>> i still think we are dealing a little bit with a labor shortage at the lower scale end of the laborarket. still have a lot of people with pent-up savings. still people who are hesitant to come back to work due to fears of covid or childcare problems or whatever is keeping them by. it really is easing. i do think we are going to have strong job growth in december and going into january and february. there is some really good tailwind as people return to the labor force. the supply shortage, the big crunch voting back the recovery over the last six months, i think we are working our way through that romaine: i'm curious about the types of jobs the people coming back into the workforce, what they are gravitating to. there has been a lot of anecdotal evidence they are going to more freelance top jobs -- freelance type jobs weather is for the flexibility or whatever other reasons should i'm curious what you are seeing in those trends and how it shakes out in the labor market. >> you can see a growth in people looking to freelance for sure across a variety of data sets. you can see it in

it is a very strong labor market. it is a tightening labor market.e still wants to get more spending and employing more americans through some of his programs. how do you do this when companies are complaining about a shortage of workers? at 12:15 p.m., bank of england's catherine mann speaking on a panel. to me, this is one of the crucial questions as we look at a flattening yield curve. the bond market doesn't buy it. the bond market is saying the fed will not be able to reach the terminal rate is expecting to reach, and get the fed is continuing to say they will raise rates with people ratcheting up expectations for a rate hiking cycle. does the market have it wrong, and it is simply distorted by a lot of the dynamics at "central's around the world? jonathan: joining us now is priya misra, global head of rates strategy at td securities. the pivot at the fed, it is not just them, it is you, too. what is the fed call now? priya: we are looking for the first rate hike in june, looking for three hikes this year, and for balance sheet runoff to start e

labor market is exceptionally strong. over 6 million jobs were added last year, and the unemployment rate is again below 4%. other metrics, such as the fraction of workers who quit their jobs, suggest that the labor market is very tight. historically, when quits have been high, workers have been moving to jobs they prefer, for higher wages and better working conditions. indeed, we now see upgrading of job quality and increases in nominal wages, especially at the lower end of the spectrum. household and firm balance sheets are even healthier than before the pandemic. to date, we have not seen large or persistent increases in long-term unemployment, indebtedness, evictions, or bankruptcies. this contrasts with the aftermath of the global financial crisis. of course, given the scale, novelty, and uncertain path of the pandemic, the recovery also comes with challenges. labor supply has yet to recover to pre-pandemic levels, as health, childcare, and other related challenges remain. inflation is a valid policy concern, and it

principles and labor ideals, labor rules. do you think ha, with endemic and the changes in your space still make it worthwhile. unified to mobilize effort? yeah, i think it makes it to essential. you know, we started on this system if we call them international labor standard, sees as you call them, unified rules of good behavior, the rules of the game in the, in the economy, in respect of labor. we started this 100 over a 100 years ago. so it's not something which is the child of globalization. but when globalization really took hold and we're now talking it's, it's getting on for half a century ago. now. these, these common rules became all the more important because the notion of fair competition, a level playing field across the global economy became ever more pressing. and i think the rationale, the international labor standards became stronger with globalization and what's happening today. cove, it of course, has put a major obstacles in the operation of the global economy. we know all about them. but i'm not convinced

as labor market continues to improve we will see people back into the labor force.t is going to be the key element to watch over the coming months, not just in the december payrolls report but over the coming months as to how strongly the labor force participation rate increases. aside it continues to increase will act as a release valve and will be assigned we are not headed towards an environment where there is increasing wage price inflation and the spiraling dynamic. i do not think we will get there. i think we are in an environment where in a sturdy labor market we will see stronger labor force participation. there is a bit more bargaining power for workers at this stage of the labor market recovery. that will gradually erode and over the course of the year head back towards labor market that is more similar to pre-covid that it is to what we've seen over the past few months. lisa: to build on tom's question and your response, there is a why underpinning these comments, why people have remained out of the labor force, is it worry about a health scare , a worry

the labor market?he key center point of discussion, i am pleased to say that we will come in someone who looks at the cutting edge, kim kimbrough. you know well about the balancing act of a federal reserve as a regulator and someone looking at job holders on the daily. is the job market strong enough to withhold a rate hike? >> i think the job market has never been stronger, it is never a better time to look for a job. look across a number of different measures, they help us gauge the strength of the labor market. it is a strong market. it is recovered extraordinarily quickly when you compare it to other recessions. even before the financial crisis, we are recovering at a breakneck speed. i would say yes, the labor market can withstand rate hikes, but not everybody is weathering the storm in the same boat. i think some boats are in yachts and some of us are in dinghies. how are the people who are not set up? romaine: i am curious about the unevenness of this recovery. the idea that last year and even i

this is a strong labor market. my strong sense is we can move rates up without having to severely undermined it. i will point out, there are other forces at work that will help bring down inflation. we hope improving on the supply side, which will ultimately come. the timing and pace of that are uncertain. fiscal policy is going to be less supportive of growth this year. not at the level of economic activity but the fiscal impulse to growth. will be significantly lower. there are multiple forces which should be working over the course of the year for inflation to come down. we realize the timing and pace of that are highly uncertain and inflation has persisted longer than we thought. we are prepared to use our tools to ensure higher inflation does not become entrenched. >> thank you. let's go to tim rose at the wall street journal. >> good afternoon chair powell. , i have a couple of questions on the balance sheet. the statements on the balance sheet today called for significantly reducing your holdings. what does

that is what the labor dynamic shows.n this historic recovery and with this president's leadership, we can work together to provide those opportunities, rebuild america's dreams for this generation and the ones to, the american worker can build a bright future for their families, communities and their great country. there is no secret that these are challenging times, but we can tackle -- but there is no problem in tackling big challenges. it is understanding what is at stake, finding ground and collaborating, moving with urgency. that is why the u.s. conference of mayors is a unique organization, a nationwide rupe of leaders in -- group of leaders in direct contact with the residents of your cities every day. this conference has been a big influence on me personally. when you first get elected, there is that lonely moment if something happens in your city. you have your support system, but nobody else that you know understands what you are going through. it wasn't like that for my first year as a state legislator in mass

because we are in a labor market that is a workers labor market, a lot of people have been able to leave their jobs and unprecedented ways, unprecedented numbers and, and look for something better. is also has a lot to do with the benefits, the unemployment insurance benefits and the pen demik, unemployment assistance that the government provided to give people the ability to say, hey, i haven't been appreciated in my workplace. i haven't been earning what i deserve to earn. and they're looking for other options. many of them are making other options, but it's important as we are in this inflection point to think about. what got us here. what got us here was exploitation. what got us here was a disregard for human dignity in the workplace. and as we build back, as we think about the world, the future of work for workers that we want to create, we have to take into account the lessons of the last 15 years. and those lessons include that humans need not just dignity, not just flexibility, but also stability and security. oh, thank you, adam. i'd love to get your take from up works perspect

this mystery underlines how tight the labor market is. at 10:45 a.m., president biden is giving remarks on the labor market. how does he talk about the gains in the labor market while talking about the need for more stimulus at a time when wages are picking up and inflation is a key concern? at 12:00 p.m., the goldman sachs bond market conundrum, -- is speaking on this panel. will u.s. growth be higher than the previous decade after the pandemic? this is the key question underlining that flattening yield curve, the idea that the long and is pinned even as we three -- events receipt 3, 4, 5 rate hikes over the coming years priced in at the federal reserve. why is it so flat? is the fed getting ahead of itself or is the bond market giving the wrong single? jonathan: that will be much of the discussion this morning. we have to start with wonderful guest, randall kroszner, the former fed governor. for a lot of people going into the labor market, there try to figure out with the latest variant, it hit economies worldwide, and what it will mean

we saw labor force participation rise. we saw wages persistently higher for people at the lower end. there really was no obvious imbalance under the economy that threatened that expansion. it could have gone on for years were it not hit by the pandemic. we would love to try to get back to that. that would require price stability and that is going to require the fed to tighten interest-rate policy and do our part in getting inflation back down to our 2% full. i mentioned two-sided risks. a couple things. one, covid is not over. covid can continue to evolve. we just have to accept it is not over and the risks to it can slow down growth and that would be a downside risk from a growth standpoint. i would point to, another risk is just further problems in the supply chains, which can slow down activity. lucy the situation where their in china where their, no covid policy may cause more lockdowns. and that may play into more problems in supply chains. in addition, there is what is going on in eastern europe. there is plenty of r

the aging labor force.ome have retired and are not coming back. but all of that feed into consumer prices. next week, we will see the cpi report. in the last segment, we had people guessing what kind of handle we would have. certainly, the fed is concerned about inflation. jon: i want to pick up on something i alluded to in the start of the show, we have had conversations with economists, if you are having a harder time getting your workers -- we keep talk about this labor shortage. sometimes that may flow to other areas, capital investing, new technology. what is happening with this labor shortage could impact where money is spent on the economic roadmap ahead. are you seeing that in your numbers? dana: it is what we are hearing from our members. automation is an option here. we cannot find workers especially in those in person services that are public facing, may not have high wages, so we are looking to invest in these areas of technology to make up for the fact that you cannot find people. alix: does th

you look at the black labor force participation, the hispanic labor force participation for prime ageorking adults, and across the demographic spectrum but especially these groups. romaine: i wish we had more time, we would love to have you on for a longer conversation about this. andrew levin, at dartmouth professor of economics. don't go away, we will have our final thoughts. this is bloomberg. ♪ bloomberg. ♪ caroline: it has been a week dominated by thoughts about what the federal reserve will do, and next week will be dominated by who the federal reserve will be made above, and how focused they are on diversity. romaine: the hearing on tuesday, and thursday will be more consequential than people realize. i think the questions of what we hear from them will be important. bloomberg technology is next. this is bloomberg. ♪ every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for jus

small beta the labor force. -- a small gain in the labor force.unts for the number of people who got jobs. 651,000. the number of people who reported they were out of work, down 483,000. we saw a big swing in employment in the household survey once again. we will have to reconcile that. the news is still 3.9%, and that is something that will catch the fed's i. jonathan: stay close as always. 3.9% on unemployment. the previous read was 4.2%. the headline number 199,000, the previous number revised higher to 240,000. the estimate into this was 450,000. yields higher by three basis points on ten to 1.75. pushing 90 basis points on twos. up almost four basis point on 30's. joining us is jeff rosenberg, portfolio manager at blackrock. your response, your reaction? jeff: the focus is the headline, while a miss, this expected to be revised higher. we have this calendar set up that december gets revised higher. it had the revisions earlier. i think the market is looking past the disappointment on the headline. the unemployment rate come the labor force pa

we are clearly on a pass to have a labor -- on a path to have a stronger labor market. would say at the top of the list is the threat of price stability. if inflation does become to persistent, if these become too entrenched, inevitably that will lead to much tighter monetary policy and it could lead to a recession, and that would be bad for workers. so really, the achievement of maximum employment, by which we really mean continued progress in hiring and participation, is going to require price stability, and that is going to require us to use our tools to the extent they work on the demand side, while we also expect some help from the supply-side. sen. menendez: do you expect inflation to subside as supply chains repair? chair powell: overtime, yes. the question is how fast, and the risks we run in the meantime is that inflation becomes entrenched. what you make a good point about vaccination. getting ahead of the pandemic, i don't think two years ago we thought we would still be having record levels of cases, and even close to record levels of hospitalizations. getti

but as i did more work, i realized working my way up meant a lot of physical labor.so much energy to work with for the rest of my life and i could use that energy towards making a lot of money, helping someone else make a lot of money or doing something meaningful. i found the nonprofit working to save the rainforest was looking for volunteers. i went, volunteered and my life changed. suddenly everything i was doing had meaning. stuffing envelopes had meaning, faxing out requests had meaning. i eventually moved up to san francisco to work out of the office here, given a lot of assembly through los angeles county and then came up here and doing assemblies to kids about rainforest. one of my jobs was to teach about recycle, teaching students to reduce, reuse, recycle and compost, i'm teaching them they have the power, and that motivates them. it was satisfying for me to work with for the department of environment to create a message that gets to the heart of the issue. the san francisco department of environment is the only agency that has a full time educational team,

that's more pro labor we're labor has leverage, certainly in the locked downs. charles, you know, labor's been able to exercise their collective bargaining a lot more effectively. and i think we have to look at a generational thing here. the boomers are retiring and for all the younger generations. that's good riddance, which i totally understand. so the millennials there's, there's some, several movements here that are, i think, manifestations of this cultural shift in what, what's acceptable, and what's no longer acceptable. and one of them is anti work. another one is slow living. another one is, it's been around a while is fire, you know, financial independence, retire early. all of those are manifestations of, of, of a desire for some kind of lifestyle that is not working 40 years to pay your student loan debt and make billionaires richer. and so i think those are all indications that the millennial generation, which is this largest, the boomer generation, is re re calculating. you know, these very these, these, these major issues like what kind of life do

organized labor but public service because of the people that you know you represent. the people that you know are counting on autophytes for them and make the right decisions that are going to have an impact onnary families and livelihood. regardless of disagreements at the end of the day the underlying message i know that is most important to much of you and i know is important to kill is the fact that we want to fight for better lives for the people we represent. that is why you are going to be serving on this board, and i appreciate and honor that you accepted this opportunity. i am looking forward to seeing something change for the better for workers throughout san francisco. with that let's debt you sworn in. (applause). >> i will put on my mask. covid is running rampant and we are close to each other. place raise your right hand and repeat. i say your name do solemnly swear that i will support and defend the constitution of the united states and the constitution of the state of california against all enemies foreign and domestic that i bear true faith and allegi

to meet the current level of labor demand.e going to end up with an unemployment rate well below what we saw before the pandemic. so you have a structurally tighter labor market, and out of that, evidence that the phillips curve is steepening. it could be not only steeper than before the pandemic, but steeper than we have seen in the last 30 years. if you extrapolate from the past eight months and overlay that with a 3% unemployment forecast, that puts wage inflation in a 5.5% to 6% range. even if you are very constructive, you still get a floor on price inflation around 3%. so that is what the market is grappling with, the inflation pressures sifting out of the supply chain into the labor market, and the labor market makes it a lot more sustainable. not 7%, not at 6%, but above 3% for the for siebel future. jonathan: you are look -- for the foreseeable future. jonathan: you are looking for 3%. amazing stuff. anneta markowska, thanks very much. we need to get back to microsoft eying $70 billion deal for activision. activision

so why is the labor market recovering so slowly? you know, we're in a world which is predicted to grow by just over 4 percent this year. so one would hope that labor markets would be improving as well. and in fact, they are improving the report that we, that we published today shows that in fact jobs are being created, we're going in the right direction. but nevertheless, the recovery process is slow. great deal slower than we were predicting by the way, 6 months ago. it's incomplete, we're not getting back to where we started off the pandemic with, and it's uneven. there are some parts will doing better than others. why is this? well, clearly the persistence of the pandemic. the oma crum variant has thrown our previous predictions into disarray. and so it's proving a much more difficult mountain to climb than we have previously thought. you mentioned alma kron there and, and just to go off that we've already seen a lot of economies and countries start to pull back on those job support measures by cap to a lot of workers afloat thro

we don't have labor demand what we have is a labor supply problem.'re clearly on a path to have an even better market so what are the threats. >> right near the top of the list is the threat of price stability if inflation does become too persistent if they are entrenched inhe the economy and the achievement of maximum employment and hiring and participation would require price stability that requires us to use our tools to the extent they work on the demand side while we also expect some help from the supply-side. >> do you expect that to subside ase vaccinations increase. >> over time, yes. but the question is how fast on the risks we are running in the meantime with inflation psychology is entrenched but you make a great point to get ahead of the pandemic. i don't think two years ago without we would still have record levels of cases are even close to hospitalizations. getting past the pandemic is a single most important thing we can do. >> those that were hit hard with the pandemic while the midwestte was most strongly affected and at the end of

the labor market is far stronger.nflation is running wealth over 2% target, much higher than it was at too time and these differences will likely have important implications for the appropriate pace of policy adjustments. beyond that we haven't made any decisions. >> thank you. let's go to victoria at "politico." reporter: hi, chair powell. i wanted to ask, you were talking about the health of the labor market and i am curious whether you would characterize where we're at right now as maximum employment? also along those same lines obviously rate hikes on the table this year. do you think the fed can raise rates, bring inflation under control without hurting jobs and wages? >> sorry, just getting both parts of your question written down. so i would say, this view is widely-held on the committee that both sides of the mandate are calling for us to move steadily away from the very highly come accomodative pace that the economy fades challenges conditions during the pandemic. most participants agree that labor market con

i thing the real risk is really the labor market, the supply of labor read it is a tight labor market in the conventional sense of how we look at it, three point 9% unemployment. that is the number we all remember. that is a great number, but ultimately we are still missing 4 million people that were in the market two years ago, 3 million of which are either women or over 55. that is a health issue. so if this thing is not linear, you can't project it. tom: very quickly here, and on radio it should be noted that she has a 70,000 piece lego millennium falcon behind her in her living room. you know that the galactic economy never was the same after hyperdrive came in. hyperdrive came in like on the millennium falcon and change the economics of star wars. are we misjudging the technological innovation of the next couple of years? alicia: yes. that is why we still believe in tech. i don't think tech is going to have a great quarter because this is a quarter that the bond market and the equity market has to do the rotation into the tightening and that is coming forward, but ultimately, dig

labor demand remains strong.aints on labor supply employers are having trouble filling jobs and wages are rising while labor force participation edged up it is subdued reflecting the aging of the population in addition some who would otherwise would be seeking work are out of the wofrts from the pandemic including caregiving needs and the virus. the current wave of the virus may prolong the effects. over time there are good reasons to expect improvement in participation and employment inflation is above the longer run goal supply and demand imbalances have continued to contribute to elevated levels of inflation in particular bottlenecks in supply constraints are limiting how production can respond to higher demand in the near term these problems have been large ore and longer lasting than anticipated. while the drivers of higher inflation are connected to the dislocations caused by the pandemic price increases have spread to a broader range of goods and services wages have risen briskly and attentive to the risks

the labor market has made remarkable progress and by many measures is very strong. job gains have been solid in recent months, averaging 365,000 per month. over the past year, payroll employment has risen by 6.4 million jobs. the unemployment rate has declined sharply, falling two percentage points over the past six months to reach 3.9% in december. the improvement in labor market conditions have been widespread, including for workers at the lower end of the wage distribution and african-americans and hispanics. with constraints on labor supply, employers are having difficulties filling job openings and rages are rising at their fastest pace in years. labor force participation has edged up, it remained subdued reflecting the aging of the population and retirements. it addition, some who would otherwise be seeking work report they are out of the labor force because of factors religion the pandemic, including caregiving needs and ongoing concerns about the virus. the current wave of the virus may prolong these effects. over time, there are good reasons to expect impro