wages could provide a slew of fatah speakers. breathing room for mario draghi. they backed up better growth in the region. a tale of two european banks, baby deliveries. welcome to bloomberg daybreak on this friday. it is jobs day. we have some earnings it just came out. fiat chrysler just came out. we are going to do great for the rest of the year. the stock is up. alix: they are really confident. david: their sales are down. it they are having trouble in china. they say it's going to be a great year. alix: i wonder what they see. david: they say their cars are really going to click in. we will see. alix: no quagmire for them.

we have jobs day. it's a quiet day. the dollar continues to be the story, grinding its way higher. this actually delivered over in europe. that's a shocker. the dollar continues to move higher. that will eventually pose a problem for the fed it. by .01%.down david: you will have to explain that to all of us. are going to get u.s. jobs data for the month of april. we have market services and all day long, we will talk to fed officials. to james williams

and michael mckee will talk to the cleveland fed president at the hoover institute. alix: it's time for the first take. we are joined by a u.s. economist and rachel evans. what is your call? >> our expectation is this rebound from the fed were installed will continue to get legs. we are a little bit higher than that consensus. we are at 210. i think the risk is we could see the unemployment rate grind lower. we are talking at 0.1 decline. if that happens, that means the fed has hit their targets for the year in april. that presents the risk that there is some downside risk to their unemployment projections. there estimates could be too

conservative. david: how much will employers be paying for these numbers? i think we will see more evidence of those warm but not hot wage pressures today. with the echo again cost index. >> it's a little bit different than when we went into the fed meeting on wednesday. that's what we will be watching for today. i think there is going to be a lot of focus on that with the fed speakers coming up. everyone will be looking for a sign or indication of rate cuts by the end of the year. miss statement? there is a long data treasury bond having record impacts.

we have seen outflows since that meeting. transitory wasn't in the formal meeting statement. it's a potential that he is not an agreement with the committee and is more optimistic about inflation. david: that's interesting. carl: that's a little inside a small. earnings have some from european banks overnight. these are two different stories. they are going to cut costs and make money. because ofctually up their capital ratio. they are doing what -- better than they thought in capital. what does this tell us about the economy in europe as well as the united states? carl: a slow-moving economy is not favorable for banking profits and earnings.

a lack of volatility in the markets is negative for banks. the yield curve is not favorable. it seems like they are coming around to the understanding that negative interest rates do not help the banking sector. if you are trying to stimulate the economy and you do something that hurts the banks, good luck with that policy. around, central bankers will be more wary about that particular policy. alix: it could be less significant than the burden from the shift in normalization expectations. about you always wonder him, if he's campaigning. alix: everyone is campaigning. chart.this stock earnings cuts so far in 2019. what does that tell us about

what companies are in? they are cutting costs in order to have a better performance. that is something we see across earnings. this is something that was pointed out in a good piece this week. they were predicting and earnings recession, that has been less severe than we thought. back, it'sn you step a positive. hasn that a lot of that come from the back of cost-cutting rather than sales increase. that is something people can focus on going forward. inflation, wen will go back to his comments about the european economy. it's going faster than we thought. is that good news for europe? carl: do you believe in the easter bunny?

entirelyt not jokingly, the data is very sensitive to the easter holiday. easter fell late this year. it includes vacation prices and whatnot. when you do that, you don't see much change in the efficient -- inflation trend. excitedd not be to about a mythical creature. alix: the water in the rhine river, you can't transport stuff. that could weigh on inflation. you sent out a good comparison. when it comes to anticipating relations? rachel: we have been trying to see any sign that we might be getting interest back into europe. seen for the last year,

we have stopped to see outflows. it looks like everything is brilliant. stopped in the middle of march. that suggests a lot of the money has come out. the question of what they see, that's going to be the big question going forward. we have the gdp data. have a slight inflation reading. whether we can see some further momentum in that data to encourage people to come back into europe will be very interesting to watch. alix: thank you very much. you can find all the charts we just used. that's on your terminal. david: we are watching tesla again this morning. this morning, they will borrow even more money and issue more shares.

this is after elon musk said their market cap is going to be $500 billion. later, a little bit more for shareholders. david: remember when they weren't going to need any more money at all? let's look at the jobs report. this is bloomberg. ♪

>> this is bloomberg daybreak. the first quarter performance australiay floods in and the fatal crash of any fuel

ethiopian airlines plane. shares of the aunt meet our climbing after soaring 163% in the ipo. it was the best opening for a u.s. ipo this year. it's the best for a company raising $200 million since the financial crisis. they had high-profile backers. john flipped his press ahead with a plan to rein in costs after the first quarter in more than three years. they made 80% of their profits in asia. europe accounted for 1%. they are still investing in technology.

the u.s. turnaround plan is the biggest just egypt -- strategic challenge. payroll numbers for the united states are due out next hour. 190,000 jobs were added. toronto, the asset manager at of macro strategy. it's good to have you here. seecis: i think we will range down numbers and modest wage growth. component of the mandate, it's hard to get excited. we need to shift the conversation to what the market is going to do after this release and more toward what it can tell us about the length of the cycle. i am spending more time on the labor force for dissipation rate number. that's going to signal to us that we may be into a longer

cycle than many are expecting. david: the wage increase, it depends on how big the wages are. that could cause concern about inflation. francis: wages stagnated this month. they are not up very much. at least not what we are expecting. week.w this is really my biggest concern in earnings wage growth affecting the margin part of the story. doesnk we need to focus on wages mean inflation and toward to higher wages mean companies come under pressure. alix: we have a great chart that illustrates that.

eci lag behind a little bit. higher.really still at what point do we start to see the margin compression? we could lead to price increases. francis: this is a critical question. it comes back to that component of the participation rate. if we can bring more people off the sideline, we can suppress the painful wage growth on companies. even as a macro strategist, i'm listening to earnings calls to see if they are feeling the pinch. they do see they have to pay more to get better label. there is no concern about margins just yet. david: why would we not be able to bring more people off the sideline? we aren't distort high levels. as you look around the world, a lot of companies have a higher labor force for dissipation rate than we do. francis: it comes back to the theme of the week, what is

transitory and structural. maleuld bring more primates back into the labor force to get back to precrisis highs. issue. the big economy, we get wages strong enough we can entice people who thought they were out for get it back into the market. if the labor force participation numbers start to take off, you thishear more people say is the longest expansion in history. alix: doesn't matter where the jobs are and where the ever force participation might be increasing? francis: it's going to matter to the sector and the tech column. in fed seems to be zeroing

on the average numbers, the bond market pays attention to pc and wage growth. from a market standpoint, that's what's going to matter. david: we've got productivity numbers out yesterday, which were surprisingly high. if we do have a trend of increased productivity, how does that go against the wage numbers and job numbers? francis: i know this wasn't the headline on your bloomberg terminal, this is the most important piece of the news this week. we see a trend increasing, that's a game changer. the growth is elevated and suggests we could ask end the cycle a little bit further. 2020 growth looks sluggish. risinguctivity growth is and participation rates are rising, you will see the conversation shift.

alix: we get a million fed speakers. what message do we need to be looking for? powell said it transitory. what can we expect from the speakers? francis: i hope for some sort of consistency. what we got from powell was a variety of inconsistencies. his press conference took a different tone. we are looking at a different story from powell than other officials. i am hoping for more of a clarification. i think they are all right, reasons whyansitory it's week. it's not one or the other. it would be nice to see both of those. alix: can the transitory factors become structural? managementasset

prices, can it become structural? francis: absolutely. at this point, we are separating between what are idiosyncratic risks and the long-term trend. the long-term trend is not great. this is the first economic cycle where average inflation is below 2%. it's been missing expectations for eight years. this is a long-term problem the fed has to tackle. can they tackle cell phone prices or airline prices? no. alix: great point. you will be sticking with us. coming up, they get proactive. the seat ceo says the bank is zeroing in on cost cuts. we will break it down. this is bloomberg. ♪

david: european bank profits continue today. taylor: it's about cost-cutting for these ranks. they have room to improve. hsbc showed some good cost control. down total expenses are a decade low. they really should be a trend in the coming months. you see a divergence there with expenses between hsbc and socgen. this is one way we can value banks. they are managing to get it done. this is relative in purple here. in orange, that's underperformance trending at four times on the price. u.s. banks are about 1.5 on the

basis. it all comes down to the ecb and the flattening yield curve. the 210 spread. down to the lowest going back a few years. blue was the performance of the banking index relative to the stock european index. they have struggled. alix: thank you so much, taylor riggs. let's walk forward through the yield curve conversation. overall inflation is at the highest place in the year. is that transitory? francis: probably. it's a story in europe versus the u.s., europe is looking for growth react celebration. in the u.s., the inflation story

will matter most to markets. can we finally get a bottom that sustains for two to three months? i need to see that before i get excited about the economy. this is what the ceo had to say about risks in the market. have thatget is to throughout the year. if you look at the one off this quarter, it was in line with cost growth. we didn't think we would be able for theve that remainder of the year. alix: the biggest risk then? willl: the biggest argument i hear for europe is china will help europe. that is true with global trade flows continue. local focus.lus is i don't how much it will help your. david: what will break europe

out of the spiral? can't move forward until the yield curve changes. that can't change until you have growth over there. once going to break it? francis: inflation would help. europe is struggling in the global crosscurrents. rise.d to see it until we see that, europe is a difficult place to be optimistic about. alix: if you take a look at the other external factors, what do you feel the likelihood is for a negative rate. you were talking about this coming out, we don't know what difference this will make. bank we see is making dovish moves. they are becoming more negative. i expect that to continue.

this is a trend that is going to continue. the fed is going to have to backtrack on that today. extent, this can go further than what priced. in europe, we can use -- move a lot more negatively, we don't get that china bob, expectations are too elevated for the europe story. sticking with be us. it coming up, the milk in a conference was talking about growing income inequality. issue,ls to address the that's coming up next on bloomberg. ♪ the latest innovation from xfinity

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it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. alix: this is daybreak. it is steady as she goes as we tread into the job numbers. , that sector is

higher. i just want to point out the monster rally the continues within the dollar, continuing to climb higher. just how much more upside is therefore a fed that is not going to hike any time soon? i do want to highlight was happening with commodities. copper is trying to rebound here in brent crude is down. this is the worst week for oil. s the longest losing streak since december. is there a stronger dollar story? is it legit? david: is it transitory or structural? we have a headline across the bloomberg. softbank's thinking about having an ipo for its fund. that would be some kind of

ipo. david: they are making money once again. incomealk about inequality. capitalism needs to be reformed. jamie dimon said they should work to improve society. investors don't see increasing taxes on the wealthy is the answer. appealing to soak the rich. that's an easy throw a solution to the problem. it feels good for a moment. it doesn't work. >> we welcome someone who has ed on incomework inequality. he is the director of the earth institute at columbia university. he has served several secretaries general of the u.n.

we welcome him back to bloomberg. it's great to have you here. let's illustrate the problem. let's take a look at what happening. grouping people according to wealth, it's quite striking. the bottom 90% of the country was getting ahead. to 1981,go forward they went down in real dollars. how bad is this problem? jeffrey: we have had rising inequality for decades. it's not just the very bottom and. it's half the population at least that is suffering declines of well-being. we know that is showing up in rising suicide rates, rising stress. there is a lot of happiness and

falling life inspected the. life expectancy has declined two years in a row. we have the gdp estimates, we don't watch once far more important, are we surviving, are we living longer? we are going backwards. david: studies track specifically longevity with income and wealth. the declines are for the bottom half of the population, those with high school educations who are really hurting. that's a lot of the populism in our politics right now. people don't like the system. they are saying this isn't working for us. alix: how does the u.s. stack up against the rest of the world? maybe we are looking at different measures. what do you see? jeffrey: the united states is the most unequal country of any high income country in the

world. .his is taking any quality after you paid the taxes and get the government transfers, we are very unequal compared to europe, compared to japan, other high income countries. our peer group. that cap has been widening overtime. everywhere because of market technology,e, inequality has tended to rise. it's only in the united states on the bottomiled part of the population. in other countries, they said maybe we should tax the ricks -- rich more and make sure everybody can have health, everybody can have education. states, you pick 1981 as the break point, that's when president reagan came in giveashed the unions and

big tax cuts. that sentence in the other direction. that's what we are living in now 40 years later. david: what do you do about the situation? it is jobs day. we can put up a chart we took from morgan stanley. the wage growth actually is benefit of the lower groups. reasons there are are monetary theory for more stimulus and a move away from central banking and monetary policy. issuescause of these that our current policy is not effective and targeting. this is a paradigm shift that even market watchers should be watching very carefully. alix: does that mean the solution is even worse with policy?

jeffrey: monetary policy no matter which kind is not going to fix this problem. this problem is structural. it's how much monopoly power you businesses, how much government help you have for health care or student tuitions or so forth. monetary policy cannot change that. i want to qualify it's not going to be some new trick of printing money or deficits. we don't talk about the fact that all of those other high moree countries do collect tax revenues than the united states as a share of national income. they guarantee health care, they guarantee higher education. we have a huge group of young people in this country with massive debt on their backs as they pay for higher education.

they don't finish college and and up in debt without agreement will get them through. debt on$1.5 trillion of the backs of young people in this country. it's a shocking thing. monetary policy cannot fix that. that is regulatory policy. categories.e david: it's not just about taxes, it's what you do with the dollars. where do you put those dollars? we are not sure we trust the government to invest in a way that will benefit all of us. jeffrey: what i would say to anyone on this is take a look at other countries. in canada. look at germany. look at sweden.

just look. go online, take a look. you will be surprised. longer life expectancy, more vacation time, lower inequality, great prosperity, higher life satisfaction. told by thet we are wall street journal every day. countries look good. go take a look. it go online and examine the u.s. case versus the others. see what we can learn. there is a lot to learn. alix: we mentioned ray dalio earlier. with manyining theory people talking about it. the relationship between fiscal and monetary policy.

is that inevitable? francis: we will start to have to look at how ineffective monetary policy has been. wage inequality, even our potential gdp numbers, i agree that central-bank efficiency is much more reduced. we have to shift the four some of these big problems. jeffrey: he says capitalism needs to be fixed. he says some trick will do it. that's another evasion in a way. i don't want to attribute motives. that's another distraction from a the structural things we should be looking at. how workers are represented by unions or whether we are bashing unions, what kind of regulation against monopoly power, those are structural. monetary policy cannot solve that.

as a monetary economist for 40 years now, i've been trying to explain there is no magic trick with money that will solve problems that normal policy needs to address. david: we have to talk about venezuela. it seems to be a tragic situation. there isthe problem is a winner take all approach by the u.s. and others right now that says we have to make that regime change and we are going to cross the economy until they agree with this. we put up sanctions that mean they can't breathe. the can't eat because export earnings have been stopped by the united states. you can't starve a population. negotiationncourage of the political forces there so they can start to recover from a

complete disaster. david: thank you both very much for being with us. it's time to find out was going on outside the business world. british prime minister theresa may is continuing her brexit deal.t a speaking to a conference in wales yesterday, she said leaving without a deal would disrupt trade. she said an agreement would most work for manufacturers and exports. syria,y escalation in activists say dozens of airstrikes by government forces in northwestern syria killed several civilians. the u.s. said it is concerned by the increased fighting, which has killed 300 civilians and

displaced thousands of people. a warning from iran. minister said opec is in danger of collapse because some nations are trying to undermine the members. it was a reference to saudi arabia. president trump trying to cut iran's oil exports. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. alix: once interesting to me is iran is pushing back on that. david: that's what i thought. they are worried. alix: they are losing a lot of money. is tapping saudi arabia. this is how much oil is in the ground that you can get out quickly.

the bottom bar is how much is it risk. that could be very bullish for oil prices. it is if the market refuses to believe it. when that resolves itself, there will be a lot of action in the market. david: coming up, elon musk changes tune on his capital needs. we will talk about the stock offering today. live from your, this is bloomberg. ♪

>> this is bloomberg daybreak. keane.up, margaret

alix: we're looking at three companies worth watching this morning. we are focusing on tech. i will start with tesla. they are going after more money for debt and equity. now they have gone out and insed 1.6 billion dollars debt. that is up the amount they said they would do. people continue to fund. alix: that helps. is that enough? you didn't think it was going to happen. it happened. david: it's going to be worth $500 billion. he said it's going to be worth $500 billion. looking at amazon. warren buffett decided to pull

the trigger on amazon. david: he's talked about it at the shareholder meeting. i think he made it clear he wasn't doing it. has two deputies that really invest. it was one of those guys. alix: he said he feels like an idiot for not buying it. this is something new. david: he passed on it early on. alix: there is still a regulatory headwind about google and amazon. we have a probe into the amazon user data. they compete against businesses themselves. we want to see if this is a fair use of data. david: it is so start when it comes to these huge tech companies. they are going to change the way they do business.

the u.s. doesn't have a problem with it. we will see. the third company is facebook. alex webb joins us. welcome. they are going to do cryptocurrency? alex: we knew they were getting into this on some level. the wall street journal has a good story. they are looking into how that's going to work and what the implications are for the platform. david: what are the implications for the platform? explored. been they get a lot of value from their interaction with their platforms. they might pay users in the form of some of these digital tokens that can be spent elsewhere. it's a smart way of driving engagement, giving something in

return. that money, those tokens can be spent on product. better sense of consumer behavior. recent that's important because the threat is amazon. amazon is into the advertising. they have that last leg. david: is this move the elephant rubbing up against the elephant of facebook? alex: it's a step facebook is already taking. we will have a link on that page theyou can purchase through

instagram app itself. they are pushing act against that. -- back against that. david: thank you so much. coming up, how to spend $1 million on art. we have a guide on how to use that money to start your own collection. this is bloomberg. ♪

alix: if you have a spare million dollars lying around, you can spend it on art. we asked for advisors on how to use that money to get an art collection started. we clearly have a spare million. >> the reason i did this is we are about to the main auctions.

there are some $50 million artworks coming out. important to remember that for the wealthy, you can build a collection from $1 million. i asked a bunch of advisers to work different categories to put together artwork so you can buy right now. those of us who don't know are very well, the old masters are cheap. >> that's exactly right. i talked to a major old master dealer in london. he suggested looking at different periods and building a collection of that. them and we moved on to

more contemporary art. tsg.: you can scratch your you can do good things in the world by helping the environment. >> it is a word. collection among the environment. you can take contemporary art and make it thematic. you can build a collection that involves environmental issues. it can be an important collection. the entire point is if you have $1 million, you might want to look at mediums other than paintings. theings are fractions of cost of paintings, they are still wonderful works of art. david: you have a picasso in here. at 250. was topping out

>> you get to own an original picasso. david: they said don't worry about how much you pay for what it's worth. when you want to sell it, it might not be worth that much. nobody said this was a great investment. >> no one is making that argument. it can be. it depends on how you time the market. alix: contemporary heavyweights. let's do this one. >> there are late career artists who are relatively cheap. someone like laura simpson. $495,000.y she is creating interesting art that will hold its investment and appreciate. david: you probably shouldn't like it as well. alix: that's nice. you don't need to. james.thanks to

the latest issue is available on newsstands. you can see this every weekend on bloomberg television and radio. we will continue our jobs day coverage. the jobs number, look at the dollar. it's continuing to be strong , which took some rate cuts off the table. commodities are still floundering. what does that say about the global growth conversation? this is bloomberg. ♪ so with xfinity mobile

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wages could provide the next clue with what sun deck. at room for mario draghi. there is better growth in the region and a call for higher bond yields. up.mes are down, debt is we talk about the industry and what it means for global growth. welcome to bloomberg daybreak. it is jobs day. the machine keeps going. we haven't seen a slowdown yet. alix: one person who is not looking for a job, stephen moore. it was the craziest thing. alix: he is still in, he's not backing down. he still wants to be on the fed board. david: all was his quote.

he was looking forward to the confirmation hearing. an hour later, he withdrew. alix: there is now a job opening. we can have that chart. the president is 0-4 on fed vacancies. up.res are you will see a lot of jockeying ahead of that number. there is a continued strength in the dollar. we have better inflation. you had a huge jump in overall inflation. the dollar is a beneficiary of that. brent is down by .1%. if you look at the numbers, it should be up. david: you only have an hour left to figure it out.

we are less than one hour away from the jobs numbers. for000 jobs were estimated last month. she is a rate specialist. i want to know what you are looking for and what you are looking at. >> several small discussions, we expect 160,000. is there any temporary boost to hiring? is there an easy way? this is a small technical thing. it has very little to do with the narrative of how the economy is doing. we have talked about that for a long time. it's just try -- shy of the cycle.

of itis some evidence getting week. the economy still doing relatively well. >> i think it's going to be around 200,000. given the fact that we have seen a slowdown in inflation, you want to see consistently good job numbers. if you see a meaningful slowdown, that's premature. the adjustment for employment has been steady and strong. alix: is this going to be a case of confirmation? >> we have had one week month. we are looking past that. there is a lot of volatility on the numbers. what do we see on the wage front?

i think the market will be happy. of the question is where it comes from. are people still coming into the workforce? despite the challenges, there are some people coming in. torsten: one thing that ofprised us is the number people who have been coming back to the labor market. that's been much higher than anyone expected. the percentage of people outside the labor force you find jobs it was relatively weak. not many people were coming back. you are starting to see wages move higher. you see people get slowly back into the labor market. that is good news at the moment. this is the highest level of people coming back. the number of people who come back is still at a very high level. we have a lot of people and disability insurance.

we have a lot of people who are able to come back. when they come back, they get jobs. they will take wages that would be holding down the economy. chart and the labor force growing is a very important part. does that mash up with a transitory conversation? >> it does. inflation impact we have had in the past, where inflation picked up, it's encouraging into these numbers. if you look at the correlation between correlation expectations in europe, they go up in europe goes up. you see a large divergence.

they have cratered in europe. see ancern is if we don't pick up in europe inflation, it will be a struggle for the u.s. to hold up as well. david: we've got those numbers a short time ago. any idea why that happened? torsten: some of it was become of easter. it was a significant jump. the european economy, we have had some problems in manufacturing. we have had this divergence between oil and european inflation. david: since we are on encouraging data, let's look at the quota data for quarter three growth. it shot up substantially. number?a significant >> it has been picking up

gradually. is it sustainable? -- it has been lackluster at best. does this delay the eventual recession? that is something we will be looking for. no --n: the tax cuts are now showing up in higher productivity. some companies are more productive. maybe as a lift in your jobs. do we see margin compression? torsten: this is the other side of this. it was negative yesterday. that means companies are able to not paymore income and the same amount to workers. the cost for unit produced did not go up as much.

normally, if i can hire workers for not much more money, i don't need to invest in capital investment. if the: the cause is worker turns out to be more productive, i can pay them more. wages are going up. it companies can afford what you see. they have been slowly moving higher. we are beginning to see that move up. i know it's very early. it is a bit bumpy. the big picture is it looks a little bit better than it has for quite some time. >> it has worked out great. created -- you see this

meaningful deepening. i think that's the best. the data fact that continues to be strong, there is a selloff with the front and tech. laste both of those in the three weeks. going to beys are sticking with us. david: let's find out what's going outside the business world. this is first world news. >> the last few days of freedom for michael cohen. he will report to a federal prison north of new york city. he's been sentenced to three years for tax evasion, lying to congress, campaign finance crimes. the 10 could she is prisons.

mike pompeo will meet with the russian foreign minister next week. sidelinesmeet on the of the council in finland. there are high tensions between russia and the u.s. over the venezuela crisis. last electionhe as illegitimate. russia is backing maduro. council in afghanistan ended today with a call for peace within. to hammere gathered out a strategy for future negotiations with the hallow -- taliban. several boycotted the meeting. this expose the deepening rifts in the administration. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg.

david: we will look at the u.s. consumer and what wage growth could be. margaret keane will be joining us next. this is bloomberg. loomberg.

david: the american consumer is the driver of the u.s. economy. they have supported solid growth. there may be some indications of some weakening, particularly in the liquid season credit card payments. we welcome margaret keane. servicing a million credit card holders.

welcome back. it's good to have you here. access into so many consumer credit cards. what you see? margaret: we've been watching this very closely. in 2016.d looking we tightened up a bit. we feel pretty good about where the consumer is. one of the things we look at is that patterns. consumers are paying their debt. alix: are there any areas that have weakness? where would you be looking to double check? margaret: you want to be prepared before you see that the liquid seas. we look at minimum payment, are ?hey paying their payments we don't see any indication that. we feel confident about where the consumer is. david: when you see some indication of banks, do you have

a different set of customers? are you protecting against the eventuality? movement we saw some and tightened up a little bit. weare looking to make sure are underwriting correctly. we want to put credit in the hands of people who can afford it. we have a lot of data. make sure we are underwriting the right way. we can see the consumers holding strong. torsten: are there differences across the rust belt? any patterns? margaret: i think this gets back to consumers working. of the a vague factor strength of the overall economy. we see this in our business. how good news is it when you see wage growth? margaret: we think that's a good

thing. i think that's holding the consumer together. the consumer has continued to be thoughtful about how they take on credit. while we see an increase in how they are paying back and pain attention to their credit euro. are you more aggressive that surging up customers? margaret: i don't think we ever get aggressive. we play to our strength. we try to be consistent. one of the things that's important is we support retail. us, we are at for big part of their sales. that we goake sure after our customers and deliver. our goal is to help our partners grow. is this brick and mortar?

could that be good for your numbers? consumer is going where they want to shop, where that in-store or online. if a shop in store, there is a stronger brand for that customer. that's important and we look at that. david: you've been a proponent of big data and technology. can you manage your risk more effectively? are you more confident because of the patterns you can follow through big data, you can loan more money because you know where it's going? margaret: we have more data on consumers so we can look it credit performance. have our credit cardholders. we can look across the portfolio. the other piece that has been helpful is around fraud. that's where we've been able to

use a guide there. are you in-store or out of store? do you live in connecticut and you are shopping in someplace that doesn't make sense? we look at patterns. onx: you have any sense wages and credit applications? hire wages have not been going anywhere. lower income has been moving higher. do you have a read on that? margaret: you have to look at each customer individually. do they have a job? can they afford the credit they are applying for? you have been very dependent on loyalty cards. what does that business look like? are good: i think the big thing here is we are tied to the

brand. customers, loyal they will take up the credit card. that customer is a consistent purchaser. if we take somebody like t.j. maxx, they are very loyal customers. they love to get their points. the moyle -- more loyal we tended to keep that customer loyalty that brand. torsten: heavy seeing patterns with customers who pay their balance every month and the customers who are revolving? margaret: we do look at that. we've not seen a difference. we know somebody paid off the whole balance. that would be a signal that something is happening to that

consumer. those are things we watch. are balance sizes going up? margaret: we are a bit cyclical. more andnd to spend then go back up. david: the federal reserve says we are not raising rates. what does that mean for your business? margaret: we try to manager balance sheets that way. it's not a big deal for us. thank you so much. it's a great perspective and we appreciate your time. you will be sticking with us. coming up, we will dig into the dollar pot direction. there is a rally before the number. this is bloomberg. ♪

alix: we are minutes away from the jobs report. euro-dollar is still lower despite higher than expected inflation. we are getting a little bit of risk on here. why has the dollar state so strong? >> the economy is doing better than most of the others in the world. there is a slowdown in europe. we see a slowdown in a variety of asian countries. the u.s. is just the shining star in the world. alix: is it following another indicator? yield. a combination of i think it's mostly on fundamentals. data, growth jobs in the first quarter versus the expected trajectory for growth in germany.

it's a huge divergence. needs to. we've got a big trade deficit with the rest of the world. we are borrowing money hand over fist. that's a very important question. arerest rate differentials on the short run. that should be, driving the dollar higher. is the newson today was it being weaker. that thea surprise dollar has been appreciating recently. alix: what does it hurt? we are tiptoeing a bit around that question. there isd of the day, a significant impact on inflation.

one thing that could throw a wrench into the machinery is the could hurt earnings and u.s. economic outlook. that would be something different in terms of what everyone is expecting. should the long run, we get back to fed value. 125. it's taking a lot longer. that's the trouble giving the fact that we have growth. david: what is long-run? >> depends on the trajectory. i expect we will see some recovery in the second half. that will be positive for negative dollar. torsten: the euro going up hurts the european economy. it's very asymmetric.

it has a bigger impact on europe than the u.s.. some people would like to see the euro hasn't appreciated. alix: the path of least resistance? think both in the u.s. and europe, you are changing economic fundamentals. we believe it will be anchored at 2.5%. hence we know volatility. sticking withl be us. we are moments away from the jobs report. this is bloomberg. ♪

♪ alix: this is bloomberg daybreak after little bit of a risk here the highs up by 10. the dollar strength permeating

here. euro dollar lower. you have yields up up by two basis points on the 10 year. and commodities also starting to turn around here as we wait for the jobs numbers. and now wu we turn to for the labor department. added beating expectation. the unemployment rate declined to 3.6%. that's the lowest since december of 1969. meanwhile, average hourly earnings rose six cents to $27.77. that's an increase of 3.2% year-over-year or .2% over the month. the labor participation rate declined .2% to 62.8%. and there were significant gains in various sectors in professional and business services added 76,000 jobs,

construction, 33,000 jobs, and health care, 27,000 jobs. there were also some revisions. gains.y, up from 3,000 and 196,000 to 189,000. overall, employment gains for the month of february and march, 16,000. since this hiring has not impacted this month's job numbers and it's anticipated to have picked up later in the year. meanwhile, 3.1% unemployment rate for adult women and that is the lowest since 1953. overall, 263,000 jobs added. 3.6% unemployment. lix: an unreal number. let's get try it the desk here. as kevin was speaking, this looks like goldilocks to you?

>> dave was right. he said that we should worry about the economy. he did clearly say this is not over heating and this is not overheating. this economy is still chugging along very nicely. clearly, it is inflationary in the terms that wages did go up but it didn't go up as much as we expected and the unemployment rate, 3.6%, i mean, that's really low. that's the bottom of the expectation. so this is, i mean, goldman-sachs locks is the best description i've heard. -- goldilocks is the best i've heard. >> fundamentals are very strong and this is a very robust economy. and it's probably a little premature that the market. >> it's telling you that the

narrative that we had, people worry about china slow do you think, they're worried about european slowdown, a trade war, brexit. i mean, all those worries, looks like all that's been pushed behind us and now the economy is responding and saying well, maybe we shouldn't be worrying about these downside risks as much and literally with employment going up so much, that's a strong signal that some of those worries were justified and seemed to be behind us for now. >> i'm not trying to find -- i'm not trying to negative but should it raise some of the models that we'ved a going in? david: if you say to an economist, they would not believe it. >> in particular not because we're speaking about q-1 first quarter is always weak but we didn't see that this year. so this should have been most steady. and we had a government shutdown. that didn't show up. d that now shows as a higher

number. the headwinds are just fading. alix: they're picking up a little bit for like a second, what do you make of that? >> to me, it's basically tells you that we're on a spready trajectory. i think the markets overreacted in pricing and cuts which is given the trajectory of job creation, i think, you know, we should be the fed being on hold makes sense. a patient fed makes sense. we have to see the slowdown of inflation is transient. david: we've been wrong every month but is there slack left? >> as we discussed earlier,

there's still some people who come back to the labor market who have been outside who could be coming back. but this rate should be higher. you have a strong headline, low unemployment rate. solid growth and wages would argue for vindication of the fed from this week and for no excuse for long rate -- loan rates to stay at least for now, relatively low because we still have very strong tailwinds for his economy. alix: they will continue to gain from these higher h.e. >> yes, it's been a very significant development as we've seen wages go up for the low income groups. not so much for the high income groups. it's not a surprise that they still show solid wage growth. earners e lower wage

tend to spend more of their income. they don't tend to save as much. that may promise good news around the corner. >> absolutely. in a majority of the g.p.s., it's -- g.d.p., it's consumer led. there's wage pickup but there's not a significant rise in wages. the concern is that overtime, the wage starts to rise faster than expected then you should see a expression -- compression of profit margins. you're not seeing that yet. >> we have several members and the fed speakers later on. it will be very interesting to follow up what their reaction to his. is it still going to be relatively cautious and balanced? david: does transitory hold up? i'm think about the fed speakers

and what they'll be saying. right now, we really don't see inflation. it's 3.2%, that's growth no question but we haven't seen inflation pick up. >> it's a bit of a conundrum in the sense that the fed wants to wait to see that there's a pickup in inflation but if they wait too long or if they cut rates too soon, we could see a decline in inflation expectations. and then it becomes much harder for the fed to be able to prop up inflation. so it's tough. and if they do cut rates too soon, you could see a bubbling of asset prices and that's a balancing rate for the fed. alix: the participation rate came down. does that reverse? is that going to keep drawing people and how many more people are there to draw back? >> we don't know how many are on

the sidelines but it's clear that drop might have driven some drop in the unemployment rate but it is a very important question for wage growth. it has been weaker than everyone expected and if that's the case, it will be critical to see how many people can come back to the labor market and take jobs. they compete for wages which is something that is holding wages down. david: is there any chance that the tear hiring for the census might affect the numbers? >> we needle to -- need to look more carefully at that. but with wages basically saying at the higher level, it still -- we'll have to see what markets are doing. they do seem to jump a little bit here but not much. and that could be one thing to look at. david: there is some steep in the curve. should we be surprised that the long end hasn't risen more?

we should have growth. are we surprised the longer the curve hasn't come up more? >> well, because wages are very muted. it's a beautiful like goldilocks cenario for the fed. and that's what drives yields and the fact that the economic environment is still, you know, struggling to generate growth, subdued, i think that i'm not surprised that you're not seeing more of a reaction in the bond market. alix: like less so. it went by the dip. now you have yields up while one and a half basis points. >> and there's some distortion from the census hiring. david: yeah. >> so if you try to isolate that -- >> but this unemployment rate is the lowest since 1969. alix: yeah. >> i mean -- it's hard to argue.

alix: fair point. and sort to wrap it up, the census is that for bloomberg economics, they're able to take that out. so based on that pay rolls were still really good at $236,000. >> oh, great. alix: it was still solid. >> the question is what the rate of unemployment? it has to a lot lower given the fact that we've seen consistent decline in the unemployment rate. alix: let's get to the yeah cap here. the numbers are really stellar. overruling we added 263,000 jobs. strip out the census hiring it's still 236,000 jobs. 3.6% employment low. 3.2% wage growth. manufacturing and retail and the labor force participation mate moved down slightly lower as you saw people coming out of the workforce. and the market reaction pretty muted here. you had a dollar at the height of the session. now we're off that. you have the sell-off-of-the

bond market that went to nowhere. so you're taking a look at that goldilocks as we take it all in stride and you have s&p futures continuing at 11 points. thank you both very much. pleasure to spend the day with you. david: outside the business world with ra nita young who is here with first word news. >> british prime minister theresa may was heckled as she began her remarks about the election results about the welsh party conference. >> thank you, everybody and -- >> why don't you resign? >> we don't want you! >> the man was escorted from the room to jeers and shouts to get out from other party mevents while may responded to good afternoon in welsh. she's leaving the e.u. that leaving the e.u. without a

deal would disrupt trade. a powerful cyclone is tearing through the eastern coast of india. more than a million people have evacuated the storm. it is the worst storm to hit india since 2014. the psych clone is affecting the weather as far away as mount everest. it's also disrupting air and train travel. a warning from iran. the country's oil minister says opec is in danger of collapse because some nations are trying to undermine their fellow members. it was in reference to the pledge to fill the supply gap created by the u.s. sanctions on iranian export. president trump is trying to cut iran's oil export to zero. global news 24 hours a day on witter, powered by more than 2,700 journalist i'm rengata young and this is bloomberg. alix: coming up, the real economy for farmers. we're going to take a look at

the health of global agriculture through the lens of agco. we will be joined by the c.e.o. for the final day of the real economy series as we have a killer jobs number. this is bloomberg. . ♪

>> this is "bloomberg daybreak." coming up in the next hour, the pen. alix: the goldilocks jobs report. 263,000 jobs added in april. still 236,000 jobs and unemployment rate falls and your wage growth is there.

does not -- is not what we expected. goldilocks scenario halted. equities continue their journey higher. david: it is time for follow the lead. this is a deep dive into the stories making headlines and moving markets with insights from industries, veterans and the insiders. all this week, we're looking at how the u.s. economy is doing by talking to c.e.o.'s of companies who need to navigate through it. looking atn -- we're real economy through the lens of agriculture. for a look at the farming economy and what it means for agco's business, bloomberg's taylor riggs. >> let's take a look. we're looking at the net farm income and that is going to fall to about $7 billion. that's about half of what it was in its peak and below the 20 year moving average. we have net cap income looking at its second lowest reading back to since 2009.

according on the march, crops are rising due to the increase in corn. corn and wheat have done well, soybeans, off 20% given the lack of demand over from china and the tariffs that we installed. and machinery has been the underperform here going back since the beginning of the trade fight. but you have agco making a rebound here. analysts are saying that agco might start to benefit given the early stages of a multi-year recovery that we're starting to see if these farmers really start to replace some of the old machinery that they're currently using. alix: we welcome now, martin richenhagen, the agco c.e.o. in atlanta. we want to get insighting into how the economy's doing. what are farmers telling you

right now? martin: the mood of farmers vary a little bit from country to country. and here in the u.s., of course, we are -- the farmers are hit by the sanctions from china, the homemade problem we could have youed and hopefully the china deal gets closed soon and then basically, farmers start to buy again from the united states. alix: so martin, if that happens, is that going to be enough to revitalize to farmers? they're getting hit on multiple fronts. martin: well, i think it would help a lot and of course, the weather wasn't very good in some parts of the world. but let's say weather is various and we have -- varys and we have weather situations from all over the world. we do business basically in all relevant countries of the world and in some countries, the weather is too dry and in other

countries, it's too wet. in average, it doesn't have a big impact on our business but it has an impact, slight impact on those farmers who were basically hit by the flooding. but this is a small percentage of farmers who farm alongside the big rivers. alix: and joining us is a columnist who covers industrial furs. brook, your question? >> i want to circle back on china. we have seen some positive reports as far as the trade deal. if we did see a deal what, would be the trajectory for recovery if would you see a huge surge of orders and people came off the sidelines or a tempered return to buying? martin: i think that it will take time. so we should expect something to happen very quickly. chinese basically are good business people and they are loyal to their suppliers and now we basically decided not to be a great supplier anymore and they

substituted beans, for example, they brought in the u.s. by beans coming from brazil and argentina and of course, we need to somewhat prove that we can be reliable partners in the long run. and the challenge i would see and therefore, swrobbling that some things will change quickly. so it will take some time. the quality of the product we do here in the farm good in the u.s. is of course excellent. alix: so? your forecast for this year, you're calling for 2% to 2.a% pricing gain. i'm assuming that relate those tariff we've been seeing. what has been your response to that? are customers willing to absorb the extra cost? martin: yes, we are. very very efficient in doing that. we are the market leader in many countries of the world. and i personally believe that the market leaders should lead when it comes to pricing. so therefore we do that in europe.

we do that in south america and here in the u.s. i hope that the market leader is heading into the same direction. it's justified by technologies. it's justified by better solutions and by digital solutions as well. >> also what we've noticed is farmers continue to struggle is they've made a shift into the more organic premium farming to eke out some kind of pricing gains if they themselves can have. how much of that winds up feeding true to your business? martin: that's only a small percentage of farmers who do this in the u.s. there's a big amount of farmers -- you can hear from my southern accent that i'm not really born in georgia but in germany. so in germany, switzerland, in the scandanavian countries of europe, there's a bigger factor. it doesn't have a big impact on us because let's say a tractor doesn't mind or doesn't care how

the farming is done. we like it. we have solutions for organic farming mainly in tracibility. so it's mainly a software position farming approach and we offer quite some intelligent solutions to support farmers in that area. >> definitely caterpillar talking about investing in digital and services. do you think people are willing to pay more for that? can you charge extra for that element in farming equipment? martin: that's a good point. so it depends on what the offer is. so that means when you listen to young people, when you go to a farm, so everybody is excited about those things. you have to boil it down and you have to basically offer solutions which finally improve the bottom line results for the farmer. and if this is the case, then of course, farmers are prepared to also pay for it. >> yeah. martin: so we want to help

farmers to improve productivity and become more efficient and that is also why we launch our brand to the technology world, technology leader in farm equipment here in the united states. >> yeah. martin: and we got quite some traction. >> martin richenhagen, agco c.e.o. it's been great to catch up with you for that read on farmers. alix: the jobless rate following to a 49-year low. this is bloomberg. ♪

♪ alix: the job numbers for april. ira, where is my bond sell-off on this? >> so no bond sell-off because if you look at the hours worked and the wages numbers, those didn't meet expectations. so you've had a little bit of rollover in what i call

aggregate labor income. the amount of jobs times how much everyone is making slowed down. for the bond market, it's not very flashery -- inflationary. alix: so we have the speakers lined up as well. what will be the buzzwords you're willing at? >> i'm going to be looking at patience. do they continue to use the word patience like they did on wednesday? i suspect they will and what's the key for them to actually do any kind move? alix: good stuff. i wrapped it up on this jobs friday for "bloomberg daybreak." coming up, "the open." this is bloomberg. ♪

jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, payrolls friday in america delivering another month of solid jobs growth. looking forward for a day full of fed speak data after german pile slapped down -- after chairman powell slapped down rate cut tops. 30 minutes away from the start of trading. here is your friday price action. futures with a nice bid. futures up 16 points on the s&p 500. the euro week and the dollar stronger. the euro-dollar 1.1150. treasury yields dead flat. 2.54 yours yield on the 10 year. let's begin with the payrolls report. joining us from the labor department, kevin cirilli. the take away? jobs added to the u.s. economy in april, sm