>> i am mark crumpton. first word news. . president biden says there are signs that inflation started to wane in that the latest jobs report shows more good news. >> inflation, maybe, i'm not over present -- promising maybe begin to ease. gas prices have fallen 80 straight days, the fastest. klein. in a decade -- decline in a decade. >> mr. biden was speaking about

the current state of the u.s. economy at the white house this morning, over 19 booster shots that target the most common new variance should be available in a few days, after the cdc signed off on the rollout of the updated vaccines. one can from moderna and the other from pfizer and biontech, they have -- secure china's support for a reverse quarantine -- challenging cross-border ties, city leader says it plan is to have travelers first isolate in hong kong and then enter china quarantine free. nasa will try again saturday to launch the august 1 -- artemis 1 one rocket. it is the first major flight and

space agencies ambitious plan to return to the moon carrying test dummies. instead of astronaut. you can watch it on -- you can watch on bloomberg television saturday. 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 mark crumpton, this is bloomberg. >> welcome to bloomberg markets. >> the s&p 500 stock hovering near the session lows down to the tune of .7%. we are in a dive into that later to check out what the two-year yield is doing we are seeing a reversal of this week's dow,

nine basis points. a lot of the hazard gazprom with a story that gazprom -- a lot of it has to do with a story that gazprom has halted its. transmission of gas. . for now that is the macro picture. >> when it comes to individual movers, we did see investors shy away from technology, a case worth highlighting rod calm that is still up today after better than expected results last night, has come off its highs of the day. you talked about broader energy, occasions, oil is having an update helping names like halliburton. investors going back towards gold has helped barrett today, you have an earnings story with lululemon showing its pricing power in an inflationary

environment. leading the nasdaq 100 right now with a gain of 6.5%. >> u.s. employers adding more jobs in august, more people entering the workforce, the payroll growing a better 315,000 jobs last month. the jumper dissipation rate climbing, let's bring in the bloomberg international economics and policy correspondent. i went through those numbers, what was the most important one there? >> it is the participation rate, it shows a lot more people coming back into the office, they believe there is an opportunity to get jobs. it will help the inflation picture if there is more people looking for work, employers may not have the pay as much. the other good news is that the

economy stays in a reasonably good footing with the 315,000 jobs. we somebody fracturing jobs up 22,000, construction jobs up 16,000, incidentally manufacturing jobs are at the highest levels, since 2008. mortgage services, we know real estate is in trouble. mortgage applications have fallen off tremendously, that category. will continue to lose jobs. the other big winner is women. we wonder where women had gone, the participation rate is low. all the sudden they are back in the workforce. they did not come back last september when the -- when we thought they weren't -- what. the number of employed getting

much closer to what they were before the pandemic began. >> thank you for the context rate down and where you're seeing in the latest jobs report , we talked about that the s&p 500, cooling-off has moved into the tail end of the day here, let's bring in just who has tracked the market action today -- jess who was tracking the market today. you said september can be a rocky start for jobs, how do we take this jobs number and measure the mood of the market coming into it? >> the mood of investors seems pretty upbeat when you look at average hourly earnings and is almost goldilocks scenario for markets. you see job markets timing when inflation pleasures are cool -- are cooling. you look at all the gains we saw premarket and this morning, they're worse now.

investors are expecting there will most likely be a 75 basis point hike at the september meeting. they are looking ahead to next week, we will get decisions from the bank of canada, also the ecb. ahead of the fed meeting will hear from the bank of england, and we will get the cpi data, the last big inflationary report before that. september is historically worse month for the stock market. >> let's get back to the big thing, it is pre-chicken senses that the fed needs -- pretty much a consensus that the fed needs higher on the plummet. how much -- unemployment. how much unemployment is too much unemployment? >> our gas is around 4.5%.

-- guess is 4.5%. when the equity market goes from the or to the three in the other direction, it makes a lot of news. once you get over 4%, we are 3.5% now, people start to take notice. >> let's bring in, a chief economist of apollo management, how much unemployment is too much unemployment? >> it is a good question, the conclusion for today is that the labor market has been sorted out. it is telling us very clearly that the labor market is not slowing down, more rate hikes are needed. we probably need a rate that is more than 4% unemployment to seek meaningful impact. it also touches on why inflation is so high, is a demand or is it supply? the san francisco fed saying it

is mainly supplied in the new york fed says it is labor making demands. we will have little time to figure out how much more the rate needs to go up to get that cooling of the economy that the fed want. >> we are looking at the unemployment rate of three point 57% -- 3.57%. let's look at the average hourly earnings, those came in higher as well. on a real basis people lost money in theory, what is your take? >> that is correct, inflation is 8.5 percent, average allergies -- our lease -- average hourly wage came in lower. it continues to be, will happen to wage inflation? wage inflation has moved a little bit down, relative to levels it has been pre-pandemic. it is a very important question

you're asking. will wage inflation come down quickly? will consumer price inflation come down quickly? so far the loan rates is the markets conclusion, certainly a very critical aspect of the discussion we are having, what will come down first. willoughby wage inflation or consumer price inflation -- will it be wage inflation or consumer price inflation? >> at the end of the day, how high will the rate have to go for the fed to achieve its goal? >> we are thinking the fed funds rate will peak next year above 4%. in the long run, the job growth, the u.s. economy issue, it is -- taking an immigration and people retiring, job growth should be 100,000, the payrolls came in at

302,000, the labor market is still too tight. this means that unemployment is still a little bit too low and the fed needs to increase that to get full employment and not beyond full employment where we are at the moment. at the same time if inflation stays at 8.5% and it is supposed to be 2%, they are overshooting. the fed funds rate may have to go higher than the 4% peak the market is currently pricing for the march of next year. >> since we are talking about the participation rate today with indicators of what the fed likes of c, is that a threat the --see, is that a thread that the markets like to plat? -- paul at >> as he mentioned from 60.1 to

61.4, that is good news. people are coming back to the labor market. the employment rate went up, or people are coming back after the pandemic to look for jobs. the challenge from the macro perspective is that a love people did not come back to the labor market. it is telling us, to your question, we need to see more people come back. that will be helpful in trying to keep inflation under control and trying to make sure inflation does not go out too much. if more people got a look for jobs there will be less upward pressure on wage inflation that is good for a fed perspective. overall it was a report that could be described as goldilocks. it is clear that the u.s. economy is overheating in some areas and there are other sectors where this slowing down. that is why the fed will probably raise rates 35 basis

points at september. >> always happy to have you on the show, they do so much, coming up we dig into the markets more and more. more conversation next this is -- this is bloomberg. ♪

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>> this is "bloomberg markets." let's get back to the markets, as stocks recover from session lows, a lot of this has to do with the payroll. summary liquidity cashing out ahead of the long weekend. to explain all, who else better to ask than the bloomberg macro strategist.

you wrote a pretty interesting column today at how the market was anticipating the jobs numbers. we get to that in a second, my throw some news number -- news that you. gazprom says that nord stream will be shut because of technical issues. off the back of the headline we saw the euro fade, how much of a story in central banking is really more about the ecb than the federal reserve? >> i guess it depends on your geographic orientation. clearly the fed is still the world's central bank as it were. it sets the tone for global assets. in europe clearly the ecb is extremely relevant. they are facing and unsolvable -- an unsolvable monetary problem as is the vanke of -- bank of england.

a lot of the inflation they are encountering is because of inflation -- energy prices, has nothing to do with the price of money. obviously supply shock from the russian faction. as we see today, that supply shock can be exacerbated with the flip of a switch or the lack of a flip of a switch. as the pipelines stay shut. that radiates into negative sentiment across broader markets. which is why we have seen the s&p and u.s. equities paid after that -- fade after that quote and quote goldilocks jobs number, apparently she had to leave the building to get some gas from somewhere else. >> let's build on that, your headline today was goldilocks pays a visit, how long will she stay? she is not staying long as the s&p struggles into the afternoon here, can we really see a market leaning on the go deluxe narrative with one data point?

>> no. it is a really great jobs number from the feds perspective. arguably from the markets perspective. one number does not constitute a trend. it does not change a whole lot about the september meeting because we still have the cpi report. we have a 70% chance of 75 basis points, to a 50% chance of pricing in 75 basis point. as not said anything about the overall scope of the cycle. it is one data point, not a trend. the uptick in labor force participation rate only takes back to everywhere in march. this is not breaking new ground. it is tracing out -- we need to see the participation rate take

up to 53% or above. before arriving to the systemic comfort that the labor market is loosening. >> cameron joining us as we watch the s&p struggle into the afternoon. technology stocks under pressure. much appreciated we will take a quick break, when we come back we will hear from the virginia governor on his thoughts of president biden's primetime address and if he agrees if democracy of -- is at risk. this is bloomberg. ♪

>> this is "bloomberg markets," and i am john. president biden delivered a primetime speech test -- stepping up attacks on president trump and republicans that

support him. he talked about the president's tone earlier on bloomberg. >> i was stunned at how divisive the speech was. at a time when people across america, and i know in virginia are worried about the most basic issues of rising inflation, education challenges and it is a timer we have to focus on these issues. the president jumped out and was incredibly divisive and pitting americans against one another. what we learned last year in virginia is it that these most important kitchen table concerns , we can deliver common sense solutions. when i won last year it was not republicans versus democrats, we won the independent vote and a lot of democrats came with us. we have runaway inflation. let's be serious we have real

challenges in inflation. the fed having to move aggressively to slow things down. jay powell came out and said it will hurt. yet we have our president trying to divide the nation. i think it is time to put all of that down and focus on the most important kitchen table concerns that americans, and i know virginians have. we can address them with common sense solutions like we do with virginia. getting taxes down and funding law enforcement and education. >> was a stock worn -- stark warning from the president of united states, d believe there are antidemocratic forces in the republican party? >> i believe we have people who are searching for leadership. [laughter] leadership comes at a time when we need to be focused on these most important issues. not calling each other names and trying to divide the country. when we look at what is happened over the course of the last couple of years we have seen our

economy fall from a good one to a real challenge one. inflation running away. a crisis at the border. we watched america fall from the international scene in leadership. i think americans probably recognize this. we can see it in the president's job approval ratings. he has terrible job approval ratings. at a timer we are heading into the midterms, what you do? you change the narrative. let's go back and talk about the economy. let's talk about schools. let's talk about crime. let's talk about the border. let's come up with real solutions to these important issues and not college other names. >> 67% of americans democracy is in danger of collapse. when you see a number that big do you worry that our institutions are under attack? >> well, i, i, i feel that entire question is an odd one.

america's democracy is not going to lapse. -- collapse. we have seen tough times historically where we have worked through it. this is the most amazing form of government ever envision, america is the best country in the world. we will work our way through this. what it requires is for leaders to focus on solutions to the most important challenges for virginians and americans. >> that was virginia governor glenn youngkin speak to our very own joe mathieu. $23 billion, that is the develop meant of the nasa space system costed to watch the artemis one tomorrow. we will have a live on bloomberg television and radio. tune in as we talk about the financial angle, the history behind it, and the future of

space travel. stick with us, bloomberg markets the close is next. this is bloomberg. ♪

>> i am mark crumpton, keeping up-to-date with news from around the world. russian energy corporation gazprom says they are key gas pipeline to europe will not open tomorrow as planned. because of a technical issue has been discovered. they say they will ba.4 halt of gas to your -- be a full halt of gas prices to europe. it had been shut down for maintenance, there had been a concern of stoppages in a full halt coming winter. >> it killed at least 18 people including a prominent