day, thursday. no one has a clue what 8:30 will bring. they adapt and adjust to the pandemic. one thing is for certain, look for higher unemployment. no one is more clued in on the surge in cases of the virus. arizona is worse than new york ever was. mexico surges. france does better. we hold these truths to be self-evident that summer is here, trump and biden, they begin the dash to the first tuesday of november. good morning everyone. i am tom keene in new york, nejra cehic in london for francine lacqua. there is an uproar in london about how you are going to travel and if you are going to quarantine. nejra, we must look in this hour, these unfolding events in

hong kong are extraordinary, and the prime minister says he will take many citizens into the united kingdom. is that right? than 3absolutely, more million potentially hong kong citizens are being allowed citizenship in the united kingdom. extraordinary developments in hong kong. -- not a lot of clarity and it is difficult to see where the risks actually lie. whether it is easy to abuse or difficult to apply. tom: i agree with you, strongly. i think there has been an getting totion of their friday morning, of getting into the weekend and the experience of each and every

day. our team in hong kong is working on that. working on that 24/7. now with our continued reports, our "first word news," in new york city, here is ritika gupta. ritika: for the first time, u.s. daily coronavirus cases rose above 50,000. there were increases in big states including texas, florida and california. california halted more reopening's as did new york city. becoming is increasingly a disease of the young. today's monthly u.s. jobs report is likely to be a mess, employment claims -- none of limit supposed to -- the trend may not be immediately clear

because of the problems dealing with misclassification of out of of work americans as employed. the house has taken aim at the new national security law china imposed on hong kong. lawmakers passed a bill onnimously placing sanctions chinese officials involved in the crackdown. it is similar to a measure passed by the senate last week. if the senate approves the house bill, president trump is expected to sign it into law. the british economy is gearing up for what is being called -- that is the day the u.k. reopens its pubs, restaurants and hotels. both the government and businesses are counting on big boosts on the path to recovery. they said there is economic activity returning faster than they had expected. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. i am ritika gupta.

this is bloomberg. nejra and tom? tom: we appreciate it. futures are up. vix under 28. really showing an extraordinary run. look carefully of the vix this morning. the point figure chart is really optimistic. we will see what the vix does again at the 28 level. nejra: your right to make that distinction between the optimism equities and what we are seeing in other parts of the market. it is the cyclical sectors that outperform as well. the 10 year yield is steady. nasdaq futures point to a higher open.

a bit of dollar weakness coming through. a lot of it being driven by optimism around vaccine trials --m pfizer and bio rentech bioentech. see.interesting to this is a wonderful conversation. we will take a little time to introduce professor bauder. theory and had a there was a way they did economics at yale university. it was different than harvard, efferent in cambridge. it was different than chicago, distinctively different than the university of chicago. the heart and soul of that was a guy named art oaken.

aboutnged how we think economy and shock, particularly its effect on unemployment. we are thrilled that professor bauder of yell university could join us this morning. --lem butler, does the siri does the theories of macroeconomics, do they work under the shock we have had? work, once we get sufficiently, deeply into unprecedented covid deep shock. shock thathe kind of emphasized. it is not caused by financial crunch or uncertainty. it is caused by a medical

emergency. it indirectly affects -- feeds back to the economy. [indiscernible] numbers the u.s. is seeing in terms of new covid a second wave will provide a non-open downward impulse. tom: professor buiter, what is so important here is the realization of all of our

viewers and listeners that we are at the zero bound. we are thrilled to have willem buiter for you. what is interesting is we are here. professor buiter, we have been talking about this for years and we are finally at an extended zero bound. what does that mean for society? forget about the economics. what is the effect of that on the greater society? -- interestave rates. nominal policy rates are too high. [indiscernible]

the bank of england, the bank of japan. we are not going more deeply negative in order to make monetary policy and effective weapon again. -- an effective weapon again. nejra: to build on tom's point about the impact on society, we are looking ahead to a second positive month in terms of payrolls but we are expecting toe of the fiscal stimulus start being pulled away in the autumn. how bad is the u.s. labor market going to look into the end of the year?

first, we are expecting something of a second wave /continuing -- continuation of the first wave in the united will both through lockdowns and private cautionary behavior hurts employment. then of course the number of -- [indiscernible] which is entirely inappropriate.

a depression on the conventional unemployment broadlet alone on the unemployment rate. [indiscernible] tom: professor buiter. thank you so much for joining us. too short of a visit, especially on the legacy of all of this theory and how you fall into the shock of this economy. let's remember the unemployment rate has a 21% level and with adjustments last month, those revisions and what we will see now in the misclassification debate, those numbers possibly could be much higher. we are going to move this conversation forward. joe weisenthal speaking with paul krugman. we will have some of that conversation from last evening and then we drive forward to jobs day and jonathan ferro

picks up the pieces at the white house with lawrence kudlow. this is bloomberg. ♪

tom: bloomberg surveillance. good morning. nejra cehic in london for francine lacqua. i am tom keene in new york. it feels like a friday in new york with the jobs report. frankly a lot of other data as well, coming out today. we will have a much better look at the american economy by 12:00 noon today. willem buiter joining us with his work with citigroup. then we turn to a different style of macroeconomics.

has been a careful student of the domestic economy with some controversies i might say, writing for the new york times as well as academic services over the last number of years. here on the present state of america is paul krugman. paul: we are in big trouble. back about a month and a half ago, i was laying out the bad scenario. it was clear we were going to have a couple good months of recovery. there was a lot of pent-up demand for people weren't allowed to do. the bad scenario was that we would have a spike in covid-19 cases that would lead us to have toinstall -- lead us to have stall and backtrack. we are going to get a jobs report on thursday, which is going to look good but it is

going to be in the rearview mirror. it is going to be a dead cat bounce, and it is clear that the high-frequency data and everything we are seeing says we just hit a wall because of the spike in cases. >> let's stipulate for a second that in order to get recovery, we need to get the virus under put a veryit so effective therapy or vaccine. we know that in congress, they will revisit this question at some point in early july. what would you say are the key priorities from economic policy standpoint? view i have been of the that this is not like aftermath of the financial crisis where you have a wounded economy or economy that had gotten over -- before the crisis, so it took years to get out of it.

i don't think that is happening. say i don't think the economy as of february was fundamentally unbalanced. if the virus were under control, i think there is a lot of good reason to believe we could have a very fast recovery and wouldn't need that much in the way of policy. the problem is that appears to be a number of months off and where we are now is that we are back in the situation we were in, in march and april, and economy that is in a coma because of the virus, and so the goal of policy is to make that situation tolerable, to avoid having the depression spread and have a partially locked down economy livable which means we have a lot of programs that we put in place in

march and the big concern is a lot of that stuff is going to expire in a few weeks. joe: are you surprised, arguably by the effectiveness of the programs? we see household income actually up between april and may, relative to the extraordinary collapse in unemployment. you can't look too much of the stock market, but it looks like buoyant forasonably some consumer companies, not what you would expect during a period of mass unemployment. first of all, i was surprised by what they passed. the cares act was highly imperfect, but by the standards of how we dealt with previous downturns, it was damn good. unemployment benefits were a huge lifeline.

most of the unemployed ended up with more income, which in turn contained the spillover. we shut down part of the economy and one of the great concerns was shutting that down would lead to a secondary round of unemployment but we provided so much aid that that didn't happen. nejra: nobel prize-winning economist paul krugman in a wide-ranging conversation with our joe weisenthal. coming up, ray dalio joins erik schatzker for a virtual conversation on the economic recovery and opportunities post kevin need -- post covered -- post covid-19. this is bloomberg. ♪

nejra: i am nejra cehic in london with tom keene in new york. let's go to hong kong where we are joined by bloomberg's senior asian government reporter. expect protests in hong kong over the weekend? >> i think yeah. i think people are shrugging off some of the opposition to the new law. we saw protests on wednesday but we haven't seen any since then. there is a lot of aggressive proactive policing taking place

in hong kong these days. the moderates that swelled those protests we saw last year, are afraid to come out at the moment. it is too early to say if we will see protests over the weekend. there have been scattered smaller protests but nothing like the big ones we saw last year. tom: it may be too early to ask this question but you are so good at it i will ask anyway. changedibe of hong kong with these actions? >> that is a good question. i think definitely, there is a chill over the democracy movement in hong kong, among a lot of ordinary people. out,e law was being rolled they pushed out the legislation at 11:00 on tuesday night, almost the middle of the night. people were deleting twitter accounts, people were scrubbing whatsapp chats.

people in some of the groups i was in were saying is it ok to even be doing this right now? people are afraid and the vagueness of these laws which replicate the vagueness of similar laws on the mainland like stealing state secrets, that sort of thing, they can be applied to anyone and in a lot of different situations. people are very worried. on wednesday, we saw people being arrested for simply having a banner that says hong kong independence. a few days ago, that wasn't an arrestable offense, and today it is. things are changing quite quickly and that is scaring a lot of people. tom: great reporting. we will have much more on this through the day and through friday, tomorrow and in the weekend as well. is so much to talk about on this thursday.

wide set of economic data is starting off at 8:30 in the united states. claims six times higher than normal, some would say. --the american labor economy it may be a good number but it is in the rearview mirror. we will try to drive the conversation forward for you. worldwide, this is bloomberg. ♪

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ritika: this is bloomberg surveillance. i am ritika gupta. areident trump says masks

good, but questions whether americans should be made to wear them, even with coronavirus cases spiking across the u.s. he said he would wear the mask if you were in a quote, tight situation with people. democratic challenger joe biden for wearing a mask. raised president trump. the fallght in -- for second quarter -- for the full second quarter. that tops the president and the republicans in the same period. it is the second straight month that biden's fundraisers came out on top. the house has joined the senate in rejecting president trump's defense of naming military bases after confederate generals. committee took similar action earlier this week. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries.

i'm ritika gupta. this is bloomberg. tom and nejra. am: he is a nationalist, disciple of barry goldwater from long ago and far away, that kind of republican. some would say that john bolton is an americanist. we do know he is an author of over 700 page book, over 500 pages, it has made a huge splash. we spoke to ambassador bolton yesterday. here he is on the future of republican politics. john: i think it is difficult, ae way these past three and half, four years have evolved, for them to be as independent as i think many of them want. a lot of people who were never republicany the leadership is complicit. the fact is, nobody wants to be

the subject of a donald trump two minutes hate on twitter. i think we will have to have within the republican party, a very significant conversation after november 3, especially if trump loses, which is at least a about --sibility, at about the future of the party. i want to make it clear that donald trump does not represent conservative philosophy. he does not represent the republican party. he is an anomaly, and i am not going to vote for him for the first time in my adult life, i am not going to vote -- vote for the republican president or nominee because i don't think he is true to our philosophy. he is true to donald trump alone. to breakador, i want in because the polls contradict that. the polls show that the

republican party by and large as overwhelming support for president trump, and that is the reason why republican leadership wed tore often than not he president trump's goals. what makes you think the republican party is different? john: because public opinion polls take a limited picture based on a limited question. do you support donald trump over the democrats? what i am talking about is the larger issue of what the party actually believes in, and in my conversations across the country for an extended time, i don't doubt that in this debate, i think the trump view will be rejected. part of ourortunate political dialogue today, that it is all torqued around donald trump. do you support trump or oppose

trump? it is one of the things we need to correct. we will have to correct it sooner or later. we may be able to correct it shortly after the november election. it may take four years after that. tom: john bolton, two more questions about your interesting book. damning.e details were would any of this have happened, russians and bounties to the taliban to go after marines. would any of this have happened if mr. trump had had his three generals in the same room? was the great tipping point for the administration when those three generals walked out the door? john: i don't think so at all. i was in the room with him a lot of times as well. he doesn't listen well. he doesn't absorb things. former secretary of state george schultz once said the importance of listening is always underestimated.

even lyndon johnson said when i'm talking, i don't learn anything. those are points donald trump doesn't understand. we all made our mistakes. i certainly made my share. i tried to lay out some of them in the book. i think things could have been done better. i make that argument in the book. ultimately, trump is trump. that is the problem. this is not somebody who thinks in policy terms. nostrum aegean afghanistan. we haven't had a strategy in afghanistan with respect to russia or china or north korea. the list is long. withambassador bolton, bloomberg surveillance yesterday. viewng us now, a canadian as he watches the american political system. what we do here best is get to the next day, forget about bolton, that is ancient history.

the seniors today is leadership of the ministry of branch. they will be briefed on russia, the taliban and marines killed in afghanistan. what do you look for? josh: one of the questions that has not been answered is whether this reached the president's daily brief. there are questions about how closely he reads those. they say he was not briefed in person but it emerged yesterday that it was a decision by a career official as opposed to a political appointee, to do that. they are saying we are playing the straight, it was a career person that called the strike and said this was not verified and we are not winter brief the president on this. something this explosive should have been brought to the presidential level. administration said flatly

yesterday, we did everything right and by the book and now that this has been leaked, it has muddied the waters and getting to the bottom of it is going to be impossible. josh, a completely unfair question, is this a flap, a kerfuffle? or is this the real deal of a scandal? think -- i don't think it is a flap, i also am not sure that we have all the facts yet. i don't want to jump to any conclusions. for instance, the administration took it seriously enough. they have been coming up with a menu of stuff that donald trump could do if it was confirmed. they are saying -- they are arguing that saying they are

taking it lightly is unfair. is, hese the flipside has a long history of not taking a particularly harsh tone in meetings with leaders that would typically be adversaries of the united states. that includes vladimir putin. that also includes china's president. there is a lot of fire under the smoke, that was here before we knew about it. the administration themselves are saying this was intelligence they had and it was not verified and that is why that menu of options never rose to the level of the president. of course john bolton told us he said the prepublication review of that book barred him from talking about it. nejra: josh, if it turns out to

not be a hoax, the presidents word on the matter, how much of a game changer could this actually be for the election? certainly, we have a group of republicans campaigning against trump, running ads meant for trump himself to see on tv in the morning. i think this will fuel that. the polls show right now that donald trump is heading for a blowout loss. a lot of things can change but if this is true, it is not looking good. was they say was a hoax that he was briefed and ignored it as opposed to a hoax that this intelligence was there. the administration, despite the president's tweets which are all over the map on this, the conceding thatis the intelligence does exist, the

assertion that the president was briefed on it and didn't do anything, they are saying that is not the case. at least that is what they are saying public -- publicly. tora: thank you so much bloomberg washington reporter, josh wingrove. up next, johns hopkins professor of nursing joins us. this is bloomberg. ♪

tom: good morning. bloomberg surveillance. in new york and london. jobs day in america. a big economic morning.

right now, jason farley joins us, with johns hopkins university school of nursing. he is versed, exceptionally so in -- exceptionally hospital procedure. the intensive care units across the sun belt are more than crowded. in some cases they are bursting at the seams. what is the major difference between an icu bed and a regular hospital bed? jason: good morning. first and foremost, our staffing. peso -- patients in intensive care get more one on one care. then we talk about the acuity of care received in intensive care units.

people who are in that setting typically require more frequent contact, more intensive types of procedures, mechanical ventilation often done in intensive care units. are well of procedures rehearsed and very procedurally -- very procedural in nature. it to change as regular hospital bed to intensive care bed? east of los angeles, where they are really having this issue, what is a constraint to making more icu beds? is it staffing that is trained? underestimatet the real herculean effort that hospitals are making to turn normal floors into icu floors.

fromis changing everything how the ventilation is structured, changing the way in which the training can be implemented for those health-care workers, kind of like a rapid set training anding most of the nurses physicians don't routinely manage ventilators. when you are thinking about moving other wards, you are thinking everything from staff training to physical space to the types of equipment they have available and access to, to the types and ways in which the airflow and environment, those kinds of things actually process. nejra: dr. farley, as we see every day, more updates on the pausing of reopening plans in various u.s. states because of the resurgence of cases, there is a widely read article in the

bloomberg talking about covid-19 in the usa, being increasingly a disease of the young. many young people spreading the active. being as reopening is being put on pause, and order to actually pause the spread, is it enough to wear masks and adhere to social distancing rules? then: i think right now, notion of is it enough is an important question but enough is all we have at this moment. part to has to do their wear their mask consistently and continuously went out in public. we also must keep our distance. if people are not in masks, they need to keep a wider berth. it is essential that we understand and recognize you may feel completely fine.

we understand the desire to be out, particularly during summer months israel. it helps our mental health and/or physical health, but we must recognize that there is a virus or collating that you could be transmitting to someone, who could be significantly impacted by the illness. nejra: our thanks to jason farley of johns hopkins. be sure to check out the bloomberg for the latest ourrmation and tuning for -- and tune in for our exclusive conversations with johns hopkins experts. join bloomberg for our annual broadcast of the boston pops fireworks spectacular, carrying on the fourth of july tradition from the comfort of your own home. this is bloomberg. ♪

nejra: i am nejra cehic in london. francine lacqua has the day off.

the jobs report in may left many questions unanswered. scarlet fu breaks down last month numbers. -- last month's numbers. >> chunk it up to data collection issues in march. the survey questions to determine the un-limit rate is simple, did you work during a particular week? the answer can be anything but. it is easy to misinterpret. takers may also improperly classify people as employed, just not at work, when they should have been classified as unemployed. as a result, the bureau of labor put -- of labor statistics published a jobless rate of -- for may but says it is actually higher when adjusted for aiders -- when adjusted for data errors. if the bls fixes the data errors in june and starts properly accounting for who is working, the results may be an increase in the and employment rate. even if the reality is more

people returning to work, adding to the confusion, the same jobs report include monthly payroll figures which are compiled with a different survey. economists worry it could send a diversion signal from the amount -- from the un-implement rate, raising questions about whether it is data error or something bigger. u.s. seniorloomberg economic reporter joins us now. -- do youesilience to expect to be perfected in the numbers? >> i am expecting another strong number, around 3 million jobs in the month of june. another decline in the un-limit rate. what really matters is what happens over the medium-term and how much this job growth is sustainable. obviously the june number will be a good one, unless we get another -- like we did in may

but what really matters is what happens in july and august with the new acceleration in covid cases, and going forward as people stay unemployed for a long period of time. nejra: when we really -- when will we start to see the impact of the second wave of layoffs? >> it depends on what you call the second wave. if you are referring to the number of new cases, new virus cases, we will probably start seeing that in july and august. companies slowed down reopening's and some companies are closing, so we may see a negative number in july. i would not be surprised. i also think about the second wave of layoffs in terms of how it impacts overall demand, whether white-collar workers

would be affected because there is no significant demand for their goods and services. whether adjustments to industries that were hit hard in the first wave of layoffs are now seeing a secondary impact from those industries and are closing down. let me give you an example. cannotestate person who sell or rent out a retail space, will they need so many workers anymore? nejra: that brings me to my next question, which is what are you going to be looking at in the data beyond the headline number? is it going to be different industries? is it going to be the wage number? what is going to give you a signal of how protracted a slowdown in the jobs market might be into the second half of the year? >> obviously we are building

different things, including those that you mentioned. one important thing for us is how much wage income is being lost and how much wage income is recovering. there was a huge drop between may in terms of how much wage income was in there. support hasrnment been able to replace, more than replace, that loss of income but going forward, with all of the expiration of programs including the payroll protection program thethe expiration of augmented unemployment benefits, that income will not be sufficient enough to support the recovery going forward.

in august, personal income will start falling again. this payrolls report will let us know where things are going. nejra: bloomberg economics, thank you so much. in terms of where markets are going, firmly in the green. well.quities positive as reflecting yield that, absolutely steady. coming up later today on the jobs report, lawrence kudlow, 10:00 a.m. new york, 3:00 p.m. in london. this is bloomberg. ♪

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analysts, companies, strategists , portfolio managers, has a great sense of what earnings will be in 2020 or 2021. >> you have a fed that has looked into eight television camera and said we are just printing the money. >> it is not a discussion of whether there will be a recovery or not. let us not confuse a bounce with a recovery. >> this is "bloomberg keene,lance" with tom and lisa abramowicz -- with tom keene, jonathan ferro, and lisa abramowicz. live from new york, good morning. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. already the buzz word, misclassification. tom: put it in the 6:00 script. it is so important. this is the