>> companies are navigating these once in a 500 year events, i think they will continue to do so. >> the consumer is healthy. we are saving. we have the demand. >> there isn't any pent-up demand. the reality is it's not moving to it new higher level of growth. nothing structural has changed. >> one central bank is tightening further. you should expect currency appreciation. >> this is bloomberg surveillance tom keene, jonathan

ferro, and lisa abramowicz. tom: good morning, everyone. it is jobs day in america. across the nation and around the world, it's just another jobs report. i am sorry, there is something different. jonathan: let's go through the number. 400 k is the low. one million is the high. there is a belief that whatever this is, it sets the tone for the federal reserve decision on september 22. tom: it's much more about the gaming of gdp of america. ellen stopped the world with a 2.9% statistic. if you have a 3% american economy, how do you add jobs? jonathan: demand has been great. supply-side is been the issue. that's where the story is. that's why september is so crucial. would we start to see labor supply match the demand we've

got in this country? you might have to wait for it. tom: helen made it clear it was about the auto industry and another of -- a number of other sectors. when it comes down to the six americans out there, which are you focused on. lisa: the one third of jobs she says are not coming back. i was thinking about the question. the answer is not clear. how does the fed read that? is there a lot of slack in the labor market? those jobs are not coming back. all of the jobs that are open don't have people to fill them. i don't know the answer. the uncertainty of an economy that has been fast forwarded. tom: i want to get through this quickly. the observation from randall, they all say the same thing. the technology mystery of the

labor economy is profound. jonathan: we've got to work through this. tom: that is surging. jonathan: surging by one basis point. in and around 130. we talked about that earlier this week. tom: widely anticipated. our guest to talk about the market. we have credit suisse. there strategist had 5000 spf going out. >> there is a big disconnect between the economics which are coming in weaker because of supply chain issues and covert issues and corporate profits, which are coming in at much stronger than anticipated. you talk about two labor

markets, didn't look like each other. jonathan: you talked about how corporate profits been tremendous. you push back against a more u.s. approach. -- nuanced approach. why do you want to grab hold in any way you can? >> what you have is a strange translation between the way corporations behave and the overall economy. when inflation is higher, companies are able to pass that on to customers and keep the cost down. they are doing a brilliant job of pushing their margins higher and higher. everyone said they would get eaten alive. that's not what's happening. the areas that are most cyclical

, brick-and-mortar retail, that's where the excitement is. it's not doing a better than it was a year ago. lisa: has the federal reserve severed the market? you are talking about the differential from weakening economic data. expectations are coming up. how do we understand this? >> you made the comment a little while ago on this disconnect between the number of people saying they want to find a job and the number of jobs available. it doesn't appear it's a lack of demand for labor. there is a mismatch. there are a number of retirees, people moving. it really looks like it's not only a supply chain disruption where companies can't get their

parts. this is a broad based disruption from the pandemic. it is difficult for policymakers or strategists to figure out why the date it doesn't seem to make as much sense as it should. john -- tom: you nailed the call this year. it was simply getting it right. part of that was don't -- have patients. i don't want you to do would individual stock. update us on the gig attacks and their support in 2022 and 2023. >> it's interesting. if you separate out the story between fundamentals and the backdrop, the fundamentals are much stronger.

however, when interest rates fall and they fell from 175 back down to where we are right now, it helped tech and growth companies. you have this strange situation where the fundamentals are screaming to buy cyclical's. the tech companies are doing well because of backdrop. jonathan: wes the suggestion it? just by the index? tom: take the u.s. open. that's how you sleep. jonathan: go ahead. >> the story is the destruction it we are seeing in the economy is going to last much longer than we think. and people are asking about whether inflation is transitory, it's the wrong question. it is the reopening process transitory? the answer is yes. if that happens, as much as it

may be vaccine for the fed, it is good for corporate profits. companies if you get out how to manage it and turn it into better profit. that's what's driving the market. it's this incredible profit share. lisa: how long can the environment persist for equities? >> i don't think i would describe this as goldilocks. the whole economy is broken. we can't find the labor we want. lisa: but stocks are up. >> that's not the same thing. if the fed doesn't do something, i don't see that they are going to. this thing is going to continue auger than we think. these are disruptions in the labor market. it's not going to disrupt the stock market. the next year is going to be

another strong one. when we put out that 5000 number and it seems so aggressive, perhaps it doesn't seem strong enough. tom: you want to make some news here? that's go. 5100? jonathan: you did this to yourself. >> a month ago when we put out the number, everyone is nodding. jonathan: that sounded like an upgrade. we will take it. now we are in trouble with the rest of the team. thank you. he talked about how the labor market is broken. this is the quote from the team here at bloomberg when they looked at the small business survey. 50% of firms had job openings they could not fill last month, up 1% from july. a larger share in data going all

the way back to 1986, 41% of small businesses and their owners said they raised compensation. openings are up. there is a problem filling those openings. tom: it permeates every discussion i have. they are looking for jobs. jonathan: jobs and getting it done? is it 16, 20? tom: we don't know. i've been right on this. 15, 17, $20? have we found where that level is yet? lisa: i think the overall average wage increase captures what you are talking about. basically, that income is seen a bigger increase. it is disproportionate to people

who don't see as big of an increase. i wonder if that is not being caught by the data. tom: to me, it's a big deal. the reason we can do this is the support we have, including the good people at the tennis channel. you can see jonathan ferro on the tennis channel this weekend. it will be a sight to see. lisa: where are you going to be? tom: reading, summer reading. jonathan: you are very upset about this. tom: i am. jonathan: i will get you a seat if you want a seat. i would love to see that. equity futures are up. from york this morning, good morning.

your payrolls report is 18 minutes away. this is bloomberg. ♪ >> progressive groups are calling for a big effort on the spending and tax plan. they demand democrats avoid any compromise. the request has more urgency after joe manchin called for a strategic pause in action on the agenda. a surprise announcement from tokyo, the prime minister says he will resign. that leaves the ruling democratic party scrabbling to find a new leader for a general election. whoever becomes party leader will be assured of becoming the prime minister. in new zealand, a man described as an extremist attacked people with a knife in a supermarket. this is before being shot by

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>> when you look at behavior and you see they are quitting in large numbers and you see a lot

of job openings, that suggests a tight labor market. we also see a lot of wage pressure. the key for the fed is it be turned into significant inflation. back to the productivity issue. jonathan: the university of chicago school, from york city, good morning. i am jonathan ferro. your equity market is positive, up seven points. the yields are higher by a basis point of 12954. the print, 12 minutes away. the median estimate is 733 kate. tom: we love to look at these social aspects of this labor economy. it's a tradition with james glassman. an understanding of the american labor economy right down to its fiber.

jim glassman, good morning to you. i want to devote time to the trickle up wages. a lot of people go against this. the idea of $15, $17, target advertising $20. does that trickle up? >> it appears to be. i hear this from my clients who are complaining about having to compete with amazon. this is a challenge at the lower end. the need for workers is pulling people up. there are limits to how high this and go. can i pass this on in prices? they don't feel they can. some cannot, some can't. tom: how does technology overlay into this if there are small business takers, how do they

have trickle up wages and maintain profit? >> what's interesting is more and more people are realizing this is a structural problem. it's making them think harder. i hear the story a lot. they think it's going to be good for workers. if you bring a robot into the manufacturing site, you need people to manage that thing. it upgrades the level of skills. they think it's going to be attractive for workers. that's not the way it should work, when you are innovating and boosting productivity. you may have fewer people, you ought to be able to do the same thing and pay people more. lisa: this goes into the price increases that walgreens and walmart. we see it day after day. we look at the average hourly earnings, what are the average

is not capturing that we see in the anecdotal data? >> the big wave, the averages don't tell you. when you have a major demographic shift like what's going on right now. he five-year-olds are retiring and 22-year-olds are coming in. young workers may know more about technology. they don't have the same life skills. i have a feeling it's a demographic thing that may be dampening the whole shift in wages. we hear people say they are paying more for specific jobs. we look at the averages, it is masking what is really happening. lisa: you think the labor market is tighter than it seems? >> i think it's got a lot of slack. seven point 5 million jobs below where we would've been had there been no pandemic. many of those will be backend. there are so many dislocations.

it may feel tight. there is a lot of work to do. tom: thank you so much. jonathan: we need to get to the host of the main event. it is michael mckee. he joins us ahead of the report. 733 k is the median estimate. what should be looking for? michael: this is going to be more consequential than we've seen in some time. it is going to revolve around that headline number. anything under 600,000 is going to be seen as a problem. anything over one million michael everything forward into september. keep an eye on that headline. tom: what is so special now? michael: several fed officials identified this as the data they wanted to see.

chris waller was the first to mention it. rob kaplan has talked about it. others are saying we want the september number because the august number is the last when they will get before the september meeting. lisa: what is more important, the headline number or wage increase? michael: the fed is going to parse out what the effects are that are impacting wages. our lower wage people getting jobs? it's a little harder to tease out. they look at things like the cost index. jonathan: you are fantastic at cutting through the stupidity of the conversations we have on a daily basis. what are we looking at here? perhaps into december, what is it? michael: the fed comes out of

the september meeting and says we are going to announced tapering it soon. that will price into november or december. they will get the october report and see what happens. the idea that we get a big payroll number could force them to announce a taper. if we get a really poor number, they push that back to november or december. tom: they have a labor mandate. has it been overwhelmed by this modern experiment where the labor mandate -- they can talk all they want. it's really not part of the discussion. michael: what they are trying to do is bring down not just what maximum employment is. tom: give us a number. what is maximum employment? michael: we've got 3.5% without

any kind of inflation. the long-term forecast by the fed's you could have 4%. that takes into account a smaller labor force. they want to bring down the black unemployment rate, which was down in the fives before the pandemic began. they are trying to make it a broader definition. jonathan: thank you. do you like that? it's a baseball reference. michael mckee in five minutes time, along simon tom keene. this is bluebird surveillance with your equity market at record highs going into friday. your 10 year yield is up just a single basis point. we've been hanging out in and around 130 over the past week since chairman powell spoke.

your estimates, 733,000. the range is wide. the low end is 400 k. at the high-end, it is one million. the payrolls report is next. this is bluebird. ♪ -- this is bloomberg. ♪

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jonathan: the payrolls report is seconds away. live from new york city, this is "bloomberg surveillance." futures up .2% on the s&p. yields higher is in basis point. here is the number. update downside surprise. michael: a big downside surprise. only 230 5000 jobs were created in august. the unemployment rate does decline .2% to 5.2% as forecast, but that is a dismal number, much lower than the lowest forecast we had in the bloomberg survey of economists. the employment rate at 5.2% reflects 8.4 million people who are unemployed, that is a lower

number than it had been. it is hard to tell -- a lot of people getting jobs and it is hard to tell why. a lot of concern about the covid variant in august. it was early in august they do the payroll report surveys. maybe it did have an impact. private payrolls, 243,000. manufacturing payrolls up to 37,000, that is 10,000 more. let me back up. that is less than the 52,000 revised manufacturing payrolls. 235,000 jobs created. the july number revised up to 1,053,000 from 943,000. that is 110,000 additional in july. that takes some of the sting out of it. it does not fix everything.

tom: the math on that is 369,000. jonathan: mike, you take a deeper dive. subtle moves on the back of this. equity futures fading, up just as joe points. in the bond market, subtle shift. what you are seeing is a move to the front end. yields lower about one basis point. this is what priya misra was looking for. the bull steepener come in the front end rallying off the back of a weaker than expected print, the idea that maybe the federal reserve could push out, massage the message and push out any conversation about rate hikes. quickly. dollar fading, dollar weaker, off one third of 1%. tom: we do this once a month. euro 1.19 gets my attention. priya misra nailed it.

let me go to you as you observe this as mike reads this report. what i see is this is a jobs report that is extremely fed centric. it is not about the labor nuance, it is about what chairman powell will do. jonathan: many people set the tone for september 22. we can have the conversation right now. michael mckee, a massive downside surprise. let's translate what that means for the conversation on the 22nd. michael: it probably means the fed will sit back and say we want to see more data and see if this is a covid caused anomaly. the average hourly earnings went up significantly. .6%, pushing up the annual rate of 4.3%. that may be a function of who got hired. i am looking at the breakdown of jobs.

employment at leisure and hospitality, unchanged. that is been the area that needs the most job growth, decline 42,000 jobs in eating and drinking places. tom: what does that signal? michael: that signals that for some reason these people were not being hired because they were not looking for work or because the restaurants and bars were not looking for people because they cannot staff up during the pandemic situation. we will not know. the anecdotal report is what the fed will be looking for. let me note, 61.7% comment no change in the labor force participation rate. lisa: no change in the participation rate. there was a much bigger than expected increase in wages. what are you looking for to understand how broad-based this is versus something that is compositional versus jobs created in the month. michael: it will be hard to get that out.

the folks with models and excel spreadsheets can look at which categories add the most jobs compared to the change in wages in those categories. we can guess when you see a number like this, you will seeing and drinking places were down 42,000, leisure and hospitality no change. the people that get the lower wages probably not adding to this, whereas professional business services, higher wage people coming back in the labor force adds more. tom: this is a report much more nuanced than i thought, a little beyond the morning to get important perspective. jon ferro, the nasdaq 100 speaks. this is the nasdaq jump away from what we are seeing in spx and dow because there is a lower rate regime.

jonathan: starting to see things change in the long end of the curve. let's push through the big downside surprise on the payrolls report. yields higher on 30's by about three basis points, on tens by two. there is a view on the september 22 meeting that number will anchor the hawks a little bit and stop them flying away and leaving too much room for chairman powell. let's bring in jeff rosenberg of blackrock, the portfolio manager. the downside surprise. your first read? jeff: the first read is this has some delta variant on it. retail is lower. leisure and hospitality which had been contributing 500,000 does not show up at all. the wage increase you are talking about -- the disappointment is in those two

sectors, leisure and hospitality, which speaks to the delta variant impact. because that is the fingerprint, that is a temporary impact. initial bond market reaction was lower yields but now you're starting to push higher in the back end. that said the market is looking through this and seeing this is temporary. if we talk about transitory inflation we will talk about transitory delta variant impact, at least with regards to market reaction. a little bit of disappointment in terms of labor force participation rate. that is more of a temporary factor related to the delta variant. the market was already pushing back in terms of expectations of when the tapering announcement would happen. in terms of folks were getting

something sooner, we will get another month, maybe we will look for that. they did not come out of the september or october reports as we waited until later this year. jonathan: governor brainard has been on the money for many people. wait for the september data. do you think they have the luxury of time to wait? jeff: they do in the sense that they will be focused on the longer-term implications. they have talked over and over about the necessity, particularly jay powell's speech last week, the need not to react and overreact to short-term developments. from that vantage point they do not need to rush in. the most important thing is the emphasis that tapering is not tightening. once we get past the tapering announcement and they go on autopilot of these monthly

reduction, we will shift the conversation and it will be about what is this due to the path of future tightening? the path of future tightening does not begin until may be late 2022. they have a lot of time before we get to that. lisa: how important is the revision upward from the prior month, the idea it was revised upwards to more than one million, the idea there was momentum and perhaps this blip is just a pause due to the delta variant? jeff: is a good point and that is another part of this report. it reinforces how strong the labor market was going into the delta variant impact. that may be what the market is looking through, that this is a one-off slow down and not the beginning of a new trend. strengthen labor markets will reemerge after the opening. jonathan: equity futures

changing a little bit. unchanged and negative on the nasdaq. i'll be catching up with rick rieder at the top of the hour alongside anna lohse -- anastasia amoroso and michael collins. tom: i just did the three-month month moving average of where we are. away from the gloom of the moment, this is a pleasant surprise. jeff rosenberg, 225,000 jobs over five days -- that is not a bad number. jeff: not bad at all. you're reinforcing the broader point, which is if you look through the noise this is a strong labor market, a good recovery. is there more room to go? sure. those are the points many of the more dovish members have been highlighting. that is the broader takeaway, that the reopening is happening.

the thing this is not talking about and the federal be concerned about and our focus will shift towards is the impact on fiscal policy. they will -- you'll have a fiscal tightening even with a $3.5 trillion stimulus plan. that is not the same kind of stimulus as the stimulus that is rolling off. the fed will be concerned about the impact on the economic growth of that fiscal late. tom: are you managing that 12 months forward, 24 months forward to a 3% american economy. is that your overlay as you manage bond money? jeff: that is. it is in most of the longer run forecast. we have been incredibly impactful impact on short-term growth from a combination of reopening and historic amounts

of stimulus. the overriding debate is what is the underlying capacity of the economy, the strength of the economy, the ability to deliver? the consensus is we are going back to that level. the concerns on the downside is you will press even lower. that is the argument against moving too quickly and overreacting to what might be transitory impacts on inflation. the other side of the argument is we have serious structural damage to inflation, inflation expectations, supply chain. the fed has admitted they underestimated the degree of how long the restart economics would impact the supply side. all of that affects the growth but also the inflation side. tom: markets reverse. the nasdaq 100 back around to a

modestly negative. the vix out to 16.53. the 10 year yield higher. lisa: it seems like people are looking past the huge headline miss and looking more the upward revisions, more the momentum heading into what was a delta month that saw zero jobs in the travel, leisure, and hospitality sectors. shocking giving where we are in the reopening. this goes to the question is the fit getting this right and does this data confirm that there is a lot of slack in the market or are we starting to get concerned with respect to the wage data? jeff: honestly it is too early to know. there's a lot of critique on both sides of the debate as to whether the fed is making mistakes were not. one obvious concern is there is a tremendous amount of inflation.

it is in assets. you see it everywhere. it is the acid inflation, financial stability concerns. there are folks concerned about it. that ultimately shows up in a negative way. given what we know today is hard to argue that is the case right now. it is almost right in front of them. they do not feel the need to move preemptively. that is the change inflexible average inflation targeting. they will be reactive, and that is the kind of fed response function. tom: jeffrey rosenberg from blackrock. thank you so much. carl weinberg emails with a great observation. 750,000 jobs a month -- are we just being too impatient? the fact weinberg goes out eight months, the rest of us are

looking out one weaker eight hours. michael: what is driving everybody's views is the bond market because the bond market is reacting to what they think the fed is going to do in terms of tapering. does tapering matter? not that much. they will still be stimulating. the $120 billion a month is not doing anything to increase jobs. that focuses is perhaps a little misplaced. 235,000 would've been averaged during the pre-pandemic period. tom: have you ever seen a central bank so exposed, so data dependent to wait and wait and wait? michael: we have not seen it because this is a new reaction function for the fed. they change the way they look at things. they want to run the economy a little hot and pull inflation up and unemployment down. we will see how that experiment goes. without a lot of jobs

comparatively, how does the fed react? lisa: i am looking at the participation rate. the fact that it did not budge is disheartening. we are still at 61% from a pre-pandemic hi. where did the jobs go if they are not coming back, if one third of all of the jobs lost during the pandemic will not be resurrected? michael: a certain amount are places that went out of business, retail stores, restaurants, bars that could not maintain. a certain amount may have people that have retired out of the board and the companies are unable to find somebody or they are automating the jobs so they do not need to replace people. this would be a project for the economist who write papers for quite some time to tease through all of this. lisa: and this is something tom has been talking about all morning, automation and the technological revolution. using what we just heard from

jeff rosenberg, the idea the fed's data-dependent and we do not understand the data. the data has been a mystery. is the fed getting increasingly -- to shocking markets should the data shock us and away we are not getting right? michael: that is very possible. the problem is we will not know until we have some history behind it and time to look back and see where we went wrong in anticipating what was going to happen and how this comes together. the problem is traders on the bond desk have to do something right now. the economics and the trading function do not match up. it is interesting to see. i've to go back up in the report for just a second. it'll be interesting to see what the fed thinks of this in terms of the fact we did not get a lot of jobs, but we did see the unemployment rate drop a lot. looking to see if i can find the

different categories for that. the unemployment rate for black americans is down a full percent, actually it goes up. it was 8.2%, it goes update .8%. the fed will say even of national and informant went down we did not get a good number for the minority unemployment. tom: michael mckee, thank you so much. toronto making note that higher-paying categories is where we saw the job gains. lisa: that is interesting but we cannot extrapolate too much. tom: is a social issue or a compositional issue? priya misra, we hope scheduled to join us in a number of minutes. ira jersey right now on rate strategy.

what does the bond market say this morning? ira: the markets saying they think there will be more fiscal stimulus and maybe the treasury department is not going to cut coupons as much as people thought. that is one of the reasons you are seeing this knee-jerk reaction to the markets, the steepening with the long end yields going up. look at the front end. look at what is being priced into interest rate hikes. we are priced about 6% of an interest rate hike out of 2022 and 2023 instruments. this number is showing we will get more fiscal stimulus, maybe the fed will still taper. that is what the long end is telling you. the short end thinks they will not hike for a while. this is a recipe for running hot and the steepening of the yield curve. lisa: you think this takes a

september announcement off the table? ira: i think it does. they will couch it and you will see chair powell say we would like to taper. this does not change our mind at all. i think november is when they will announce and they will start it right away. they will announce the first wednesday of the month. tom: too short a visit, ira jersey. on the equity markets, gina martin adams. corporations will have to adjust off of this. how will they? gina: i think they will think about their comps. the six-month stretch of average hourly earnings gains as the economy is starting to slow, not seeing much easing in pressures. margins in the second half of the year starting to fall. analysts have some confidence this is temporary and the compression we see in the second

half as bethany is slow down, that, pressures remain high. that is supposed to be transitory. we'll see margins go higher into 2022. i think companies like think carefully about the cost structure and their operating environment. costs maintain a higher level that many companies are comfortable with. lisa: we have been talking about this from the bond lens. let's talk about a from the equity lens in terms of what companies see in terms of slack in the labor market. when you see a labor force participation rate that stays the same at the depressed rate and when you see this low number of jobs created and you hear about all of these job openings, what is the inference? there is a lot of slack or perhaps things are tighter than other people are saying? gina: frankly there is a lot of

volatility and it is very industry-specific. you are seeing wage gains in specific industries outpaced many people's expectations. here are seeing a lot of volatility in the labor force. the fact that this is august and starting in september is also playing into this because we have to get our kids back in school to eat. the attention of labor force to allow their parents get back to work, we are starting to see a little of that. we are seeing growth as a result of the delta variant and some slowdown in economic activity. frankly the real story is volatility. there is no one story you can paint out of this report. it is industry by industry. company comps are higher than they would like to see and that may continue to play out over the next couple of quarters. lisa: you think traders are

adequately pricing in the margin pressures we will see in the next quarter? gina: i think they're pricing and margin pressures being temporary. in the next quarter, if margin pressures continue into 2022, absolutely not. the expectation by traders is all of this inflation pressure is very temporary and it will ultimately go away. the risk is it will not. michael: gina martin at -- tom: gina martin adams with bloomberg intelligence. any number of people at bloomberg, mohamed el-erian publishes and speaks of stagflation winds we may see coming up. right now, a victory lap. and they gave economics, it is tough to do this. we suggest at surveillance 369,000 plus the revision, that is the new 400,000. priya misra nailed the call today.

700 50,000 jobs per month of last 90 days. how that affect the jay powell calculation. priya: thanks for having me back. it is a weaker report, but if you look at the moving average and the other data, it is suggesting the recovery will be in fits and starts. the reopening will not be in a straight line. we think the increase is still very much on the table but we are calling for december taper, not a september taper. later this year they taper and we see inflation next year. we do not think they are hiking until the end of 2023. lisa: are you pushing back your expectations for the start of taper to december today based on this report? priya: no. we have been calling for december since we were looking for a week report today. lisa: looking forward, what you will you be looking for to get a

sense of how quickly they could readjust their expectations? we know wages are skewed by compositional issues, but are there other aspects that have you concerned, like the labor participation rate? priya: labor participation is a key one, particular for the next couple of reports. we know unemployment insurance is running out and schools are reopening. the doves on the fed indicate there is a lot of slack in the labor market. until wage inflation picks up, not because of compositional effects, when the true underlying wage inflation picks up that is when some of the transitory narrative falls off. that is going to be key the next three months. tom: we need to give a careful shout out to james o'sullivan as well.

working with priya misra. when you talk to jim o'sullivan about q4, what do you argue about? priya: we argue a lot about the pace. jim had a great call on the number today. decelerating from a 7% first half gdp to a 3% or 4%. what is the next step? are we going down to 1% or 2%. jim has indicated that things are decelerating. growth is still well above potential, which would allow the fed to exit. it is an inflation question where jim has a slowdown in inflation. that is the extent of deceleration and what is longer-term impact on inflation. tom: link your bond world to the equity markets. we do that clumsily within the

media. does the yield mystery support equities or create raider uncertainty for equities? priya: i do not think there is such a big disconnect between the two. the end point of the hiking cycle, the market has taken down that number significantly. the fed is only hiking to 1.5%. that is a very bullish environment for risk assets. i am less concerned about the fed aspect and more conservative growth slows down. that is something the bond market has priced for but the equity market is not. i see it more as a growth concern rather than affect concern. tom: one final question. tell me about the x axis duration. i know we go out to december and taper. to these begin to extend out yield angst to the middle of 2020 if not later. priya: in terms of when we think

rates will rise? it also depends on the fiscal side. if we get a $3.5 trillion were 2 trillion or as senator manchin says nothing, that is key. if the fed starts to taper there's lot of supply risk. i think a gradual rate rise starting at the end of the year -- tom: do you and jim o'sullivan, congratulations. we greatly appreciate your return this morning. 200 for 5000 -- 235,000 revisions gets you near the td securities number. we will give them a victory lap. there are others that got it wrong. speaking of getting it wrong, michael mckee joins us. he goes back and forth. the bottom line is if you're

away from the middle, it is dangerous. it is a tough business. michael: it is always dangerous but now it is hard. there's so much we do not know. jim o'sullivan was below forecast. we do not say gas -- we do not say guess. give him credit. he was looking at factors other people were not looking at. tom: i have questions. wages, productivity, red sox pitching. michael: the good news is bloomberg tv is on all day. tom: michael mckee with much more perspectives. stay with us on television and radio. this is bloomberg. have a great labor day. jonathan: a big downside surprise on the payrolls report. live from new york city, good morning, good morning. "the countdown to the open"

starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: from new york, we begin with the big issue. more fuel for the fed debate. >> this is where the rubber meets the road. >> the payrolls report. >> what matters is the strength of the labor market. >> the stronger the jobs report. >> that lays the ground for a september meeting that could be consequential. >> will likely view is the extremely accommodative -- we should all be rooting for taper. >>