break.arkets get a just to the rescue, investors look to plummeting reports to provide direction, and the chair in the hot seat, the fed says it is data dependent and now fed chair day -- jay powell has to prove it. david: welcome to bloomberg daybreak on this friday, jobs day in the united states. i'm david westin alongside alix steel. jay powell has to prove their data dependent. alix: that was interesting, a cut, ais point rrr sickly meaning banks can lend more. the interpretation is that they need the stimulus that they are going into the loon your desk lunar new year, where liquidity is tighter. we might be over interpreting it. david: you know why money is tighter? lucky money.

the actually give cash in little envelopes, hansen out to people. alix: all of that is irrespective of trade, but it definitely helped the risk sentiment feel we got overnight when we learned we would have a --day-two day trade meeting monday-tuesday trade meeting between the u.s. and china. yesterday was such a brutal day, it has been such a brutal week, we will have that bounce. but we will also have the jobs number to provide some direction there. inflation slowed in the eurozone , very much in oil story, but it did calm the question about an ecb rate hike in the back of this year. selling bonds, anything you can get, selling, a five point basis point increase. the curve is now inverting more on that later, and rude, up over 2%, could be heading for the biggest weekly gain since 2017. volatility is the name of the game when it comes to qualities. -- commodities.

david: at 8:30 eastern time, the department of labor will be releasing its nonfarm payrolls numbers for the month of december, and expectations are there will be a bounce back from strong holiday sales and employment during the holidays. at 9:45, u.s. composite pmi data for the month of december, and then fed chair jay powell is interviewed alongside then bernanke and janet yellen at the american economic association in atlanta. we are here with cameron crise. it was the week that was really bad. the government said -- this is a chart to show how rough the past few weeks have been. when you come in today and see this kind of rally, do you attribute it to something macro, or do you think it is a dead cat bounce? thought yesterday was

interesting because we spent all of the fourth quarter pricing in these horrible outcomes, now we are getting it. to buynusual for markets the rumor and sell the fact, or in this case, the opposite, selling the rumor in the fourth quarter. it would not surprise me if we , asup buying the facts now evidence emerges that the economy is not about to tilt into recession, which i think will ultimately be how it plays out. lookingeople are just for good news, so maybe some of the good news is that china is confirming that we will sell a delegation over monday and tuesday? we knew this was going to happen -- alix: but robert lighthizer isn't there. david: but the market says oh, we will have a delegation in china. >> i think so much of the market volatility in december was around political uncertainty, which is getting more difficult for investors to price in. the good news overnight, yes, we will have people in china talking about trade on monday,

and also that they passed a bill tot night in congress potentially avoid the government shutdown. a lot of people are saying it is still a long ways away, but it was a piece of good news. david: the democrats in the house had a majority and passed the bill. they now have to get it through the senate and the president of the united states, who say dead on arrival. >> but it is still something. alert, and ite was like oh my god. but hopefully clarity on the data. david: we will get jobs numbers, the forecast is some thing for over 184,000 jobs being created, on down a little bit earnings. cameron, coming back to how markets will react to this, a lot of people are saying we will be that number, maybe north of 200,000. bloomberg intelligence is saying north of 200,000. cameron: we had the adp number out that was 271,000, which would certainly suggest some

upside risk, because broadly speaking, there is a correlation between the two. you may recall the previous month's data was disrupted a bit by the weather, so that would naturally argue for some bounce back as well. i suppose you could argue that the market might be more vulnerable to a downside surprise than an upside surprise, because in a sense that would confirm the message we are being sent by the business sector, and that is really the debate moving forward , the consumer sector in the united states remains extraordinarily strong and robust. the business sector seems to be rolling over, and the question will be that the fed will have to answer, and markets as well, which side will converge with the other? is this a china related blip on the business side or is this the consumer coyote moment? that wasove that,

really awesome. that leads into the fact, using the micro versus the macro. on the one hand, if you had all the trade tensions and etc., you could have weaker soft data but rely on earnings. earnings would be good, and earnings will still grow. this year, maybe next year, but now you have both, the micro and the macro rolling over, same with apple yesterday, providing a difficult environment. the bloombergt of reporting after the apple news was that they were the first of many companies we expected to say cut their revenue projections. as you are saying, we are seeing strong -- u2, cameron -- strong consumer and labor data, but on the other side, softening and manufacturing. it will be interesting to see if we see any of that of the jobs report in terms of manufacturing specifically. just bloombergt reporting. we have the chief economist for the white house go out and say, you haven't seen anything yet. apple, we have worse coming, and that means we have china right

where we want them. cameron: how that squares with trade wars being good and easy to and i am not quite sure -- easy to win, i am not quite sure. but listen, i think that was always going to be a precursor to some sort of deal being would feel the. negative repercussions of the escalation of tensions and i think we are now at that point. there is probably more incentive now for the president and his sort ofcome to some accord with china and there was last year. that is one reason for potential optimism. backgroundhis is the for fed chair jay powell, which leads us to our third story, talking with ben bernanke and janet yellen later on this morning. stock markets are fully pricing in a rate hike. -- sorry, a rate cut in 2020. what does jay powell have to do today? cameron: taking a step back, a lot of the market price and see

in fixed income is due to a ty.uidity -- illiquididt markets had a bearish till last betting on higher yields. it is like the hotel california, everyone has checked in and finding out they can never leave . i tend to think that some of this pricing is tending -- coming from positioning rather than views. back to mr. powell -- there are two issues here. one, he could signal that maybe the data is rolling over and we can afford to pause early this year. expect that but it would be nice to hear it from the horse's mouth. the other issue is the balance sheet. you could maybe level some accusation that the fed hasn't been particularly effective in communicating their view, i think their view is the correct one that the balance sheet, so-called quantitative tightening, does not have that

many macro implications. marketser or for worse, believe that they do and the fed has not done a particularly effective job of explaining why that is not a big deal. peggy, how difficult is jay powell's job today? he could turn too fast or too slow. inwas saying to rate hikes 2019, you cannot go all the way to, we are going to cut, but if he doesn't move at all how will the remount gets -- how will the markets react to that? peggy: he has to react to the data. it is on the upside, he will have to be tighter in terms of doing the cut. investors i talked to are looking for a signal that he is not on autopilot and the fed is not on autopilot, and they will look at the data and respond to it, but we will see how markets react to that. think bernanke and yellen will be sitting on the stage with him, like god, i'm sorry. david: i know what it feels like

to be in your job, i know what you are going through but i'm glad i don't have to do it. andmberg's cameron crise peggy --, thank you for being with us. stay with the work for live coverage of jerome powell eking alongside former fed chair ben bernanke at the annual meeting of the american economic association in atlanta at 10:18. and a reminder, you can use all the charts we just used and more on your terminal. you can browse recent features and even save our charts. coming up here, we will have more on this morning's rally veteranve sharon, investments portfolio manager. that's coming up next, this is bloomberg. ♪ t, this is bloomberg. ♪

emma: this is bloomberg daybreak, i'm emma chandra. the largest ever pharmaceutical deal will also be a big payday for bankers. the company has agreed to pay $74 billion in cash and stocks. in estimates, bankers that morgan stanley, ever core and dial will receive as much as $85 million in seeds. goodlatte beats the competition again this year. -- last year. returnsbillion total 1.8% in 2018, the best performance on among the 10 largest actively managed u.s. firms. beat hisnsistently peers since the funds began in 2010. and citigroup is urging investors to buy the tip. city strategists armed with a new note, they say a slowdown is forecast for this year, but not a recession.

ti upgraded emerging markets overweight and also u.s. equities. a neutral rating on europe, and underweight on japan and australia. emma.thank you, markets are breathing a sigh of relief after the worst first today start of the year since 2000. do you buy the dip like citi says, or is the worse yet to come? jpmorgan saying this suggests continued signs of economic slowdowns, reinforcing investors fear that recession is around the corner, which is not our house you. on the other hand, kevin hassett, says corporate earnings will continue to take a beating from china. kevin: it is natural that their profits, to the extent they generate in china, would be going down. the chinese economy is slowing and one reason markets are responding the way they are, they are downgrading your

forecast for folks who have a lot of business in china. the chinese economy is on a path that we have not seen in decades. steve, good to see you. which side are you on? steve: we do not see a recession in 2019, but we would argue the uncertainty around trade and the fed, the longer that last, the greater the odds of a recession become. we certainly think we will have some volatility in the first quarter, but the faster you can get resolution on that the better things will be. alix: when the macro is bad, the micro was good. now you have earnings revisions rolling over, and we see a lot of forward guidance being cut, the most in seven quarters. do you not have the macro or the micro, what do you do? is the point, the data is unlikely to make anyone feel better. at the least we have an economic slowdown, at the worst it is a recession. the data will not tell us anything different. earnings growth will slow each

quarter for the next several -- no better data out of china, likely, so we might get some urance from something that is not the data. the fed needs to come through to give investors and businesses some confidence to step in. k with the micro for a moment. we had amazing earnings growth last year. it will not be this way this year, but how much and how fast will it slowdown? grew: by my estimate, we between 20% and 25% last year, it looks like it will be closer this year to 5% to 10%. historically, you get better return going 5% to 10% when they are going over 15%. so when will those come down? david: what is the over and under, depending on what happens with china trade? steve: given the likelihood that the economy will grow between 2%

and 2.5%, revenues are likely to be somewhere between 4% and 5%. it is unlikely that earnings growth will be lower than that in our view, but we will have to see how this plays out. alix: utilities is having a good consumer revision and consumer staples. to --s not where you want at the end of the day. steve: what we are looking at, the risks have increased. isyou think the recession going to happen, and all of the classic indicators of a recession have not turned on yet, you have to believe that markets are going to head higher, that recession is coming for us to have material downside. david: let's talk about china, because they cut their rrr rate this morning. chinese economic counselor said that chinese economic rose in 2019 is hanging by a thread and the trade negotiators are shouldering big hopes for t -- for a truce.

certainly we have gotten china's attention. what are the prospects realist ugly -- realistically? we have a deadline of march 1. steve: in a negotiation involving the president usually goes to the deadline, so we should expect this will take some time to play out. there are incentives on both sides. the two negative impact in the trade war are that we overwhelm the chinese economy, hurt their growth, and that pulls down growth, which is happening, and u.s. investors do not have the certainty to invest, which cuts down on the benefits of tax reform. it is hard to analyze these things because it is a sample size of zero in our lifetime. but there is most political desk but there is enough political impetus for both sides to make a deal by the deadline. conversation has been, the soft data may have been weaker but the hard data is ok. we are seeing is economics of price index in net bloomberg terminal for u.s., china, and

europe. youou are in a world where have those uncertainties and no definitive answer and you wind up having manufacturing rolling over, what do you do? steve: we were 11% overweight equities entering the fourth quarter of last year. we cut that to 5%. we are pretty darn close to neutral today. if you have a non-recessionary 2015, 1998, 1987, markets are poised to move higher. if it is a recession, they are poised to move lower. stay close to the vest, understand which way it breaks, and move aggressively and investing in that direction. david: and this takes us right to the fed, which is what we will be talking about next with you, steve. steve chiavarone will be staying with us from federated, and up next, jay powell has pledged allegiance to economic data, and some figures may give him reason

to worry. what to expect from his interview today, coming up next. this is bloomberg. ♪ s is bloomberg. ♪

david: federal reserve chairman jay powell is appear for a joint interview with his two predecessors later this morning. a lot has happened since the last time he spoke publicly. yesterday, michael mckee talked exclusively with dallas fed president robert kaplan, who struck a decidedly more cautious note about where the fed is heading. >> my own view is, we should not take any further action on interest rates until these issues are resolved, for better or for worse. an advocate of taking no action, and for example, in the first couple of orders of this year, if you asked me my base case, my base case would be, take no action at all. david: still with us is steve chiavarone of federated investors. he said we should be looking at the balance sheet at least.

that is a slightly different position from what we have heard from chairman powell. is this a change in the fed or just mr. kaplan? steve: we hope it is a change in the fed. we were fine with every rate hike over 2018, but we think it is time to stop or pause. you have a market that is concerned about recession, you have parts of the yield curve that are starting to invert, and you certainly have an economics lowdown. we are trying to engineer what is a soft landing from 3% growth to 2%, 2.5%. in that environment, with inflation nowhere to be seen in a meaningful way, we think it is appropriate or the fed to take a the fed appropriate for to take a pause and realize that look, they have overshot their inflation expectations for the past 10 years. they might already be there, but jay powell is saying look, i cannot go from three rate hikes .o zero in one shot like we discussed in the last segment, the longer it takes for him to give the markets uncertainty on that, the more risks rise of having a crisis of

confidence. i think he needs to give that clarity sooner rather than later. david: but if the fed does move in that direction, how much of it will affect markets, and how much of it because it is mandated? on the inflation the inflation front, they have overestimated it, but they are around 2%, not far from it. and they are really up at full employment. alix: and kaplan said that the markets were one third mandate. david: he said we would look at the markets, which is news to me. steve: you don't look at the markets, but you have to be respectful of a 20% move in the equity market. it is telling you some concern about something more than a short-term blip. the bigger issue for the fed is we are still close to zero bound, and they do not want to prematurely cause a recession when they only have a couple hundred basis points to cut. if going slower means the expansion lasts longer and they can get more rate hikes in overtime, that is probably more prudent. find what i still

confusing is the market pricing. if you come into the bloomberg, they are looking at a cut, that blue line, but it is priced in almost fully at 20 five basis points. the white line is no hikes at all. no matter what, jay powell not concern this. -- jay powell is not going to concern this. are we on the brink of some kind of we rating in the market when you have a shorter end of the curve inverting? the market is increasingly concerned about a recession in late 2019, and that is the impetus for a cut. that is what needs to concern the fed, the market is increasingly pricing in a recession. you have a scenario where every retail investor and technician hates this market and every strategist likes it, because the normal indicators of recession are not flashing. but you also have this confidence issue where the markets do not trust the economic data or the central bank, or fiscal policymakers.

are looking out and not being pushed by inflation and you are close to the zero bound, it is prudent in our view to just take a pause, see how things go, and look, if we wake up in six months and everything is fine, get back on the horse. if not, you have not exacerbated going to far. alix: steve chiavarone, you will be sticking with us. livext, we will have coverage of fed chair jay powell, speaking along former fed chairs janet yellen and ben bernanke at the american economic association in atlanta. literally every economist is there, that's coming at you 2:15 eastern time. and then we will preview the number of u.s. jobs report next. this is bloomberg. ♪ this is bloomberg. ♪

alix: this is bloomberg daybreak, i'm alix steel. i have an antitrust conversation happening on set, help me. yesterday was a rough day for the markets, the worst start for the s&p since 2000.

now we are getting a relief rally. but is this a relief rally or a dead cat bounce? tech that hit particularly hard today, see what they do today. almost in europe up by two percent, potentially china and the u.s. maybe inching towards a deal here, they will definitely need on monday and tuesday, and in asset classes, it is a re-rating of the euro-dollar off by .1%. oil, of inflation was in but the question, will we not see a rate hike this year from the ecb or will it be pushed back? selling is across the bond market, particularly in the u.k., yields up by six basis point. in the u.s., the 2-10 spread, a bearish steepener, a big underperformance when it comes to the belly of the curve. rude, up 2%, the best week for crude since 2017. -- crude, up 2%, the best year

for crude since 2017. an update onget what is making headlines outside the business world. let's turn to emma chandra. emma: on capitol hill, the new house democratic majority voted last night to end the partial government shutdown, but that brought congress no closer to resolving the impasse over president trump's demand to build the border wall. both the president and senate republicans oppose the democrat plan. with parties will meet with the president later today. next week, the u.s. and china will hold their first round of trade talks since last month meeting between the country's leaders. then, president trump and xi -- ing agreed to a 90 day the trade war. china has temporarily lowered tariffs on u.s. made cars. and former nissan chairman carlos ghosn will finally get his day in court. he has been in a tokyo dale sale cell.yo dale sell -- jail

--secutors have extended his several times. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm emma chandra, this is bloomberg. searching for signs of a strong jobs growth. the final jobs report of 2018 is expected to show payrolls rebounding, 184,000 jobs in december, and wages around 3%. our bloomberg is economics senior u.s. economist, and still with us is steve of federated investors. elena, your forecast? elena: we expect a strong report overall. we actually expect the unemployment rate to decline again, and we are expecting strong wage growth as well.

i think the economy has been doing really well, that means we will see strong job gains. it is just too early for the markets to give up. david: if that turns out to be right, is that good news or bad news? steve: i think it is good news. in light of some of the softer economic data like the isn and parts of the business sector, the brightest spot in the economy is the labor market and the consumer. i think unequivocally, a good jobs number today is good news, and our model suggests it will be good today. yelena: we agree with you. the only good spot i would say is consumer spending in the labor market. everything else seems to be doing not particularly well, business investment and the manufacturing sector, the housing sector. inn you have all of the eggs one basket, that is a risk if something happens to the consumer, the labor market, that could be not that great. alix: is there any distortions

that we need to take into account? yelena: seasonal hiring, by december people start getting fired. we have such a great holiday shopping season that i think companies will extend hiring into december and fire less people than usual this time around. that will bode well for the overall jobs numbers. david: as you say, you are above anything in consensus except wages. we are seeing wages trailing off. yelena: i think 3% is a pretty good number, actually, so we have 3.1% for two months in a row. we expect a 3% reading this time around, and it will be very broad based. if you look at the trend, the year-over-year growth in wages has been pretty well broad-based. in hospitality, in retail. you have the whole spectrum of different industries where wage gains accelerate.

david: stay with us, we are going to dive deeper into the question of wages, because one of the questions is why wages aren't growing even faster than and some economists are suggesting because increasingly large employers have gained the upper hand in wage negotiations. with us or nathan wil myers of mit's sloan school did a detailed study in which he concluded in part "data on publicly traded companies shows that dependence on large buyers lower suppliers' wages and accounts for 10% of wage stagnation since the 1970's." joining us now, our specialist. is he right, there has been increased concentration over time, since the 1970's, in employers? >> there is debate within the antitrust community as to whether there is increased concentration. in a macro sense, certainly, data will show that concentration amongst industries

has increased. but in an antitrust sense, we think in terms of product markets and think in terms of the markets that actually compete. in some senses, there are some have notve industries necessarily increase in concentration. david: that focuses on selling products. this is a chart from professor work, that there has been some fairly substantial, particularly led by manufacturing in that top line. jennifer: the interesting thing about that is when you get increased concentration on the sell side, you are getting increased concentration on the buy side. if there are fewer sellers, there are fewer buyers and fewer employers. they kind of go hand-in-hand. on the other side, where fewer buyers can suppress wages or suppress the price of an input, the market sometimes can be defined in a broader manner. on employee might not be

substitutable with another employee, but if there are fewer manufacturers hiring, different kinds of employees across the board, it can have some suppression on the labor market. this is the focus right now with the federal trade commission and the department of justice, which are looking at these issues. the department of justice, in particular, is going after these companies that enter no coach agreements, meaning they will not solicit others employees. david: mark whitehouse from bloomberg opinion did a tease where he did a heat map from federal numbers showing bargaining power for employees versus employers. this is the amount of employer concentrations. the white is low, dark blue is very high. has this been gaining and does this affect wage increases? there is a lot of economic data showing increased concentration. we see the entry rate of new companies has been declining since the late 1970's. increasing share of

jobs in the economy is coming from companies expanding in size rather than companies entering the market. while it is a positive thing for the economy overall, it does not really matter which channel we get the jobs from. what really matters is the creation of new companies, and the impact on productivity. ultimately, the wage gains. the lower the productivity, the lower the wage gains, and it ultimately has an impact on ontral, on policy rates, medium-term outlook. that is why this topic was such a hot topic last summer. alix: let's take an example of bristol-myers, they will be billion of $2.5 synergy in 2022. is that job cuts or productivity gains, therefore higher wages? how do you read that?

jennifer: it is probably all of the above, and i think a lot of politicians believe that they should be looking at the effect on labor when they assess these mergers. two companies have come together and they have redundant employees, so some of the employees are let go. this is not a negative in the antitrust world, it is a positive. em with labor comes from too much market power, that is an issue. but on the merger side when they look at those layoffs because of redundancies, that will go on the plus side when they assess the merger. david: steve, which side of this argument do you want to be on? steve: we looked at this a lot in terms of wages, and the underlying causes the industrial revolution, which we have talked about here. you also have the substitution of technology for labor, which also keeps those wages down. what it means for investors is the following. unemployment rate

does not now lead to the kind of wage gains you would have gotten in the past, which means inflation can grow slower, which means the fed can be more patient. i think that is the underlying argument as to why, going back to the fed, we think they can take a more patient approach. in the past, under 4%, which is exploded and filtered through to inflation. the market cycle has to cut off. this one can last longer if the fed recognizes that changing dynamic. alix: so how does that deal overall? it is easy to look at wages, but if you take the eci, you are taking in things like vacation time, extra bonuses. i was talking to someone who visits china a lot and the labor is so tight that they provide free housing for workers. that will not show up in a wage gain. yelena: well, a vacation in hawaii. david: that's a good idea, we should travel to show to hawaii. steve: i will sign up to join you there.

[laughter] yelena: that is one of the been sowage gains have tepid, but they are growing steadily. i think this year will be crucial in terms of how it changes and what we are going to inflation, and we are going to see that filtering into consumer inflation as well. up -- yelena: of federatedone investors, yelena shulyatyeva, and jennifer rio, thank you very much. how you can test your car with help from the sharing economy. that's next, this is bloomberg. ♪

emma: this is bloomberg

daybreak, i'm emma chandra. coming up in the next hour, the u.s. express ceo. this is bloomberg. and i'm here with your bloomberg business flash. shares of gamestop arising in premarket trading. according to the wall street journal, private equity signal partners at apollo global are bidding for the video retailer -- videogame retailer. for sears.t day chairman eddie lampert has made a $4.4 billion rescue plan that would keep the bankrupt retailer in business, but sears could decide in favor of one of two potential firms who want to liquidate the company. if the cut is made, an auction will be held january 14. that's your bloomberg business flash. alix: turning now to pursuits, where we cover all things luxury.

up next, airbnb for vintage cars. fans of vintage cars are getting a chance to drive their favorites with help from the sharing economy. no tosorts are going tech bring in a new generation of and altitude tourists, eight ways you are drinking champagne wrong, eight tips to for youre you uncork next celebration. where were you on new year's eve? [inaudible] david: joining us now is chris rose are from bloomberg pursuits. vintageart with the cars you can drive. yes, and someone might want to drive your car. [laughter] chris: it is peer-to-peer car-rental things, but for vintage cars. if you want to test out or borrow a car for a weekend, you can go to someone who has a fancy or vintage car, they have precleared you, and you borrow it for the day.

it can cost $250. david: that sounds great. tell me about the preclearance part. before i let someone drive my car, i want to know they are not going to wreck it. chris: all the members are precleared and they are checked. a lot of times, the owner will need you to give you the car and walk you through it. alix: but they are not on a road by itself with the car. so what happens if the crash happens to the car? chris: the same thing as renting any car. it is insured. alix: but that is worse, it is your baby. chris: it is like airbnb your house. there is a risk that comes with these peer-to-peer things, but people are really using these car trade programs to test out vintage cars to see if they want to buy them on their own. david: is it day by day, is there a minimum or a maximum? chris: you can do it for a few hours, like the car, but it can

cost from $250 to $600, you get everything from an old bmw from 2 -- we test0's drove a jaguar from 1990, a bronco from the 1980's. question -- any car in the world, what is the one car you want to drive? the car that i own is the one that i like the best, but i would try to drive a duesenberg. probably, i would love to try that. but i do not think a duesenberg will be in this. those are worth millions of dollars. i do not think people are renting out the million-dollar ferraris, but you never know. alix: you never know, and maybe if you go to your techno resort for skiing, you can see if they have one. they want to get younger people into going to ski resorts, but now it is basically a techno club in the ski resorts. chris: this is a new thing in

the elsewhere in switzerland, skier ship has declined 20%. these resorts, which are still fabulous places to go, are trying to get younger people to come. they are doing that by hosting music festivals. the kind of thing that you think of, coachella, outside lands, 80 --ave more dg eighj, focused festivals with tense out in the mountains, and it costs about the same as ski tickets. david: are they all in the ltro that does raise the question of climate change, because the outset had a tough time with climate change and global warming, keeping skiing on the slopes. is this a way around that problem? to getit is an effort around that and they have become popular over the past five years. savingalps, they are

snow from earlier in the season. alix: is the ski resort footing the bill, or do i have to pony up more money as well? chris: you have to buy tickets from the festival and the resorts, so these are for-profit enterprises and the owners say it costs 40% more to throw a festival in the alps because of infrastructure stuff rather than on a beach or in a desert. my worst caseke scenario. it is called, i am in the middle cold, i amt is in the middle of the snow with snowboarders on the bunny slopes, and then i have to go to an edm festival. that's my nightmare. david: but you could drink some champagne. i did not know some of the stuff at all about drinking champagne, including keeping it in the refrigerator for a long period of time. chris: i am a person who always

has a bottle of champagne and a fridge -- in the fridge because you never know when you will have a champagne emergency. [laughter] next bird our wine says that can dry out the cork and let air in, -- our wine expert says that can dry out the cork and let air in. so keep it in a normal refrigerator only a couple days before you open it up. also, people often go for a don paring on organ cocoa -- dom p or other brands they people know the flavors. try getting a vintage champagne from other brands or smaller brand. david: also, you should buy it by the case, strong advice. alix: yeah, because i have room for that. chris: we go through it on new year's eve. people's cat champagne around

you -- people discount champagne around new years, which is kind of counterintuitive. they know that people try champagne during that period of time and might get hooked, and they need to move most of their volume during that period of time. i have old-school champagne glasses, but i can't use that? chris: they are fun and festive, but flutes are not the best way, champagne stylists will tell you, to drink that. it is almost better as a normal wineglass, it gives you some good notes and keeps the flavor in the glass. david: but you do not want the wide one because it warms up too quickly, but something the bubble are going to rise up through. those shallow ones, you don't want those. [laughter] david: chris, great to have you here.

next, shutdown showdown. the house passes a bill to fund the government has nancy pelosi resumes -- as nancy pelosi resumes the speakership, but funding for the wall is not included. more on that, coming up next. this is bloomberg. ♪ ♪

david: alix, this is what i am watching today. the government shutdown today and maybe tomorrow as well. we had an exchange yesterday as the democrats took over the house of representatives, between the vice president of states and nancy pelosi about what is going on. >> we are here to make a deal. >> we are diligent, diligent and persistent in trying to open up government. >> it is a deal that will result

in achieving real gains on border security, and you have no border security without a wall -- >> we are not doing the wall. >> we will have no deal without a wall. >> does anybody have any doubt that we are not doing a wall? david: so they are getting really close. [laughter] --id: it's got a be a wall it's got to be a well, we are not doing a wall. but doesn't this lead republicans in a tight spot? if i'm correct, the democratic house passed the bill the senate themselves past before president trump came out with a number for the border wall. david: democrats are saying, we will appropriate all the money, and then let's isolate the wall part and debate it. alix: and they are funding homeland security until february 8, to give us time to the wal -- for the wall? david: it seems like a reasonable position, and when you read it, you said oh good,

they are getting it fixed. wants, what nancy pelosi the democrats are fixing it, it is president trump's fault. and he came out and crashed that press conference, came out and shilled for the wall, it was kind of crazy. david: but i think he's all that to his base. every time he says it, the base as oh yes, we need that wall. alix: and we can do this forever at the end of the day. first quarter, we are down by 1/10 if that is not resolved in the next few weeks. up, the head of u.s. rate strategy will join us for jobs. this is bloomberg. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ markets catch a break.

the u.s. and china will meet next week. the stakes are higher as trait starts to buy into corporate guidance and the hard data. jobs to the rescue. investors look at the employment report to provide direction after manufacturing jobs rose the most since 2008. the fence as shares our data dependent. now powell has to prove it. the rate cut next year. david: welcome to bloomberg daybreak. it is jobs day. and jay powell day. which way does it want to go? alix: is it good news, good news? or good news, bad news? want to keep optionality for the fed. he will not want to take out rate hikes for the first quarter. and he wants to address the weakening data. it is a tough spot. toid: you can't turn abruptly or the turn it self will shake up the markets. alix: how do you do that?

in the markets, a relief rally underway. s&p futures up by over one. the worst today start to a year since 2000. it is probably a stat you don't want to have in your back pocket. inflation rolled over a little bit in the eurozone. moving back potential rate hikes . but the euro stronger as the risk on trade continues. it is pretty much sell bonds. the 10 year yield up by .05 basis points. and crude in that risk on rally up by almost 2%. 830 eastern time -- time, the payroll numbers for the month of december. will there be a bounce back from strong holiday sales? at 9:45 a.m., we get u.s. pmi data.

at 10:15 a.m., jay powell is interviewed alongside ben bernanke and janet yellen at the american economic association in atlanta. whowe turn to emma chandra is here with first word news. emma: the new customer craddock --ority ended to -- voted the new democratic majority voted to end the government shutdown. the president and senate republicans a present democrat's plan. the president will meet with both parties later today. the u.s. and china will hold the first round of trade talks. president trump and xi jinping will meet. the u.s. has delayed tariffs and china temporarily lowered tariffs on u.s. made parts. and chairman jerome powell give the u.s. economy a thumbs up last month. today he may strike a more

cautious tone. data has given the central bank reason to worry. according to interest-rate a rate cut would be the first in a decade. ,lobal news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. thank you so much. one thing that might provide clarity is jobs growth. tonomists expected the u.s. add one hundred 80,000 jobs in december. unemployment steady at three points at -- 3%. our guest is head of u.s. rate strategy and had a three point 1% -- 3.1% 10 year yield. cracks the consensus is that we

see the economy moving along nicely. yesterday was a real scare. it is one of the best indicators of gdp and where the economy is going. cautiously optimistic here. a 180 ask well. pretty close to consensus on job creation. betweentroubling is leading indicators and the other standard numbers we have seen. job creation every month has been robust. if you look at housing data, you start to see weakness there. retail on the other hand is very strong. on the other hand, some of these leading indicators say it is too early to tell. things could change. we could bounce back up as conditions improve. it is time to see how things evolve going forward. what roberts to

kaplan was talking about yesterday about the labor market and consumers. robert: we have been trying to balance a tight labor market, a strong consumer, and trying to meet the dual mandate. i think it is critical in the job that you a close attention to what the markets are saying. -- that you pay close attention to what the markets are saying. >> [indiscernible] you should only look at two things, which is the dual mandate. and unemployment. what the fed is saying after this point is that we have to do something. maybe the economy is more lukewarm and we don't need to do it as much. that is why it is extremely important. alix: one of the things that is

not look -- david: one of the things that is not lukewarm as the job market. the blue line going down, it would suggest a pretty hot market. issten: unemployed people now around six million as the chart shows. and the white is the number of job openings. it is pretty impressive that we have more job openings than unemployed people. you are right from a fed , that we have a dual mandate of keeping employment at maximum. tri-mandate in some ways now, from the fed. how do you look at the bond market and the curve? now pricingt is cuts for 2019. that is a huge roundabout from even a month ago when we were pricing in two hikes for 2019.

shows maybe it is time to look at financial conditions and pod. financial conditions have been part of the unofficial mandate. even though it is job growth and goingion, there is always back to the 90's. you do see the 210s and 530's going to zero. how might you change that or move up your timing? subadra: it is interesting. we have yields -- [indiscernible] like we might actually be there. it might have peaked at 325.

from now on, we have to see how the data even. we have gone from a regime where the market will price and paste the rate hikes to potentially a regime where we were back in 2017 where you would price one hike at a time if conditions warrant a rate hike. and every time the fed thinks it is appropriate to hike, they will have to guide the markets to start pricing a hike and it will be a lot of work from the fed. there at what point is connection between the job numbers and the stock market? wages put downward pressure on margins, that can affect earnings. market: the labor continues -- we could still get good numbers. you ist this chart shows shows wagesnge line

going up. the white line is profit margins which is inverted. if wages go up, profit margins go down. people say wages going up is good. but it's not good in the sense that it eats into profit margins for companies. maybe we should also worry about higher wages and higher labor cost. it makes up around two thirds of costs for corporate america. alix: are people going to come off of the sidelines? offer companies having to crazy things to get people off the sidelines? all the anecdotes across all sectors in health care and retail, industrials, even homebuilding. you hear anecdotes that employers have to offer things you haven't seen in a long time. the general wage pressure is high. i can't believe i'm saying this.

the labor market can't see a bit of a lagging indicator. it had a lot to do with trade worries. where you to a crunch are saying, the companies can hold back hiring. out ine will figure that the next 20 minutes. david: wages are one cost. the cost of capitalism. how much they have to pay. at what point do rate increases change the dynamic for a corporation? is an interesting question because we see a significant movement in yields. investors, despite the volatility in equity markets, the spread might be whiter. but the cost of funding is lower. havehe lower end yields

helped despite the widening of credit spreads. torsten: and we go away from credit markets today cleansing. credit is growing. david: and this would be a longer term trend, actually. moving back to banks. will stay with us. coming up, we will get a read on hiring from the frontlines. this is bloomberg. ♪

emma: this is bloomberg daybreak . it shares of gamestop are rising in premarket trading according to the wall street journal. private equity firm sycamore

partners are bidding for the videogame retailer. it may beays announced by the middle of next month. a pharmaceutical deal could be a big payday for bankers. paytol-myers squibb will for salvaging. bristols bankers -- leads bankers. could paynd citigroup as much as $10 billion. billion fund returned 1.8% in 2018, the best performance among the 10 largest firms that invested mostly in mortgage backed securities. peerssistently beat his since the fund began in 2010. that is your business flash. david: jobs day is never just about jobs, but about how much people are getting paid for

those jobs. on the frontlines of the wage negotiations, the chicago-based staffing firm specializes in finding and placing professionals. welcome. it's great to have you back with us. you have done a survey i want to get to. fascinating, about how people feel about their jobs. >> the feeling is very strong. 3.7% the lowest in 50 years. it has been that way for three straight months. seekers are optimistic about the employment opportunities in front of them which puts a lot of strength on future opportunities and different opportunities they can look at for our country. people lookinge for jobs. people with jobs are reported being happy. thomas: you look at unemployment

the way it is and the phone calls they get every day, opportunity for new wage increases and promotions are putting pressure on the job seekers to take a look at new opportunities. even though they may be happy, you can take a look at the fact that they earn more wages. torsten: when you look at the different sectors, you are broadly based in the different parts of the economy that you covered. are there differences across those impacted by tariffs and trade? are there areas where there is more overhead in the labor market? this point, we have not experienced that. most of the things we have seen in the professional services site is very hot and in demand. are two sides of health care. a lot of people think medical health care is any type of opportunity.

they are strangely opened in strong -- open and strong right now. there are opportunities such as medical billers, medical coders. care information management. that is growing in demand right now. accounting and finance professionals are very much in demand. torsten: when someone says i want to hire, what do -- i want higher pay, would you employers do? do?hat do employers a challenge for employers. employers don't want to lose employees because they have to back fill that position. they really are getting more aggressive spending time with

their employees to work on the conversation. and we encourage all of our employers. as well as trying to fill the openings they have. you have to look at the reward for that. so if they are trying to attract or hold on to existing employees, how do they compete other than price? other than wages? thomas: a lot of it is the culture they work in. what are the opportunities in front of me? where am i going? a lot of business is fast-paced. sitting down with employers and talking about successful planning, they want to know they have successful planning and they have an opportunity in front of them. and that is coupled with increasing wages. alix: are you noticing people

coming back into the workforce? and if so, why? thomas: we are noticing that areuse opportunities showing larger wages. they are also getting phone calls. there are a lot of people making phone calls to attract and find these individuals. and that is also the piece that has been brought in. in that hot working environment where you need employees and to retain employees, do you see training changing gekko is there in -- training changing? is there increased training? the most important one is they are changing their decision-making process.

a shorter timeframe from final interview to decision-making. 72% of our survey says that people, job seekers want an offer within a week. more are spending time on training individuals to help them get up to speed. and that is very strong. want more opportunities. and wage competitiveness is very important. torsten: with enough people coming back from the labor market, what kind of skills do they have? [indiscernible] at 3.7 percent unemployment and a 50 year low, you have individuals that don't

have the skill sets needed it to jobs that employers are looking for. we trainme time, can this individual on the skill set we need? david: thank you so much for your time. that is thomas moran from edison group coming to us from -- from addison group coming to us. head ofjeffries global foreign exchange coming up next. live from new york, this is bloomberg. ♪

alix: we are moments away from the jobs report, the final jobs report of 2018. how should we be positioned for the next seven minutes? brad from now is jeffries global head of fx. brad: take a look at the end

when you talk about non-foreign payroll on friday. the aussie has been in play. we had yen volatility earlier in the week. to get a nice number, something in the 195 area. you can see a little bit further with the dollar-yen higher and the aussie-yen higher. a little bit,off but we still have the meeting later in the day with a jay powell the rest of the crew. markets will probably be more subdued than usual as we wait for that data today. alix: is there anything that you wind up seeing here gekko you have -- seeing here? as we were pointing out, the dxy has done pretty much nothing. the treasuries are

recovering from the dramatic decline we have seen so far. and despite the fact that the market is completely price tag, we have that pricing and made cuts for the coming year. it has also seeing narrowed, typically. from the rate market point of view, it seems like the dollar strength is a little bit of a conundrum. alix: what do you make of that? brad: some of the dollar strength had to do with cross currency basis and it became very expensive to hedge dollar risk. i think going into the first quarter, we have a lot of uncertainty. the rest dollar is still a safe haven and still a very high-yielding safe haven. flows on anytract sort of market volatility.

we have a tremendous amount of uncertainty in q1. we have chinese trade policy, brexit, all sorts of issues to .hurn through i think that will continue to help the dollar and 2019. but it would be helpful to resolve some of these issues and see some more stability that feeds that are global growth. we can start to see other currencies rally and the dollar to weaken a bit. agrees 2019 will be volatile. link for me, if you will, the safe havens. the yen, dollar, swiss franc. brad: the yen and the dollar will be fighting for first place. the dollar has the edge because of the high-yielding nature of the currency. probably dollar number one, the yen number two, and the swiss franc is always out there. that is probably number three. it of a european safe haven.

more of the european safe haven. i think gold will come back into play as things start to kick off and deteriorate. which i'm not calling for, but if that were to happen, and will rally. about the yen with the overnight trading session. what do you to get that to? the unwinding of positioning? qualityhat really exacerbated by liquidity? fundamental or technical? brad: i will go with number two. you have that new york to asia time where liquidity is very challenging to begin with. japan was out on holiday and folks scrambling to buy yen as a safe haven point on the apple news. the liquidity wasn't fair and it exacerbated the move. and it't there exacerbated the move. probably a bigger move than it should have been.

it has been stable since then. alix: what is your favorite trade right now? subadra: it is tough. for me, i want stability in the market. and we have a lot through the first quarter. we need to get to the government shutdown. we need clarity on the terrace situation -- tarrif situation. alix: is there something on your shopping list? subadra: i think the flatness is here to stay. situation you have a where the front-end is expectations and the backend keeps rallying. that is probably your safe trade for the near term. brad: i think it will be a rocky q1 for sure. the dollar will whip around.

the currencies will whip around. emerging markets as well. and when we get to q2, it will be a better macro backdrop. my shopping list is things like the euro, the aussie, the g10 space. even brazil. but you kind of have to write through this rocky -- ride through this rocky period. alix: thank you very much. we are 45 seconds away from the jobs report. let's check on markets. a very deep selloff with equities rising in europe as well. here, youset classes guessed it. it is a weaker dollar. pretty much given up whatever kind of games they had. the 210 spread, 17 basis points that continues to get flatter. the yield up by about five basis

points. the we are looking at 480,000 jobs to be added in december. i want to head over to kevin cirilli at the labor department the numbers. --in: 312,000 jobs added this slightly lower than .xpectations [indiscernible] the average hourly earnings rose. year-over-year it is up.

there were some revisions in november. from 237,000 to 274,000. the unemployment rate went up to 3.8%. of the 312,000 jobs added, job gains in key sectors including food services, construction, manufacturing, and retail trade. job growth for the entire year million,otaled 2.6 compared with a gain of 2.2 million in 2017. this does not factor in the partial government shutdown effects. we will get that impact in the next jobs report. alix: thanks very much. unreal numbers. markets reacting in kind. dollar shooting higher, yield shooting higher. equity market a little bit of a lagger, losing steam.

worrying over a rolling economy, markets breathing a sigh of relief now. just want to recap those numbers here for you. 312,000 jobs added in the month of december. november revised up. unemployment rate falls -- excuse me, rises to 3.9%. average hourly earnings rises to 3.2%. precipitation -- labor force participation rising. david: 70 more people are coming in from the sidelines. alix: we were just talking about that. basically we are cold calling people now. like, we need people and we will get you back in the labor force at the end of the day. david: people are taking those cold calls, answering the phone. now we want to turn to subadra rajappa of societe generale, and

torsten of deutsche bank. >> to me, coming in today, i was what the estimate is going to be different from what we heard after the december fomc meeting. he was kind of dismissive about the impact of conditions on the outlook for the u.s. economy. significantly pressing financial conditions. but now the data is supportive of that narrative he said back in december that the outlook for the economy is still quite positive. david: this data points in one direction. >> is a huge sigh of relief on constitution avenue in d.c. it must be very pleased that it can now stick with the story it had been telling. there must've been some anxiety at the fed given what has been happening. they are telling you that maybe the economy is not quite

overheating, but at least for .ow it tells you that alix: is it sustainable? >> obviously wage growth accelerating further, that is definitely not sustainable. there's a level of unemployment growth just to keep the rates steady. the short answer is this is very surprising, in particular with the 24 hours of anxiety we had yesterday. alix: does this in some ways make powell's job more difficult? now he will look more bullish than what the market is pricing in. >> will talk about the dual mandate, which is employment and justify that there are more rate hikes.

or is there anx: overheated market or more slack? >> now it is at least a lot easier in the sense that he doesn't have to talk down a lot more, but can be much more -- there canalso be no doubt about it that they are probably sitting here coordinating what we. are saying, how do we talk about this. this becomes extremely -- what we are saying, how do we talk about this. this becomes extremely important. if you go back a year or two ago, nobody would say the models predict that we could have this kind of job edition for this many months in a row and not have runaway inflation. >> that is very true, but it has been a struggle to get wage growth up and running. we had hits and misses, but now it is starting to get a little more consistent. it is consistently staying about 3%. what we'd be looking for is what

the feedthrough is to labor costs, and if that will actually start to way on corporate profit margins and take us to a recession. that is the traditional outlook on this cycle. david: you have that effect on corporate profits. on the other hand you can have a very positive effect on consumer spending. >> absolutely. the question becomes how much is topline growth going up and how much is labor costs going up. increased offset the in labor costs, but that being said, 3.2 is the highest level since the recession, so there is certainly something here to think about for the fed in terms of the we want to slow that growth down in wages we are seeing at the moment. alix: this is what powell will have to do was today. yesterday we spoke to robert kaplan, and the big takeaway was just how dovish he sounded. >> my own view is we should not take any further action on interest rates until these issues are resolved for better

or for worse unless i would be an advocate of taking no action. for example, in the first couple of quarters of this year, if you ask me my base case, it would be take no action at all. alix: torsten, how many people on the fed are like kaplan? how many have a sigh of relief like powell? >> this shows you how difficult it is to be an fmoc member. sometimes mike is a right -- fomc member. sometimes markets are right. sometimes markets are wrong. the committee normally anchors their thoughts around economic data. that means if the dual mandate is moving the way it should come a we are doing what we have been planning for all along. should we be paying attention to markets? in some cases it becomes necessary, like it was yesterday, to say we are paying attention to what markets are saying. but it turns out today that this was more challenging because the data was better. david: just to step back for a

moment, this is one data point. it is one month. give us a broader perspective if you put this against all the other data points over the last 12, 18 months. what does it tell you if you are a member of the fed? >> if anything this cooperates the trend we have seen over the last year. in 2018, every month we've been creating over 20,000 jobs. this has been basically telling you that the strengthen the economy continues and some of these what people might consider lagging indicators. there's still retail sales, strong jobs creation. to me this is more of a continuation of a broader trend we've seen over the last year. this how do you deal with kind of information when you have not only the market action, you also have in theory, a fed meeting where everyone is live. is it shorter duration, shorter positions? how do you handle that? >> to me, the fact we are going

to have a press conference at every meeting as a little bit -- adds a little bit more volatility to fed expectations at every meeting. but also if you think about the broader context, we have seen this unwind of the balance sheet going on in the background. to some respect, if you look back in time, the objective of qe was to take out volatility. if you are doing the reverse, it is going to add volatility to the markets. does a lot to be lost in equity markets, but the general is the fact that there is a press conference at every meeting adds to the volatility. david: you talk about constitution avenue, which is where the fed is located. let's talk about pennsylvania avenue come over the white house is located. they are going to be pretty pleased with these numbers as well. to what extent can the properly claim credit, because i expect they may, with tax cuts?

>> the congressional budget office said last year the tax cuts boosted gdp growth. in that sense we have seen a significant tailwind to the economy. the question is how long is that tailwind before it fades off, or will it continue? the tax-cut is playing an important role, but 300,000, that is just more than what we've seen. for a long time we've been saying we got to see a slowdown in employment growth. when we get to that, employment has to go down and down. but this is a pretty wild report we are seeing with such a significant overshooting of jobs. what industries? clearly there have to be specific industries that need to go get more workers. in your work, what are they? >> basically everything that goes to the cyclical side of the economy. moranheard also from tom earlier from edison, it has been a fairly broad-based recovery. it also looks relatively

broad-based. all of the trade related sectors were getting more hits, but that is not what we are seeing here. we are seeing that employment is grown across all sectors of the economy. alix: and services as well. there are gains in education, retail services, hospitality. manufacturing jobs also added the most in a year. so you mention dual spread through in terms of job. >> the tailwind for the u.s. economy was the tax-cut. the headwind has been the trade war. now we are seeing it is still a tax cut that investors should be leaning on here. david: talk to me about global growth. is the united states alone, and the u.s. consumer enough, to really get global growth going again in the world? >> absolutely. the u.s. is about 25% of global gdp.

now it is looking like we are back on the decoupling theme. in that sense, global growth, we still have a lot of challenges in asia and china, also in europe. but this report says the idiosyncratic policy in the u.s. of the tax cut is actually helpful in terms of lifting the u.s. and the global picture. alix: that brings us to the inflation data out of europe today. a lot of that is oil, but the slowing feeling in europe as well. do you see that in the bond market, and eventual decoupling from central banks were will be the synchronized? -- be the synchronized -- be desynch ronized? >> to me, that is really where i see the struggle. ,f the fed actually does pause that is going to competent monetary policy overseas. given the fact that in the u.s. we have a lot of ammunition

left. we can cut rates if we need to. they can do more qe. but in europe, there's really not that much room. yields are already negative territory. at 3 trillion. i think it will be more trouble for europe going forward. >> if you look at equity futures come s&p 500 futures, that is not doing too much compared to how much rates are moving. there's something going on here in terms of how this is interpreted relative to an equity market. it might be that we are getting back to the discussion about higher wages cutting into labor costs. is that good news for equities? alix: the fed can pare back. it wasn't as bad as we thought. is that the narrative? >> absolutely. the --uster report, with a gang buster report -- , janetf you were there

yellen or ben bernanke, the question you want to ask him? how financial conditions are going to impact his outlook going forward. seen tightening of conditions since the december meeting, so be curious to see how financial condition factor into is thinking in the last few weeks. how muchstion would be should i put on wage and payrolls? david: both great questions. thank you so much. saidto recap what torsten was blockbuster, these numbers for the month of december, 300-1000 jobs added as opposed 301,000 jobs added as opposed to what hundred 84,000 predicted. -- 184,000.t rate

updicted unemployment rate to 3.9%. alix: the big move is going to be in the bond market. equities holding on to their gains, so good news is still good news as the market is concerned, because we are not rolling over as much as the market suggested. the dollar shoots higher, and bonds selloff, particularly the belly of the curve. the 10 year yield up by about seven basis points. the curve continues to flatten. the 210 coming up. let's get back to the u.s. to summer jobs. joining us on the phone is eric fuller, u.s. express ceo. and still with us is torsten's lock -- torsten slok of deutsche

bank. >> we've seen it for the past 18 months, it has been harder and harder to find drivers. as the economy continues to andnd and construction manufacturing expands, we have people leaving our industry to go into those industries. we have probably one of the most marginal jobs in the country, so people would rather be home on a regular basis. alix: one thing we did see in this number is the labor force precipitation -- labor force participation in greece by 110 based -- labor force participation increase by 110 basis points. how do you manage it? age of a newe driver coming into our industry is in their 40's. so how do we cap into a new, younger generation? as an industry we have been unable to do that. it is unattractive be on the road for two or three weeks at a time. it is not a lifestyle conducive

to a lot of younger people, so we are trying to adapt and change to attract younger people into the industry, and i think that is the key. are you seeing truck drivers leave because they are getting better opportunities because of this job situation? >> i think we are starting to see that recently. truck jiving is typically -- truck driving is typically a variable job based on how money miles a driver runs or even based on a percentage of revenue. the first half of the year, the market was so robust and there was so much demand that we saw that drivers were able to make more money, so we saw people coming into the industry. i think the telling piece of this report is that you didn't see any growth in transportation. , evens indicative of though the economy is expanding, we are not able to keep pace with the needs because of the fact that now that the market is not as robust from a freight

demand standpoint in the first half of the year, drivers aren't able to make that extra variable pay, and we are losing out to construction and manufacturing. >> when you look at the different nuances of the areas you cover, how important is the trade war? how important are tariffs? are you seeing more interest and demand for mary is not impacted by the trade issues? >> i think the biggest thing with trade is it has created a lot of lumpiness in the normal seasonalities. we normally have seasonality that is very predictive, and we know when things will be stronger and weaker. what has happened this year because of the trade war is there has been a lot of lumpiness where customers have ordered out of cycle to either try and get ahead of potential tariffs or things like that. created someas issues just from a scheduling unpredictability standpoint for our industry. >> when you look at the workers who are leaving, are they going

to competitors or other industries? >> our industry has over 100% turnover, so there is a lot of come, but we see people about half of the people that leave, are leaving the industry. aret of these people leaving the industry to go into construction and manufacturing and warehousing, jobs like that. insight if youan have one into e-commerce, just after the holiday season. you hold things around on trucks. how much is it for e-commerce giants like amazon, and how much for traditional retailers? is it shifting, and is it changing your business? >> alix: it is shifting -- >> it is shifting. we are probably about 15% true e-commerce, but customers like walmart and home depot and even procter & gamble are doing a portion of their volume through e-commerce as well, so it is hard to break that out. traditional e-commerce is

becoming a much larger portion of the truckload market. >> we saw quite a dramatic drop in activity. is that also what you are seeing in your anecdotes? can you confirm it was different from november? >> since august, the market has weakened a little bit sequentially, and we have seen that. i don't think it is significant. i think everybody gets caught up in the fact that looking through the lens of the last 12 months, 4% gdp, things slowing down, but it is still well above average than what you would normally see compared to the last 20 to 25 years. alix: really great to get your perspective. thank you so much, eric fuller, u.s. xpress ceo. torsten slok of deutsche bank, also thank you so much. after a jobs blowout, what will he say about the data?

markets on the move. selloff.pike, bonds this is bloomberg.

alix: fed chair powell is going to appear with an interview with janet yellen and ben bernanke later this morning. michael mckee is in atlanta, joining us for a preview. we get these blowout jobs numbers and the isn, that was very difficult to digest for the markets. what does powell have to say? the pressure is off of him after this jobs report. he will say the fed is data dependent. if you look at the data today, you wouldn't say it is time to cut rates. he's going to be able to say the fed will watch very carefully what is going on, and we are not on a preset course, but it doesn't look like he has to do a rescue mission for the markets anymore, which is interesting

because we saw robert kaplan yesterday doing that, and this morning with somewhat dovish comments. it appears powell is a little bit off the hook now. tox: you will also talk later on, whether kaplan was sounding dovish. what about the divergence we are going to hear from powell on his teammates? it's going to be a little bit interesting to hear his forecast for future rate reallys the rate markets aren't reacting in the same way the equity futures markets are. you still see yields below the fed funds rate, which suggests the market thinks the fed is done. basically they've reached neutral. say powell ratify that, or they are still being stimulated at that level? david: these jobs numbers are the latest break and shiny object. yesterday we had the isn.

is he going to have to reconcile those numbers? the ism were almost discouraging, as these numbers are encouraging. michael: we are getting into lumpy economic data, and it isn't exactly clear were the economy is going from here. the general forecast of every economist is that we are going to slow down a 2019, so it may be a question of how far. there was pretty much no chance they would be doing at the january 30 fed meeting. that pushes the next serious discussion until march. by then you will have the february payroll numbers, january payroll numbers. they will have two more of these reports to go on, plus all of the ism numbers and every other bit of inflation data comes out. ofwill have a better idea where the economy is by the time the next rate move comes. alix: bloomberg's michael mckee, thank you very much. stay with bloomberg tv for our live coverage of fair catch jerome powell speaking alongside

janet yellen and ben bernanke in atlanta at 10:00 eastern. later on, catch our interview with atlanta fed president. it is going to be a really interesting conversation. i love what mike said, like the rescue mission for market is off the table. david: it is getting more and more interesting as each developed comes. ,lix: blowout jobs numbers market holding on to gains, spike in the dollar. coming up, "bloomberg market, " with reaction to this blowout jobs report. this is bloomberg. report. this is bloomberg.