economy. the unemployment rate fell to 4.6% in november, the lowest level since 2007 prior to the recession. measures of major markets move slower and participation in the labor force has been little changed for two years now a further sign of improved conditions in the labor market given the underlying downward trend in participation stemming largely from the aging of the u.s. population. looking ahead we expect job conditions will strengthen somewhat further. turning to inflation the 12 month change in the price of personal consumption expenditures was nearly 1.5% in october. still short of our objective but up more than a percentage point from a year earlier. core inflation which excludes energy and food prices tend to be more volatile than other prices and has risen to 1.75%. as the influences of early declines in energy prices and prices of imports continue to fade and if the job market strengthens further we expect overall inflation to rise to 2% over the next couple of years. our inflat

to a much more resilient domestic economy, a service economy.to do. it takes many countries 50 years to do that, and countries generally have recessions occur during the transition. so to say they overstepped in formal policy behaviors, the market is saying that china's dependency on debt and leverage of the balance sheet is a continuation of investing in some of the unproductive state-owned companies and not a good long-term solution. i would say indeed it is not a good long-term solution. hopefully, this is a short-term remedy and they get back to the basics of trying to build a better domestic economy. >> are you worried about the debt pile in china? >> we have to be. we all have to be worried about it. keep in mind, if the economy continues to grow six plus percent, you can't grow at 6% and have your balance sheets grow faster. so in the future, i would prefer to see the economy growing 6% with at the same time some form of deleveraging. >> what do you make of the market reaction with what we saw with the currency over the last few months? i

it is a vote of confidence in the economy. as you know, this this was a decision that was well anticipated in markets. i think it will have relatively small effect on market rates, it could boost very slightly some short-term interest rates that could have an effect on borrowing costs that are linked to them. overall i think household and firms can see very modest changes from this decision. it's important for households and businesses to understand that my colleagues at home to judge the course of u.s. economy to be strong and we're making progress toward inflation and unemployment goal. we have strong labor market and we have a resilient economy. >> smack in with the financial times. there's been a a lot of discussion about fiscal policy but even if you discount or does don't know what the fiscal outlook will be next year unemployment is already below the longer run projection under the policy rule you cited that would suggest that a policy out to be tighter. is there risk risk that the federal reserve is already behind the

the economy. we start to see two different people got frustrated with the inability of this model to continue to deliver economic growth in the 1970's. one was we saw in france, a big turn to the left. a socialist government than nationalized a lot of industry, promising it would accelerate growth. that do not work out very well in france. other countries, great britain, the united states, germany, sweden, japan and several others turned to the right were politicians came in a if we have smaller government, more deregulation, that will bring us faster productivity growth and that will stimulate the economy and raise living standards. the track record of that was not very good either. where a situation in people were desperate for solutions. they knew the previous model of a big, activist government with a free market base was not working out as they try different things to speed up economy. basically, none of the proved successful. host: people still looking for solutions today to some of the prob

in this economy britain is now 70% ofa in this economy britain is now 70% of a service economy.erally does not produce anything. neitherjobs, economy generally does not produce anything. neither jobs, nor wealth, nor anything. that is important. it does generate wealth. we have to take into account that now you have millennial ‘s radio1 that now you have millennial ‘s radio 1 tavern to keep the same job for 30 years. we have to accept that there are those changes but the key issueis there are those changes but the key issue is what thomas ways. —— raised. this is about being liberated from dougie don't have to be a core manner because your father was. there are people who want to be coal and they do not have the possibility any longer. continuity. the barbers expecting the sun to follow them down the pits or whatever. the choices, you have to become an addict international bit of the labour force that is being flung an over the world at the behest of capital enterprises. that breakdown of community is very serious. let's move on because the wars and divisions in syria, yemen and

virtual economy... the fact that we have manufacturing companies basically going down, losing markets and so on. and yet the stock on the stock exchange is going up. why? because governments pump new printed money into markets. not into the economy. that is the virtual economy. that is what i was talking about. share price goes up. the governments are supporting the markets, not the economy. that is such a crucial mistake of a virtual economy and as regards the online companies, they are basically destroying the economy. they are not creating the economy. i would not say all of them... 0nline companies can create wealth. just because you cannot manufacture things does not mean that you do not create wealth. you can create new kinds of transactions and communications. the problem is, in this economy britain is now 70% a service economy. the service economy generally does not produce anything. neitherjobs, nor wealth, nor anything. that is important. but it does generate wealth. we have to take into accou

economy? the u.s. economy is not in a bad place.ent-elect do more wille than good to it, or he get away with an even stronger economy? michael: i think, francine, the next step here -- we have talked the talk, let's walk the walk, as the cliche goes. with respect to what the market is anticipating if we get some fulfillment of that, the early indications from the appointments would say that we are going to move forward, we are going to have action to follow the words. we have had a lot of words over the last eight years, some of which have not been followed by actions. if we get a surprise to the upside with actions following the talk and we get the deregulation that we have been hearing about, i think the markets will respond favorably. but it is a function of, will the people coming and have the audacity to come in and do all this stuff? michael: it will be interesting to see. with us.olland is coming up on "bloomberg daybreak: americas," a conversation with robert shiller of american university. york, 2:00 p.m. in london. this is

either profits or the economy.ecause no one knows what the proper level is, it's a casino. >> chinese stocks in a bear market for the second time in seven months. down 20% from the december hike. >> my take on china is china has a serious challenge and set of challenges to convert from exports and construction stimulated by easy money to domestic consumption of goods and services. it is a serious problem. is it something easily surmounted or is it a disaster? people have gone from the first to the second. angie: january's worst-case scenario did not come to pass. but throughout the year, the financial world kept a close eye on economic data coming out of china. let's look at some of the most significant numbers. >> a day of dramatic headlines with china dominating the news. the governor broke his long silence. what did he say and what was significant about it? >> we are not going to push the currency down. we do expect volatility along the way. we can only take him at his word. we have seen it go by. >> china is si

to a much more resilient domestic economy, a service economy. very hard thing to do. it takes many countries 50 years to do that, and recessions during the transition. china policy behaviors overstepped, the market is saying that china's dependency on death and leverage of the balance sheet is a continuation of investing in some of the unproductive state owned companies and not a good long-term solution. i would say indeed that it is not a good long-term solution. hopefully, this is a short-term remedy and they get back to the basics of trying to build a better domestic economy. >> are you worried about the debt in china? >> we have to be. mind, if the economy continues to grow six plus , you can't grow at 6% and have your balance sheet's growing faster. in the future, i would prefer to see the economy growing 6% with some form of deleveraging. >> would you make of the market reaction with what we saw with the currencies? investors overreacting, do you think? >> first of all, what the world saw was something that was confusing and not well commu

economy.n everyone's interest to make sure it is as smooth as possible in one way of doing that would be a transition. francine: what does the government need to do today? do they need to give assurances that it would be the first set? auglas: i think that would be good first step. but this question of at what point do you finalize your approach? the factors you want to take into account? i agree in a sense that you don't do it piecemeal. you work out what the underlying framework is going to be. francine: are you moving some of your workers abroad? bought a very big french bank in 2000 which has --en us more option analogy more options than any others. it, if it to take requires us to have more of a base than europe, we can transfer some of our people in london back to paris because we asrate the paris and london sort of a pair and many of the people in london came from our bank and in france, so it is an adjustment. douglas flint in an exclusive interview with francine lacqua. quick look's t

economy.he only country with saw doing that is germany but it's more on the migrant issues. anna: thank you very much. coming up on the program, japanese industry gets a boost and export volumes rebound sharply. we are live in tokyo. what is in store in the year of the rooster? over there toead assess the economy for the next 12 months. this is bloomberg. ♪ yusuf: it's 6:20 in london, 10:20 in divine and it's almost the end of the trading day in hong kong. we've seen volumes come back quite substantially today, a 10% difference in terms of the average volume. the dollar- just below the 6.96 mark. especially with where the fed is going in the rate hike. let's get the bloomberg business flash now. toshiba has fallen by's daily thet say it met the cut value of acquisition by billions of dollars. the possible write-down falls the acquisition of a nuclear construction unit bytes westinghouse division last year. there have been arguments over new nuclear projects in the u.s. which are years behind s

developing the economy. we start to see two different things as people got frustrated with the inability of this model to continue to deliver economic growth in the 1970's. one was we saw in france, a big turn to the left. a seriously socialist government that nationalized a lot of industry, promising it would accelerate economic growth, and well, that did not work out very well in france. we saw in a lot of other countries, great britain, the united states, germany, sweden, japan, and several others turned to the right were politicians came in, saying, if we have smallervernments , government, more deregulation, that will bring us faster productivity growth and that will stimulate the economy and raise living standards. the track record of that was not very good either. so, we had this situation in which people were desperate for solutions. they knew the previous model of a big, activist government with a free market base was not working out as they try different things to speed up economy. basically, none

economy to the dollar is lower than the european economy to the euro.lar isn't that strong. barely above levels we saw at the beginning of the year. we have an offset, the strong performance in the equity and credit markets, which generate -- which will actually be effective in the u.s. unlike europe, because of the way u.s. households tend to invest. chart want to show you a -- you talked about this anchor we are seeing at the moment in terms of central banks acting as an anchor. that is the spread between bunds and treasuries. hadn't been there before. ralf: that was one of my high conviction calls of the year. in 2017 and we have reached my target. i would point to a couple of important follow fires to this. first of all, -- qualifiers to this. there is a relative swap spread story there. and if you look at the divergence we see in the curve, it explains 99% of it. -treasuryhat the bund reflects the short term in the u.s.. it has further to go in our view. we artfully pricing in what we think the fed is likely or what the fed is saying they want to d

i've never heard of economy, maybe i'm wrong on this, i've never heard of economy tax into prosperity, nor i have heard of economy where poor people can spend themselves into wealth. what you've got in the traditional obama is tax increases and stimulus spending, that's the clear cut formula for a disaster. trish: and we saw it, right?. >> they'll do it well. trish: we saw it, 8 years of it, 1.8% growth annual on average, considering where we were. we should have seen a big jump. >> isn't it wonderful? no inflation and low interest rates? not! [laughter]. >> go ahead. >> and just to put these two things together, interest rates and economic growth go together. >> yes, they do. >> the more likely economic growth is going to be stronger, the higher interest rates will be. >> thank you, brian. >> real rate of return. >> amen. >> and if you want to add inflation on top of, that that's another reason for rates. higher rates don't necessarily mean bad things. in fact, they mean good things most of the time. trish: you know, if you have higher rates you're in a better economic environment, s

to the economy. these are things that market participants are trying to view along with the likely path of interest rates. i think all of that factors into movements into stock valuations but whether they are appropriate . >> you have talked about whether the valuations are still within historical ranges and norms. is that 20,000 within historical norms. >> i think rates of return relative to the level of interest rates as low. and taking that into account. i believe it's fair to say that they remain within normal ranges. >> john hilton. he said that much progress has been made since the crisis and making them more secure and safe. does it extend to the culture of the banks. the way that they run the way that they operate. do you think maura needs to be done there. if there has been improvement that it will continue to be that culture in the next administration and congress. there have been many ways in which there have been compliance failures at large organizations and you've seen the series of enf

economy. takes centeron stage at the bank of england. rates are expected to change but what will the minutes till us about the road ahead? eu leaders meet in brussels today at the end of a traumatic year. refugees on the agenda, could 2017 be even worse? anna: a very warm welcome to the program. this is our flagship europe show. let's talk about what we heard from the fed and what that has done to the dollar. the -- the dollar the big beneficiary from what we heard from the fed. how the changing expectations from the fed around interest rates in 2017 have pushed up the dollar index. the rate went up 2.75 percent as expected at the fed. the fed also signaling that the economy is strong and will improve and taking what some of our colleagues have called a victory lap. let's put up the risk radar and on variousere we are asset classes. we've seen reaction aplenty to what we heard from the fed yesterday. to reiterate what we heard about the dollar, this is the bloomberg u.s. dollars stop index. wh

economy.what extent the fomc updates , more than the actual moving rate decision that has been expected for some time. one guest saying the deficit you may climb to 3% next year and it would spell the end of the bull market for bonds and punish stock and housing markets in his view. saying they will raise rates more aggressively in the years ahead. on actelionuses in and the takeover talks that exist around that business. johnson & johnson has ended talks for a a takeover deal. -- the newspaper says it is in talks that could ion at as much as $30 billion. lots to talk about as we wait for the fed to give us the results of their deliberations. details about with moving in the markets, kind of quiet as we wait for the fed. , but let me take you to my first chart. yields sliding across global debt market including the treasury market after the boj increased. the curve flattening as well for jgb, dropping 7.5 basis points. at the moment we're at 0.79%. the boj took this action due to the sudden ri

economy --ms of the think in terms of the economy, the current economic conditions they do show someickup in asia manufacturing economies, but of course the pickup is not broad-based across all the asian countries. performe some that will better, for example, china and japan showing stronger signs of manufacturing sector, while we have other countries such as malaysia and decline inhowing a the manufacturing sector, so in terms of the current economic settings for this country, it is quite divergent at the moment. rishaad: thank you very much indeed. haidi: up next, after recording its worst month against the dollar in two decades, we look at what is next for the yen. this is bloomberg. ♪ haidi: november brought the dollar its biggest monthly gain against the yen since 1995, a near certainty that fed will push rates higher. we do have some event risks this weekend. referendum have the in italy. that could set up the yen as a haven. how much further are people taking this rally and dollar-yen? how far can it go? question, really the isn't it? there is a split, not surprisingly, and th

economy. he plans to convene the chief executives and major tech players. ibm, microsoft. to discuss where the industry can help his nascent administration create jobs. to sweeten the conversation by announcing plans to hire 25,000 u.s. workers. alsorump tower gathering doubles as a peace summit of sorts after a campaign season in which trump called for a boycott of apple because of its stance on privacy. a spat over immigration reform. jeffccused amazon ceo bezos of using his ownership of the washington post as a tax dodging scam. they said it would have such problems if he were elected. to hear more from some of those leaders, we continue to watch live coverage of the lobby. next up, we going to bring you comments from the head of opec including some comments on the trump tech for secretary of state rex tillerson. a look at the world's oil market and the effect of the global economy in the changing face of the oil industry. >> ok, good morning. welcome to this center for strategic internatio

economy. if the u.s.here the entire thing you could start to look for to, maybe three increases. >> in terms of where you see treasuries headed, joe has -- tell us how you adjusted your portfolio? >> far from panic? the -- we cut the average on the bond fund. gradually over time. we will stay right about there. we have built into the portfolio a yield curve. sort of a mechanical thing. but the passage of time help you. we are into a situation where there are a lot of bonds that have been issued selling at discounts. far fewer selling at premiums. market a different bond than a year ago. it allows for different strategies. it doesn't mean turnover goes up a lot. a different sort of bond. when there is an adjustment up in rates, you have another compensation going. you can do what is known as writing the yield curve. it incorporates as well. the mechanics of the market are important. what we have to bear in mind is we don't have a market that is anywhere near as likely in corporate it was 10 years ago. that

how do we build stronger economies with equal opportunities for all? how do we build a sustainable world for generations to come? how do we protect our cities and harness the power of technology for our own benefit? humanity has always been good at forward thinking. in this series, using the latest bloomberg research and analysis we will make sense of the problems of tomorrow. inequality, sustainability, urbanization, the gender gap and the demographic time bomb. and in this film, the march of the machines. what effect will artificial intelligence have on the world? does the rise of the robot mean the fall of humanity? narrator: the world is changing. today, we stand on the brink of a fourth industrial revolution that will transform the way we work, the way we live, and what makes us human. >> there is a group of technologies combining to create transformation across almost every industry at the moment and those technologies include artificial intelligence, 3-d printing, robotics, big data, and life sciences in terms of genetics and medical engineering

economy -- and housing that will begin to reflect that.e central forecast 2-3 and the fed said three interest rate hikes is on the upside if there is more of this fiscal stimulus, more growth, more inflation then we think, then the fed will be more aggressive. >> they are doing a good job. they did a good job. i -- again -- i have full confidence in the open market. >> [indiscernible] the fedlayers there on decision. let's discuss the implications now. craig mckenna is the chief market strategist at accu trader and he joins us live from sydney. great to have you. we heard a slightly more hawkish tone from janet yellen the same unemployment at four point 6% -- we are close to full employment and it seems that the only lacking indicator now is inflation so what do you make of this yet but should the fed be reconsidering raisinre are they still behind the curve? i think they are to a certain extent. i think that what we saw last night and the weight of the reason the market reacted the way that it it is you know it was only a small move to sa

economy, sounds a bit like that.nk there will be -- they will be more tolerant of that than usual. in other words, they will not push up interest rates. i think it will be reflected in the dollar, which will stay pretty strong. anna: king dollar is something we will talk about in 2017, as it was in 2016. thank you, chris wyllie. coming up, japan's balancing act . forecasters expect the economy to expand in the new year. analysis, live from tokyo. this is bloomberg. ♪ i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers. private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. hey, drop a beat.flix? ♪ show me orange is the new black ♪ ♪ wait, no, bloodline ♪ how

economy.says the economy is expanding at a moderate pace since mid year. it had been a modest pace. i don't know what the much difference is there. unemployment it says has declined. job gains it says are solid. household intending rising mode modestly. business spending is soft. inflation, they're a little more worried about inflation. they say it's increased before they said increased somewhat. so those are the big headlines, guys. a little bit more concerned about inflation when you look at the language, they talked about the market based or the inflation spreads in the market having gone up quite considerably. so a quarter point here and maybe a slightly more aggressive fed to next year. but not by the way for outlying years beyond 2017. >> got it, steve. thanks so much. let's bring back our all-star fed panel. diane, david, danielle, and scott. david kelly, initial reactions to everything you just heard there steve. >> that's very much in line with what i thought we would see. and i think

economy. for those companies that could compete in those international markets we don't need those scenarios but the deliberate growth in to identify to launch those oriented problems of exports and protecting businesses to improve our own situation. and until the year 2025 to enable the economy to reach the of global medium. we need the business community to be actively engaged for increasing economic liberties we need including debt stable system through 2014 that provides every year a moratorium from our rules and regulations despite the changes of the conomic situation. but we must use the taxation system in a way to achieve the objective with our competitive environment for those russian companies. we need to include the existing benefits to make them more efficient. of a bike to suggest the proposals of those russian taxation system. we need to prepare the amendments want to the russian tax code and make them last for long term. and also to develop mechanisms to ensure a stable budget so

there is a tight regime and it can push the economy.t is not so easy is to achieve financial stability at the same time. if you start from the point of view that the economy has set the stage -- you gravitate towards the opinion that growth will be at around 6.5% next year. -- wein terms of the yuan have seen dollar strength and one weakness as a bit of a -- and the yuan weakness as a bit of a theme. they do not want to encourage fast outflows. , if they are intervening in the market or manipulating the market, right now, our colleagues at bloomberg intelligence are suggesting that they are stopping it from falling as fast as it wants to fall. where do you think that currency and for the chinese? >> it is a tricky one. it does appear to be downward pressure on the renminbi at the moment. you look at the reserves -- they have been falling. against the background of a country that has a current account surplus. but the scale of those outflows does not appear to be as severe as 12 months ago when you were approaching crisis point with capi

and the fed chief said the economy is pretty good. good enough to raise rates by more than we thought. the market endured a mild sell-off. dow breaking a seven-day winning traek. nasdaq declined. instead of getting destroyed. come on. head to the 2,000 point run we've had to the election it's peanuts. i think we can admit we've been due for a bit of a sell-off. we didn't see a wholesale slaughter as some people expected. given the rare heights we got to. this kind of pull back, to use a word people hate to hear in relation to a loss, healthy. it's an extraordinary time but not so extraordinary that we can keep rallying after through and through the rate hike. there was a brief moment where the market cheered the hike. minutes after the 2:00 announcement and the dow looked like it was going to pierce the 20,000 mark. the bideuyers stormed the rampa were thrown back by profit takers. who seemed motivated by desire to lock in. rather than a need to bail on the entire market. you know what that relatively gentle sell-off means after the r

for a long time, economists and policymakers that we advise believed that the economy -- as the economy grows, gates will be distributed across society and we know now that has not happened. it was postulated that as the economy grew, there would be a period as you had higher inequality but it would dissipate. after reaching a certain level of development, that things would become more equal and we did not want to worry about equality. perhaps inequality is because of a good cause, and so we also don't need to worry about it. yet, we know, and i think the data changes is to bring into question, we need to rethink the dynamic between inequality and growth. this leads me to the second finding, also from new research from a week ago by thomas and his colleagues. they have told a new theory on the distribution of national income. picture gdp growth data that comes out every quarter. but based on -- they have matched that information about information happening across families so you can account for all of the income. their data shows that the bottom half of the income distribution in the un

economy and the global economy.at wells fargo. -- this is bloomberg. ♪ the italian prime minister still talking to press at his year-end conference. he has been on the job for two months -- two weeks and a half, apologies -- that referendum was on december 4 and he took over december 10. he is talking about italian banks. he has said the government has done what is right, what was needed for the banks. he says he hopes that the dialogue with the institutions on the italian banks are fruitful. he is talking about monte dei paschi. this recapitalization demand has been long and painful. he said the government will pass more measures to improve the italian banks. he does not go on to say what those measures are. lack of detail, but we have a broad brush. optimistic prime minister, as you would expect, from a man who has been in charge to an half weeks. taylor: israel's prime minister benjamin netanyahu has struck back a comments made by secretary of state john kerry over the middle east peace process. he accused john k

confidence ine of the economy.hanges in fiscal policy or other economic policies could potentially affect the economic outlook. of course, it is far too early to know how these policies will unfold. moreover, changes in fiscal policy are only one of the many factors that can influence the outlook and the appropriate course of monetary policy. i would say at this point that obviouslyicy is not needed to provide stimulus to help us get back to full employment. we are operating under a cloud of uncertainty at the moment and we have time to wait to see what changes occur and factor those into our decision-making as we deem -- gain greater clarity. as the federal reserve embarks on its tightening cycle, we are likely to see monetary policy divergence reach new extremes. says my new guest. andrew, always great to have you. thank you for coming in. i made a chart -- i didn't. the queen of charts did. what the dots are telling us in 2016. that is the blue impaired what they are telling us this year. at 1.3 at theo be end o

that is because we have the economy we have. i recognize that employment and types of employment are changing. technology is a driver in many of those cases. that is why i have asked chief executive, matthew taylor to do a report of the view of modern employment practices so we can ensure the framework is the right one as we go ahead for the economy of the future, and for jobs of the future. this shows that it is the conservative party that is the party of working people. thank you mr. speaker. the conservative election manifesto promised the employment gap by 2020. ministers justified their plan to cut the benefit from next inil, but promising to cycle in proving employments of all of the benefits. it has become apparent that funding for employment is not being increased, it is being cut. is target date for that abandoned. surely the only honorable course is for the government to abandon the benefit cut as well. prime minister. prime minister may: over the last three years, more than 300,000 disabled people have gone into work.

or european economies as people thought it might.ump's election has led to rising bond yields, but not such a big hit yet, and even though t in the u.k. or european economies as people thought it might. italy has upset the political applecart by voting no, there is a long way between that and something as drastic as leaving the euro area. when you step back, nyu economics professor michael is looking at the very existence of the euro area. zone is a flawed construction. it is very difficult to restart growth in the south, and so you go for a long. ng time and the support for the people who say this does not work starts to rise, and down the road you have a potential unwinding of the euro experiment. >> perhaps this is one reason expected tois not taper. when you hear him say something i mario draghi, i have a lot of weight on my shoulders to hold this euro area together to create more growth and not to stop stimulating too soon. if it does extend this program by 3-6 months is there a risk of eligible bonds to buy? >> it is one thing

to a consumer driven, technology-savvy, research and development economy smoothly?he transition is under way. big steps have been taken. heavy restructuring is under way. the population is supporting the transition. and that is reflected in political support. but it is a massive undertaking to transition the economy, but you can see the research side, the consumer side, the tech side is going very, very strongly. and the chinese firms are beginning to invest in lower wage economies in the same way that other businesses used to invest in china, so they are going into vietnam, myanmar, africa, and effectively replicating the stage of development that they went through in other countries and building infrastructure to create trade flows, trade corridors. so, you know, as ever when you try to do something very ambitious, you worry, can something interrupt it, but i think china has managed it successfully so far. francine: how many non-performing loans do you think chinese banks have? douglas: you can see what they report. many think there may be other elements there in

for a long time, economists and policymakers that we advise believed that the economy -- as the economy grows, gates will be -- gains will be distributed across society and we know now that has not happened. we used to believe this because of studies done in the twentieth century, where it was postulated that as the economy grew, there would be a period as you had higher inequality but it would dissipate. after reaching a certain level of development, that things would become more equal and we did not want to worry about equality. perhaps inequality is because of a good cause, and so we also don't need to worry about it. yet, we know, and i think the data causes us to bring into question, we need to rethink the dynamic between inequality and growth. this leads me to the second finding, also from new research from a week ago by thomas and his colleagues. they combined date from -- data from a variety of sources, they have told a new theory on the distribution of national income. picture gdp growth data that comes out every quarter. they have matched that information about information hap

$720 billion -- it turns out the economy grew.yless people really has take count. tracy: how are people reacting over there? >> well, with some confusion. thing is not the newly released third-quarter figure, which shows the economy shrunk 1.8% year-over-year in the third quarter, which is everything you might expect from an economy dealing with the fallout of a failed coup, with slowing investment. but the strange thing is the upward trajectory of these other figures -- which sits very strangely with other, more high-frequency measures of the economy, industrial output, 3% year on year growth, it turns out it grew 6.1% higher than previously thought. the gap between these sets of figures is having people pore over the statistics closely. angie: absolutely. but in terms of concrete things that the actual government is doing, are they doing anything concrete to improve the economy over there? >> well, it seems like the government is the only one doing anything. if you look at the most recent contraction, 1.8 almost all sectors exce

francine: you are of course a lot more concerned about the economies of europe.ere anything politicians can do to stave off -- i don't know if you want to call it a wave of populism or being more in touch with voter angst -- let's call it that. mr. flint: i'm not a politician or a social scientist, but it does seem to me that people react badly to uncertainty in their own position. they want to believe that the future will give them more opportunities to be able to do more for their families. their kids will have a better life than they have had and so on and so forth, and i think that means giving some confidence to populations about the kind of work that will be available in the future. we are entering a period of enormous technology change where technology will transform many of the industries that have been less touched than manufacturing. that will have a big impact on the job market, so what will governments do to reassure people that they will invest in the retraining, the rehabilitation of people whose jobs are going to be affected by the digitalization a

it comprises the two largest economies in the world. two economies na are highly int dependant. we have numerous common interests and challenges and many of the toughest global issues cannot be solved without china/u.s. cooperation. for years, the bedrock of our relationship has been based on three principles. first, that china's rise is good for the united states. second, that both countries must work together where we have common objectives and, third, we must manage our differences carefully so they don't spiral out of control. those three principles are still valid and should continue to govern our relationship going forward. both sides, however, have to acknowledge that attitudes in the united states are changing towards globalization. international trade and china, itself. let's look at these changing attitudes crystalizing in the minds of american business leaders, policymakers and the public. no one can reasonably deny that china joining the wto has brought about enormous benefits for china and overall the rest of the world. having china inside the global rules-based sys

economy.reating a commission, the only job is to make that get and sell these rights, to have the money to make everything. now, we move past four investments. we need economic activity everywhere. economic activity makes great jobs. where are you most interested in investing your money today? what is most attractive? >> we are interested in improving our countries. locationrking in that -- youongly in the areas cannot solve with philanthropy in poverty. many things around. the only way is with jobs. that was carlos speaking to our own erik schatzker at the year ahead summit in mexico city. scarlet: let's get you to a look at the biggest business tourism in his right now. a contract approved that includes a 30% raise over four years. labor spending improved by $509 over the first year. it could also leave higher pilot wages at other airlines. buying cardinal commerce in a move to improve security for transactions. helping insurers authenticate purchases online. the acquisition will help the pa

a robust economy. it was just a small backing off from the recent highs. that to me isn't a big deal, but this is the theme that's probably going to continue into next year. >> tim, do you think it would have been better for her to just kind of outright acknowledge the extraordinary things that have happened in the stock market and the ism surveys and whatever, you name it, the confidence stuff since the election. did that kind of need to be said, and, mike, about to be knitted together? >> the feds are very selective on the markets when they want them to be a factor. they've talked about the markets in terms of volatility. i absolutely understand how the feds sought today to avoid any kind of confrontation with new administration policy. and ultimately, i do think it was also interesting when asked about fiscal policy and in the timing of where the fed has been overly accomodative. she kind of implied we wanted to do this before on 1 or 2%, i don't know if we want to do this now. she would never ackno

francine: you are of course a lot more concerned about the economies of europe.ere anything politicians can do to stave off -- i don't know if you want to call it a wave of populism or being more in touch with voter angst -- let's call it that. mr. flint: i'm not a politician or social scientist, but it does seem to me that people react badly to uncertainty in their own position. they want to believe that the future will give them more opportunities to be able to do more for their families. their kids will have a better life than they have had and so on and so forth, and i think that means giving some confidence to populations about the kind of work that will be available in the future. we are entering a time of enormous technology change where technology will transform many of the industries that have been less touched than manufacturing. that will have a big impact on the job market, so what will governments do to reassure people that they will invest in the retraining, the rehabilitation of people whose jobs are going to be affected by the digitalization and a

is this going to spur the economy? absolutely. >> jonas, tax reform -- a complicated tax code actually hurts people who can't afford a accountants, it hurts people who have to do it on their own. >> there's a difference between tax reform and lowering taxes. >> you can have both. >> we had 90% plus tax rates in this country. when you lower those, it has a huge benefit -- >> you're talking about when jfk took office. >> it has a diminishing return. obama didn't raise taxes on most of the middle class. he left the bush tax cuts in place. the bush tax cuts is number two i'm talking about of which was already diminishing return of economic growth because already average middle class family paying average single digit drk. >> he raised it on high earners -- >> hardly anyone is paying taxes. >> you're saying it's not good for the economy. >> i'm saying to get to the 80% tax rate is a ridiculous level of complexity and the reform to your original point which we desperately need because it's such an absurd path you need to get

economy is doing well. why is she forcing through 2 billion pounds of cuts. >> what is important is that we remember those that are benefitted from it and we remember those that are paying for it. the universal credit system is there to ensure that people that work will always pay for people. >> he believes in a welfare system where people are able to live on benefits. >> child poverty is rising and now covers 4 million children across this country our people are suffering because of the policies of our government. people are paying the price for her failed economic experiment. they even abandoned the previous pledge for the so-called national living wage paying at least 9 pounds per hour by 2020. what is the new pledge on living wage. and fewer families in relative poverty and i come back to the point i have been making in answer to his previous questions. it's only possible to do these things by having a strong economy. the one thing we know -- the one thing we know is that the policy would not deliver a

we expected the economy will continue to perform well.ith that the job market strengthening further and inflation rising to 2% over the next couple years. positive takeet's on the economy. it wast on to say, that a tiny move. if she wants to emphasize that it was not a tiny move to the market. if janet yellen is trying to why are we the dot, saying markets react so strongly to yesterday's announcement? >> one interpretation of this is that the market sees the fed, based on the economy looking stronger, willing to raise its rate hike by one notch for 2017. what makes a difference? could we see the end of gradualism and a faster course of hikes? raised the same concern on bloomberg television earlier. >> the risk of the central two to three, and the fed said three, interest rate hikes is on the upside. if there is more of this fiscal stimulus, more growth and inflation than we think, than the fed will be more aggressive. he has ather topic, huge concerns on federal reserve independence. republicans in congress who want to rein in the fed. t