>> we are in uncharted territory. there's a lot of unknowns as we look beyond three to six months. >> the economy generates private sector demand, and then the banks will be happy again. >> what is going to power consumer spending is the services side of the economy, not the good side. >> everything we follow would suggest every bit of inflation is being passed through, and then some. >> the market is overly price for that inflation risk in the near-term. we are still going to have higher inflation to come. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.

on radio, on tv, a simulcast. huge news flow. russian sanctions, we will get to that in a moment. right now, citigroup is out, and it is a strategy refresh. jonathan: is the headline. citi to exit retail banking in 13 markets across europe and asia. it is a strategy refresh from citigroup, and the new ceo james fraser to exit retail banking in 13 markets across asia and europe. in the numbers themselves, i know that headline caught your eye. tom: but as you mention, the retail shutdown across the world , what is so important to me is the efficiency ratio. jane fraser and her first time out, she's going to make very clear what the tone is on cost control. citigroup is a different bank from bank of america and j.p. morgan. lisa: although it is trying to consolidate some of its efforts, to your point. take a look at the premarket

share price pop, up now 1.8%, so clearly a response to the beat, both with with specs across the board in earnings, but also to getting out of certain markets in the retail banking side. really want to focus on equity sales and trading. $1.48 billion, that is versus an estimate of $1.1 billion. it was a blowout quarter for equities trading at a time when everybody was trying to russian. tom: sonali basak joins us, our chief wall street correspondent. i want to go to what you nailed yesterday with the other banks, which is the efficiency ratio of fortress fraser. what does it look like? sonali: she held expenses roughly flat at a time when they are dealing with consent orders and at a time of reshaping the bank. that idea of getting 13 different markets, it will be more expensive on the front end more likely as they deal with the structure and costs.

but people like that they are getting more focus while still keeping a global reach, which is unique to citigroup compared to, say, bank of america. she told analysts last quarter she would be focusing on this bank, but not overhauling completely, and she just took over. this is really her first earnings call as ceo. jonathan: let's talk about the strategy overall. do you see this as something that has been in the pipeline for a while, or is this something that fraser came in and said this needs to be done? sonali: a little of both. you see jane fraser really changing up what that fabric of that consumer bank looks like with new leaders. but when she did take the earnings call last quarter, before she took over as ceo, in michael corbat's last call, she did say there would be more changes. she said she understood citi was lagging behind peers. prior to today, citigroup was trading at the multiple -- the

lowest multiple price-to-book of all of the big six. lisa: does this mean more market consolidation? does this mean pulling out of more markets? four does this perhaps mean acquisition with all of that cash -- or does this perhaps mean acquisition with all of that cash? sonali: focusing, that is really the key here with citigroup. the consumer business is not the same fabric. if you look around the world, they are facing pressures. revenue down in north america 8%, latin america 18%, asia down 7%. you are still facing pressures around the world and that consumer business. how do you tidy that up? jane fraser was in latin america prior to taking over the consumer business. tom: they were in australia, china, indonesia, thailand, vietnam. jonathan:jonathan: the international bank becomes less international. jane fraser, the citi ceo,

deciding to double down on wealth and pursuing exits from consumer franchises in asia and across europe. lisa touched on the numbers briefly. let's do that again because the numbers are decent, getting buried in the strategy overhaul. treasury revenues, you can go through every single line item in the numbers are looking better right now. i thing many of the bank ceos feel the same way. here's the line that sends out for me and a lot of other people as well. it comes from jane fraser herself, seeing the healthiest consumer emerging from a crisis. that is the good story here in america, the economy. let's get to the foreign policy story as well. we are getting some headlines across the bloomberg on the foreign policy side of things. the united states issuing sanctions on some russian debt, companies, and individuals. we lead with that reporting. nick wadhams and the team earlier at bloomberg. now getting confirmation of that. the united states sanctioning

six russian technology companies, issuing sanctions on russian debt. they will now be on ruble denominated debt and non-ruble denominated debt. now we are getting sanctions on companies and individuals, too. as for the companies, sanctions on six russian technology companies. so much to get through this morning on the economy and also on the foreign policy side of things. tom: if we get dollar-ruble up, i can tell you, weakness in ruble. when you are in a frontier economy, that is a tangible move. i don't want to dovetail citigroup into russian sanctions. i think we need to do that, but i would say that when you see retail shut down, that is nothing more than expense control. jonathan: i would also say what we have seen with the likes of hsbc, it is really difficult at a large international bank. i think that is probably the

issue with citi. how many times have we heard from credit suisse, going back to basics? we've heard that from european banks as well, going to the domestic story. i think in some way, to some degree, that is what we are seeing from citi today. the home market, that is where the money that. tom: hsbc is really becoming the hong kong and shanghai banking corporation. they move five senior officers to hong kong, where they will join steve major. jonathan: right, steve major in hong kong, too. it is interesting that hsbc doubles down on what it would consider its home region now, and citi is pulling back from the likes of europe and asia. i think we will see a lot more of this. we have seen a lot of it already. tom: futures up 24 right now. sam stove all with us -- sam stovall with us with cfra this

morning. you have seen every kind of boom, every kind of bull market. in what way is this bull market rally distinct from the others we have witnessed? sam: first off, it is the speed. we fell 34% last year and only 33 calendar days -- year in only 33 calendar days, the fastest on record. we then recouped all that we lost in fewer than five months. so by august 18, we were back in record high territory, which was the third fastest on record. now, with investors basically looking across the valley into the second half of this year into 2022 and saying the sky is the limit, i think that is really what is propelling prices. jonathan: how will these banks leverage this better economy, and what is the business model to really get exposure to at the moment? george: i think banks are basically loosening up the cash. they are taking it off of the reserves and starting to put it to work, making strategic

changes, as citigroup just mentioned it is doing. i think also focusing on additional trading and realizing that the consumer is, once they are let loose, they are going to start spending and making up for the time that they were in lockdown. lisa: would you like to see as an investor the banks take more risk? sam: i guess the treasury, the fed has said that the banks are securely funded, so we certainly don't want to go back to the time of 2007, 2008 and get too far over our skis in terms of risk, but obviously you need additional risk in terms of making the prophets. -- making the profits. tom: i've never heard go to cash out of sam stovall's mouth. what does the gloom crew get wrong now? sam: you are right, when life

gives me lemons, i try to make whiskey sours. so basically, i think investors have to realize that first off, investors are optimistic by nature. if you are bearish and wrong, you are ridiculed. if you are bearish and right, you are hated. basically, what we are expecting is that earnings, instead of reaching $200 a share by the end of 2022, might actually come closer to the end of 2021. the targets that a lot of strategists, myself included, placed on this year are being eclipsed or at least approached by the end of the second quarter. so i think this market is showing us that it definitely has upside potential. jonathan: i've got to say, and the media, if you are bearish and wrong, you keep getting invited back. [laughter] you don't get ridiculed. let's get to the headline of this morning. from citi, they are to exit retail banking in 13 markets

across asia and in europe. did numbers out of citi really good. one good number, fix sales and revenue -- number, fic sales and revenue. we do get the headline, the united states issues sanctions on some russian debt, companies and individuals as well. there is the confirmation right now. the president has made a big push domestically over the u.s. economy, and you rightly pointed out earlier this week that foreign policy has come onto the radar and a much bigger way in the last couple of days. tom: the complexities of this, this is of international relations, and folks, you've got to believe a response out of russia, and that could center on the tensions on the eastern border of ukraine, plus the crimea story and what is going

on east of kiev. jonathan: the dollar-ruble payer now with a 77 handle -- dollar-ruble pair right now with a 77 handle. tom: the pros at bloomberg use a basket of currencies against ruble. i usually go to dollar-ruble within the media. but nevertheless, that is where we are. we have to say thank you to sam stovall. two short a visit from the gentleman with cfra. dow 33,786, up 102 points. jonathan: up by about 0.8%. s&p five futures -- s&p 500 futures up about 0.6%. in about 25 minutes, retail sales in america. we need to continue to digest and process jane fraser at citi

picking a move early in her tenure. tom: sonali basak, one question, and then we will go to gerard cassidy. your observation as you study these earnings. sonali: 21% return on tangible equity. jane fraser knocked it out of the parking in her first quarter. $4.5 billion in fixed income makes it right behind j.p. morgan. tom: is there a different tone in the presentation then we saw from mr. corbat and his team? sonali: there's a tone of somebody who was to show she is coming and swinging. the first out of the gate, 13 markets gone. she says we don't have the scale we need to compete. tom: let's go to gerard cassidy. he always comes in swinging into the lobster markets of portland, maine. he is with rbc capital markets. when you give up on retail in vietnam, is that nothing more

than a closeted cost reduction? gerard: i think it is. and when you take a look at the markets they are exiting, the numbers that they have provided really do not have a material impact to the bottom line. you might recall, some years back they exited a handful of these consumer markets, and they obviously didn't go all the way. jane fraser, with her first strategic move, is trying to make the company more profitable by exiting these markets where they really don't earn very much money. jonathan: what is left? what's more to do? gerard: it is going to be interesting because this is one area of focus for many investors that they really needed to trim down their global footprint on the consumer side. they just didn't have the markets. so the question is, how do you build upscale in the united states? when you look at j.p. morgan chase and back of america, their franchises in the united states

have returns on equities of over 30%. citi cannot match those numbers, so citi will have to take a look at how we get bigger in the u.s. jonathan: we asked this question of sonali, and you can answer it a little more aggressively, i imagine, because he read bloomberg, we have to be double medic. do you see -- have to be diplomatic. do you see a difference between mr. corbat and jane fraser? gerard: absolutely. we expect new guidelines on targeted return numbers, what they expect to be able to achieve with these strategic changes. citi has a lot of work to do, a lot of heavy lifting, but with the new leadership under jane fraser, i acting there ash i think they are going to be able to accomplish new and better numbers for shareholders -- i think they are going to be able to accomplish new and better numbers for shareholders. lisa: in the market, who is winning? gerard: it looks like so far, goldman sachs came out on top in

almost all of the categories, whether it was dcm, trading and markets for ficc or equity. but to your point, they are all very strong numbers. lisa: there's a question of how long this can last. i was looking at a headline about citigroup's trading numbers following on the spac-a- palooza, or whatever you want to call it. how long can that last for earnings? gerard: unless we get continued volatility and strength in the markets, we should understand that the spac/ecm business has started to slow down because a number of the investors in spac's have already allocated the money for that. there's not as much money to go into spac's. that is going to be a look to advisory business is as we get into the second half of this

year. tom: we talked to thomas schultz from aew. do you presume another season of roll up's because of the technological superiority of these winners? gerard: i think you are right, we are going to see more consolidation. it is already starting to pick up. when you and i were young men, we had 18,000 banks in the early 1980's. today we are down to 5100 get we expect continued roll up's, for consolidation to continue over the next two to three years. small community banks, but also the big deals like we saw with acquiring people's bank of connecticut. we are going to see big regional deals, we believe, over the next two to three years, and the

canadians will likely get stronger in the u.s. jonathan: you're so gracious with your time on mornings like this morning. can i squeeze another when in? just your report card for the quarter. we had the likes of goldman, j.p. morgan in the last 24 hours. who won the quarter? gerard: reporter: so far -- gerard: so far, you've got to put goldman sachs at the front of the list. but when you look at the banks, i would say jp morgan probably came out ahead, but they all have the same trends, which is the loan-loss reserves are very meaningful. they are going to continue throughout the year, and that is going to be the bridge until we get loan growth and higher revenue growth in the second half of the year. jonathan: gerard, good to hear from you. gerard cassidy of rbc. was that your take talking to a lot of people in this market, that goldman is the big winner here? sonali: yeah, the returns are very good. they highlighted more levers to

clamp down on costs, and they are beating on every respect. more than $1 billion in advisory revenue, which is a business that people keep think will -- that people think will keep getting bigger. jonathan: the news elsewhere, so much news this morning, retail sales in about 12 minutes. we had the bank numbers. we need to talk about sanctions before we get to retail sales. dollar-group will out to a 77 handle with a move of 1.6%. nick wadhams and the team at bloomberg leading reporting this morning over sanctions we could expect. nick, what are we getting? nick: we are still trying to parse out exact a what is going to happen. the big one for bloomberg's purposes is that it looks like the u.s. is going to bar u.s. banks from buying russian bonds on the primary market starting on june 14. it looks like there is still going to be secondary market

trading allowed, so it is big market trading action, but it ultimately may not affect all that much money. tom: pre-pandemic, you lived on the airplanes with the state department. how will our allies in europe respond? nick: they are still taking a look at the extent of these sanctions, which literally just hit. but a huge focus for this administration so far has been to do things in concert with allies. they say we don't want to have any surprises for countries that could potentially be caught in the middle. you can be sure they briefed allies on what was coming, including potentially expulsions of intelligence officers operating as diplomats. so we are checking to see if there's going to be a similar wave of expulsions from countries in europe. tom: frame the dynamics, the fungibility if you will, of the russian foreign exposure right now. not so much syria, but their actions on the border of

ukraine, and for that matter, how they could fill a void in afghanistan. are they steeled to do that, or are they not ready to create a fuss? nick: afghanistan, always ready to create a fuss. that is a huge part of these sanctions, responding in part to the allegations that russia was essentially offering bounties to afghan fighters to attack american troops. that is a big motivating factor here. the timing is propitious for the united states because they are seeing the biggest troop buildup since 2014 along the border with ukraine, so they do want to send a very clear signal that that buildup is a huge concern. but these are sanctions that have been in the works for months. we have been tracking them since essentially the biden adminstration came into office and announced it was going to launch this big review of these perceived russian misdeeds. but certainly trying to signal

here that they are not going to tolerate that troop buildup along the border with ukraine. lisa: i wanted to talk about timing and who the signal was for. is it for the russian government , the middle east, or for the allies in order to get some sort of cohesion ahead of the china discussions? is that a way to read some of these moves by the biden adminstration? nick: i think more of what you are seeing is that the administration said in its first day of office that it wanted to review all of the actions by russia so that cyber attacks the solarwinds hacked, the russian bounties in afghanistan, the navalny actions, what they were really addressing was a perceived idea that for four years under president trump, there really was no significant action at the leader levels certainly against vladimir putin. there were sanctions over the salisbury attack and things like that. but really, this perception that donald was pulling his punches for whatever reason with

vladimir putin, would never say a bad word. they announced this big review. it took a few months to get there, and now they are rolling out what they see as a very stern response with a big sanctions package. lisa: what is the expected response from the kremlin? nick: i think what you are almost certain to see is expulsions. we have been down this road before, after the trump administration expel some russian diplomat's. russia expelled about 400 american diplomats during the trump administration, so there's very little that russia can actually do that would have a financial impact. but you are probably going to see the tit-for-tat expulsions, and of course, russia may decide that vladimir putin will not attend this climate summit, a big initiative of president biden's, set for later this month. russia could show its disapproval by saying we are not going to show up. jonathan: for the environment

down in washington, d.c., dan tannenbaum pointed out a lack of leaks around this administration. we are not talking about days ahead of time, we are talking about hours now. just how tight is that ship down around washington? nick: i am not so sure about that. we reported this week -- we reported last week that sanctions would be coming this week. i am going to do our own horn. -- going to toot our own horn. [laughter] bloomberg has definitely been ahead of the pack on this. you are really not seeing any of the palace intrigue, any of that . everyone was singing from the same songbook, but you are starting to see a few turf wars, but certainly none of the drama and histrionics you saw out of the trump administration that merited a lot of those leaks, but also, there is a certain

amount of fear because the administration, like the obama administration, has said it is really going to get tough on leakers and really punish anyone who tries to do that. so we are seeing a lot fewer leaks on a lot of the internal politics of the administration. jonathan: you are doing your job and doing it well, nick. thanks for catching up. taking a bit of a dig at reporters down in washington. tremendous reporting from the team down in d.c. tom: a tremendous chart i have used from years ago on mr. putin and russia, this goes back to the collapse of the soviet union, it is the mass devaluation of the russian ruble compared to the dollar, from one to one to one to 77. that is may be the ugliest chart in the system in terms of wealth destruction. jonathan: it is not pretty, is it? coming up on this program,

retail sales in america. it is up next with lewis alexander, nomura securities chief u.s. economist. we are looking for something close to 10%. from new york, for our audience worldwide, heard on radio, seen on bloomberg tv, this is "bloomberg surveillance." ♪

jonathan: from new york city, for our audience worldwide, good morning to you all. alongside tom keene and lisa abramowicz, i'm jonathan ferro. retail futures just moments away. and i slipped on the s&p 500 come up 24 points. we advance .6%. the wow from tom keene. let's do claims first and i will work through the data. a good downside surprise on claims. 575,000. there is your punchy number on retail sales. month on month, 9.8%. i stress month on month, 9.8%. the median estimate 5.8%. carl riccadonna of bloomberg economics almost on the money, looking for a 10% pop for march

retail sales. bank of america around 11.5% is a big number and huge upside surprise if you strip out auto and gas, let's go retail sales ex auto and gas, 8.2%. the headline number month on month, 9.8%. the control group input to gdp, retail sales control group, 6.9% , a slight downside surprise. that is a boom number. two data points to look at. a nice retail sales print in the right kind of move lower on initial jobless claims. jobless claims down to 576,000 from a revised 769,000 tom: we make jokes. that is the showbiz part of it. this is the healing of a nation. that is terrific good news on getting the employment rate down

to somewhere in the vicinity of february last. on retail sales, these are good numbers with constructive revisions as well. jonathan: they are good numbers but it is a market that is position for it? equity futures still elevated on the s&p 500. advancing 27 points. take a look at the bond market. yields 1.60, down three basis points on the session. we are seeing this with retail sales. we saw it earlier with cpi. cpi was hotter than expected and on the data yields were lower. we are seeing it now. yields down three basis points. 7% on the control group. 6.9% to be precise. the headline number 9.8%. these are tremendous numbers. we are gearing up for these tremendous numbers. ever since we got the headline on the vaccine front. tom: what i will notice is the

real yield at negative zero point evan five. i am not even sure you could do a show. i do not know if you can do the show with the real yield coming to a greater negative number. jonathan: nominal yield down to 2.27. let's turn to ira jersey. your first reaction? ira: i think the market was ready for this kind of number. this 10% number you noted that carl riccadonna and our bloomberg team nailed. the market is rallying a little bit in terms of rates. i think because maybe this is as good as it can get. this is a lot of fiscal stimulus baked into these numbers. next month will not be quite as good and the month after will be even slower. the big question for the rates market is how sustainable is this kind of recovery?

tom: we are thrilled to have you on. i have to rip up the script as the secretary of state comments on these new sanctions. you work for wall street. what does it mean if they cannot trade russian paper? ira: obviously that will affect emerging markets trading desks. it is probably pretty incremental. things for u.s. big banks are things like u.s. corporate bonds. that is where a lot of the issuance comes from and a lot of syndicated makes their money. i do not think it is huge from an economic perspective for a lot of these banks, but it has to increase fear you can wind up having more economic wars and what happens with geopolitical tensions in general. that can lead to risk off activity. lisa: i want to sit on the data that was better-than-expected

across the board. looking at the bond market move, a lower bond yield, tenure at 1.60%. yesterday jay powell said stop looking at expectations, look at the data. the data looks tremendous. when does it matter? ira: the problem is he and all of us who look at the data will say the next couple of months you have to look past. the fact is there is not going to be $1400 fiscal stimulus checks going out every month. it is not going to be sustained. the question is how much does this filter in. how much does this get month over month gains of 15%. things like that other trade war with china, other geopolitical

tensions with russia, all of those things have the risk of derailing some of that. i think we are going to see an economy that is pretty decent by year end, federal reserve that will signal us going to asset purchases in 2022, and jay powell did hint yesterday. if that is the case, those really yields that are -75 basis points can go to zero. if that happens and you see that kind of increase in yields, you're talking about 2.5% 10 year yield by the end of next year. jonathan: we have to run. we have to leave it there. ira jersey of bloomberg intelligence. i will do a shout out. let's start with the data. the right kind of downside surprise on jobless claims, 576,000. we were looking for 700,000. elsewhere on retail sales, your headline number, 9.8%.

your median estimate 5.8%. that is an upside surprise. away from what the economists were looking for, the market was your yup for a big number. here is the price action. equities elevated going into the print. they stay that way. nasdaq futures doing nicely. up 1%, off the back of a move in treasury yields. call it three to just above 1.60. that is the data. here is the shout out. carl riccadonna was looking for 9.7%. lisa: misted. tom: way off. jonathan: lewis alexander looking for 9.5%. lewis alexander of nomura. tom: let's talk about this. jon and i feel strongly about not gaming people when they are wrong or right because market economics are brutal. it is even more brutal now. lewis alexander joins us with

nomura. someone who delves micro with macro like no one on the street. what does this retail boom due to your guesstimate on the duration of a boom economy? lewis: one month data does not tell you a lot about that. i would very much agree with ira's point. an important factor is the duration of the fiscal stimulus. i would point out on the 1.9 trillion jobs plan that was just past, ceos estimate they will spend 1.2 trillion of that before september. that is extremely frontloaded. this problem, we have this surge now, but how long it will last is very important. we have the peak in growth on the cycle for us. i think that is going to be increasingly the discussion we will have. lisa: how much are you looking at supply chain constraints.

you know people -- that is the aggravated number. how much can people buy at a time when you have companies that cannot hire enough people? lewis: a big part of the advance we will see over the next year is a normalization of the composition. if the threat of covid-19 goes down will go back to traveling, they will go to restaurants. there is more capacity. where you are seeing the supply constraints, things like the chip constraints, the shipping constraints, is in the goods side of the economy. i think those things will moderate. as we look forward over the next year or two, i do not think the supply constraints are going to limit what the economy can do in terms of her oath. we are going to get -- in terms of growth.

we are going to get burst of inflation. tom: lou alexander, see by see talks about -- do you just assume a shift from a goods snooze to an acceleration of service sector profit and prosperity? lewis: i think that shift will,. when you look at what has happened of last year, you've about one third of the economy that has been very depressed because of covid-19. that includes travel and entertainment, but also things like collective health care. those things when covid-19 is no longer a threat will come back. at the same time, the parts of the economy that have benefited him covid related demand, the fact that people have gone out and bought goods, that stuff will moderate. that is part of how we expect the economy to evolve. jonathan: always good to catch up with you. what a morning. lewis alexander, no more u.s.

economist off the back of a better-than-expected sales print retail. 9.8%, the number, 5.2% of the median estimate. the price action is interesting. yields fall by four basis points. 1.50 9% on the u.s. 10 year. tom: within the mix of the news, that is a huge deal. i love what neil dutta says. he goes for it. he also says the european union getting its act together. you have to watch the blended dxy statistic and we do not see it yet. euro through 1.20, will we get that? jonathan: looking forward to the conversation on bloomberg tv and radio. in the next hour i will be catching up with chetan ahya on this better economy, a better economy this man has been looking for for the best part of 10 months. keep waiting, tom.

it is coming. in the 10 year treasury, 1.74 to close out march. back to below 1.60. jonathan: the way you got -- tom: the wave you got out of coinbase yesterday, you were courageous. jonathan: let's go for a drink later. is this it, really? this is bloomberg. ritika: with the first word news, i am ritika gupta. the biden administration has hit russia with a new round of sanctions dozens of russian officials will be penalized, expelled from the u.s., new restrictions on buying russian debt. that is in response to allegations russia was behind the massive hack to agencies and in the u.s. presidential election. president biden has ditched many of his predecessors policy but he agrees with donald trump to limit exports of u.s. technology to china. the biden administration added

seven chinese firms to a black rest. cannot sell to them without special permission. little support in congress for easing the pressure on china. unitedhealth raised its forecast for 2021 after first quarter beat estimates in earnings. the largest u.s. health insurer is the first to report and is seen as a bellwether. the company's insurance division -- u.s. health regulators have extended the pause on the use of the johnson & johnson vaccine. it concluded the meeting without a vote on the issue. now it will seek more data. helping vaccinate rural communities and other harder to reach populations. jp morgan is launching a multi-trillion dollar green initiative. the bank set a goal to finance 2.5 trillion dollars in projects that climate -- the combat climate change and enhance

sustainable development. it will include $1 trillion in financing. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> we will reach the time at which we will taper asset purchases when we have made

substantial further progress towards our goals from last december. that would be before, well before the time we consider raising interest rates. we have not voted on that, but that is the sense of the guidance is it would work in that way. tom: the calendar for jerome powell is an interesting calendar for the april 28 fed meeting. there is a calendar for the beleaguered transportation industry. delta airlines report. the headline sequence is fascinating. a troubled look back. the look forward i find brilliant. they are losing $11 million a day. they are making $4 million a day. the lines crossed somewhere about september, optimistically. lisa: everyone is trying to get on planes and fly places, or a lot of people are, more than there were a couple of months ago. the interesting aspects of the restart is the likes of delta cannot bring on enough pilots,

my flight attendants to get some of the flights going. the labor market shortages in the services area. jed kolko has been covering this , he is the chief economist at indeed. out of harvard. what is your take on how severe some of these labor market shortages are that we hear about , particularly some of the services sectors? jed: it is sector by sector. we have seen an increase in demand for labor right now job postings are about 18% above where they were just before the pandemic. there has been a steady recovery. in some sectors, like manufacturing, construction, driving and warehouse jobs, 50% above where they were before the pandemic. the boost in labor supply has not quite yet caught up the boost in demand.

there are a few factors holding people back. one is concerned about the virus. another is the added burden that parents, especially mothers have in balancing childcare with work outside the home. he factors. -- key factors that vaccinations will help take care of. lisa: every week we get these numbers and they have come down. still above 500,000 americans filing for unemployment claims. how can this make any sense given the fact there is demand for labor. i hear what you're saying, but those issues have been the backdrop for 12 months. jed: the numbers reflect the late -- the rate at which people are able to apply. i think a better view of the set of people looking for work and do not expect to get called back

is the core unemployment rate. it is the unemployment rate minus all of the people who have been temporarily furloughed. that is still elevated but it never went as high as it went during the great recession. the unemployment rate we saw during this pandemic, when it's bite last year, was mostly temporary unemployment your be -- temporary unemployment. people who believed or were told they would get called back that were not searching the way people were permanently laid off. now that is getting back to normal. there are people who are not working, people who are waiting. not as big a spike as the headlines were suggesting. tom: i look at your work and i folded into what the esteemed jared bernstein does on the white house on the social aspects of our american economy. he basically invented this. tell us about your two

america's. i look at the indeed website and it is a bunch of happy people working from home and innovating. we know there is an america that is not participating. how wide is the divide? jed: working from home is for the fortunate. people who have a college degree. more than one third of them have been working from home. even during the pandemic. for people with a high school degree or less, it is under 10%. a big difference by education, by race and ethnicity. the concern out of the pandemic is the way the labor market may shift permanently could be to eliminate some lower wage jobs even more. the government a few weeks ago put out updated projections, long-term projections about which occupation will make up the economy over the next 10

years, and the long term biggest hit could come to many of the jobs that require only a highs pulled degree, or even less. we could see more polarization in the labor market as a result of jobs in some sectors being permanently lost. tom: which unemployment rate do you use? from a social aspect the traditional unemployment rate does not get it done, does it. jed: i look more broadly. i mentioned the core unemployment rate. temporary unemployment is especially useful in this pandemic. also takes into account those working full-time but want -- those working part-time time but one full-time work. also the employment population ratio. that looks at everyone 25 to 54, the sheriff them who are employed. -- the share of them who are employed.

that accounts for people that still could be coached back in if they felt safe and wages were high enough and conditions were right. lisa: jed kolko, thank you so much. that was terrific and an important conversation at a time where there so much uncertainty. it is important to be having this conversation as we talk about the world flush with cash. we still have this high unemployment rate relative to history and we also have real labor market shortages. these frictions slowing down a recovery that otherwise would be full steam ahead. tom: we did not have time to get to jed kolko on the san francisco market. i know you've been looking at pacific heights for $16.5 million. with all of the gloom about san francisco, the tech boom we are still in, the metrics in real estate, you wonder what it says about jed kolko's two americas. lisa: there is a question about big urban areas rate i will say

i've been asking you to liquidate some of your bitcoin holdings so i can go and make lots of profligate purchases around the country. there is a question as we look forward to two america's, how quickly we can get people spending and borrowing and doing the american thing. tom: i sat on fifth avenue last night. it was new car after new car after new car. we have just seen near 18 million units in march as part of the retail boom. lisa: we've been talking a lot about how the cities we have seen have been coming back in a big way. do your point about san francisco, deutsche bank put out a report yesterday saying office space demand might decline 10% to 40% over the upcoming years. tom: an eventful day to say the least. the secretary of state speaking on new action by the joe biden administration against vladimir

putin and russia. this is a complex topic. we will have much more through the day. as well on banking. brian moynihan of the bank of america, later. this is bloomberg. good morning. ♪

want to save hundreds on your wireless bill? with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost?

we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at xfinitymobile.com/mysavings. ♪

jonathan: it is the boom you have been waiting for. from new york city for our audience worldwide, good morning. "the countdown to the open" starts right now. equity features are positive. .6% on the s&p 500. a smoothing american economy. >> we have had the speediest recovery ever. >> the economy roaring out of the gate. >> the economy is starting to open. >> the bar has been set high for u.s. data. >> expectations high. >> lofty expectations. >> the potential for another boom in the economic data. >> the second quarter is a turning point. >> there is a lot of cash sitting around. >> the data print will be so eye-popping. >> this is the point where the strong growth outlook becomes fact rather than forecast. jonathan: that line from