i am joe weisenthal. >> as in the bounces back, treasuries fluctuating s jobe tomorrow' report. jobs, big report tomorrow. why is it harder to fill a job. china, things may not be as bad as you think. we will have a round table to discuss the good, bad, and what it means for the market. >> we begin with stocks. interesting day, dow down triple digits, and now we are flat on the day, the s&p and positive territory. up on also picked 10-day average. interesting. it was pretty quiet all

day, but it did not feel like a q3 day. maybe this is the start of a quiet q4. q4.e we will have a quiet >> i was looking at the 10-year yield. way up.ble to claw its moment, our investors so anxious that will will -- we will see a 1.9 print. redheads -- so many fed heads -- volatility is driving this show. 40% odds of a move this year. volatility.k about

looking at glencore, down 30%, now up 17%. it was pretty ugly. is one month.e the orange line is three months. the green line is six months. volatility is not going anywhere. investors are expecting a bearish outlook when it comes to glencore. joe: that insane day when it 30%. already, the stock has recouped a lot. people will be watching glencore as a bellwether. i want to dive into my terminal. i made a messy chart to tell the story of the global economy. there's no hope breaking down what each line is. here are a few of them. the white line is chinese pmi. the green line is south african power consumption. -- there is a common

thing. they are all going down. this is the story of the world economy now. anything related to emerging markets, commodities, china, manufacturing, all going down right now. europe manufacturing still growing, but not the direction we want to see. >> you have a killer auto sales report coming out. is a positive domestic u.s. story, but global manufacturing, commodities, continues to be ugly. theomorrow, we get all-important jobs number, employment data for september. joe: a bloomberg survey of economists says 200-1000 jobs were added last month and that the jobless right will hold steady at 5.1%. >> joining us is the chief international economist at deutsche bank securities. what do you think for tomorrow?

jobs and 5.1, close to the consensus. is, one of the questions what will happen with wages? are we about to see that wage pressure that people have been watching forever? you point to what is going on in the u.k. as an instructive example. that we popular to say will never get inflation, never see wage pressure, but you need to look at the u.k. data to see that wages have gone up nicely. joe: we have that chart here. you can see the purple line of wages, average weekly pay ely.lerating nicely viewe >> something is brewing. the atlanta fed has a number of

indicators, suggesting tightening of the labor market. we will see tomorrow. wages thatook at they track for women, you are seeing a rise in men's wages. . >> the general trend as they are tending up. -- trending up. there is a mystery here white men's are going higher and women's are giving. the labor market is getting tighter, 5.1, u.s. domestic economy looking better. have only the inflation question left. another way of looking at labor market tightness is how long does it take to fill jobs. you point out that it is getting harder to fill >>. .t is ge

>> it is getting more and more difficult. the labor market is quite tight. the fed has the luxury of saying they are not seeing that yet, but an important leading indicator. hit aou talk about how it certain number and we just took off. what is the level in the u.s.? >> the fed has been lowering that number. it wasn't long ago that the fed said when we hit a threshold of six and a half, we will start thinking about hiking rates. it is 5.1 and they are barely thinking about hiking rates. we have a constant downward relation to that question. the clear thing is that once we we will startvel, to see inflation grow from this to up, and that's what rates markets should be worried about.

if there is a nonlinear effect, that could start to take off. long-term interest rates will start to move. that has been an extensive that to have on, but this is very important as to white rates continue to be so high, because we haven't seen that uptrend. >> is there a labor market that indicates the labor market? now 2.5.3, four, nowcloser to 2.5 and above, it is time to get going. , inversephillips curve relationship between unemployment rates and inflation, it is not dead. it does seem that people are confused and have not understood the cycle. what has changed? why have people been so confused? >> the phillips curve is in

hibernation and will come out eventually. the fed action still has that in mind, otherwise why are they talking about raising rates in december. we had rates is -- wages continuing to be so slow, people are slowly coming back and holding wages down. more unskilled labor will come back and that will make sure we don't see wage pressure. there is a huge debate at the fed that there is labor that can come back and hold wages down. > others are saying no, we have to keep wages down because others are not coming back. we will talk about hidden labor slack in the market. joe:. joe:what stocks were the best-performing. just oneause of company. that story when we come back. ♪

alix: i am alix steel. joe: joe: i am joe weisenthal. "what'd you miss?" appeared 80 million purchase of shares in the pipeline and terminal operator. latvia. 80 million purchases of shares in the pipeline and terminal operator. we do want to get to the top headlines. latest to begin with the on a mass shooting in oregon, seven people dead, 20 wounded

after gunmen opened fire at community college. authorities say violence is over, but was not immediately clear if shooter was killed or taken into custody. umpqua community college it itpened at .- joe: hurricane joaquin where does it go next? category four storm. it will turnredict northwest, but some computer models say it could head out into the atlantic. good thing that gasoline inventories are about 12%. amazon flexing e-commerce of muscles, banning sales of apple and -- can no longer list products. the retailer says prime video does not run easily on the devices and want to avoid customer confusion. those are your top stories. chief international

economist at deutsche bank securities. alix: labor slack and u.s. jobs report tomorrow, one of the issues is what we have been talking about. a possible explanation for this, jobless rates versus the unemployment to population ratio. people not in the job force that want to work. is that and a nation for the diversions? of the story,arts and that is one. people basically lost their jobs fed the recession hit, and has concluded that half of those basically were baby boomers retiring and not coming back. the other half was people who went into studying and university and got more education, more likely to come back. the question is that we have not seen a dramatic increase in the

employment to population ratio quite yet. the debate is, will these people come back or not? joe: what is the answer? >> most of them will not come back. if they are coming back, why are they not coming back when the employment rates is 5.1 p we have seen a significant klein. of -- i wouldigns not have expected them to come back already. alix: bloomberg intelligence tracked the cost index versus the employment to population ratio and plotted it on the graph. historically, these indicators track each other. it is not the eci and unemployment rates. if the labor slack is there, it does make a difference in terms of wages. to employment population ratio, lower wages, higher, higher wages are. >> that's true.

that'st important thing supporting we need to hike soon shortage of labor and construction, labor and transportation, various industries with anecdotes of shortages of labor. that is an important part of the story. something moving, something brewing, we did not hear that two years ago. the lingering picture here of something happening on wages is an important part of the world, but it has been a lot slower than we expected. measurethere any better than u3? >> janet yellen a speech where u3 was a good measure of slack in the labor market. people leaving the labor force makes this recovery different, but most members have said this

is still the best measure we have. alix: what ones are keeping you up at night? that when thes fed does hike, will that be volatility reducing or increasing volatility? this is important for rates and vix andfx. a lot of questions i get, we have done this, is that a sign, people say that everything is stable, or is that a sign that they did hike rates so we will now have more volatility. this is important for all asset classes. joe: awesome stuff. alix: thanks to the chief international economist at deutsche bank securities. joe: why does one analyst known as "mad dog" -- ♪

>> before the break, we watched why the analyst called man. -- mad dog would be against the dollar, driving down the nikkei average. >> the analyst predicted in 2011 and he believes that japan's quantitative word only psychologically failed to boost inflation. >> it also talks about the fact that inflation is going to rain, therefore the dollar is not going to be -- >> signs of stability in china's economy, factory data out today suggests that manufacturing is settling at a three-year low. with us to debate the question, gordon chang, author of the coming collapse of china and lee lynn miller. .hank you both for joining us

you think things are not as bad as the china headlines we see almost every day. you think things are actually ok. why do you see things so differently? >> you'll have to think they are good to think they are individually better than what people think right now. back in august people thought china was going to fall off a cliff. of the sector, the stock market antics over the summer, people are worried. there is a slowdown underway but it is not quite crisis time. >> what do you see that everyone else is not see? >> people are up sussing over the manufacturing pmi. the manufacturing sector is weak. that's not the entire economy. we've shown for the past two and a half years at the manufacturing sector is not -- it's one of several sectors and we are seeing strength

elsewhere, services for instance. >> what you say about that? it makes sense in terms of china trying to rebound. what do you see in that kind of data? >> services are growing, but they are not growing robustly. companies said0 china was not very good. the exception was nike and apple has done well with its success -- with its six asked sales that 6s sales.sales -- we are seeing that capital outflow at $135 billion a month. i will think china can survive that and that is a real indication of what people in china think. >> one number that is turning up in china is land sales which are accelerating. this measure is improving. when you look at this, do you

see a sign of an improving economy or another bubble in the making? in cities like beijing or shanghai, things are pretty robust, people are now starting to buy apartments. overall, especially when you look at third and fourth tier tooes, where there is just much building, you are not going to see very much in the way of new property development. first half of the year, construction starts by area were down 15 eight -- 15.8%. >> leland, what do you think when you see that number? i think the biggest thing about property is not that it's going to be the growth driver, they don't want to falling off a cliff, they don't want to be the problem area. we've seen some very mediocre to so again,ata,

property is not looking good, but it does not looking terrible yet. joe: another thing taking up his government spending. is this sustainable? will this work? stimulus got the interest-rate, reserve great requirement. we show that for the last two quarters that real interest rates are falling. there is not a monetary policy solution to china's growth worries. the fact that they can shift onto stimulus, tools? they do, but uncharted territory. alix: you were shaking your head, nodding in agreement. >> everyone says that they have tools in their toolbox come up for reductions in the reserve requirement ratio, no

appreciable effect. everything they have tried has failed. propping up the stock market, bust. august, puzzling. stimulus, but that adds to that, a really big problem for them, a critical issue when you are at 350%. that will be the big issue going forward. alix: what does beijing want to see. ? what are they going to do to try to fix it, help it? want thelearly currency in the basket. one of the things they seem to be doing is tried to shift the legitimacy of the party from economic growth to global power. they see the imf as part of that. they are trying to follow what

the imf is telling them. the imf is telling them to go to a market-based great. they have to create a floor for it. u.s. congress gets mad. the whole thing is a circus. spending $20 billion a day defending the currency. they are not doing that in the internal market. they are doing it offshore, hong kong, london. could exhaust foreign-exchange reserves in the year assuming no inflows, but also assuming the burn rates is not increased. this will be critical. they can intervene all they want because they can print, but they can't print dollars, and dollars are the only thing they can use to defend their currency. that means they are really in trouble. alix: it is great to put the data point to you guys. you agree, but have different interpretations. thanks so much.

we will be right back. ♪

alix: i am alix steel. joe: joe: i am joe weisenthal. "what'd you miss?" is out tomorrow. i can't wait. nobody can wait. thathing people noted is they are only looking at 100 and $2000 -- 100 and 2000 jobs. -- 100 2000 jobs. the expectations are not high. are not too high. wage growth we still haven't seen. joe: i agree.

economic hipsters will be looking at wage growth and unemployment rates as long as we are in the 200 range, people will ignore that. that is it. we will be back tomorrow on "what'd you miss?" ♪

emily: drama in the cease week. done as ay is not deal. what does it mean. c-suite.in the jack dorsey is not a done deal. what does it mean? i am emily chang. this is "bloomberg west." amazon takes a swing at apple and google. plus, google and microsoft declare a truce in a five-year battle over smartphones.