> i think we started the new economic recovery. >> we are certainly in the midst of a slow-moving policy mistake. >> if you are in the world where the soon to be are just economy is authoritarian, you don't have a global free market anymore. >> this is an extra nearly severe crisis, but it is also hopefully a roughly short-lived crisis. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: -- tom: good morning, everyone. an extraordinary jobs report. with theago,

unemployment rate over 10%, and that is nothing like what we see this morning. the mystery of what we see with this is absolutely extraordinary. we've got the voices lined up to talk about it. the market standpoint, economic standpoint. what is missing, maybe we will get that from mr. kudlow later, what is the view of washington on the american labor economy? jonathan: and will the view change with jobs numbers falling apart? i never thought i would sit here and say it could be positive one million, could be -one million. quite simply, no one knows -- million.negative one quite simply, nobody knows. tom: bernie sanders of vermont talking about the inequalities out there. this jobs report will show the start discerns between the -- stark difference between the haves and have-nots. lisa: that has really been the

hallmark of the crisis that has ensued. there's a question of looking at the granular month we data, and the belief that looking at some of the corporate reports and the earnings that things are getting worse and a lot of sectors. layoffse broad-based that are secondary cuts, not the initial service sector cuts. at what point does washington step in and say we see those cut s and we want to step in? tom: we had a clear understanding the third week of march, visualizing april and may. jon ferro, can you visualize november? jonathan: i can't even visualize the next couple of weeks when into august. it gets incredibly uncertain. right now, here's the spread. the spread is still what the spread was two weeks ago. a plan for $1 trillion, republicans coming up a little of, and democrats for a plan north of $3 trillion.

this was their deadline because they have to face the embarrassment of going home without an agreement. the real deadline was a week ago when the enhanced and implement benefits expired. they had already expired. i think economists are already doing the work on this. how much damage have we already done, and how much damage will we do if this gets delayed another week? jonathan: we welcome all of you -- tom: we welcome all of you on bloomberg radio and bloomberg television. certainly a linkage with what we see in washington has never been greater. i would suggest that maybe off of this jobs report, we go right to the august report, and then september 16 is the next fed meeting. to synthesize all of this, julia coronado, macropolicy perspectives, gets us started this hour. what are we going to see in 28 minutes? [laughter] julia: well, i think as jonathan

said, the band of confidence which is usually really wide at plus or -100,000 is now plus or -one million. minus 100,000 is now plus or minus one million. we see across every indicator that the economy has lost some steam. now the soon is, have we lost steam, but we are still looking progress, or are we actually backtracking now? none of those is a good option. we still had a huge hole of unemployed people, millions and millions. so any loss of momentum at this stage of the recovery is not good news. moving into august, how do we regain the recovery momentum that we have lost? we absolutely need the fiscal stimulus. i am baffled by the lack of

urgency in washington. jonathan: let me ask you the question that would be worthy of a policymaker like yourself. the balance of risk right now, if it was tilted one way or the other, is it tilted towards moving back, or just slowing down, stalling a little bit? julia: i think the risk is definitely that we move towards. i think we already have seen that we are stalling a bit, but with the virus still very elevated, we simply can't go back to normal in any sectors. now we have the chaos of the school year upon us, which is going to present huge labor market issues and challenges to the workforce. i think the risk is definitely more to the downside then to the upside. jonathan: this is the problem. i am catching up with bob prince of bridgewater a little later. this pain is going to with be with us -- this pain is going to

be with us for the next year. mistake?ready making a what does that look like? julia: we have already made a mistake in delaying. to be clear, the initial round of stimulus was well-designed for the plan of shutting down and controlling b virus, getting things under control, and then evaluating the situation in moving forward. we didn't do that, so it was stimulus designed to build a bridge of support across a temporary disruption. it did that very well. we actually had well targeted, generous support. we still need that. we are still in the pandemic. we still have double-digit unemployment. and yet, there are policymakers who have this perspective that they can sound the all clear. now, i think lisa touched on this earlier, we are starting to

see a more typical recessionary dynamic take hold, with more permanent layoffs across sectors, not just the sectors directly impacted by social distancing, as businesses become cautious and hunker down for a more protracted cycle. that is exact a what we were trying to avoid. the longer they did their and -- they dither and dig their heels in, the longer that takes root among consumers and businesses. time is of the essence right now. lisa: this was part of the argument initially in the pandemic, people saying that 3/4 of all of the job losses in early april were temporary. that has dramatically shifted as the weeks have gone. do you have a sense as some of the secondary and tertiary cuts, as companies say we need to be storm, to weather this do you have a sense of what that unemployment rate you are , of what proportion

that is permanent layoff? indeed develop to this koran and limit rate, where you bring in the marginally -- this core unemployment rate, where you bring in the marginally unemployed on temporary layoff. tot has risen from 5% in may 6% in june. i would fully expect that to rise again today. that is one measure that we are calculating and looking at. i think you had mentioned earlier the earnings reports are showing us a higher share of companies reporting permanent reductions in force rather than almost everybody announcing temporary layoffs in q1. now they are talking about adjustments in cost structure. tom: we are going to get to this with michael mckee and a bit and jim glassman. this jobs report is what it is

going to be. is the next jobs report going to be even more of a mystery? julia: absolutely. we already have our eye on these high-frequency indicators. we've got some beyond the survey week from the july report. there's some measure from home based is being developed and analyzed by the st. louis fed that shows a further loss of momentum. that shows outright job declines since the july survey of the unemployment report. it is early days. point, that is where the risks lie, that we actually lose some ground here. tom: can this adjust the september fed meeting, this far away from september 16? can it change the thinking? julia: i don't think that the

fed has taken anything for granted, and they are still going great. it is doing its job keeping markets focused on the far future, not the near future, and keeping financial conditions well supported. officialser heard fed basically beg for fiscal policy the way they are now. we heard it from charlie evans most recently. we heard it from vice chair ,lara to -- vice chair clarida from chair powell. there's just so many tools they have in their toolbox, and i think the fed's attitude has already been all guns blazing, take nothing for granted, do not sound the all clear too prematurely. i think that is their orientation. but again, what can they throw at it now beyond what they are already doing? jonathan: julia, fantastic to

catch up with you. i am sitting here and it just totally remind me of europe almost 10 years ago. here we are in a situation where the market is doing ok because the central bank stepped in, and all of a sudden fiscal policy makers have lost the urgency. and guess what? you have the federal government not wanting to bailout the periphery, the states. if we don't get help for state aid, we have been told state austerity starts immediately. the parallels here just become clearer by the day. tom: the economic policy institute, which conservatives read as a sort of liberal left block, was brilliant this week in parsing the state job losses already in the state job losses to come, and it is tangible. jonathan: so what is the strategy here? the federal government can act counter cyclically. states can't. state finances don't work that way. if you don't get federal assistance, you know what is

going to happen. they are going to have to cut. tom: the only thing countercyclical is we are not having two conventions, and we are on our way to some kind of convention. that fed meeting, i've got to bring it up right now because i forget the actual date, but the november fed meeting happens two days after the election, november 5. jonathan: we've got a virtual jackson hole coming up as well. from new york, the papers report -- the payrolls report 18 minutes away. this is "bloomberg surveillance ." ritika: tiktok says it is shocked by president trump's executive order barring american from doing business with the company. it is vowing to challenge that order. owner,of we chat's china's tencent holdings, tumbled on the news.

negotiations on a new coronavirus release bill are edging towards the brink of collapse. a meeting thursday between white house officials and top congressional democrats ended with each side accusing the other of being unwilling to compromise. the main sticking point is that topline number. the democrats want 3.5 trillion dollars of aid. republicans want $1 trillion. a grim milestone in india. the country has surpassed more than 2 million coronavirus cases. more than 41,000 indians have died. communitycomes as health volunteers went on strike, complaining they were ill-equipped to respond in rural areas. goldman sachs slashing its second-quarter profit by 85%, boosting its legal fund reserves by $2 billion to cover costs connected to investigations into the 1mdb investment fund. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more

than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> it is not surprising to me that this bull market so far is moving very closely with the

1982 bull market and the 2000 bull market. the other recessions that created double-digit unemployment rates in postwar history. jonathan: i had of the payroll report that is 12 minutes away -- ahead of the payroll report that is 12 minutes away. euro-dollar, $1.1818. tom: on bloomberg radio and bloomberg television, good morning. we are trying to give you a conversation and perspective across economics and how it goes into the market. we can't do better now than james glassman of j.p. morgan chase, with decades of experience in studying the labor economy. and michael mckee is locked in as our head of economics and policy as well, looking at the research nonstop as we go to this report. jim glassman, you traveled this nation for mr. diamond. what have you observed of the labor economy in your travels? jim: it is a really mixed picture. my travels have been more

virtual now. anybody who is connected to the consumer is actually doing quite well. , with them is municipalities, it is all tied to the lack of travel, air travel, and the school system. that's where the new challenges are emerging. but because of the help given in the early rounds, the fiscal stimulus, almost $4 trillion of funds released to help people who are furloughed, the consumer is doing pretty well. because they're doing quite well our manufacturing, homebuilding, things like that. a lot of that activity done online. the challenges are in the school systems and municipalities. classrooms do not work for most communities. there are 7300 communities that rely on colleges and universities, and elementary schools going virtual is a real big challenge for families. tom: that granularity is

evident. michael mckee, you will look at the granularity. what is the single thing you will look at when he go into this report? michael: if you break it down, i would look specifically at the jobs in government, local and state government. a may distort this report some because normally, the people who work for school districts -- not teachers, but the janitors, cooks, crossing guards -- are laid off in big numbers in july. you look at the nonseasonally adjusted numbers in july, and there is a spike downward every july, but seasonal adjustment accounts for that. so the seasonal adjustment looks like there is nothing. we are expecting about one million people to be added into the numbers by seasonal adjustment this time, but those people didn't leave the labor force in july. they left in april or may. so we may get a distortion, and that is why you have got to look at private sector jobs as the

most important figure in this report today. lisa: talking about the public sector, you mentioned some of the staff in schools. it is not just me griping about the complete disarray. we are getting a decision from new york city today on whether schools will be open. do we get any sense of what a drag it would be on i can, recovery if schools weren't to open -- on economic recovery if schools weren't to open? jim: they are opening virtually, but that is the problem. lisa: oh, come on. any parent who has a child, opening virtually is not opening. but carry on. jim: exactly. my guess is, when you look at higher education, i think all of the energy generated by that is about 4% of gdp. that includes the ncaa revenues, the funding from the federal government, and the tuition we all pay. that does not account for the upheaval in the element tree school system.

that is another big challenge. but i think that is a challenge ahead, and i think that is going to be with us until we get a vaccine. i think if you look at aggregate hours worked, they have been telling you the macro story. the u.s. economy has recovered about 55% of the ground we lost from february to april. i would keep an eye on that because that has been a real good heads up for healthy monthly gdp is going to evolve. we are running about 95% of our potential level. it is hard to imagine we can do a whole lot better until we get a vaccine, with all of this challenge of managing schools, no travel, and what the municipalities are dealing with. lisa: what are we expecting when it comes to wages? the increased due to the enhanced unemployment benefits, and which jobs ended up adding cut. now we are getting the secondary layoffs. are we expecting significant decline in wages?

michael: that will really depend on how we people don't get jobs again. the wage data is basically a proxy for who has been laid off. when all of the lower paid service workers were laid off, we saw a rise in hourly earnings , and they started to come back to work in the may and june payrolls, and that reversed. if we see the same kind of thing this time because governors shutdown bars and restaurants, we will probably see a rise bigger than expected. it is really hard to use the hourly earnings numbers as any indication of where we are in terms of pay or salaries because of the composition of the labor force. jonathan: when this number drops, the one question heard across zoo meetings all across meetings allm across the world will be what it means for policy negotiations. michael: this one seems to be headed more towards failure. it is hard to see the positives,

but a bad report puts a lot of pressure on the government negotiators to get together again today and try to figure some thing out. if we get a good report, that validates both sides' willing ness to take it to the brink, so it does have a lot of import. jonathan: mike mckee ahead of the payrolls report, sticking with us. jim glassman of jp morgan, thank you. jeff rosenberg of black rock joining off after the number comes out. the bond market basically unchanged. the 10 year yield, 0.53%. the dollar trading at session highs. down 12 points on the s&p, -0.3%. and unpredictable jobs report and an equity market within 1% of record highs. tom: i really can't emphasize enough how rich this report will be beneath those headline numbers. lisa: i'm looking for the reaction in markets. if you get a better-than-expected print, does

that mean less pressure on washington? if you get a worse than expected print, does that mean more pressure to get a deal, which could be supported? jonathan: ridiculous situation, isn't it? i can't even believe we are having this conversation. tom: what is important is what julia coronado said, that this is nothing more than a set up to next month report. jonathan: for the month of august? tom: the first week of september, may be first friday of september. labor day is in there. labor day is a holiday here. jonathan: i've been here for five years, tom. tom: really? i didn't know that. jonathan: county you down to the payrolls number, four minutes and 30 seconds away. we come down 11 on the s&p 500, down 0.3%. five day winning streak on the s&p coming into the job sprint. $1.1820.ar, down 0.5% on that currency pair.

the bond market treading water, 0.53% your 10 year yield. the median estimate, 1.4 8 million on payrolls. the print up next, here on bloomberg. ♪

jonathan: it is about that time. the payrolls report 10 seconds away in new york city. the most unproved dicta both -- the most unpredictable prints in months. here is michael mckee. michael: we are looking for the numbers to come in. we are above forecast. 1,000,008 hundred thousand jobs is the total nonfarm payrolls, with 17,000 jobs additionally added. jobs.00,000 26,000 manufacturing jobs in the unemployment rate falls to 10.2%. average hourly earnings up .2%. the annual average, 4.8%. average hours unchanged. there was an expectation they would drop down but they come in

34.5. a couple of things i want to ,heck in terms of the numbers in terms of the unemployment rate. we know 10.2% is the overall number. 12 point 9% is the unemployment rate for hispanics, for asians. african-american, 14.6%. all of those are lower by a percent. hispanic falls 1.8%. a drop. a couple of other numbers to take a look at. let me go down a little bit farther. , the your of people number is -- the u6 16.5, down from 18. more discouraged people getting into the labor force. the number i wanted to look at that has been significantly changing, the job losers, the

people who had temporary layoffs drops to 9,225,000. , looks likeb losers it fell a little bit. june, 2,000,877 in july. the number of people who came back to work in july did not change. if you're looking for any kind of good news in a report like this, i suppose that is the kind of thing you would look at. the labor market did not get any worse. the number of people who got jobs significantly lower than the last couple of months, but in general it does not look like things worsened a lot. just static. at last thing i want to look his local government. we did see 241,000 people added on local government payrolls and

33,000 on state government payrolls. it looks like the seasonals did kick in. probably the change in private payrolls is a better measure of where we are, that is 1,462,000. jonathan: let's take the price action at the moment off of the upside surprise. the threat of a negative print through the last month. this is the price action. erasing losses on the s&p 500, now unchanged. in the bond market, yields unchanged great now we are not up even a basis point on the 10 year. on the dollar index we are firmer .4%, a similar move on euro-dollar. in the grand scheme of things, the range of estimates very wide into this print. in the grand scheme of things, not far off the estimate. the median estimate 1.5 million, we come in at 1.76. that is the good news.

here's the conversation now. what does it mean for a policy in washington? tom: it will be interesting, your conversation with lawrence kudlow. he will clearly take a victory lap. there are a couple of statistics that are gloomy, but it clearly pushes the trend away from the democrat party gloom and much toward republicans saying there are indications of a healing economy. , nobody does this like michael mckee. the statistical summary came out late and i thought michael, you did a great job in terms of what we all lean on going beneath the headline data. you see on data government employment? about onee lost million people in the education component, those were added back in. you end up with a higher number of overall payrolls then you would have. that is why they looked at the

change in private payrolls, which is 3 million less than the overall payrolls. one thing i want to point out in terms of the unemployment rate all he 10.2%, the labor force shrank 62,000. it did not grow as it did in the prior to two months by 1.7 million. we see employment rise and thisloyment rise more at point. the decline in the labor force -- we end up with a lower unemployment rate even though we did not add that many jobs. if alan ventnor is listening, we give you another victory lap. she had predicted it in our ago. there is a question about how accurate the data isn't reflecting the here and now. the idea this was tabulated before the true slow down began and some of the research it's in the virus cases across the country.

can you give me a sense of what the weakness may have been following the end of when the report tracked that could be in the economy? michael: we have seen a number of high-frequency data that suggests we did see job losses at the month went on. because the report measures from the middle of june to the middle of july, it is logical to assume there were more people on payrolls and that is what we saw. we did not get the kind of numbers we saw in may and june. half of what we saw in june, less than half of what we saw in june. there clearly has been a slowing in the repair numbers. let me also quickly look at this. the mistake the labor department had in calculating the unemployment rate is apparently still there. it is a smaller problem, the misclassification of workers, but they say the unemployment rate would've been about 1% higher if not for that. it would've been 11.2%. the good news is a lot more

companies are applying. 70%. last month it was 63%. more accurate data but there is still an error. tom: 15 seconds. did the president get his big report? michael: no. they can take a victory lap and say we are creating jobs, but clearly the rate of job growth has slowed down. higher than we got during the great financial crisis. tom: way too high. muchel mckee, thank you so , always wonderful on these dynamics. linking this report into the financial markets, jeffrey rosenberg joins us. portfolio manager of the systematic multi-strategy fund. let's look at systematic right now and i see higher yields. is that a modest adjustment or can you say we will pull back from those lower nominal yields of the last number of days? jeffrey: i think it is a modest

adjustment and earlier you nailed it when you link the report not the implications for monetary policy, but to the implications for fiscal policy. when you're looking at the bond market in the yield reaction, you have to go out a lot of decimal points to see the reaction to this report. this is not about influencing monetary policy. monetary policy has been clear it will be highly accommodative. they are going back to trying to get the economy to run hot. you needed to have a very big number. even if you had a big number, i'm not sure that would've changed the monetary policy outlook. this is much more about influencing the market direction and taking direction from fiscal policy. this is a little bit more of a positive report. that makes it a little bit harder to argue for the big projects, the big program. we will see their -- we will see where that plays out.

tom: we welcome all of you on bloomberg radio and bloomberg television. it is about conversation. jeffrey rosenberg with us of blackrock. blanchflower will join us. looking forward to talking to him about the quality of the you arent lisa: jeff, talking about washington, d.c. and the need for fiscal stimulus. right now it seems like there is not a ton of urgency based on the fact republicans are going home and there might be some sort of executive order. this report will not light a fire. as the market too sanguine about another round of financial support? jeff: there is a lot of uncertainty. you look at the report and it adds to that uncertainty. the market is expecting some kind of compromise, some kind of deal, perhaps they were leaning towards the higher end. eventually the market is expecting some kind of next round program to come through.

today's payroll report still gives a bit of ammunition. we talked about 10.2% unemployment rate. we are making progress, but highlights the significant amount of damage that has been done and continues to impact people. that is the argument for another program. lisa: how do you use the economic data we get to decide how to trace? -- how to trade? jeff: it is a big challenge because the economic data is so dramatic. let's just take the payroll report itself. we came in closed expectations, but the range of the expectations is greater than anything you have seen at any time. the inflows and outflows are orders of magnitude greater, and the ability around the expectations range from -600 to over 3 million. ,hen you look at economic data what we emphasize is the

surprise. what uncertainty means is it is much harder to gauge what is the surprise level. your impact of any economic data relative to expectations because you do not know how to anchor those expectations all have to be dampened relative to normal period. tom: within the mathematics of all of this, there is a point when you shift from the yield study to a price study. in the tension i have seen that. are we now at a point where people are just buying full faith and credit because they are buying it and we'll take it at any price and price matters, up up we go. terms of safe assets when you talk about full faith and credit, it is about treasury and treasury yield. it is about monetary policy and monetary policy expectations. we have change the functioning of fixed income markets, how we set prices. it is a lot less about what the

economic numbers mean about it affected inflation and short-term movements. it is first about what does it mean for the policy response. the policy today is moving towards a contemplation of outright control. we call it yield curve control of the bond market. it is much more about our assessment of what does this do about the change in policy, less about the economic data directly impacting trading. it is a very different kind of environment for setting interest rates by the bond market. tom: where are you are the caught -- where are you on the call on the bonds? what is your call on the full faith and credit market? jeff: the call is the policy is very clear. the policy is maintained market functioning and pivoting towards accommodation. what that means is we will have

very low interest rates for a very long time. zero interest rate policy will be with us for a long time. i did not think we will see negative interest rates, but the control of the long-term interest rates is very much part of the policy. you are looking at a period of very low interest rates, front end interest rates pegged and functioning like a surrogate for cash. long-term interest rates under the thumb of monetary policy. until we start to see real progress on inflation. a low and, it is stable interest rate environment. lisa: if you're just joining us, we are speaking with jeffrey rosenberg of blackrock following the better-than-expected job report. there was a pop and equity futures, there is a rollover as people date into the negative. -- as people dig into the negative. talk about inflation, we can focus on real rates in the

united states at -1.1%, all-time lows. how low can they go? what is the answer. jeff: a lot of the movement in the real interest rate is pricing in a recovery in inflation expectations while at the same time the fed is pegging nominal interest rates. we could see that move a little bit more, but it is very unlikely we will see significant increases in expectations absent seeing to get increases in actual or perceived inflation pressures. we are very far away from that. covid shock is a massive disinflationary shop. what we are seeing in terms of negative interest rates is a recovery off of those extremes, and a little bit fueled by the short-term recovery in terms of commodity prices. we are still in a low inflationary environment. until we break that environment, which i do not think is happening in the short run, we will not see significant changes.

tom: thank you so much. michael mckee has now had a chance to go through 325 pages of the report. i kid, but it is not just about the headline numbers. what you see beneath? michael: looking at the composition of the job growth, exactly where you would expect. strength in leisure and hospitality's, up 592,000. three fourths of that at eating and drinking places. the waiters and waitresses came back. the question is for how long. did they lose their jobs again as states shut down? we saw government employment rose 301,000. it would have normally been a negative number. it came from a change in when people were let go from schools earlier this year than usual. they usually disappear from the report in july. there is some artificiality to this. manufacturing and construction held in their, they cruise --

manufacturing and construction held in there. they group relative to others. 26,000 for manufacturing, 20,000 for construction. that is where we have seen the strength, manufacturing and homebuilding. it is about what you would expect in terms of the breakdown of where the jobs are. the question is how may people cap the jobs. lisa: the other question is how regional some of the data is. are we seeing a resurgence in jobs in areas where the virus cap is going down and a decline in joblessness in areas that have become hot spots. we have any insights? michael: not in this report. we will get that when they break down the state-by-state numbers. probably would see arizona, california, florida, the leisure and hospitality categories falling up significantly. we will have to keep an eye on the jobless claims numbers and see where we go from there. tom: michael mckee, thank you as always.

right now we go to hanover, new hampshire. blanchflower is with dartmouth college. he is definitive on wages and definitive on the nuance of our employment and underemployment danny blanchflower, wonderful to have you with us. how underemployed is america? is, althoughtainly we have seen a decline in the data now. the reality is the unemployment numbers have come down. underemployment has come down a little bit what we will see is we do not have great measures of that. the question is if people go back to work, are they going to get the same hours in the same income they have in the past or will they have less hours and less income? that looks to be the thing we will need to look at. if you are restaurant worker or

a restaurant owner, will you get the same amount of work you've had in the past? the underemployment story is something we need to watch. this is definitively a good report. better than i expected on every component. the establishment data is good, the household data is good, employment population rate is up. labor force participation is up. these are good numbers, but the question is what happens state-by-state and what happens down the road when and if the stimulus payments run out. you studied the bank of england and the united kingdom is a different economy. what is the risk of one month of a better report? can you extrapolate it out toward you have to wait for the first week of september? david: this is unprecedented territory. we have never seen any dip of the kind we saw. not the scale of the dip, but

the speed. there is no precedent. mike was talking about what happened state-by-state. that whatu're right we have to do is watch things month by month. i have nothing in the past to help me with this. this is encouraging, and the government will be able to say recovery is coming. the question is, are we headed towards a cliff. that is the question we do not know. we will have to watch and wait and see if there is a second round of the virus, is our second round of layoffs from firms, we are still at 10% unemployment rate, plus another point with that misclassification. not as big as it was but my reading is you have another percentage point because people were wrongly classified as employed when they were unemployed.

is thene idea i love idea of walkabout economics, the idea you get away from the charts and the formulas and you walk around and you take a look at how it feels and how it looks like your into thousand eight, if policymakers had been able to do that, they would've come up with a different result. what is walkabout economics telling you? david: the first thing walkabout economics tells you is we are not doing much walking about. i call it the economics of walking about the internet. is important to get deep within the numbers. we are hearing recovery. slowing we are hearing in big states like arizona and texas and florida. the question is does our sense of what is happening, the survey census is doing, that report was more weak than this. i we -- i think we have to do

what bloomberg is fantastic about, talk to people on the ground and talk to employees. i've seen big firms are doing ok, small firms are doing ok from the story is about midsized firms. how are they doing? back to tom's question, do we know what is going on, the .nswer is we do not lisa: we did not pay him, i promise. david: bloomberg is certainly very good at this. in 2008 if people had done the economics of walking about. models missed it entirely. it was clear when you talk to employers and people, they saw this coming. we have to be mindful of using that market intelligence to tell us where we are going. this report is little more positive than the market intelligence, but let's see where we go. lisa: there's a question of

something tom keeps talking about. the income inequality. initially during the pandemic people were saying this is going to be exacerbated dramatically by the covid era. we still feel that way based on the fact lower wage jobs are coming back if the economy comes back online? david: we are. we are seeing across the board changes. we certainly are still seeing much higher rates for african-americans, for hispanics , for less educated good two points. the ones whore have this arrow which means you top the numbers up. it is also the people disproportionately impacted by underemployment, and you see this being inequality. one story we have to get to is in a period of lockdown where people have been temporarily laid off, what about young people?

what about the youngsters who left school in june. they are missing out on these numbers. we will start to see them coming through. the story about minority unemployment, less guilt unemployment, what will those be doing? i think the social unrest we have seen as a function of young people have nothing to do. tom: a new history as well. i want to take the time to rip up the script and i want to talk to you -- i've had the privilege of standing with mr. blanchflower in his lecture halls at dartmouth. does virtual learning work, not only at the dartmouth level, but down to kindergarten? do you think this nation can virtually teach our students? i can talk to the classes i taught in the spring and i've about to teach again. i think they went extremely well. we put a lot of resources into

it. i think it was pretty successful. i am not so sure about how you will deal with eight-year-olds think ther-old, but i model for the university student has changed the world. it has changed the campus experience. it was very effective. i have a class of 50 students in the fall and i will teach them about what bloomberg does, the economics of walking about, and we can do it pretty well. there are people in china, there are people in argentina. it is pretty good, but because it has been successful, it will challenge this higher education model. the question is down the line, where you going to do for the young ones. that is a greater challenge. they need more handholding cured our students have done pretty darn well. tom: we have to leave it there.

david blanchflower, thank you very much. i want to look at the markets, which have adjusted as lisa abramowicz nailed. futures at -10, futures improved and then they came back. dow futures at -50 and the 23.25.-- the vix euro-dollar 1.1838 with some dollar strength of of a better report. i do not want to oversell it joyed it has been an adjustment off of where we were at 8:29. on bloomberg radio, further conversation on this report good jonathan ferro at 9:00, and conversation with larry kudlow, and then mohamed el-erian, anastasia amoroso, bob prince

from bridgewater, and rick rieder from blackrock. lisa and i thank our team for terrific conversations. stay with us. bloomberg radio and bloomberg television. ♪ businesses are starting to bounce back.

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morning, good morning. the countdown to the open starts right now with 30 minutes until the opening bell. futures negative .33%. payrolls friday. all the positive upside surprise remove some of the pressure in washington with talks on the edge of collapsing and officials on the brink of heading into the weekend without a deal. nancy pelosi blaming the opposition. "the republicans and the presidents do not understand the gravity of the situation. we are far apart and it is most unfortunate." mark meadows -- "perhaps some of our democrats are not serious about a compromise." president trump still threatening to go it alone. "ifhe meantime -- democratic leaders put partisan demands aside, we would reach an agreement very quickly in the meantime, my administration is exploring executive actions." michael mckee joins us. michael: i will not characterize either