caroline: from bloomberg's world headquarters in new york, i am caroline hyde. romaine: let's look at where the markets ended on the day. u.s. stocks managed to close higher as technology shares and real estate's managed to overcome losses in financials. caroline: the labor market may never be the same again the pandemic and recession could leave permanent marks. we have seen millions of people

working from home a, but we have seen warehouse jobs surgeon. the challenges are immense and when it comes to returning to some sort of normal. workersmon encouraged back into the office to increase credibility -- increase productivity. they had to send a workaround with the coronavirus. caroline: there are so many issues with the coronavirus that are confusing. the temporary issues with the virus, the medium-term with the slowdown. the white line is the people who are on temporary layoffs. blue line, permanent layoffs. normally, they just move together. the number of people on temporary layoffs surged in march and april. the number of people who lost their jobs on a permanent basis,

that continues to rise. we really have a case of two labor markets. is not just -- one of the reasons we might have two labor markets is that the labor market is moving to something different. our entity spending as a share of gdp, that is the highest on record. give you aer lines better sense of what is happening. that is the blue line that is trending up. the yellow line trending down, that is building equipment and media. you saw the share of technology spending outpaced the share of more physical spending. of what iseflection going on with how the labor market is shifting.

becomes: the focus then perhaps people working with machines, but also the hotness of some of these ipos. aboutake, that is all cloud-based computing. joe: we talk all the time about this sort of divergence. is going to beow massive. when is the last time berkshire bought into a software? let's bring in product research or stephen englander. it is a weird labor market. in some ways, it is getting better faster than the fed expected. as the fed six about doing a thinksjob -- as the fed about doing a better job in this recovery, what are the

indicators, and how is it going to think about the labor market? >> i think, on a week to week basis, there is nothing much better than continuing claims. nobody drops off unemployment until they have a job. i think that is the best short-term indicator that we have. monthly data, i think they will look at how many people don't job a job, have not had a for a long time. based on historical precedents, if you have not had a job for four months or six months, you will not get one soon. caroline: needing to add further? what further bandwidth do they have to ensure that they can fire on all cylinders, encourage the market that we can go past

2% inflation and get employment back to pre-pandemic? stephen: you're right that they don't have lots of bandwidth. they can act on policy rates, they are maxed out. long rates are not really going anywhere. they are trying to get real rates down. i expect that is part of what they are trying to do tomorrow with their production -- with their projections, project that they can get inflation above 2% but at the same time show that they are not going to raise rates. seen inflatione expectations i just a little bit. adjust a little bit. there also seems to be a disconnect on how we are measuring that. some people look at the current

state of play, the housing market, other hard assets, and they say inflation is already here, we are just not measuring it right. stephen: i think there is some truth to that. there are a lot of products that we don't by now. prices are not going to go up or down because it is driven by willingness to purchase those goods. but i think if you look at everyday things, cup of coffee, restaurant meal, so on, i think there is a perception that those are going up in price. for the fed, that has to translate into people saying, look, my effective cost of borrowing is low. i have to go borrow money, build a house, do some investment.

they have to hope that it works. asis not really as effect of nominal interest rates but it is still there. one of the big questions going forward is, will we see a policy regime shift? let's say we got president biden and he had a unified democratic congress, maybe we would get fiscal stimulus and things like automatic stabilizers, or physical action more on a permanent races. how would that change the fed's job, and also what you would see for markets and expectations? if you had that, presumably that would be tied

into fed asset purchases. you are basically having helicopter money. the government spends, the fed buys, nobody is the worse for it. fromnk there are ways saying that formally. , i would have said it was the major issue whether a democrat or republican would win the white house with respect to the dollar and rates. now, i think it really matters ,he progress of the economy whether we get back to normal. suspect weecast, i won't even be there by the end of 2023. if it turns out that we are very lucky and we end up with a stronger economy and better health outcomes than we thought,

that will be the major driver of asset markets. biden may want to spend more money. whether he can and will is another issue. interesting, a democrat or republican win does have some arbiter in terms of where the federal reserve is going in terms of whether we see remit with policymaking. biden getting really into the economic vernacular, talking about whether you should expand the mandate of the federal reserve into looking at inequality. how youactor that into are thinking, low unemployment rate across gender and race?

the fed, to their credit, they were talking about but 2018 only 2020, and 2019. it gives them confidence that they will stick to the rate policy. i think there is a developing understanding that the fed will not only target aggregate unemployment, it will target unemployment differences across different groups. the inequality question. the problem is that the fed as a rate tool. you cut long-term rates and it makes rich people richer but it also creates jobs. that is the role of fiscal policy. romaine: it is definitely not their fault. it is curious though that so many people want to but the onus

on the fed to sort of run is hotter and i guess boost the labor market. we have already gotten the sense as to how long running hot can take to sort of provide benefits to everyone with regards to the labor market. if you have a situation where fiscal policy makers do not step up to do something to create a more equitable job market, why do we need the fed to do this? them to dowe expect this? >> the fed does not have authorization on their own to do helicopter money. andsome reason, congress the executive branch kind of don't get it together and don't do the fiscal that we need, this will be another very extended

recovery. real interest rates are negative, so there is no reason to think we will recover. but the trajectory will be a lot slower than if there were proper fiscal measures put in place. i think they would be in a tough situation. romaine: a lot of issues here that they will have to address one way or the other. whether they have the capability of affecting that change will be interesting to see. stephen engle it or, the standard chartered global head of fx research. join us tomorrow for our special programming, the fed decides. that will be with caroline hyde and tom keene will stay up past his bedtime to help caroline out. some interesting comments coming out of the ceo of jp morgan. jamie dimon talking about the whole work from home paradigm.

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focused today, we are on the amec, the recession, and some of the ways that the job market may be permanently altered. joe: today, we had jamie dimon. they have told people to come back to work. they have blamed young people for not being as productive on fridays and mondays. jamie dimon says going back to work is a good thing. everybody knows there is a cost

to this extraordinary lifestyle change. hf course, people have to weig the health risks with other things. jamie dimon saying that the costs of not coming back to the office are building. costs when you send them back, then you have one trader get coronavirus and having to send them back home. it will be really two steps forward, one step back. more, i want to bring in sonali bostic with the latest. loudlyan, the first to bring everybody back, and now the first to -- send somebody home. sonali: this is pretty incredible.

less than a week after starting to bring people back, letting them know that they wanted to bring as much as 50% of their people back. that is pretty impressed that pretty aggressive compared to other banks that have been slow walking it. faced these issues before. it just goes to show that this whole equation will be much harder than expected when it comes to potential covid cases in the office. on top of all of these other issues the bank is also thinking about including childcare, transportation, and general retention of their employees. if people do not want to come back to work, then how do you ?lso keep your employees happy

romaine: the virtual conference that jamie dimon was having tummy talked about some of the psychological effects of people being at home. he talked about the idea that people need to be at work to network and advance their careers. i am wondering, with regards to those issues. and caroline brought this up. andne person gets infected it upsets the apple card -- the apple cart, do banks and other companies have contingency plans in place for somebody coming down with the virus. it seems like the law of averages says it will happen. sonali: we already see it happening. it did not take that long. all of the other banks are looking around, watching jp morgan, watching the new york stock exchange, and seeing how

the experiment is working on. --s phone, jp morgan lowered this fall, jp morgan lowered its net income forecast. other banks with that income under pressure. the idea of bringing people back in what might be a very tough second half of the year is something they may be thinking about. caroline: of course, we are starting to see citigroup resuming job cuts as well. that will be something that will be weighing on many bankers concerns right now. sonali: absolutely. they will not be limited to citigroup. morgan stanley from account was the only one to make that promise into 2021. but 2021 is not that far away. there are concerns about what

headcount will look like. -- tour thanks to sonali: sonali bostic with the latest. basak with the latest. coming up, we will be selling -- we will be showing some charts. this is bloomberg. ♪

♪ caroline: today, we are looking at some of the potentially more permanent changes to the labor market due to the pandemic and recession. i know one part of the labor

market you have kept an eye on is freelancers. a lot people positioning themselves as freelancers. some ate a from -- data from upwork shows how extraordinary this year is. are is basically people who working but classify themselves as a business probably for tax reasons. the blue line, way out of scale, more people doing that. you have to figure there will be some return to normal but you also have to figure some people will really like this new arrangement, they will want to make it work. romaine: when we talk about the labor market and job losses, we tend to focus a lot on the lower end of the spectrum. there's been a lot of talk of

white-collar jobs falling victim to the recession. citigroup put out a statement saying that they plan to resume job cuts. they had put a pause on job cuts during the covid-19 crisis. they said it will be only about 1% of their global workforce and they will still end up with a net increase in jobs on the year. it has added total this year about 26,000 people. it shows you some of the belt-tightening that a lot of these big corporations are starting to do. caroline: 2020, there will be more warehouse workers, but it seems to be people working with machines. ofs chart came, the maker autonomous forklifts, robot

powered vehicles used to move materials around warehouses. inzon is so outperforming this market. we have not seen a shift to pure automation yet. actually, you have seen u.s. employment and warehousing and storage to a record. for now, perhaps some of the jobs really are available. joe: earnings after the bell from fedex. that stock up after hours. it just shows how there is a very human side to the e-commerce business. a record number of people working in warehouses. romaine: i was going to say, we had not actually seen a lot of humans in this video but there are a couple here servicing the machines. seriousness, in all , when we talk about these types

of jobs, the same thing happened in the last recession when you had new jobs created, unfortunately they did not pay as well as the previous jobs we lost. joe: i think it is another one of those things where the fed, as it looks at measures of wages of a will try to avoid some of the premature tightening. caroline: as we were mentioning, to make this a circular conversation, to the fed's credit, this is where they were looking pretty pandemic. -- looking pre-pandemic. wanting to make sure people reenter the workforce. thisne: if we want to make a circular conversation, we have west, on kim kardashian hopefully no job cuts there.

joe: she is going on facebook strike. caroline: what was the turn of phrase? thoughts and prayers. that is it for "what'd you miss? " joe: have a great evening. romaine: this is bloomberg. ♪

♪ emily: welcome to "bloomberg technology." i've emily chang in san francisco. u.s. stocks recovering from a slide at the close, ending the day flat. apple unveiled a slew of new products, also ending the day just in the green. apple adding three new apple watches to its portfolio. new