mexican peso, 2017? next year, are they all going to be in monterey? but: that is a part of it, that is not all a bit. in the service sector, we have seen divergence. in manufacturing, we are making a comeback. we lost 6 million or 7 million manufacturing jobs, and now they are coming back. tom: i want to give you major credit.

you have been talking about this since your public service. coming up, he replaced alan krueger. he is not as good looking. furman. stay with us on "bloomberg surveillance." ♪

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and it is an interesting twisted jobs day morning. risks are often the equity market. a lot going on in emerging markets. in backdrop as we go to 8:30 a.m. this morning.

today's jobs report is in an hour and wall street one thef it had impact on policy. they meet less than two weeks from now. they will have the data. an average forecast of economists had last month job creation at 217,000. the report is due out in the labor department at 8:30 a.m. eastern. we will have it for you right here on bloomberg television. a standoff between hundreds of migrants and hungarian authorities is now in the second tday. officials insist they go to a camp and register. hungary has five such camps. they are fleeing war-torn syria. david cameron says his country will take thousands more of the refugees.

>> we will continue with our approach of taking the from refugee camps. this provides them with a more direct save route to the united kingdom rather than risking the hazardous journey which has tragically cost so many of their lives. vonnie: micro crisis will be the subject of three meetings today among political leaders across europe. in the race for the white house, donald trump has made a decision while joe biden is on the fence. the vice president is still not sure whether he will run. his family is still mourning the death of his son earlier this year. he willrump announces support the republican nominee and will not sustain a third-party campaign. he signed a pledge found loyalty to help you party. just to the republican party. hillary clinton will run a tight rope in puerto rico. inis starting to $72 billion

debt that the government says cannot be repaid. that may alienate creditors and hedge funds. many of them are sentenced to forgery. tim tebow makes his case for an nfl comeback. he threw two touchdown passes along with an interception as philadelphia lost to the jets last night in new york. siegel is fine to be the third string quarterback and he has been out of football for two years. tom: that is a long time. brendan: the argument is that he always finds a way to win. if you do not win, that makes it hard. tom: very good. let us go to the bloomberg terminal. we have alan krueger of princeton. he worked for president obama for a modest amount of time. this is labor participation. we all know this for decades of increased joy in employment america.

we go stable for a good 20-30 years. there is this recent eight-10 year rollover. this is 5 million jobs that evaporated. what kind of jobs evaporated? 7 is a mixture. -- alan: it is mixture. total number of jobs have been grown, just not as fast as the population is. it where we see a slowdown and labor force participation and who declined, we can see a lot of it was driven by trends among women. that they run out that he showed was interviewed that was 500 there was a flacco and a gradual decline. -- there was a flacco any gradual decline. tom: how do you respond to republican presidential candidate to say that guys like isn are wrong and that it too much regulation?

how you respond to critics? alan: look around the world. labor force is higher around the world with much lesser regulation. the only recovery we ever have lower labor force participation rate at the end of the recovery was from 2001-2007 that wa/. this is being driven by demographic trends. we have had the strongest job growth that we have had some late 1990's to the affordable care act to. tom: you answer that question before. [laughter] alan krueger working with us and he worked with president obama. let us do a data check here is a troubled market. it is now south a little bit here. the 10 year yield is down two basis points.

let us squeeze it in today. lower.ian dollar is the brazilian realities front and center. it will be amazing to see how it opens. brendan: this is "bloomberg surveillance." tom keenegreeley with and vonnie quinn. buy a not wait to an item.v and i today?t is the number phil: it is medium income growth. this year, it has been a little bit of a disappointment putting along. that is the number they are

looking at these days. the top my number is super important but i have heard from folks to be wary of that august .cros surprised there is some concern that there might be wonkiness to the number, but medium incomes are what they are paying attention to. brendan: you alan krueger with us. do we have any idea on which number is going to make him the happiest? what will make him get up and dance this morning? phil: wage growth would make him throw if it is significant. i do not want to speak for him but he has a victory today because tom keene said he was better looking than jason furman. furman might be tracking tom keene down by the labor day weekend. brendan: you are lucky we did

"ot 30 "star wars q question. vonnie: phil mattingly, thank you so much. he will be covering the jobs report. stay tuned at 8:30 a.m. eastern. i want to return to you. long-term employment is down 5% once, but where does th's fall out? are we there? unemployment rate will drift down, assuming we avoid i see a getting down to the low 4%. vonnie: the long-term unemployed? alan: it will still be high. it is still historically high for the u.s. and if we look the movement in and out of the labor force, they tend to be leaving the labor force still at higher rates. that will continue to lead the unemployment rate to the client.

brendan: what are the stars that fix?n never other pursuits retire early. concern ourajor young people who are having so much difficulty getting a first job here. tom: let us go back to lbj and we have the right and the left , a primalnd sanders scream of people who do not feel they are participating in the american dream. can we jumpstart an investment policy? what is the history of the investment tax credit for targeted policy directly linked to job formation? does it work? alan: i think it has worked. i supported and other round of the new jobs tax credit in 2010, 2011. tom: why can't we do that?

alan: the lowest hanging fruit is to invest more infrastructure. we have so many more cars now given car sales and our roads are in horrible shape. there is no better time than right now to invest in infrastructure and congress not pass a highway bill. tom: what about tax credits now -- the lbj. theory? alan: one and one employment rate was -- when rate was 9%, i would. i would focus on interstate -- inner-city areas, the hardest areas that are still struggling. tom: you are getting ready for the data at 8:30 a.m. here. the markets know doubt moving . thank you for your response to our twitter question. onere still accepting those by one, even by carrier pigeon. is this the most important jobs

report ever? stay with us on jobs day. "bloomberg surveillance." ♪

tom: good morning.

time now for a morning must-read. here is vonnie quinn. vonnie: a bloomberg view writer has a pertinent essay out this morning dealing with immigration. this is in the context of that awful story going on right now in hungary. needs and should cherish, everyone taking a leaky boat or a rusty minibus to berlin, lisbon, or metric. these are almost exclusively young people, sometimes unaccompanied children, and integrated will pay for and care for europe's retirees. the point of the piece is that by 2015, as 28% of the population will reach retirement age in the dependency ratio of over 65 economically active 2060,sed more than 50% by is immigration every countries problem? alan: immigration can be an

engine of growth. a major reason for the success of the u.s. is our stance towards immigrants. when we close off immigration, we did much worse. i regret that congress was not able to pass immigration reform it that would have strengthened the u.s. economy in a number of ways. dick tracy increases modest --rly easy to we embracing immigrants is not easy. tom: you are seeing a live look at the train station in budapest. i clearly remember the 1986 and the yearstion after that of those refugees coming to the united states. in europe do what we did 1956-1960? alan: i do not see why not here .

the media card for europe given their history. look at all the companies that immigrants have started in the u.s. and the contributions they have made to medicine and science. it has made is a much stronger economy. brendan: the qqqs in the article was that we have a discussion here on whether to editorial say that these people are traveling to get to europe's whether they are migrant refugees. refugees flee a war and in my group is looking for better economic conditions. migrants, toem integrate them, they would have to do what europe is not prepared to do -- give them a visa and find an apartment. alan: i think that's absolutely right. the world is facing an enormous migrant crisis, anything since we have seen since world war ii. countries like japan are never able to incorporate the immigrants and that is why they struggle so much.

vonnie: what happens to countries who do not embrace migrants? alan: you could be in a severe downward spiral. andining population entitlement problems. tom: alan krueger and we will be joined by carl of open and bloomberg intelligence. we are looking at the jobs report and the ramifications for janet yellen. stay with us on "bloomberg surveillance." ♪

tom: like a rock, it has not moved to tender -- since december 15 2008. quality seat a from alan krueger. it was like functions in the application. it is called the gentleman seat. posted to top headlines. here is vonnie quinn. vonnie: u.s. interest rates are at risk. global finance ministers meeting in turkey.

on thee focusing potential disruption that a u.s. rate increase could trigger. the iranthe passage of nuclear deal is inserted, the obama administration is stepping up efforts to reassure persian gulf allies. they are meeting the saudi king and they want to be sure that the u.s. will make iran leave up to the agreement. meetings were postponed during tensions of talks with iran. is not arice slump review of 1990 84 2008. andy cole told investors that the world is not awash in oil expects output to fall 6%. those are top headlines. tom: ed morse the other day clearly disagreed with of the the theme there.

continental philosophy a lot as well. right now, what a unique jobs report we will see. we will bring more data with more brazil and more china. no one cares. they only care on how janet yellen will interpret the news. and alan krueger from princeton both know that this has become a silly debate here. here we are at 217,000. what is the number that matters this morning? isl: the consensus forecast 218,000. the consensus always tends to overshoot by 30,000. that alone points to 190,000 on the payroll number. august tends to be weaker than the six-month chart. somethinge risk is potentially below 200,000.

the fed is looking the on this at this point. if this was under control, september would be the icing on the cake, but they are looking at financial conditions. tom: they will go beneath data to be waged dynamics. what should we look for in which dynamics? carl: they are inflation pressures and it is a lagging indicator. we do not want to set policy on a lagging indicator. they are looking at these components ofg the report to tell us what inflation will do further down the line and that means outright job creation number of personal income. he mentioned that the seat of economy is consumption for the second half of this year and it is all dependent on domestic spending propelling the economy through the second half of the year. brendan: that was another thing earlier this week.

in the control room, somebody said we should put carl television. vonnie: i was going to ask -- how much do they dive into these numbers and what point can someone who is ideologically pocket change their mind? they are giving a speech less than an hour hitting a case for further delay. is there anything to change his mind? alan: just as one job report after many. it would take some enormous surprise in some cases for people to change their mind. you raise an important point -- it is a committee. it is not necessarily of one mind. they compromise and they have funny dynamic sometimes. earlier, there was a case for the mind got changed . is he the only one? alan: if you look at the

comments, they have moved over times. carl: he is by far the most hawkish member on the committee this year. if it is stronger than expected, folks will say that is great. the economy was fine before all the fireworks transpired. if it is weaker and history suggest that will be the case, people will say the economy was already struggling. vonnie: is there update between now and september? carl: this is what the fed will focus on. they need to see stability in the financial market. you have opportunities for that would be preliminary university of michigan sentiment survey next week. you have retail sales the following week. that is the end of the first two regional purchasing manager service as well. nowdan: i'm looking right

and dilma rousseff is speaking to a local radio station in brazil and she is saying the kinds of things when you are not going to get a budget like it is natural to have debates democracy. is goinghe pace that to be worried about developments in the financial markets. is that domestic or international? focused onare international developments, but we have seen in equity markets and credit spreads that there is some degree of contagion back into the domestic economy. they are watching both. vonnie: karl, thank you so much. it is time to answer our twitter question of the day. it the most important jobs report ever? no, the fed has fever and the only medicine is stability and much more cowbell. much more cowbell.

tom: how the economist advised officials to boost nominal gdp? alan: nominal gdp depends on inflation. neede longer run, we too to invest more in education. tom: we need something new to get us up again. alan: consumer confidence will help. people wonder why households are not spending the more the benefit from lower energy prices. i think that will come over the next several months. cowbell.for is ie: the next answer have no time for this nonsense. brendan: there is a waiting for godot quality as we have been waiting for six months. for policyhallenge

makers is the product and best hippocratic oath. vonnie: potential of the fed to blow up the dollar bubble. is an interesting -- i have no prediction of what will happen today other than that we will cover it and we will see what comes out. it may be a yawn. how about an agenda? we will go to the jobs report and i say we need to listen to more people. i think the best way is to listen to true experts about what is going on within the american economy. i remember many moments since 2007 were too many had been wrong in their certitude. that is my lecture on the jobs report. vonnie: i will keep my eye out speaking.cker

it will be interesting to see what yes to say about the consumer economy. brendan: i think we will all be watching brazil. yal is at 2.74. can we are looking at the point where it becomes a consumer collapse. at 8:00 p.m.veted last night and this was a change in what we were seeing in brazil. i look at brazil and i look at the print a 3.80. trip ofer how that turkey will be back to his nation. brendan: we're hearing headlines from dilma rousseff that they are not confident they will be at the budget. vonnie: that is not a long time. brendan: it's not about him. it's about whether she has a governing majority to carry out what he needs to do.

tom: alan krueger, thank you we will. we will continue our coverage in 32 minutes. we continue with bill gross on bloomberg radio. good morning. ♪

♪ erik: good morning, everybody.

it is friday here in new york city and it is job stay in america. you are watching "market makers." i erik schatzker. stephanie ruhle is out today. at 8:30 a.m., we have the august labor report, which economists predict 217,000 jobs. we will cover that with the current and former chairman of the council of economic advisers. alan krueger will be back in jason furman, who holds the job currently. let us get the five things you need to know this morning. we have a panel discussion to start. matt miller is that and carl is here and jack rivkin. what else can we start