e. economists expect the headline job number to be solid, while analysts worry about average work week. speak to one of the largest payroll managers. bonds take a big break after the biggest today rally in yields since 2009. and investment grade companies borrow $74 billion this week, the most in over 45 years. david: welcome to "bloomberg daybreak" on this friday, july 6 6,on this friday, september jobs day. we still have dorian coming up the coast. alix: it's been such a slow storm, yet the losses on a monetary basis might be less than what many had thought, which i thought was very interesting. david: you can see it ranked according to other storms in history. still 100 mile an hour winds, which is nothing to sneeze at, and they got a lot of rain. they are not through it yet, i'm

afraid. alix: the cotton crop is the most vulnerable now. in the markets, this is your job set up in the middle of easing from russia and china. both of those contributing. yesterday.her continue to see some follow-through buying, up 0.1% taylor: the dollar is kind of back -- up 0.1%. the dollar is kind of mixed. you had a sort of large selloff block in asia in the treasury market, so that exacerbated yields moving much higher, but crude all of the sudden off by 0.2%. -- off by 2%. time now for the global exchange, where we bring you today's market moving news from all around the world. going us from hong kong is bloomberg's jeff black, tony ahrens in london, francine lacqua in italy, and michael

mckee in washington. we want to start with china, where the country's central bank announced it will cut reserve ratios for banks. bloomberg's jeff black is in hong kong. put it in perspective for us. jeff: good evening from hong kong. this is all about the ongoing slowdown of the chinese economy, the ongoing headwinds from the trade war with the u.s., but the ongoing concerns the government has about what would happen if withally let go stimulus. there's still risk of bubbles, so what happens this evening was essentially a limited easing step that can put a floor under the slowdown. david: not only do we have what is going on in beijing, but in hong kong we have fitch downgrading. is this a surprise, and is this the worst of it? it is not really a surprise.

as you know, sometimes these rating changes take place after the big events that everyone has seen, so we know the hong kong economy is slowing quite sharply in the wake of the protests. we know that there are concerns about governance going forward. the interesting thing from the downgrade was not writing itself, but the reasoning, which stated the closer that hong kong gets to mainland china, the bigger the questions are about its credit worthiness. hong kong is still rated higher than its sovereign, mainland china. david: thank you very much. that is jeff black reporting from hong kong. in the u.k. come up prime minister boris johnson has won a second court ruling on challenges to parliament suspension. tony ahrens is joining us. does this really make a difference in the outcome? tony: right now it is pretty clear that boris johnson will have permission from the courts to suspend parliament up until

the supreme court hearing on september 17, about a week after parliament is scheduled to be prorogued. that means they will miss at least two to four sessions. aarons,oomberg's tony thank you very much. more signs of weakening in germany, with industrial decline setting up a week third-quarter -- setting up a weak third-quarter. sure that central banks will have to do whatever markets prove they have to do we .re not in a recession it takes some assurance with some measures, but markets are pricing in much more already, so we will see. that is what really worries me. alix: francine lacqua's live in italy with more. we had some great

interviews this morning on monetary policy, and i have to say, it is a little bit of a different mood here. it went from talking about the recession in germany to what could happen with italy if this government wins a vote of confidence, and whether it can push through some structural reform. the pboc can manage the economy and so the trade war won't have that huge an impact on europe, not because it could have been. so use it'll -- so you see a little more of an optimistic mood here in italy. however, i hear it over and over again, a lot of focus on reviewed physical spending and stimulus, and that needs to start from germany because they have very tough rules. we are watching all of this, and we have a focus of the u.s. we will also have an update on brexit with the minister in charge of having the u.k. exit

the eu. david: thank you so much. that is francine lacqua reporting. now let's turn to the united states, where the main focus today is on jobs, with august nonfarm payrolls estimated to rise. michael mckee has more in washington. set it up for us. michael: jobs are about paychecks, and paychecks are the foundation for spending. while the headline number is backward looking, officials are going to be looking for clues to how the consumer will do going forward. new york fed president john williams saying this week it is the consumer holding up the economy. we have seen wages rise as unemployment has fallen over the past month, and consumer spending has been strong. the wage numbers have flattened out a little bit, but they are still rising over 3%. if we get that again today, it would be reassuring. 100 60,000 forecast, new jobs created and 3.7%

unemployment. we might have an interesting bump. in the hiring numbers the census bureau was -- an interesting bump in the hiring numbers. the census bureau was going to put more people on, so that would distort it. look to the private number for what is really going on in the economy. also this month, we get an additional number down in the weeds that a lot of people hadn't been paying attention to. f there is a slowdown coming, you don't want to fire workers right away, but you might ask them to work a few less hours. alix: that's a great point, the canary in the coal mine. how does this set us up for jay powell speaking later on this morning in zurich? michael: unless there is a really strange number in this report, don't expect jay powell to make much news. he's going to want to say the fed will act as appropriate to keep expansion going, but doesn't want to give any clues away as to how far they will go.

the market is building on 25 basis points. he would like to walk away basically unchanged, looking for that 25 basis point cut. we will see where they go after that. alix: thank you very much. coming up, we are going to have more on your morning trade and analysis in the markets in today's first take. this is bloomberg. ♪

david: time now for our bloomberg first take. this morning we are focusing on the u.s. august jobs report, out at 8:30 this morning eastern time, fed powell -- fed chair , andl's speech in zurich more.

with us now are carl riccadonna and constance hunter, kpmg chief economist. carl, let's start with you. carl: there's a risk that the big spike in workers for the census could lead to a misleading sense of what is happening in the economy, so to get a cleaner read of what is happening, i would look to x census payrolls, which may not be immediately evident. i would focus on private payrolls to get a sense of what is happening. we are above consensus on the headline print because of census workers. however, on private payrolls, we , whichker than consensus is about 150,000. seen an increase in defensive posturing among businesses, especially on the capital front and hours worked.

we want to see if that is extending into the pace of hiring. alix: constance, what is your call? constance: we are looking at 160 thousand, notwithstanding this up or down 15,000. i think the important thing to note is if we get 150,000, we are looking at year-over-year -- get 160,000, we are looking at year-over-year jobs growth. it is reasonable to accept the pace of hiring to slow without necessarily causing alarm bells, but what it does do is it puts a guard rail on how fast as mrs. can expand if they can't find the workers or don't have the appetite to continue hiring at the same pace. david: but what if that -- but what about average hours worked per week? that's not down last time, which really affects job numbers. constance: ed affects the amount of money people are earning, and of course, that affects consumption. we are going to be watching all of those underlying pieces of

ita for clues regarding, is we are not hiring workers because no one wanted to hire them? you might see hours worked take up a little bit even though the hiring number went down. or is it all around a slowing, and is it comprehensive throughout the numbers? carl: if there was really a shortage of workers, we should see a spike in average hourly earnings, which we are not seeing. constance: or hours worked. an economye are in where business investment has stalled out due to uncertainty over the outlook. export demand is in decline due to the strong dollar. housing has been in a sixth quarter slump. can consumers carry us forward? the issue is we have to watch aggregate income creation or hours worked. that decline in the work week we saw last month, everyone popped the champagne and said consensus was right on the mark with the payroll print, but would be 1/10

decline in the workweek? we had seen zero on the payroll print because the rule of thumb is one tempt on the workweek is about 200,000 jobs in terms of worker hours produced in the economy. this is leading to a deceleration intellective paychecks, what we call aggregate income growth, which earlier this year was growing at 5.7%. we are now down to four point 1% growth. if paychecks are rising at a slower pace cumulatively, that tells you consumers are going to be more conservative relative to what we seen. constance: we see this in some of the other data, right? consumer credit declined a little bit last month. we are going to be watching that very closely this month. although retail sales have been bouncing around, we have some rebound in the last months numbers, if we look in aggregate, we are seeing retail slows as well. alix: i guess the important

question is the why behind it. i wonder how much that has to do with trade. the fed had a paper out two days ago talking about quantifying erased, about 0.8% by the first half of 2019. it would have gotten better, but we had a redoubling of trade tensions. constance: average tariffs in 2018 were 12.5%. by the time we get to the end of this year, their close to 29%. that doesn't mean we are going -- to shave poin 1.6% this year. tariffs are absolutely part of the problem, but they

are an easy scapegoat as well. r for retail. what is underappreciated is the record strengthen the dollar. president trump says a strong dollar is not as good as it sounds, and that is true not only for exporters, but also domestic industry. tariffs absolutely a problem, but i think they are getting a little more credit than deserved as a strong dollar, not unrelated to tariffs, is a big drag on the economy. also, yield curve inversion, financial market volatility is just creating economic uncertainty. , to getiss the earnings to tariffs. david: jay powell, the chairman of the fed, we will hear from today on the eve of the blackout period. carl: that means jay powell will get in the last word ahead of

that september 18 rate decision. when the chairman of the fed is getting the last word, that's a great opportunity to grab the steering wheel and potentially make a course correction. in the press conference, he made it sound like one or two rate cuts. now is the opportunity for him to lay out a little more of a game plan. maybe not in very specific terms, but i think be signaling from him will be which got to do more. look for 25 basis points on a regular basis in terms of fed easing, not until the yield curve is an inverted. alix: i wonder if he got a break. this is the rise we have seen in 10 year yields. for the two-year, you had the bonds moving higher. that risk assets don't need the fed to move now. constance: carrie lam did the

whole world a favor by pulling the extradition bill. what's happening in hong kong was weighing on risk assets globally. that is what caused that move earlier this week. i think you guys put the headline, something like "the phantom of trade talks," because even though we had that occur multiple times over the past several years, we continue to have tariffs ratchet higher. nevertheless, the prospect of trade talks -- alix: but to the point it means cut.n't need a basis point carl: if the economy is just grinding lower, you don't take that kind of aggressive action. alix: a few weeks ago, the market needed that. we didn't get it. kailey: that's why there has there'sarl: that's why been a steady stream of communication that said the economy still looks relatively decent.

we are just gradually easing, not moving aggressively when we got a limited amount of ammunition to throw at the problem. how difficult is it for jay powell right now to keep his fed together? carl: i think he has a well unified fed. if you get a third dissent from hawks onrd, and two one side and one dove on the others, you still have a pretty unified committee. constance: someone told me , the fede july meeting shared should resign. -- the fed chair should resign. i said, that seems a little drastic. i was at jackson hole and had the chance to speak to a lot of different presidents and board member's. there's very much a caution about the extent the policy tool

thenterest rates can stem decline when it comes from uncertainty around trade. they are not going to be able to change that. what they were able to do is solidify mortgage rates. we certainly seem weak housing for the last six quarters, so that should feed through to a slightly stronger housing market. what they are able to do is weaken the dollar and give space for other central banks to cut because dollar liquidity globally is so important. it is such a hegemonic position as the dominant currency, both in terms of bond issuance, liquidity, trade. so this gives the opportunity for the global economy to ease a little bit and have easier liquidity conditions. month ago bailey, i on bloomberg television, said interest rates are low. it does help in general terms,

but what central banks are adverse to acknowledge is the fact that interest rate differentials are very meaningful in terms of the currency levels. so fed easing should take a little bit of steam out from out of the dollar and help things we can little bit. constance: this was the subject of one of the papers at jackson hole, widely discussed. can you have divergent interest rate policy? carl: you can. you will have a very strong currency as a result. constance: in the discussion about this from multiple central bankers was, yes, this is a concern, and especially when you have the dollar playing such an outsized hegemonic role within the global financial system. it becomes very difficult to have i divergent meri -- to have a divergent monetary policy. david: carl riccadonna of bloomberg intelligence, thanks for being with us. constance hunter of kpmg is going to be sticking with us. use gtv under terminal 2 gtv cent charts --

on your terminal 2 browse recent charts and save your favorites. gtv . after 10 long years, the trump administers and has a new plan -- trump administration has a new housing plan. this is bloomberg. ♪

renita: this is "bloomberg daybreak. a number of" into facebook and google next week. new york's attorney general will lead the facebook probe. the google investigation will be headed by the texas attorney general. google already faces a federal antitrust investigation, and facebook is also under federal scrutiny. in the u.s., the government boldest step towards closing one of the final steps of the 2008 financial crisis. it has released its plan to

release fannie mae and freddie mac from government control to create new competitors. that is your bloomberg business flash. david: thanks so much. still with us is constance hunter of kpmg. we remember in 2008 when the government took over fannie and freddy. it's now been 10 years, and they are still basically run by the u.s. government. constance: i think my reading of the interpretation of this plan -- i haven't read the actual --n david:david: i'm sure there's much of a plan, frankly. alix: it is taking us back to the precrisis situation with explicit guarantee by the government. an economist at fhla, i would hope he has his hands in whatever action gets taken. it is not clear from this

reporting how much he's been involved. david: the child lunges how you make mortgages easier to get -- the challenge is how you make mortgages easier to get and not have a government backup for it. thatance: and i think there certainly are a number of people who will admit there are many other countries that have a perfectly functioning mortgage market without a government guarantee of mortgage lending, so shouldn't we try to figure out a way to get this back into private hands? david: and they've been working on it for 10 years now. thank you so much. constance hunter of kpmg will be sticking with us. coming up, alberto ramos joins us with his view on latin america's economy. this is bloomberg.

alix: this is "bloomberg . we" are seeing some follow-through buying in the u.s. equity market, up .

-- up 0.3%. up above the 50 day moving average. in europe, you're seeing on market buying coming in. bid just not here in the u.s. you're seeing a bit of a selloff continuing. in asia on the 10 year as well. crude a little bit weaker. i'm watching that. if that is on-demand growth or trade lack of optimism, that is something the currency market and bond market needs to watch. this week we are shining a spotlight on latin america. the region is awash in commodity. it has long held some of the world's largest promise and uncertainty. we see this playing out right now in argentina come over the political situation is evolving rapidly. you can join me tonight for money special, "oil's next big boom," where i take you inside grown oilica at home

companies and investors. s the dynamics to push the region into prosperity. mexico, venezuela. these were the powerhouses of latin american oil production, a source of wealth, prosperity, and competition. now venezuela is in crisis. >> it is a failsafe, and you can see it in the oil production numbers. alix: and mexico is too hard to invest in. >> you see these clients starting to take form in mexico. alix: now it is up to the next generation of oil companies. ombia, guyana, argentina, and brazil. >> it is the most underdeveloped in all of south america. >> the third region that stands out is guyana.

that is no longer it. you want to be in rockmore. it is an important place of the future. titled --ill they be will they be toppled by disruption? constance hunter of kpmg is still with us. there's so much set up there, and each country doesn't seem to get its act together to act off of these resources. why is that? luke: luke: reporter: it is a good question. -- reporter: it is a good question. economically, it is not a poor region. it has been a poorly managed geography. t is very top

expiring. the traditions are so deep rooted in glaring that even small, accra mental progress -- small, anchor mental progress could make a world of a difference. explains the poor performance of the recent past. these economies are operating with a very low level of capital stock, low levels of savings. the region does not trade enough. they need to integrate more into the global economy. low levels of human capital. end, the code for gross prosperity is open source, so you don't need to reinvent the wheel. just keep it simple. sectors,eaner public particularly in argentina and brazil. they taxed too much and spend too much, and yet invest too little. is a huge set of reasons, but they are not new, unfortunately. david: you sit stable and

investment friendly. when you see the potential and the lack of realization, how much is missing? r v -- for voc on where to erta and mexico, people are hesitant to invest. righto: you need the incentives to go develop those opportunities. if you provide a disciplined macro backdrop on the fiscal and monetary side and a stable, ,riendly, regulatory framework you know where the opportunities are and you look at the capital, how to manage their risk. you don't need to overthink these from a policy standpoint. just doing the basic things can go a very long way. alix: the pushback to that is that you are going to have these

foreign companies come in and take all of our stuff and we aren't going to get any of it. that is not totally crazy. they want to protect it from themselves. what is your take? constance: there are many models around the world latin america can look to so they can learn from the mistakes and success with regards to the requirements for other investments that are made. there are often requirements for infrastructure that are permanent. there are education investments, environmental remediation. can be many ways that handled practically. the question is how is it handled optically? how is it handled to 80 domestic operatives that has been used to a lot of policies that were perhaps unrealistic, but were appealing. how do you spin this and sell this and construct it so it is truly beneficial for the democracy -- for the economy and

many per dissidents, and how do you package that up and can -- and participants, and how do you package that up? -- alberto: there had been repudiation of national debt. there was a very significant element of policy opportunity from the administration that preceded him. leeway for the central bank. world that period, the economy was quite favored.

constance: look at a country like chile. with their copper earnings, they set up a fund norway has done with oil, and that is one excellent way to do this. you set up a sort of rainy day fund, use that to provide provide social safety nets. it contributes to your sovereign wealth, and it is certainly one successful model that's been used in developed and developing economies. alix: to focus on argentina, i did go down to visit vaca muerta. what is your take on what is going to happen with elections? alberto: i am not an analyst. it seems like the opposition will have the upper hand. alix: is that bad or good? if you have a ticket that is -- while not go with

that ticket? alberto: there is anxiety about the potential political position, and it is the argentines running on their own banks and elder deposits have declined into three weeks. they go backthat to this old populism across the region and keep on doing the same thing, yet expecting different results. so it is that fear that you've got to interrupt the policy reaction with traveling. it can be quite damaging for a country that has very limited policy options to manage. it is a very complex situation. the risk and the fear of the policy reversals, i believe

there are other national policies, but it is what is needed. alix: desperation. you know who is making political phone calls right now? cristina kirchner. over to rameau's of goldman sachs, thank you. constance hunter of kpmg will be sticking with us. tonight,n't catch it tomorrow morning it is airing and on sunday morning. david: do what you can to watch tonight at 9:00. let's get an update on what is making headlines outside the business world. renita young is here with first word news. renita: hurricane dorian is battering the coast of north carolina this morning. the owl wall -- the eye wall is howling over the outer banks, a chain of low-lying islands. it has been downgraded to a category one, with top sustained winds now 90 miles an hour. in the bahamas, the hurricane is blamed for 30 deaths, but that number is expected to rise in the coming days. isna's central bank

injecting liquidity into an economy facing renewed headwinds. the people's bank of china is lowering the required reserve ratio by 0.5%. revives will billions of dollars in liquidity. the labour party and scottish national parties have discussed a vote on october 29. boris johnson once an election, but his opponents want to make sure he is first blocked from taking the u.k. of the european union without a deal. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. young.ita this is bloomberg. david: thanks so much. still with us is constance hunter of kpmg. it seems like the politics have overcome it, for instance.

we have less chance of a no deal brexit given what parliament has done? there'se: i think slightly less chance of a no deal brexit. i've been saying for a couple of years that the eu is like the hotel california. what we keep seeing is they keep finding a way to slow back the exit date, and this is another example of that. with each turn of details, they are slightly different, but this is another example. what i will say is that our excellent team in the u.k. has put out a report on the implications of a no deal brexit for the british economy, and i think what is well understood by many people is that that would be worth for the u.k. economy that is influencing. -- for the u.k. economy. that is influencing the decisions. david: thank you very much.

coming up, more job cuts at deutsche bank. more on that next in today's wall street beat. this is bloomberg. ♪

renita: this is "bloomberg daybreak." coming up in the next hour, marty mucci, paychex ceo. now to your bloomberg business flash. the mastermind of what prosecutors called one of the largest hedge fund insider trading rings in history is out of prison. he was freed after eight years behind bars, almost two years only.

he's mostly confined to his manhattan apartment for the rest of his sentence. is it was that she was arrested on a plot to steal insider information from bankers and others. berkshire hathaway has returned to the original home of okra low borrowing costs for a bond sale. home of an ultra low borrowing costs for a bond sale. athe biggest offering by non-japanese borrower. japanese boss in yen have fallen to near a three year low. facebook confirms that 419 million ids and phone numbers were exposed in the latest privacy lapse. , theding to techcrunch database was stored in on online server that was not password-protected. it has now been taken off-line. i'm renita young. that's your bloomberg business flash. alix: we turn now to wall street

beat to cover three things wall street is buzzing about this morning. first of all, turn at deutsche bank. goldman sachs gets a rating cut from analyst as the bank continues to shed those topics. and then hundred 50 billion global corporate bonds bend -- and then $150 billion global smashing on binge records -- corporate bond binge smashing records. david:david: -- joining us is bloomberg's sonali basak. leadi: see fixed income said to his employees they would not be losing their jobs, so now we know dozens of people around the world are being cut from their jobs. latin american credit-rating, instance, is being surveyed.

this alix: has been the conversation for deutsche bank the whole time -- alix: if you like this has been the conversation for deutsche bank the whole time. sonali: fixed income is supposed to be the big driver of banking revenue going forward, so what is the turnaround plan? we know they are cutting some of the underperformers, but what's left? how do you turn this around? alix: david: golden has part -- hasor: -- david: goldman figured out a way to cut costs, to cut all of their partners. sonali: a lot of people, this is an interesting one. some analysts are discounting goldman differently now that they are entering different businesses like consumer, which could be a gross area, but it is too early to tell. alix: at one time, managing partners would really be elusive, you would have to work really hard, and now it seems like if you are here for this

long and have this kind of performance, you will make it. sonali: and they are much more in demand. he emails me periodically when we are on the air. let's turn to debt issuance. this shouldn't be a surprise, if the price goes down a lot, you want to buy more of it. berkshire with a record for a non-japanese customer. these are from record low rates. i just want to know who's buying this stuff. alix: my question is how much money are banks making off of this? who's buying it? probably hedge funds, index funds, but the banks are like yeah, let's do it. sonali: it's been a tough summer, so there have been parts that have been really troubled.

reallya lot of it is high quality. it's berkshire hathaway, people like that. also, theink distinction is if you can get apple, their dividend yield is higher. why wouldn't you go by the equity? i guess it is a different time of longer-term play. sonali: they are all underfunded. david: exactly. let's turn now to wework and softbank. the big news yesterday when i was in chicago, it is not as work may be as they thought is was -- not worth as much as they thought it was. sonali: we learned that softbank had more at stake than we work, and now "the wall street journal

" reporting that the ceo is asking the bank for potentially another capital infusion. is this ipa going to happen -- this ipo going to happen? if all else goes well, everyone says this will start next week. yesterday was a tough day, especially for softbank. they always have an issue in the mismatch of liquidity because they basically have long-term allocations and short-term revenue. that doesn't really lurk in the long-term -- doesn't really work in the long term. sonali: they will keep needing to raise money. valuation beenn earlier this year. alix: where does this leave softbank, then? sonali: $20 billion under what they wanted. vision fundsr big are having a very tough time, so

-- howthat going to fai is that going to fare? david: not easy being a unicorn these days. basak, thankonali you for being with us. coming up, starbucks is big in china, and its ceo says the company is not getting hurt on trade. if you are jumping into your car, tune into bloomberg radio, heard around the u.s. on sirius xm channel 119, and on the bloomberg business app. this is bloomberg. ♪

david: this is what i'm watching, starbucks. i talked to ceo kevin johnson. they have all of their store managers and field leaders together, 12,000 people from around the world, in chicago for three days of leadership training, emphasizing things like sustainability. they are reducing the stigma of mental illness because starbucks is in so many communities around the world, and they are doing a huge thing, costing like $50 million. . alix: meaning they will interact with customers who have mental illness? david: we seen this increasingly across the country, a spike in things like suicides, so they are focusing on that. one of the things importance to starbucks is china. one of the things i ask kevin johnson abouted -- one of the things i asked kevin johnson

about was if they see difficulties because of china. geopoliticalth situations all the time. the dialogue had no material on our been packed -- on our -- thus far, we've not seen any material impact on the geopolitical situation, but i always say we are not immune. thus far, i think we've navigated it quite well. david: at what point will starbucks get greater revenue from china than the united states? >> in the united states, we are roughly at 16,000, 70,000 stores. we are at 15 -- 16,000, 17,000 stores. we are at 15,000 in china, so it

is going to be a while. one of the things i'm always reminded of, they are adding a store every 15 hours in china. he said as long as he's alive, they can keep doing that. got a long way to go. every 15 hours. it is over one billion people they want to serve coffee ot. -- serve coffee to. alix: coming up, we continue our jobs to coverage. , cure yourelsky careerbuilder ceo, and torsten slok, deutsche bank. ♪

♪ david: welcome to "bloomberg

daybreak" on this friday, september 6, jobs day in the united states. here's what you need to know. china's central bank is ratcheting up stimulus for an economy facing renewed headwinds, cutting the amount of cash banks must hold in reserves. that will inject billions of dollars into its economy. alix: the eyeball of hurricane dorian moving now over north carolina's outer banks. top winds are 90 bows in our, and storm surge could be devastating. prime minister boris johnson's opponents are looking for ways to outmaneuver him. his latest plans are to hold a general election in late october after his plans are delayed. johnson is not going for that. -- ihnson: i would with would rather be dead in a ditch. it achieves absolutely nothing. longtime herothe

of zimbabwe who eventually turned into a villain. robert mugabe has died, one of the drivers of the 1970's war for independence that ended white minority rule, but his 37 years as president were marked by political and economic chaos. robert bychkova was 95. alix: in the market -- robert mugabe was 95. alix: will the jobs number confirm the rally? it is a mixed dollar story heading into it. a little bit of buying over in europe. the market also trying to digest what the potential china stimulus overnight meant. the central bank cut its reserve ratio requirements for banks, commercial banks by 1%, big banks by 0.5%. is it going to be enough, or does it mean some the more ominous? we are just a half-hour roi from the u.s. jobs -- half-hour away from the u.s. jobs report.

the market will put extra focus on weekly hours worked for signs of a cooling labor market. joining us now are irina novoselsky, careerbuilder ceo, and torsten slok, deutsche bank chief economist. irina, what do you see? to seewe are continuing job growth, unemployment study, but one of the things is employers are having a tough time telling jobs. over 50% of hr functions say there's not enough qualified candidates to fill the jobs. one of the interesting stats we've seen is there's over one jobs thend a half there are unemployed -- there's a half moreon and jobs than there are unemployed people. david: overseeing a change in number of hours worked, overtime hours, things like that?

torsten: manufacturing is down pretty hard, telling you the many factoring sector is relatively hard hit by what is going on in the trade war. the second thing we are seeing on the chart here, hours worked have not only got down in manufacturing, but also gone down in services, the holy grail of the debate at the moment. getting a little worried that some of these trends could become worrying and the number today. david: i want to ask you another question about ism and its correlation to labor. we have a chart that indicates overtime, manufacturing numbers were quite disappointing. torsten: that's why one of the best indicators for the u.s. economy is the manufacturing. it can predict gdp on what will happen at the macrolevel. we have seen that the chart shows this week below 50, which you could save, this is just a trade war.

and 10%s just 10% gdp of employment. you don't get the nobel prize in economics for this correlation, but you look up and end up saying it looks like the risk is to the downside. irina, that's different from the picture that you are seeing. can you help me understand why? irina: a little bit of what you are seeing is probably a leading indicator. we are seeing a lagging indicator. what we are seeing on the job side is a supply and demand mismatch. we are seeing pressure on the retail side. some of the services are feeling pressure, and those candidates are having to go into other industries. overall, we are seeing that there's not enough supply to fill the demand, and where companies are going is actually into upscaling. we are seeing manufacturers make a commitment to upscale over one

million different jobs because a lot of the candidates don't have the technology components necessary to do their jobs. david: where are you seeing mismatches? you may have more workers then you need, but less workers with certain skills and abilities. irina: the retail space is getting hit hard. we are pushing clients that are winning approval. how do you look for the underlying skill set? the transaction of looking for an matching employing candidates has really changed. that industry is looking more in going into sales. we seen a lot of growth in health care services, and transportations. also attracts an aging population, and 50% of the categories have about 25% or so of the workforce leaving in the next five years. torsten: as wages have gone up, you've seen people come out

of retirement and into the labor market. of you see any evidence workers coming from other jobs? irina: it is both because there's not a million a half ,obs more than there are people so if people were still entering the job force, we would still have a big gap. torsten: a number of people have come back quite substantially in bigger numbers. irina: we are seeing it, but they don't have the right skills, necessarily. 75% of the roles out there have some portion of technology. we are seeing the metal getting hollowed out, where the high-paying and high skilled continue to it paid well, and the middle is left figuring how you get up skilled to move into the higher categories. torsten: so the difference is in wage growth? irina: it depends by job

category angiography. one of the things we are seeing overall, we are actually seeing different pockets depending on whether it is in certain cities, where there is just a deeper aflux of jobs coming in and stronger desert around the supply. for example, one of the things we are seeing in atlanta is accountants have doubled, 6% wage growth. alix: that is fascinating. if we want to spread this altogether and related to the market, it highlights the weak employment number we got, the ism, and the weak employment in the nonmanufacturing ism, and then the huge selloff in the bond market. our markets ignoring that and saying things are really great, or did something else happen? torsten: in terms of ranking order, ism is the most important indicator. that is telling you ism is

highly correlated with what is happening with 10 year rates. at the end of the day, we tend to focus mainly on what ism manufacturing is doing. in our view, that is continuously pointing to the downside, so that is why we worry about the risks, but there are areas that did show some what isso that is why going on is absolutely key because manufacturing is still only 10% of the economy. alix: yesterday with a bond market move. how did you interpret that? torsten: when relief came yesterday that may be the economy was not falling rapidly, the market was taking a little break, that's why did number in a few minutes will become very important. it will either confirm the nonmanufacturing item or tell us there are still worries to the downside. alix: torsten slok of deutsche bank and irina novoselsky of careerbuilder will be sticking with us. coming up, and inside read on the state of hiring from the ceo

of one of the biggest payroll processing companies in the world. the ceo of paychex will be joining us. this is bloomberg. ♪

paychexaylor: -- david: is out with its small business numbers for the month of august, and shows wage growth stabilizing. the ceo joins us from new york, marty mucci -- martin mucci. torsten slok of deutsche bank and irina novoselsky of careerbuilder are still with us. tell us about august. martin: we saw a little bit of a

drop from july, about 1% less job growth from last year. still seeing job growth, but it has slowed. we think primarily this is because of the tight economy. it is harder for small businesses to hire when it is a tight labor market. a little bit may be on trade as well. about 25% of small businesses we surveyed said they would be impacted by trade. when you are a smaller business, you don't have the leverage to change suppliers or sometimes get it back in price. david: one of the things we love about your survey is you break -- break it into quadrants across the country. martin: from a wage perspective, you see the west has the highest wage growth and they've had more minimum-wage changes, which really helps the bottom 20% of

the wage earners. in the south, you have the best job growth. that has continued for some months now, where the south has more people, more migration to the south. also, the minimum wage in the south averages around eight dollars an hour. in the west, around $11.50 an hour. torsten: you mentioned that the trade war is an issue. what is the transmission mechanism exactly from the trade uncertainty to what this means in your data, both on the hiring front, but also the wage front? the trade front, most small businesses are more local and regional, so they will not be impacted. about 1/4 of the businesses we surveyed say they will be impacted, and they have a tougher time putting that into price because tariffs go up. i'm not going to trade my supplier from canada to the koreas or somewhere else.

it is tougher with a small business. 3/4 of them don't think they will be impacted because they are more regional companies. david: let's go back to that map. how does that fit with what you're seeing a careerbuilder? irina: pretty similar, actually. the west is where we are also seeing a lot of the job growth. talked about how salary discrepancy is happening in different areas. we are seeing that in the blue and the yellow because they are liking that supply. of'sare offering were sent -- they are actually offering incentives for retirees to come back into the workforce. one of the things we are seeing is this is one of the most painful times for smb finding qualified talent. the 46th year in a row, their highest out the last 50

years. david: how do your numbers small and medium-size businesses finding the right employees? martin: we've heard the job market got tough. larger employees can offer more benefit plans and perks. smaller businesses do not always have the flexibility, the recruiting power, the benefit packages, so they are having a harder time finding people when it is a tight labor market. this has been the number one issue for small businesses under 50 employees, who are probably nine to 10 months now i narrow. -- now in a row. david: what does this say for the overall macro picture? torsten: if you are a big business, you can change your supply chain around in a manageable way, whereas if you are a small business and you have one supply in china, it gets more difficult.

makes sensee, it that a significant amount of is more recent by we should be worried. to get oureed workers more educated. does that reflect in your numbers? irina: definitely. one, we have about 35% of the u.s. population with a college degree or higher. one of the things we are seeing is the jobs getting posted aren't requiring higher education. they are actually investing in upskilling and training, and small businesses don't have the ability to leverage that as much to attract candidates. the second thing is that discrepancy where larger employers are able to get an offer more benefits and more attractive incentives to get employees. one of the things we are also seeing, they are investing in technology. there's leveraging ai to figure

out the gaps of what cities, what job categories have gaps, have disparate populations, and small businesses are going to have to leverage technology to compete. marty, i knowen: you also do benefits. one of the anecdotes you are getting are benefits more generous at the moment? martin: right now i think they are trying to get more generous. health care costs in particular are very important to young people. they are interested in it. they want a competitive plan, but they do want some sort of health care plan. they also want more part-time, more flexibility. you are seeing a growing need for hr support in the smallest of businesses, where they need help. even on drug testing, drug testing used to be a very big issue. now it is starting to calm down, where some businesses are

saying, i may have to give up on drug testing because i can't always find people. i've got to attract them. you're seeing more benefits, more work flexibility in the hours, and some other changes in hiring patterns. alix: if you take a look forward, are there industries that may be coming off such gross times that you may free up some workers. obviously, thinking specifically of energy as you had a real pullback in texas, and we saw your map was not the strongest in that area. are you seeing any kind of shift? martin: not too much. we are seeing dallas is still pretty strong. as you have growth in employment in larger businesses, the small businesses around them, the restaurants and home builders, the contractors, they start to build up in those areas. in general look good.

we are seeing some migration out of those jobs, but it looks pretty positive. in the south-southwest is probably where the best opportunity is for job growth. david: i went to come back to technology. is it similar to what you described with respect to upskilling? the big guys can afford to do it, the small guys can't. can they make up the difference on the employees they need? martin: i think they can. we see a lot more small businesses using a mobile app. this is how they punch in and punch out their employees. don't use time clocks anymore. a pay their employees over their mobile apps through their pay stubs. everything is available. that does attract younger workers in particular. they want everything on their mobile phone. want to be able to schedule themselves on the mobile fun.

so that definite -- the mobile phone. definitely helps when you outsource to someone like us. you can outsource the suppliers who can do that. isna: similar to what marty saying, especially on small businesses we have success with, about 40% were applying for jobs on their mobile phone. now we are up to 90%. if you are not there, you're missing out on a whole candidate pool. it is a place where small businesses can try to compete. paychexartin mucci, president and ceo, thank you for joining us. irina novoselsky and torsten slok will be staying with us. coming up, $74 billion in u.s. inestment grade this week just a few hours. we will discuss that next. this is bloomberg. ♪

renita: this is "bloomberg daybreak." a number of states will formerly launch -- will formerly launch antitrust investigations into facebook and google next week. the new york attorney general will lead the facebook probe. the google investigation will be headed by the texas attorney general. google already faces a federal antitrust investigation. facebook is also under federal scrutiny. exxon mobil is in exclusive talks to sell its upstream assets in norway. bloomberg has learned the final agreement with the potential buyer could be concluded within weeks. assets couldgian fetch up to $5.3 billion. a sale would be part of exxon's

$15 billion divestment plan. a mobile corporate bond bench is smashing records -- bond bench is smashing binge records. the amount sold in dollars, euros, and yen the first of this month was the biggest ever. that is your bloomberg business flash. alix: thanks so much. still with us, torsten slok of deutsche bank. what was your biggest take away from the massive amount of issuance we saw in the last two days? torsten: that interest rates have fallen a lot. companies are exploiting that, and it makes total sense. it used to be the case that a lot of issuance was essentially used as buybacks, but we are seeing change in that pattern because most companies have been through that. if rates are at these low levels, if this is temporary, maybe we should be putting

things out. but the numbers here speak for themselves. it has really been astonishing. david: is this a sort of intelligence test? if the rates are that low, why wouldn't you change your balance sheet? torsten: we debate about the ultra long treasuries, why are we talking about these things now? they may not happen or they may happen. the bottom line is people view this as this may be permanent, or it may not be permanent, but at the moment it is very low rates. alix: but with them -- but then we have some anomalies. we had a big selloff in the bond market, so some could say we are nearing the end of a paradigm shift. torsten: that's why the place to look is absolutely in auctions of government bonds. auctions of government bonds have been generally going relatively well, but in some countries, even in germany, we had some situations where, is

this really suggesting there's enough demand related to supply? , supply has gone up at the moment, is there enough demand relative to the significant increase in supply we are ramping up at the moment? alix: is there? do we know the answer yet? torsten: the risk at the moment, if there is a u.s. recession, we will of course begin to worry about investment grade credit and everything in corporate bonds. in that sense, it used to be the trade was just to say rates are going down. that's the question. alix: that's a different story. torsten slok up to two is sticking with us. we are moments away from the jobs read. this is bloomberg. ♪

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there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. alix: this is "bloomberg daybreak." i am alix steel. .et the tweets begin the latest from president trump says you cannot win them all. we are just about 20 seconds

away from the jobs number. in other asset classes, you are still seeing a selloff in the bond market buying over in europe. the curve steepen's just a touch. we now go to bloomberg's michael mckee. michael: the bond market will not like this. and 130,000 jobs created, 100 -- and some of those were census hires. private sector hiring just 96,000, the consensus was 150,000. june and july hiring revised down by a total of 20,000. it is not all bad news. the unemployment rate stays at 3.7%. a big jump in labor force participation offset by a jump in household survey hiring. 5.5%,unemployment falling the lowest on record. the average work week tips up to

34.4 hours. manufacturing overtime falls to 3.2. the participation rate edges up nicely, 63.2%, the highest since february. the good news in this report, average hourly earnings up .4. that keeps the average annual rate at 3.2% which should help consumers keep spending. whoill not help retailers, lost 11,000 jobs last month. it is the seven consecutive month retailers have lost jobs. it is a story of fewer jobs created. just 14,000 in construction. 3000 in manufacturing, 37,000 in health care and education. good news on the underlying numbers. bad news on the headlines. something for everybody. the fed will probably dismiss this and go forward. david: thanks to michael for that report.

stay with us. still what this is torsten slok of deutsche bank. it is one data point. it seems to be coming together with other data points saying there may be softening. torsten: it looks like a stagnation report because you have weaker growth and employment and at the same time you have higher inflation overall. rate jumpedloyment from 7.0% to 7.2%, which is telling you there is underlying weakness. it is good in the workweek it did pick up a bit, but the bottom line is growth is slowing. alix: we did see an increase in the labor force participation rate. torsten: the general picture is slowing economy which support some of the fears we saw from ism and from trade war's. >> one of the things torsten

said is the pressure on the employer side. candidate perspective, it continues to be a candidate marketplace. 50% of companies have open roles they cannot fill, it continues to be a place that is why we are seeing turnover at the highest we have ever seen in job hopping at the highest we've ever seen. david: michael mckee in washington. michael: i want to challenge torsten with a question. is this a slowing economy or given that most of the weakness was in low hiring rather than job losses, is this a question of people cannot find qualified candidates for the jobs they want? when you look at education and health care, that stays about where it was, 38,000. torsten: as you mentioned, the census component was fairly decent, and with private payrolls at 96,000. it is slowing.

one can spin that as saying there is not enough workers and that his wife we have reached the limit of full employment. today the trend is beginning to and inboth in headline this case in private payrolls now that we are below 100,000. david: let me propose a third possibility. that is we do not know if it is slowing or not, but we are uncertain. if i am a ceo i might not want to be laying people off because i do not know if is slowing. i will wait. torsten: some of the micro data is certainly confirming there is a picture of the labor market -- this is not an economy that is falling off a cliff. we are debating the slope of where the economy is going. it looks like the slope is more to the downside than we had thought earlier. from the numbers perspective is one conversation, but we are seeing the skills gap affect the labor market.

how would you see the numbers play out. if people are not filling these jobs, at some point would you expect companies to slow down their posting? companies are getting frustrated , they are working with us to leverage technology to fill the jobs. from an economist perspective, how much you have the skills gap affect the market? torsten: we are trying to think about the sequencing of things. hours worked was weaker, overtime hours was weaker, and now you're starting to see employment weaker. what is important is this is not a uniform decline in the economy. this is a broader cloud hanging over as uncertainty. the question is where the uncertainty goes from here. alix: the payrolls for retail are down seven months in a row, the longest losing streak since 2009. based on your data, is that explained? irina: one of the things on the

retail sector specifically is more economic overturns. what we are seeing is a big shift of those candidates that have underlying skills around sales, on customer representation, on service. we are seeing a lot of that population. i want to point out to the point about trade wars, we did see a decline in employment in primary metals and in the fabricated metals jobs, the people who use steel and aluminum. we also saw a decline in miscellaneous computer and electronic parts. there is also subject to tariffs. you can read into the numbers some tariff affect. torsten: one thing in the debate is how much will the fed go in the meeting, is it 25 or 50? this support suggests to me 25. this is not a decline fast enough to justify 50.

mike, you said the fed will just do what is going to do without regard to the numbers. michael: i think the fed is locked-in to 25. this is a report that has something for everyone. unemployment does not change, but we do see average hourly earnings go up more than forecast. maybe we have some of the phillips curve inflationary pressure the fed has been looking for. it will be enough to say we do not want to go too far. we want to make sure we do not get behind the curve. alix: you get the 25 basis point cuts. what does the job look like in november and december? do we see a difference in the numbers we are seeing? torsten: uncertainty is enormous on many fronts, not only on domestic issues, on the trade war, but also the global growth picture. that was deteriorating in japan and asia -- it is looking a little bit better. we are at an inflection point

where it could be both ways but for now we are chugging along nicely. the fears about a u.s. recession are not showing up in this report. david: you see any report in what the fed does in your numbers? we had the fed tightening and now they are loosening. do you see that reflected in career builder? irina: companies cannot move that quickly. when you think about the hierarchy of getting jobs posted , we are not seeing it move as quickly as the economic and labor stats coming out. david: thank you very much. torsten slok will be staying with us. now it is time to find out what is going on outside the business world. we turn to renita young with first word news. renita: hurricane dorian is now battering north carolina's outer banks. the storm has weakened to a category 1 with top winds at 90 miles per hour. that is not lessened the threat of destructive waves and storm surges. virginia has ordered a round of

evacuation. in the bahamas, the death toll from dorian is now up to 30 and workers expect to find more victims. china's central bank is adding stimulus to an economy facing renewed headwinds. it is cutting the amount of cash banks must hold its reserves. the people's bank of china is lowering the required reserve ratio by .5%. billionswill release of dollars of liquidity. in the u.k., opponents of boris johnson are looking for ways to outmaneuver him. their latest plan, hold a general election in late october. the opposition labor and scottish national parties have discussed about on october 29. johnson wants an earlier election, but his opponents want to make sure he has blocked from taking the u.k. out of the eu without a deal. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ready to young -- i am

renita young. this is bloomberg. alix: to recap the jobs numbers, overall you had 130,000 jobs at it, but 25,000 were temporary jobs due to the census. the highlights to the upside when the average hourly earnings increased and weekly hours went back to that 34.4 level, a key level that many were watching. torsten slok calling this a stagflation report. we are looking at where the economy is going and we do not see an answer based on this. use the equities off the highs of the session, but still up. the dollar little bit softer, but all on the margin. we try to sort out what this means for jay powell when he speaks at 12:30. david: coming up, we will take a look at changes in the manufacturing industry.

that is next in today's follow the lead and this is bloomberg. ♪

renita: this is "bloomberg daybreak." coming up in the next hour, larry kudlow, national economic council director. now your bloomberg business flash. more cuts are taking place at deutsche bank. bloomberg has learned the german lender is firing dozens of lenders and salespeople and its global fixed income ranks. that is a unit that was largely spared in deutsche bank's first round of reductions two months ago.

-- has battered other retailers in north america. it has raised its forecast once again. it has beat earnings estimate for 10 quarters in a row. the mastermind of what prosecutors call one of the largest hedge fund insider trading rings in history is out of prison. he was freed after eight years early.bars two years he is mostly confined to his manhattan apartment for the remainder of his sentence. he was convicted in a seven-year plot to trade on inside information from corporate execs , bankers, and other insiders. i am renita young and that is your bloomberg business flash. david: time for follow the lead, a deep dive into stories making headlines and moving markets with insights from industry veterans and insiders. on this jobs day, we are taking a closer look at manufacturing jobs at a time when people are talking about a manufacturing recession. what does that mean for workers. here to give us the picture is

michael mckee from the labor department in washington. michael: manufacturing has been losing jobs. one exception is the furniture industry. although many jobs moved overseas in recent months, there has been a bit of a rebound. it has planned out. in august, furniture makers lost 500 jobs. we have seen wages rising in that industry, which is good news for people. the question is what is the future. furniture has been hit hard by the president's tariffs. 25% on furniture imports. not only that, and i know our guest does not make most of his stuff overseas, but he does have to use raw materials like steel , but furniture makers have been hit hard by the cost of inputs as well. david: thanks to michael mckee. knoll has been a leading

design firm since its founding in 1938, with more than 30 of its designs in the museum of modern art in new york. we welcome the ceo, andrew cogan. torsten slok is still with us. let me pick up where michael left off. are you employed more people, less people? i notice two or three years ago you had a drop off in employment. torsten: we have grown -- andrew: we have grown twice as fast as the market. we are in the midst of hiring. we have four plants in north america, two in europe, we are in the midst of job fairs to attract workers, particularly in pennsylvania. for us, the business is driven by the low unemployment rate, which as your earlier just talked about, there is a real war for talent creating demand for our products. people want to work in an environment that reflects how people are working today. more collaborative, more

hospitality based. we are seeing increased demand. the last years have been strong. materials used for employees? westen: we are -- andrew: are mostly domestic manufacturers. some of the raw materials. andrew: but we have been able to mitigate a lot of the inflation moving to non-chinese countries and things like that, which has helped all of that. we have not seen a huge impact. steel and some of the other commodities that we use the most have rolled over and year over year they are down. you are saying that the labor market is more important for you than the tariffs and the uncertainty? how do you think about the transmission mechanism from the trade war. you are saying thatwhat are ths through which this will impact you? theew: the trade war, biggest impact is the uncertainty it creates. our business is influenced by business confidence and clearly

ceo confidence has been shaken by the uncertainty, whether it is brexit or tariffs or tweets. that does create a pall over demand, but on the flipside the low unemployment rate is creating a war for talent and ceos are being forced to invest in state-of-the-art work places. not just high-tech, but consumer retail. that has much more of a positive secular force than the headwinds of tariffs for us. torsten: you are basically saying as long as people come in the door and demand your product, there might be problems in the back room but that uncertainty will not change as long as demand is as strong as it is? andrew: as long as demand as -- is as strong as it is, people will be competing for talent. millenials want an environment that is much more collaborative and open and that creates demand for our product.

that mean your benefits have been more generous? andrew: we have not had tremendous wage inflation pressure. between 2% and 3% when you encounter benefits and salaries. we have been able to attract workers at those levels. that has not been a big headwind. david: as long as people come in the door. knoll is high-end. are you seeing pull back on their orders, either not order as much because of some of the uncertainty? andrew: we have worked hard to diversify our business. we are no longer just high-end. we acquired a company which plays in the affordable luxury targets the collaborative area of the office and just last week we announced the up -- the acquisition of a company called foley which focuses on small and midsized businesses. in terms of what we are seeing companies doing today, our final

of activity continues to grow. our business remains strong. we tend to lag. down,el confidence stays that will have an impact on 2020 and 2021. the low unemployment rate is a countervailing trend that may upset that weakness. alix: we talk a lot about what would make the ceo stop hiring. what would make you do one of those things? andrew: we tend to make those decisions quickly. our visibility is generally 90 days. we have a good final of what is going on in 90 days. we continue to see growth and activity there. if we would see that final start to turn down -- alix: than you would stop hiring do not fire. andrew: you love down a little bit and watch and wait. we look at real estate, we look at absorption rates, our company is leasing space, our company -- our company is hiring workers --

are companies hiring workers. those thing remain positive. torsten: at the macro level we see a smaller work week and declining overtime hours. at the micro level, have you seen less overtime hours and shorter work weeks? andrew: we have not seen any of that. the fourth quarter, the back half of the year tends to be stronger than the front half, so we are still working full bore and have not seen any reduced work weeks. more importantly in our clients, which tend to be more service sector focused, there we have not seen any turned down. we were talking about tech workers, education workers, health care. we are in those segments of the economy that are growing. consumer. those areas -- our clients and those areas are not backing off. we are not affected by manufacturing hiring in terms of demand for our product. david: you see any erosion in

your business going out and how far out can you see? andrew: we have a 90 day window. we have a rolling funnel that looks at the course of the year but we are good in the 90 day window. we were growing double digits at the start of the year. we think it stabilizes in the mid to upper single-digit rate, and that is consistent with what we are seeing in the industry right now. alix: andrew, so great. we love getting your perspective. knoll ceo.n, torsten slok, thank you as well. coming up, payrolls have a mess, but digging under that. if you're heading out and jumping into your car, listen to us on sirius xm, channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: jobs numbers, something for everyone.

i am watching the bond market reaction. joining us is ira jersey. does this put the bond bears in hibernation now? ira: i think may be a little bit. we have to look at the holistic view of the employment report. while the headline payroll numbers disappointed a little bit, it was well within the normal standard deviation, the standard error eu tend to get between the forecast and the actual. you have positive signs. when you think about the consumer, it is not how many new is thee created, how work week, how is the average hourly earnings? aggregate income went up a bit month on month. that has been something that had been trending lower most of the year. i think it is probably an ok report, not a great report. the bond market was hoping for something more, but we still have higher yields on the day compared to yesterday.

alix: 100%. when you take a look at what happened yesterday -- ira: there were two things going on. the market had rallied a lot during the past month and there was a bit of exhaustion. a little bit of it may have been technical. second and importantly is that really yields backed up. most of this move has not been on inflation expectations, it has been on the idea that maybe growth will not quite be as weak as we had hoped before. alix: great insight. that wraps it up for bloomberg daybreak: americas. on the open, we have larry kudlow. this is bloomberg. ♪

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rejuvenation. 1,000 pocket springs provide edge to edge support, responsiveness and comfort, while premium foams relieve pressure. keep you comfortably cool and limit motion transfer. leesa's hybrid mattress is not only recommended by experts, experts choose to sleep on it too. try it yourself in any west elm store. or order online and we'll ship it to your door so you can try it risk free. the leesa hybrid is american made. built to last. and, because everyone needs a place to rest, we donate tens of thousands of mattresses to those in need. experience the leesa hybrid mattress. right now, it's on sale. order today. go to leesa.com. jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, it is payrolls friday, delivering another sign the u.s. labor market remains rocksolid. china's bank providing extra support for the economy, giving investor sentiment one more boost. and waiting for jay powell closing out the week with the much-anticipated speech. that is all ahead had. a big friday coming up and an all-star payrolls panel. from new york city, anastasia amoroso, rick rieder of blackrock, michael collins of pigeon, and from italy, mohamed el-erian. coming up later on this program, reaction from the white house with larry kudlow. we will bring you that interview around 9:45 eastern time. counting you down to an opening bell 30 minutes away. your price action shaping up as follows with futures up nine points on the s&p 500.