it is not the eci and unemployment rates.f the labor slack is there, it does make a difference in terms of wages. to employment population ratio, lower wages, higher, higher wages are. >> that's true. that'st important thing supporting we need to hike soon shortage of labor and construction, labor and transportation, various industries with anecdotes of shortages of labor. that is an important part of the story. something moving, something brewing, we did not hear that two years ago. the lingering picture here of something happening on wages is an important part of the world, but it has been a lot slower than we expected. measurethere any better than u3? >> janet yellen a speech where u3 was a good measure of slack in the labor market. people leaving the labor force makes this recovery different, but most members have said this is still the best measure we have. alix: what ones are keeping you up at night? that when thes fed does hike, will that be volatility reducing or increasing volatility? this is important for rates and

the walmart numbers are important and tomorrow, we want to focus on the eci. one of the things that has benefited corporate america is that we have not seen much wage growth. accelerate,ting to good for the economy but it will put some downward pressure on the record high margins. moment where we start to see wage growth? people are thinking it's always around one or and doesn't happen, but is it for real this time? russ: it's reasonable to assume if you have a decent labor market, you will see some upward pressure, but we have cried wolf for many years now and it is worth reminding ourselves that this phenomenon of sluggish wage growth for middle income families, this goes back decades. this is not an artifice of the financial crisis. they will take up a bit from these low levels we have had in the last five years. when companies are looking at this as a tail risk, what about the dollar? how does the stronger dollar pass through these companies? this is a great question and one thing i'm surprised by is the last week has been defined by big rally in the dolla

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friday's eci data will be very important as well as the payroll numbers next week on friday.look to see about wages. thank you, mark. .ood to see you much more ahead in the next half hour of the bloomberg market day. the very latest on the plunging shares of valiant, even as the ceo defends the company. duke energy agrees to buy piedmont natural gas for more than $5 million in cash. hillary clinton is celebrating her 68th birthday. us whylperin will tell he thinks she is the most likely candidate to become the next president of the united states. ♪ betty: it is time for the bloomberg business flash, some of the biggest stories in the news. of u.s. homes has fallen to the lowest level since last november, nothing more than 11% in september. the northeast was especially hard hit, down a record 62%. fedex will hire about 55,000 temporary workers to make sure holiday packages get delivered, about 10% more than last year. they say they are adjusting to an anticipated increase in online buying. yahoo! cents more than 15 million online viewers to the first online nfl game. they coul

i am lookingow ahead but the eci number comes out on friday.there is any indication of where they might be? >> we will not have seen that number yet. however, they know if they look at the broader macro economy, there is very limited wage pressures. the u six is coming down, the official unemployment rate is coming down. -- ise fed is a missed amid a reassessment of the curve and they realize it will take a more aggressive decline in the unemployment rate to generate those pressures. they are just not sure what the new slope is just yet, but they will need to see at least hints of it. much, carl.you so we will have live coverage of today's fed decision with mark crumpton, tom keene, and kathleen hays at 2:00 p.m. a lot to discuss and parse out. scarlet: and coming up, walgreens of -- agrees to buy right aid but hurdles may disrupt here. alix: and providing a boom for the tanker industry. we will hear from the ceo about what he calls the post opec world. and carl icahn taking aim at aig. find out why and how he wants the insurance companies to b

phil: that is why the eci tomorrow will be important.ere are so many different ways of measuring inflation when you back out food and energy costs. take your pick and show whatever you wanted to show. alix: inflation is actually pretty good and decent. the best is really good as well so how do you make a fed decision when the fed can pick and choose whatever metric they want. brendan: there is a trimmed main cpi. it. is one way to look at it is the same as with the value of the dollar.it is almost all are irrelevant. the fed looks at the trade win of the dollar. that is that it issues publicly looking at. phil: that is an argument we get from clients a lot. they say what is the fed looking at? they do not eat? they do not drive anywhere. if they had to go grocery shopping and filling out there takes, they would be thinking differently. brendan: we take out got because the prices are volatile but does that change expectations long-term? real people driving real cars. scarlet: it does for the breakeven rate. phil: it does that is why waiti

you need to have eci to be reasonable and global markets and economies to be reasonable.o i think there's a better than 50% chance that they're going to go. but listen, it is a fed that has waited a long time. could they wait longer? certainly possible. >> i'll just push a little bit back on carol's point. i've been pointing to the 2013 example, when similarly in september, everyone thought they might taper. they didn't. everyone said wow, that's off the table for a while. october of that year, they put december back on the table. still, it seemed like they wouldn't go in december and they tapered in december. are we going to follow something like that script, do you think? >> by the way, i think that's a pretty good example. i think that's largely right. by the way, i think that example, the reason why it's a good example is that you think about what happened in december, after the fed finally went, markets didn't mind at all. it wasn't much of an event. markets are prepared. it's a very different dynamic when the ecb is becoming easier because they have to be, versus th

we think the eci is starting to move up so a number of things are falling into place but i think givinghe market some confidence. >> a month ago we were all doomed. china was going to doom us all, bring down the world. we had a lot of volatility in the stock market. now we're on the verge of a four week winning streak. what changed? >> psychology has changed. >> that's about it. that's everything i guess though right. >> psychology is everything at this point and october is the month that bear markets go to die. that's what happened this year. if you look at what happened last year it was exactly the same thing. we had a very powerful 15% rally over the last 2.5 months. we bottomed at about october 5th or so. this year we bottomed october 2nd or so. >> is it not problematic there's no fundamentals. >> fundamentals are fine. the issue that caused the 12% correction over august in our view is concern about china. the domestic economic fundamentals were fine. look at the market split. manufacturing isn't great and that's been a problem all year but the consumer portion of it. auto at a ten

one of the biggest things that could cause them to change would be if the inflation numbers, like the ecis out this week, the wage number that comes out with the jobs report, if those pop up, that puts the fed in a real difficult -- >> slim to none? >> i don't think so, really. >> no? >> we got 5% unfloiemployment a other indicators like adp suggesting wage pressures. think of the position they'd be in if wage numbers pop up dramatically and there's weak overall growth in the world and weak reports here. that's a difficult position. >> what do you think, potential to move the markets today with the statement? >> potential to move markets, certainly, but after the last statement, they said they don't expect to hit their 2 % inflation point to jim's point until 2018. that was discouraging to me. now, yes, there could be a blip in the data, but they don't see the long term trend change there. markets have pretty much been moving on every utterance of the fed. put up or shut up. enough promising we are going to raise. they said they will not change policy, meaning they are not going to start