be able to dissipate. >> even if the economy slows. we will still get positive long-term returns. >> we think any pauses in the markets could be short-lived and shallow. >> we are heading towards an environment where they have to consider paper. >> from new york, for our audience worldwide, good morning. this is bloomberg surveillance. equity futures up two points. after six straight days of gains. your estimate this morning, 720 k. tom: they are grounding -- grinding flatter yield and equities grinding as well.

jonathan: the curve of 120. tom: first thing i looked at this morning. this is the major dollar index, caught up in the last few days. jonathan: here is the from the labor market. labor challenges across the entire value chain continued to be the major obstacle to increasing drugs. lisa: and how much does it have to do with the pandemic that ravages certain areas still and how much does it have to do with childcare, probably all of the above. the employment numbers will remain lower than for. jonathan: six days of gains.

43.13 on the s&p. 0.06% on the bond market. the 10 year down to 144.24. dollar strength. lisa: hike in rates ended reason it is as low as it is, we get insight into the deliberations of the federal reserve. the payrolls number comes out, june jobs reports. one of three data points. they will decide whether or not to at least taper. what i am looking for is momentum. how much momentum are you seeing or is it just isolated to services? do we get any insight into how much the enhanced unemployment

payments affected people coming back to work. president biden speaking about the jobs report. expecting to talk about the need for more on infrastructure and spending, the disparity, k shaped recovery. i find this fascinating. negotiating output after yesterday's meeting. united arab emirates coming out saying they want to have a bigger say and how they measure the output. if they don't come to an agreement, than the current output levels would be rolled over, lower than people say would be needed to meet demand you are seeing crude lower earlier in the day it was higher. the question is how much further prices could climb if they fail to reach an agreement. 75 handle -- jonathan: 75 handle. we know all about fuel. we know about oil.

travel gets expensive over the long weekend. it would be expensive to get a plane and fly to say, greece for a long vacation. tom: and you have to quarantine for two or three weeks. it is difficult. all we do within her celebrity is try to keep it private. you can't come the islands. i have been advised by one of her entourage, it is crete. she is going away after today. but it is not crete. randall kroszner joins us. good to catch up. we will get the payrolls report.

what are you focused on? randall: you want to look at the sectors and i want to look at the participation and look at what is happening in wages. all three of those will tell us important pieces of what is owing on in the market and will feed into the fed's thinking. tom: we are enjoying that one of our talents is going to greece. i want to get from you the condition. greece was on its back and no one in western economics has recovered like greece. when we recover from this pandemic, do we underestimate the human condition just to recover, where unpleasant will go down to 3%, that we will see sustained gdp? did we underestimate the human

coming out of the pandemic? randall: during the global financial crisis, i think my colleague -- tom: i am going to cut in. watching the cubs go down in flames and he has kroszner bad mouthing it. randall: i didn't badmouth it. tom: he has me totally rattled going after the legacy of the great gary becker. jonathan: i think lisa should do some of that before she goes away. tom: for those of you on radio, i were a lovely blue tie for greece. lisa: that turned out well.

talk about the idea of transitory and the idea of good and bad inflation. we are getting a sense that it could go to $100 a barrel and food prices spiking due to a drought out west in the united states good at what point does this become a deflationary? randall: they are looking at transitory and long-term factors. the concern is, could enough transitory factors lead to long-term change. that would be a change in inflation expectations. people have been getting low wage increases for quite some time. that is not changing where we have seen a significant spike in consumer prices on a variety of things. much more pressure in the labor

market, where we are seeing bonuses being offered for people applying for jobs and does it turn into a one-off bonus to higher wages. and then firms say our costs have gone up and we can charge more. then individual workers say i want more wages and when markets are strong i can demand more or go elsewhere. we are seeing a high number of people quitting their jobs. we only see that when people feel confident about the jobs market. this gets back to the human condition, that feeling of confidence. it could affect the inflation process going forward. that is one of the key things the fed has looked at. they don't want people to think, that means prices are going to rise in a consistent way and the fed is just going to support that and lead to much higher

inflation. jonathan: if you have any insight on the metric guiding this. they talk about substantial further progress but won't tell you what it is. each and every policymaker has their own view. is it the employment rate, participation rate? randall: you will get different views. there is not any one magic bullet. i think the employment ratio relative to population is important. we see that going down, because a lot of people retired. concerns about health that older people would say, it is just not worth it. i am going to retire early rather than stay in the orkut. that will put more pressure on wages as the economy and markets come back and there are not as many people in the labor pool.

that would be in metric and also looking at what is happening with wages. jonathan: good to catch randall kroszner, professor of economics. mr. shepherdson, prateek bullish on this. tom: -- pretty bullish on this. tom: one of the things that would be interesting is if it just sort of comes in and we move on. i think just as important is the month to month sequence. the first thing i'm going to do with the revisions is calculate the three-month. jonathan: i will look at how to mark the response to it. a lot of information and how a market response to data. yesterday we had this strong inflationary impulse and we ended the day with the curve

flatter and yields at the long and lower. lisa: the more you have input costs going up, the harder it will be to get sustained inflation. it is from the wages side and if people are having buying power cramped, that will slow inflation over the long-term. that is why it is important to parse out where the growth is and where salaries are increasing. jonathan: she will be here all morning and she is not going to crete. people are going to think that she is not going there. tom: we talked to randall kroszner. jonathan: some of those labor markets. tom: the way i looked at it is they have been around for 90

years. if you were to have lunch on one of the islands. jonathan: which island? tom: you would probably get marinated olives and boost employment. lisa: thank you for that. jonathan: but not in crete. this is bloomberg. ♪ >> opec has a foaming into bitter infighting. a key member, the united arab emirates, scrap the deal at the last minute, forcing allies to postpone the meeting until today . it is casting doubt on whether there will be an agreement on production that can ease a surge in oil prices. economists forecast that u.s. payroll growth at 720,000, but

recent forecasts have been higher. enhanced unemployment, health care, and childcare concerns keeping people from returning to work. u.s. versus have left afghanistan -- u.s. forces have left afghanistan. afghan forces will now run the airfield. president biden promised as many as 3500 american troops would leave afghanistan by september 11. after five years of tension over brexit, british prime minister boris johnson is preparing for angela merkel for her last visit

as chancellor. this is bloomberg. stay tuned. ♪

>> i couldn't agree more with the treasury secretary and the use of the word historic, not just for economic diplomacy but the tax code, multinational corporations paying their fair share and for the american worker and american middle-class to get a fair shake out of a tax code that has been meaning the other way for far too long. jonathan: fair is a were doing a lot of heavy lifting. from new york city this morning, good morning. i'm jonathan ferro. equity futures, six days of gains coming into friday i had a long weekend. it is like torture waiting for the payrolls report.

your bond market, 144.41. euro-dollar. lisa: when is the real yield if the day ends at 8:35? jonathan: that is 1:00 p.m. eastern. thank you for reminding me. is anyone going to watch that? tom: i think the people in greece would be interested. we welcome all of you on radio and television. markets beginning the second half with sobering movement for those cautious. never cautious is emily wilkins. i want to go 45 miles north of kabul. we saw some reports that the united states abandons the airfield in afghanistan what is the significance?

emily: this is an airfield the u.s. has been at for decades and it is part of the withdraw as troops return home after president biden ordered that the u.s. would be getting out of the country. i think there are a lot of people watching what is happening over the long-term, trying to see the actual impact will be. a lot of concern that when the u.s. leaves other terrorist groups will gain a foothold in the country and that could be a problem for the residents there. tom: a wonderful map of afghanistan of many of the strongholds of the taliban. many are near the airfield. is the somewhat like the abandonment of saigon where they will move right in? is that anticipated by the administration and the pentagon? emily: there are questions about the withdraw and one thing they say is we are not completely leaving.

we will still have individuals on the ground in diplomacy roles. the biden administration is trying to frame it as though they are not abandoning the country. time will tell. we will see how it plays out in the next month as far as what happens when the u.s. forces leave this area. jonathan: turning to domestic policy, the tax effort and international basis and everything we are doing at home. i keep hearing the word fair and that is doing heavy lifting because i am trying to figure out what the objectives are. when they say fair, what do they mean? emily: remember that these tax proposals are two things. they are supposed to be giving lower and middle income americans who feel that the tax codes are stacked towards wealthy elites and that it will be fair for them. there was an article that came

out a few weeks ago that showed that some of the biggest names of billionaires in the u.s. pay nothing in taxes. there is a growing feeling in the american public that they are not getting a fair shake. it is to pay for other programs the biden administration is putting forward. they are proposing childcare, eldercare, health care, medicare, all of these things need to be paid for and the way to pay for them are these tax proposals being put forward and that senator bernie sanders is working on a potential $6 trillion reconciliation package. the democrats are trying to find some way to pass within their party. lots of different ideas. lisa: president biden will be speaking after the jobs report

what is the political angle you expect from him? emily: to get this infrastructure package done as well as the reconciliation package will not stop for a couple of jobs numbers. the jobs report is closely watched in washington. you have releases that will come out. republicans will say the jobs numbers show we shouldn't be passing these big spending packages. democrats will say we need them. everyone will spin it to their own and and try to negotiate a way forward on the bipartisan infrastructure and the democrat only bills. jonathan: emily wilkins, thank you. on tax policy in america, emily mentioned the report that came out. the issue i have in these pieces is that they are almost hit jobs to accomplish something. if you ask how many billionaires there are in america, would you

come up with 800? the way they speak ndc is that there are tens of thousands of people with excessive wealth. i just want to make sure we don't conflate the extreme amount of wealth of some people and those who go to work and hire well educated and getting a monthly amount that the government wants to go after. it conflates into very different issues. lisa: what i am struggling with is why is this the agenda versus what we want to get done and how we are going to pay for it. why is it a matter of justice and fairness when it could just come down to what the goals are. you said this earlier, the word fair doing heavy lifting for some of the objectives which are less clear, because it isn't consensus.

jonathan: thing is to talk about millionaires in washington and they don't anymore because many of the senators are millionaires themselves. so the billionaires are almost red meat. we have a very progressive income tax code, highly progressive in america. if you want to do something about wealth and concentrated wealth, is not for me to say you shouldn't. what i am saying is you have concentrated wealth as one issue and then you have monthly income, annual income, that people pay their fair share of taxes on because they have to. they get paid and it gets tax before it hits their account. tom: conflating wealth dynamics with income. what is so important, and i have lived this over years is the summation of your taxes, your taxes now, the answer is it is a very high total percentage of

your income. that is the agony you are hearing for so much of america. jonathan: equity futures, 41.13 with positive 0.05%. your estimate, 720 k from new york. this is bloomberg. ♪

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tom: a modest disappointment.

jonathan: live from new york city on this payrolls writing, six straight days of gains for the s&p. 43.12 is where we are on the s&p 500. that was the equity price. nonmarket, 720 k, low and 400 k, top and -- top end, 700, 800,000. a little north of 2% on a 30 year yield. we have been coming in the last couple of days, grinding lower with a really strong inflationary and false, --

impulse. the employment to population ratio in america, lower through march of last year and then the recovery and then we stalled. we started to flatten out. the federal reserve and a lot of people on the fmo see want to see that -- fmoc want to see that. tom: we have had conversations about the mystery of what august looks like or november or the first few months of 2022. carl riccadonna joins us right now, chief industry economist at bloomberg intelligence. you said restaurants and bars, maybe the other part of the nation is ok, but you say if you pull out, restaurants and bars

it is a different labor picture. carl: it is absolutely a different picture. we knew the most severely impacted categories were the drivers of hiring in the recovery. while that is not a surprise, if we want to understand the underlying momentum in the economy growth, inflation, etc., we have to strip out those categories. if we take out leisure and hospitality, we see an economy certainly growing but not at the robust types of gains we are seeing in the headline numbers. if we further dig into the details, if we take out all of the vulnerable categories, dominated by leisure and hospitality but take out others that show decreases, average of hiring about 160,000 a month. a lot of folks have over

arrested -- overestimated payroll, think that tells you about some bias in the talking heads versus what is actually having -- happening in the details. my guess is we will show some acceleration relative to last month. my personal opinion is we could be setting up for a softer than expected number. tom: see how he slams us by calling us talking heads? nice job. if we look to the jobs report, we tear it apart, part of it is wages. i know wages and burgeoning inflation is a real wage. how long do we sustain a negative inflation-adjusted wage? carl: i think we will sustain that into the back half of the year. the and warehouse workers that got a $15 minimum this year will have a improvement in their

immediate situation but that is eroding away after adjusting for inflation. jonathan: can we get to the mystery chart the population ratio has flattened out and hasn't improved with the pace a lot of people wanted to see. we are pretty much where we were . what explains that for you, carl? carl: we have to be not in the thinking of that. whether it is at home learning, lingering concerns over the public health issues, also perhaps some discouraged workers in specific industries. it is a confluence of factors, a huge collapse and participation and that can be mended. maybe there is some retirement to factor in. what is interesting is we heard

from the philadelphia fed president who said that the powell deficit that chairman powell has seen, he said that could be closer to 10.5 million given the labor force. if we are truly focused on economic scoring, jay powell, the center of the committee, the new york fed president very much focused on the economic issue and we don't have to look at a vast array of metrics when we think about the dashboard. we have to look at the labor market deficit relative to fed right 2020. it is 7.6 million right now, where we stood at the end of the recession in 2009. if you think about labor pressures and inflation pressures, without much slack in

the labor market, i don't think we should be expecting a different outcome for inflation this time around compared to the last time we talked about the large deficit coming out of the 2009 deficit. jonathan: you went point by point and police has been talking about it over the last several weeks and many of those points include things like the additional unemployment insurance, the care for children, child care, all of those things and that is temporary and can be solved. i don't want to get into the semantics, but scars are permanent. i wonder if starring is actually the best just -- scarring is actually the best justification right now. maybe some on the federal reserve may not be the ones to help here. carl: scarring does not have to be permanent.

if they put rate policies in place, we can avoid some degree of starring. fed policy will impact the long-term economic consequences that exist in the post-covid economy. that is why jay powell wants to run things hot to bring folks off of the sidelines. navy now they are entering the workforce for the first time or had become discouraged and can be encouraged to rejoin the workforce. we were there in 2019 as people were saying the economy was overheating and powell was taking the benefit of the doubt and trying to run things hot. if we can get back down to the debate of 3.5 or lower on unemployment and the fed wants to get there. cooling back policy to soon

would potentially lead to that kind of scarring in the economy. i know people are talking about the extended jobless benefits are the reason we are seeing elevated unemployment. that doesn't really get solved in this jobs report. there were only four states that terminated the extended jobless benefits. if you are looking for a big tick up because those are expiring, don't look for it in the june data and you will only see it a relatively small space in july. it will take until later in the summer to see the consequences playing out in those industries. lisa: this may be granular, but i think it is important to dig into the concept of s carring.

how big will be retraining? carl: i think we can see this is very significant. if you look at the curves, we can see there are a lot of job openings and not a lot of job placement as one would expect in that environment. that is telling you there is some friction in general and more specifically the availability to land skilled labor in the right positions. tom: beverage is not the beverage of your choice, that would be the leader of london school of economics, he our goalie said that. jonathan: i appreciate you clarifying that port. carl riccadonna, bloomberg intelligence. tom: a doctor celebrating queens college yesterday, president of queens college notes, and he is a global traveler, that ticket

to crete. that is the only way ms. abramovitz is going to go. lisa: the value is tremendous. jonathan: we keep communicating to the audience she is not going to crete. tom: it has been pushed out as well. jonathan: we are done with this now. 43.11 going into the payrolls. i want to reflect on that. when you go through the industry responses point by point, chemical products, machinery, supplies, materials, labor, lack of available labor, metals.

the lack of labor is killing us. that is where the tension is. lisa: what is it that is causing people given the inflation rate is so low. we don't know and that is what carl was pointing to. we don't know how much this is scarring. later in the year we will understand what the fed's thinking is. jonathan: tom makes his point you have this gap between supply and demand, what fixes it? tom: wages. lisa: if people don't have the skills, they can't fill the positions producing about coding and the question of who is going to pay for retraining? tom: there was a phenomenal study done out of iowa 15 years ago on welders. the elasticity point is wage.

they come out of the woodwork with wage. jonathan: 43 point while on the s&p -- 4312 on the s&p. all-time highs going into payrolls friday ahead of a long weekend. the coverage right here on bloomberg tv and radio. this is bloomberg. ♪ >> there is growing doubt there will be an agreement between opec and its allies. bitter infighting after a key member, the united arab emirates, scrapped the deal. that forced opec to postpone the meeting until today and could mean there will not be any increase in production. the imf predicts the federal reserve will begin raising interest rates as soon as late

2022. a washington-based fund said the fed will scale back purchases in the first half of next year. at last month's meeting, policymakers indicated they want to raise interest rates in 2022. richard branson plans to follow jeff bezos into space. he will follow on the virgin galactic test flight on july 11 along with five others. that is just nine days before bezos plans to go on his. he will be joined with one of the first women to train for spaceflights. she actually never made it on a mission. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm leigh-ann gerrans.

this is bloomberg. ♪

romain: i am the tanglewood music festival. we will begin rehearsals for the july 4 boston pops spectacular. this will be the first event at the tanglewood. the symphony orchestra will be performing we will have the singing sergeants of the u.s. army as well in the foothills of the berkshire hills. it will air sunday, july 4 at 8:00 p.m.. this is bloomberg. >> we observed something interesting during pandemics and wars. both have a loss of life. in pandemics, there is an increase in wages and it seems like there is hesitancy to go

back to in person work after pandemics. jonathan: the chief economist from new york city. alongside tom keene, lisa abramowicz, i'm jonathan ferro. 4311 on the s&p, six days of gains. quite a winning streak, the longest since february. 143 56 -- one point 4356. -- 1.4356. the yen weakened as well. andrew pekosz with johns hopkins bloomberg

school of public health . l.a. with a very cautious tone. maybe we should have the vaccinated wear masks again. were you surprised by that news? andrew: i wasn't surprised. in baltimore, we have a location positivity rate, low testing rate, a good vaccination rate, so we don't have those kind of restrictions considered. los angeles is a very different story. the delta variant is moving quickly through unvaccinated populations, and even though the vaccine does provide protection against delta, it is always good to have more than one thing in place, particularly when the risk is getting higher. masks represent one extra thing that a vaccinated person can do

to prevent infections in a situation where you might have a higher chance of being exposed to the virus. tom: i noticed the washington post with a round number, 47% totally vaccinated. what number do we need to see? andrew: it keeps getting higher and higher as we find variants that are easily transmitted. we were using the 70% number early in the campaign, before the alpha variant and before the delta variant. when viruses become more transmissible, the number of vaccinated people we need to reach the herd immunity threshold gets higher and higher. people are coming up with numbers, but i wouldn't be surprised if he saw a number of 80% or 85% to reach that level of herd immunity where we get the population benefits, not just individual. lisa: i feel like i google this every night and get a different

answer, so please provide professional advice. what does it mean the vaccines protect people against the delta variant, against the coronavirus? is it simply that they don't get fatally ill or they do not get sick and cannot transmit the disease? carl: --andrew: with delta, the studies are coming out. we have data that shows if you are fully vaccinated, you've gotten both doses and at least two to three weeks out from a booster dose, in those situations you are seeing protection against all aspects of disease, severe disease, hospitalization, as well as symptomatic infection. the data with delta looks good, but just a few studies and we need more data. the risk is not minimal. vaccines are not perfect and with the variant that is more

transmissible, you might expect to see a slightly increased risk if you are vaccinated. the vaccines are protective. when we talk about surges with delta, we are talking about primarily in the unvaccinated population because vaccinated population will be protective. lisa: is it concerning to you that the delta variant is 60% more transmissible? the trajectory does not seem to be that great. are we seeing a similar type? andrew: so far, delta is the one we are most worried about because the increased transmission is really getting the virus a new platform new mutations on. we are always concerned about

mutations, but those mutations put on a highly transmissible virus and makes it a higher risk. we have something that we call viral fitness and it is looked at all the time. as we get variants that are better and better for circulating, the potential for mutations in those backgrounds represents a risk that scientists are concerned about. jonathan: always good to catch up and get your insight. andrew pekosz there, the bloomberg school of public health. lisa: the messaging is a delicate. you have pockets of the population that are highly vaccinated, new york city and other more urban regions. and then you have people

particularly in the south were the delta variant is spreading and people are not vaccinated. president biden will not sound the all clear if you have that mix mash. jonathan: new assessments for u.s. growth, gdp, 7% this year and an upgrade to next year, up to close to 5% growth for 2022 p that is the imf. -- 2022. that is the call out of the imf. tom: any number of people, felt it was good and that overlays onto the improved imf view. jonathan: jp morgan up. i am looking about how they are dealing with the high prices. the materials measure, 42 year high. you need to go back to the

iranian revolution from the late 1970's when we had it that big. coming up, prices in america and what it means for the bond market. the head of td securities joining us. it is payrolls friday. from new york city, this is bloomberg. ♪

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>> i think consumers have money in their pockets and we will have a super holiday season. >> i think we are far enough along that a lot of that scarring should begin to dissipate. >> even as the economy slows, rates stay low and we will get long-term equity return. >> we think any paul birx -- pullbacks or pauses in the market could be shallow. >> we are heading to environments where they should consider tapering. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jon: 90 minutes away from the payrolls report. for our audience worldwide, good morning. this is "bloomberg surveillance," live on tv and radio alongside tom keene and lisa abramowicz. i'm jonathan ferro. good morning. 43:13 on the s&p, all-time highs into the jobs report. tom: a boom economy, and i think it's important to focus on the