michael mckee with us wearing many hats. l rapidly digressed to a gentleman from new jersey, raphael bostic. what an interesting path out of harvard and stanford. a different fed president. michael: and now president of the atlanta federal reserve. raphael bostic. we welcome you to surveillance. you are in atlanta where will be a lot warmer. this morning it was 37 degrees on the back lawn of the jackson lake lodge. in some ways we are better off. it is not as beautiful but in some ways we are better off. let me ask you about the numbers we just got. 4.2% on the year-over-year headline pce, 4.6% for the core, is that out of line with what you are anticipating and as that may be put more pressure on you to decide you would like to see a sooner taper? pres. bostic: first of all i am glad we are not sitting out in 30 degree weather. that makes for a much less comfortable interview. for the numbers that came out today, i have been in the studio so i've not had a chance to look at the numbers more deeply. i would say this sort of n

that man is with us now, bloomberg's michael mckee. get to the numbers you are looking for in about six minutes. michael: the consensus is for 858,000, but the dispersion is really wide. stephen stanley at amherst pierpont makes a good point, that our models are basically designed to look at the demand for labor, but this is a supply of labor problem that is really hard to figure out, how many people are going to be out there with the jobs that are going to be open. it is interesting to see how the markets react to that. tom: the heart of what he just said is this is a permanently changed labor economy. do you believe that, and does the fed believe that? michael: i think both of us do. it has been changing for quite a while because of the participation rate as the baby boomers retire out, but this accelerated that movement. baby boomers are going to be the people who are the higher skilled, the higher paid, and except for you, everybody is quitting. tom: thank you. jonathan: i wasn't going there, tom. i promise you. tom: this is the thi

michael mckee, i really want to go to the voice and place of esther george in a washington fixated byrainard, clarida theory. it is different outing kansas city, isn't it? michael: this is one of those times when the fed bank presidenta add a lot because they are on the -- fed bank presidents can add a lot because they are on the ground in their district. they can see the course of the economy through the disease, and whether or not inflation is going to be a major issue. if esther george, who has always been an inflation hawk, isn't particularly concerned, then there's probably not a lot of concern out in the kansas city district. tom: the inflation us to -- the inflationistas are in retreat, but define a hawk right now. i don't think we know, do we? michael: it is angels dancing on the head of a pin. tom: that was almost the name of the show. [laughter] michael: a hawk is someone who wants the paper sooner. right now we are talking december, november, so if you're talking about a september announcement, it doesn't make that much difference. they are all kind of in the same boat at t

michael mckee, thank you so much . the papers released at 7:00. the yield is 1.35%.with news. the central bank -- to step down february of next year. i assume a measured and esteemed economist that is something along the case of expectations. we have to get to john ryding of breen capital. thank you so much for joining us. do we understand or do we have any inkling of how we get from boom economy to 6.6% with a glide path down to whatever potential gdp is? this is original, isn't it? john: it will be very difficult with monetary policy still in full easing mode. that is obviously going to be the key thing people are looking for from this conference is what hint chairman powell gives in terms of the timing of a tapering announcement. i want to point out one thing you did not pick up in your discussion of gd report -- of gdp report. that is we get the profit side of the economy for the first time. corporate profits were up a non-annualized 4.2% in the quarter and that is important for driving the economy. economists like to think they are looking at the demand-side con

michael mckee, you can't do that virtually, can you? michael: no, unfortunately.see behind me, this is not the grantee tons -- the grand titans. they've issued a code red warning, no meetings, so they unfortunately had to move to a virtual platform. lisa: a lot of people saying this sends a pretty strong signal. they concerned about the potential ramifications for the economy. is it fair to say that it is symbolic that it is going to be held remotely, the same way that it was last year? michael: it is, and it does suggest the u.s. faces some problems with the economy. what we don't know is how people are going to react this year. the over variant -- the delta variant became serious after retail sales came into play. only towards the end of july, so even when we get personal spending friday, it may not tell us enough about what the consumer is going to do. we do have the sentiment index that sort of collapsed going into august, and the fed has to decide whether or not this means they should lay any kind of paper announcement. i suspect kind of taper and up -- kind

tom: chairman powell and presidents and governors of fed with our michael mckee coming up.s is bloomberg. stay with us. bill, you too. ♪ (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs and to strengthen your back. do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me, it works 100%. (announcer) think it'll break on you? think again! even a jeep can't burst it. give the aerotrainer a shot. pain and stress is the only thing you have to lose. get it and get it now. your body will thank you. (announcer) find out more at aerotrainer.com. that's aerotraine

let's bring in bloomberg's mike mckee. michael economy sees some slowdown from the delta variant, we are going to see perhaps inflation write a little bit slowly, and that is what people want to find out. that is the forecast, 0.5 percent for july compared with 0.9% in june. tom: do you see the partitions so you can calculate of these other fancy te -- fancy statistics like cleveland and dallas? michael: we will have those a little bit later today if you want to. jonathan: tom knows the dallas numbers, they are not going to make the front page. how important is it to set expectations here? tom: they will be looked at in fed up -- michael: they will be looked at in fed offices. they look at pe, but cpi gives us the biggest breakdown in terms of the prices of individual items, so everybody focuses on that you get a gives us idea that we have seen in these narrow categori. jonathan: it is like red sox tickets over the last three weeks. jonathan: not a good streak. tom: they are on a price decline. jonathan: the expectations component

michael mckee will have a terrific set of presidents of the fed. am thrilled to say he will begin strong was mr. bostic of atlanta. mr. bostic on fire this morning with comments about the math forward for the presidents and governors, and indeed, the leadership of the fed. let me do a data check right now and allow lisa to get in the golf cart and get over to the wall. dow futures up 86. the vix, 17.85. the yield coming in a little bit from one point 36%. some real angst in the market yesterday after tragedy in kabul. 1.3 4% on the 10-year gilts. brent crude gets my attention. gold wandering near $1800 an counts. the euro --an ounce. the euro, $1.1759. lisa: fed chair powell is going to take the stage at 10:00 a.m. to give his speech. i really want to get to this point of the dual economic recoveries. it really goes to this feeling we are getting in markets that everything is rooming, that companies cannot or enough money , and they are absolutely raking in the cash, whereas there still is quite a bit of pain both in the labor market and beyond, pa

let's bring in michael mckee. big take away from all of this, investors seem to be happy.ike: everyone seems to be happy at this point. fed bank president i'll echo it today, all singing from the same hymn sheet. let's taper soon. jay powell at least hummed along if he was not singing the same words. he says he is on board as long as the economy develops as they expect, a standard fed line. if we don't get a surprise from covid, we will see tapering this year. wall street and main street is happy because basically the fed chairman said what everyone expected him to say, that we would get tapering this year. that has been the timetable all along. nothing that surprised anybody. the markets are priced for this. i think that is why we are seeing a positive reaction everywhere. matt: when we hear taper, does that mean going from $120 billion a month or going to zero? mike: it is a question of how quickly they do that. bank presidents have been saying we should do it relatively quickly, much more quickly than the last time. this is an interesting point because they have gone ou

bloomberg's michael mckee with the latest on jay powell. coming up later, mike wilson speaking at 1:00 in new york. our markets analyst, a former trader and voice of global squawk, vincent. thank you for joining us. it seemed a dovish speech, but ready to taper. vincent: i am not so sure it is dovish, but rather the fact that the message was made clear to markets that there is a distinct defense between the two, that it is time to remove and removing asset purchases does not mean we are removing accommodation. until we see the lights of the eyes of inflation and jobs returned back to pre-pandemic levels, i think we can still see and the markets are seeing this as the fed is saying, we are not taking away the punch bowl yet. we are moving this extra accommodation level that the markets do not need anymore. alix: we had some clearing out of dollar positioning into this. you are the effects guy. what is new for the dollar? vincent: i think is going to bounce from here. every trader i talked to this morning was like, what the hell. no one got a

tom: michael mckee, thank you so much. a dollar left. nasdaq futures down on a percentage basis. sdaq down .7%. michael gapen with barclays, the chief u.s. economist. frame out your gdp call. if you want to change it right now we are all years. -- we are all ears. michael: i think mike framed it the way i would. this feels like coming down from stimulus payments than it does reflecting delta variant fears. i think we will return to environment of more pedestrian retail sales reports on average because gains will be driven more by labor market income, not stimulus payments. this is a transition month in that regard. what jumped up the system was a lot of shortages in terms of semi conductors and autos. the ex autos number is probably more accurate read in terms of what it means for the consumer. we are at 6.5% on q3. we have personal consumption slowing to four. a lot of the growth in the next dose go to three quarters, maybe even four quarters, most of us are expecting will come from restocking. the advent tory shortages that have cropped up -- the inventory shortages that have cr

francine: that was kansas city fed president esther george speaking to bloomberg's michael mckee. it was a great interview and it is clear the hawks are circling before the jay powell speech. does she believe some of the bond purchases are ineffective or could be harmful? michael: at this point there is more than necessary. she has been in inflation hock. we are driving up more inflation by putting more money out there. assets are an issue. she is more sanguine about the length of time we will see elevated inflation than what we might anticipate for esther george. she did suggest at this point they are close enough. you can see the fed's white line is the pce inflation rate. it is well above their 2% target. unemployment not low enough yet. they want to keep pressing down on that. they do not need the qe to do it. alix: did you get a sense as to how the conversation is in terms of how fast they could taper? michael: not from her. she sort of avoided the question. jim bullard has been outspoken in saying he would like to have it done by the second quarter of 2022. will speak with r

let's go to michael mckee with loretta mester. mike: we are joined by the cleveland fed bank president loretta mester. welcome to bloomberg television and radio worldwide. we don't have the beautiful backdrop we normally do but it is nice to see you virtually anyway. loretta: thank you for having me, michael. mike: what did you think of jay powell's address today, is he on team mester, team taper? loretta: [laughter] i think we see things pretty similarly. the economy has made a lot of progress. that is the great thing about what we did early in the pandemic. now the question is is it time to step back from some of that extraordinarily accommodative policy we put on, in particular the asset purchases. the criteria that we put in the statement about what it would take to begin tapering, i think we are pretty much there. inflation, we made substantial progress in december 2020. we have also made substantial progress on the labor market. we will get another labor market report before our next fomc meeting and i'll be interested in se

michael mckee will join us to break that down. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. researchers say vaccines targeting the highly transmissible delta variant main dow be needed. a study looked at recent numbers in england. they found the antibodies raised by current shots are less effective. in china, the widest outbreak since the start of the pandemic is hampering tourism and spending during what is the peak summer holiday. that has analysts reviewing their economic growth projections. it has spread to almost all of china's 32 provinces. the british navy says a potential hijacking of a ship off iran has ended. unidentified people were said to have boarded the ship yesterday. those boaters were said to leave today. the incident took place days after a possible current strike hit an israeli operated ship in the region. two sailors were killed, and the u.k. says iran was probably behind the attacks. congressional democrats are reportedly seeking $550 billion in climate damages from big polluters.

michael mckee. have special coverage of the jackson hole meeting right here on bloomberg tv. joining us for more on all of this is aditya bhave, bank of america securities global economist. he changed his base case for the start of taper. bank of america now expects the fed to start tapering in november 2021 versus its prior expectations of january 2022. thank you for joining us. do we get alerted to a taper started earlier than expected at jackson hole? aditya: good morning. given the title of the conference, which is "macro economic policy in an uneven economy," there'll be more focus on the labor market, particularly how far have we come and how is the fed thinking about its employment mandate in the context of its commitments to an inclusive recovery. in terms of the taper itself, the july meeting minutes already signaled that the taper will start this year. we do not think jay powell has any compelling reason to signal more strongly than that, especially as you just mentioned around the delta v

here is mike mckee. michaelre just getting the numbers and for once they come in pretty much as forecast. 385,000. that is down from 400,000 the prior week. it was revised up to 424,000. initial jobless claims, a significant drop from where they were. the forecast was 383,000. we are just about bang on. the interesting news, the 385,000 will be good news but tomorrow is jobs day so people will forget. we are watching the total number of people who got the benefits, any kind of benefits, 13,156,000. at that point -- actually we are a little off. the numbers that they send out were slow. we have 12,975,000. i apologize for that. that is for the week of the job survey in july. we saw a big drop in the total number of people collecting benefits. does not necessarily mean they all got jobs, but it does mean the labor force flow is moving in that direction from no longer collecting benefits. jonathan: let me revel through the price action. not much price action to speak of. your equity market was slightly elevated. th

with economic data here is michael mckee. michael: we have the housing starts numbers.dy is keeping an eye on the housing sector. it has contributed a lot to gdp. housing starts fall 7% in july. something of a surprise. there was an expectation they might drop 2.6%. they were up 6.3% in june. building permits show more confidence. they were down in june. they are up 2.6%. housing starts have been difficult to track because we have seen shortages of lumber, high prices for construction materials, then they came down again, a shortage of construction workers. this suggests we remain on track , even if not in the same magnitude. 1,534,000 annual rate for housing starts. tom: can you glean price from this? will price continue to go moonshot? michael: the price would be going up if they cannot build enough houses. that has been an issue. not just the cost of borrowing money, which is cheap, but the fact there is so little inventory. single-family starts did rise by 2.5% above the number last year in july. 4.5% in june. single-family homes take a breather. jonathan: the marke

fixed asset investment missing targets good joining us is michael mckee, do we have our arms around an understanding of exactly how far the chinese economy is slowing? michael: it looks like it is slowing faster than expected. you can see the numbers. the big missed and how far they came in from the june numbers. demand has fallen off in china as the country has shut down. that may be different from what is happening in other places, because we are keeping our markets open. what happens in china affects the rest of the world. take a look at imports into china from the rest of the world last month, and they dropped dramatically. if that were to continue happening, that is a problem, not just for the u.s. but with europe as the biggest trading partner. the rest of the world slows down and it hit confidence. the idea that the delta variant is moving fast and having that impact has hit what we have seen in our economic data so far for the month of august, the university of michigan number on friday was a big role over. also -- rollover. also, consumers and businesses worried about what's h

[laughter] michael mckee, great for you to jump in.head i think to jackson hole in some way, shape or form. equity futures up 20 on the s&p. in the next hour, seema stanley of amherst pierpont. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the u.s. senate is on the verge of giving president biden a big win. lawmakers are heading towards passage this week of a $550 billion infrastructure bill that would provide the biggest infusion of federal spending on public workers in decades. the money would fund roads, water project, the power grid, and a whole lot more. the bill would still need to be passed by the house, who won't pick it up until next month. the securities regulator in china is calling for talks with its american counterpart on overseas ipos. last week, the sec increased disclosure requirements for chinese companies that want to list in the u.s. that came in response to beijing's clampdown on the industry. goldman sachs has become one of the last wall street banks to raise pay for junior bankers. firs

michael mckee is our policy correspondent.time we get to jackson hole, it will have a different feel than just a couple of weeks ago. mike: we thought the fed would be talking about when they might taper, but now it may be about whether they hold off because of what has happened with covid. cases in wyoming rising significantly. the county in which the symposium is held is going to code red. they say you cannot have meetings and everyone needs to be masked, you have to be social distanced. the kansas city fed decided to call it off, which is interesting. the fed had set us up for the idea that we may see a change in the operations. in their most recent meeting, they noted participants saw the path of the economy would depend on the course of the virus, risks to the economic outlook remain. that seems to be where we are at this time. we get some interesting data on friday, inflation and spending that come right before jay powell speaks. that could influence what he says, particularly if we get a rise in the inflation figures. y

let's bring in our bloomberg's economic correspondent, michael mckee. he main reason they pulled back on this? michael: apparently the incidence of covid has accelerated dramatically in teton county, wyoming. the county has gone to a code red which impedes the ability to have meetings in large numbers so they were forced to go to a virtual format. they will host it via zoom on august 27, friday. looks like they will cut off the saturday portion of it. no doubt. in the kansas city fed, and those of us who were going or going to be really disappointed. taylor: the irony of this is economists are gauging their ripple effect on the economy from delta, in a statement saying that "you can get a hotel refund." the hotel now is no longer going to have visitors. local restaurants, drivers, will no longer have visitors. so you will be seeing, on a small scale at least, some of the ripple effects on a pullback on the economy. michael: that is what is going to be happening around the country in various areas. we are not seeing lockdowns as such, but we are going to

alix: michael mckee, bloomberg economics and policy correspondent, joins us now.ichael: that is after she had the conference derailed by covid . at this point, talking about the fact that the taper needs to get started. she didn't put a timetable on it. it could be anywhere between now and the end of the year. other fed officials have said they would look to see more data. it will be interesting to see if jay powell embraces that tomorrow. the data we got today, very read because i didn't tell us a lot. the jobless claims numbers went up to 348,000, but you can't even see the movement in the line there. that is probably just noise, not telling us anything about the virus and whether it is affecting the labor market at this point. the payroll numbers that came out yesterday was a revision to second-quarter gdp. doesn't tell us a whole lot, but we go up by 0.1% to 0.6% mode is really good growth. the only new information is this corporate profits. it is obviously important if you are investing in equities. corporate profits, the white lines here are at an all-time r

we are breaking this down with michael mckee. michael: what you mean we are not spending. i am spending. we are blaming alix for the whole u.s. economy. the retail feds tend to put out the regional economic indexes to let us know how things are going on in their districts. the four major ones that are out , new york, philadelphia, kansas city, dallas, only one trend, down in the most recent quarter. we are worried about consumer sentiment because michigan numbers have fallen off and consumer confidence numbers have held up. but now they're going and the other direction. does this mean a pullback in spending? that's the concern. the other thing that has got markets off on the wrong foot was china. the chinese pmi really surprised . not only do we see the manufacturing number go down, you expect that because of the lockdowns and the supply chain shortages, but look at what happened to the services index in china. this is the official one, the broader, larger company ones. we get the broader ones tomorrow. but this one way down with china pulling back. analysis says this will

here is michael mckee. michael: dear we go with the jobless claims numbers.tty good news. 348,000 jobless claims, down from 300 75,000 the prior week. -- down from 375,000 the prior week. the continuing claims number 2,800,000. the number in the headline is a decrease of 29,000 from the previous week. the lowest revised level since march 14, 2020, when it was 256,000. we are getting back to normal in the jobless claims data. getting there slowly but surely. the prior week revised up to 377,000. the note one number -- the one number i keep following is the ongoing claims, the total number of people who are getting claims paid right now. that drops by 311,000 to 11,743,000 in the week ending july 31. the number of people getting jobless claims is following. we will see the people getting the pandemic emergency claims, the gig workers fall off. that plays into the fed question knowing about tapering. what will the impact be when the excess benefits fall off. the philadelphia fed business outlook comes in at 19.4, down from 21.9. slowing there. taking a look at t

let's get some of it with michael mckee. ael: looking at the empire manufacturing index because it is the first real-time number we have gotten based on august. it is not good news. the empire index falls to 18.3. that is down from 43 last month, which was a record high. a major drop in manufacturing in august. the other number we watch with this is prices paid, prices paid falls to 76.1 to 76.8. not a lot of change in the inflation picture. new orders fall to 14.8 from 33.2. it does suggest a drop. everyone is watching the employment report. employees falls to 12.8 from 20.6. how bad is this? if you leave out the month of june, it is the lowest since march. we are seeing numbers comparable to earlier in the spring when the economy was just getting going. this is a big falloff in the empire index. tom: out of the buffalo shop of the new york fed, 200 manufacturers, they typically get 100 responses. we will base our analysis of fed policy on the 100 manufacturers coming out of a group that is just worried about the bills prese

here with the details, our international economics and policy correspondent michael mckee. michael: the interesting thing is we don't know whether it is a shift to services were not yet. we won't get that data until the end of the month. we do know that retail sales numbers came in very disappointing, down 1.1%, much more than the 0.3% forecast. the question is why. is it the stimmy checks? maybe i should have written is it alix. this is the first round of stimulus checks the first of the year, and then the biden ones that came later. spending went way up. people bought stuff. now they are not buying as much. one of the things that has happened is that auto sales have fallen off a lot. that was one of the big movers this time. the reason is probably because there aren't enough cars to buy because of the semiconductor shortage. people probably bought, and it is still a little early for that back to school. grocery stores, if it were the pandemic, the delta variant, people would be staying home and probably buying more food. but instead, food sales at grocery stores went down.

it is a privilege to know that michael mckee will be asking questions at the fed meeting in septembero it off of the next jobs report, which follows on a three month moving average of 832,000. reset us and get us out to early september and the august labor report. can you extrapolate forward? >> we would like to. this is a unique situation and we have the delta variant, which you were talking about, which raises questions on whether people will be willing to go back to work, those who have not gone back to work. we have the question of childcare. some schools are starting up. we may see a positive impact from that. if they go to virtual school again because of delta, then you have a problem. tom: every history here means that there is a single prescription, we need to wait for more data. the speeches today or next week, do they really matter if we are going to wait for more data? michael: i don't think anything matters to wall street except for jackson hole. i am selling the trip. i will wear a cowboy hat. what i have to tell you is we don't know if jay powell will say something impor

michael mckee with important conversations, and of course chairman powell's speech. we will have complete coverage of that friday as well. coming up, david leibowitz, futures up 14. the vix, 18.70. this is bloomberg. ♪ ritika: british prime minister boris johnson will push president biden to delay the troops from afghanistan. for a more safer evacuation for the present has already said he might extend the deadline for u.s. troops leaving past the original august 31 date. in tennessee, at least 22 people were killed and dozens are still missing after record rain sent floodwaters surging through rural areas. up to 17 inches of rain fell during a 24 hour period come about 65 miles west of nashville. rescue crews are searching through destroyed homes. the storm left a trail of l -- between new jersey and massachusetts. the world's largest -- now up 72% since july. the crypt to market has seen a rise of the trillion dollars in the last months. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120

bloomberg's michael mckee joining us.omorrow, we've got earnings from home depot and walmart. guy: tune in later today. we're not done with the afghanistan story. we are focused on the fact that the president will be going to the white house. he is going to be speaking on what is happening right now. we are going to hear from the german chancellor on that issue as well. that's coming up very shortly. balance of next. this is bloomberg. -- balance is next. this is bloomberg. -- balance of power is next. this is bloomberg. ♪ ♪ announcer: from the world of politics to the world of business this is "balance of power." with david westin. ♪ >> good afternoon. welcome to "balance of power." i am annmarie hordern alongside joe. we are sitting in washington, d.c. but the eyes of the world are on kabul. the president currently not in washington, at camp david, but making his way back. joe: when we went to bed without president biden would be in camp david until the middle of the week. we are watching talking points change in real-t

we have michael mckee to help us break it down. the words you're looking for? ord i am looking for is any kind of clarity. the fed meeting took place on july 28. since then we have had the covid come back in the delta variant and uncertainty has risen about the economy. we have had some bad economic data recently. at this point the uncertainty index is up while the economy -- while inflation is rising as well. which takes precedence for the fed? will we see any clue in the minutes? you can see how the group breaks down. we have the folks are not there yet, the folks who would announce a taper this fall, the folks ready to announce a taper right now. will he move any of those pictures around after the minutes? as we mentioned earlier, do we get any details on how they're going to taper once they are going to taper? after the great financial crisis they took two years from the time they started tapering until they finished. that was even pushing it back further because after ben bernanke announced they might do it they had the taper tantrum. two they do it faster

let's get michael mckee. how much of this is soaring prices deterring people and how much of it is buyers worrying about delta? michael: we do not know what is driving the housing market. it was low interest rates and demand as everyone wanted to get out of cities and into suburbs last year. we saw the impact of that when we came out of the immediate recession and had a jump in sales that lasted for a while. now we are moving in the wrong direction. can this pull forward activity or our prices up because there are not a lot of homes to buy? those are the kind of things we do not have a good handle on yet. you will have to keep watching. it is all about interest rates and housing. we all know it is jobs day on friday. some of the interesting numbers tied to interest rates come out this week. home prices, there are three measures that come out tomorrow. mortgage applications have signaled a slowdown for a while and auto sales are expected to slow down. we have friday's august payroll number. that is going to kee

we want to get a deeper dive into that with michael mckee, bloomberg international economics and policyorrespondent. michael: one problem is that the census bureau is having trouble getting this data out at the moment. the only other number we have is a revision to durable goods numbers, up 0.9%. it had been up 0.8%. the rest of the numbers stuck somewhere in a government computer. hopefully those will be out soon. this is a backward looking indicator, so it isn't a major piece of news for either the markets or for the federal reserve area it however, we do have some important news this week that we need to pay attention, and i'm gold to shift gears entirely here. for the first time in five years, the treasury department is going to be scaling act its mammoth quarterly bond sales of notes and bonds. a shift that is so large, it is likely to counter the fed's potential taper. $673 billion in the third quarter, 23 point 2% less than they expected three months ago. the treasury will borrow another $703 billion in the quarter. the numbered revision -- the downward revision is lower than exp

a research project in august for michael mckee this morning. we have someone qualified to talk to zandi about economic spillovers. lisa: the idea of the interconnectedness of monetary policy. mark zandi sifting through, moody's analytics chief economist. a well respected economist who has been often cited for being accurate at time of great uncertainty. thank you for being with us. we start to look out september, october, november. regardless of what the fed does how can you characterize the momentum behind the labor market? mark: very good. we created almost one million jobs in july on top of one million jobs in june. i do not think we can sustain that pace, but because it would be great to have one million jobs per month, that will big -- that will bring unemployment back post-e full employment -- close to full employment by late 2022 or early 23. it is good. lisa: everyone degrees it is good. the degree to which it is great is up for debate. there is also a question of the enhanced unemployment benefits, what the roll up will do. will it all

shery: esther george speaking to michael mckee, headed to the jackson hole symposium in a few hours.h-stakes week for the commodities market. remember what happened with energy and metals, seeing those substantial losses after those fomc minutes came out from the july meeting and there were taper concerns. they took a big hit. wti gaining ground in the asian session and this after falling in new york for the first time in four days. jitters ahead of that symposium. bloomberg intelligence saying the u.s. fed taper chatter pains a grim picture for energy -- paints a grim picture. it's below the $1800 level. the uptick in yields weighing on the precious metals. copper and lead those declines in base metals. we are seeing the macroeconomic focus and growth concerns affecting those base metals. iron ore did get a boost from president xi jinping, saying that china will strive to hit key economic goals so investors have been betting that could lead to more demand. it's a similar picture for multiyear highs in the soft commodities space as well as. there is supply concerns. we have weather i

michael mckee -- alix: what we can learn from this guy is that i did right by buying my used car in july. i will stick with the whole commodities theme, the price inflation theme for the the biden administration is calling for opec and its allies to boost action in an effort to combat rising gasoline prices. national security advisor jake sullivan said while opec-plus increased -- agree to increases, they will not affect the cuts that opec imposed in january. this is simply not enough. bloomberg washington correspondent annmarie hordern has more. is this going to work? annmarie: it is a very good question. the timing is interesting because we are not due for an opec-plus meeting in about 20 days or so, and the group just met. as they pointed out in the statement, they decided to bring back some of that production during the pandemic, to the tune of 400,000 barrels a day. in increments. what is also interesting is that this came hours before the ppi report, and i spoke to bob mcnally, a former bush energy aid, and he said this is putting the biden administration under pressure at home wit

tom: for michael mckee leading our jackson hole coverage, things have changed in the last three or four days, and i would suggest even on a global basis. yes, there's afghanistan. we will touch on that in this hour. but the delta variant has changed all. lisa: it has changed us into expect and depend make to end perhaps later than expected. more than that, to start looking at lambda and what else might follow. but it really raises the question, if we put too much stock in the idea that september will bring the better labor market data then we had expected, are we going to push it out to october, two november, along the fed to remain pat? tom: we will see. i don't know. i think there is so much uncertainty here, i am really hesitant to commit. you see that in the research. what do you see in the research notes? i see adjustment in gdp down. kailey: we have seen that certainly at goldman sachs, but you are seeing adjustment to the upside. wheezing goldman sachs do it, even with delta variant concerns out there because take away the growth equation, and corporate earnings, that seems to be

that is up 3.2% for the year according to michael mckee. brett: thank you.t is a pretty decent bounce back. you had a big decline. i was expecting some payback there. the things the fed will be paying attention to are the health care component and rents. on the health care side, what will be interesting is how the situation shapes up for the fall. in the bipartisan agreement, it seems the gop has gotten the sequester extended. if you extend the sequester and medicare is forced to comply with that request, you will see health care inflation drop next year and that gets tracked about 20 basis points and year-over-year terms for the court pce deflator. the fed is dealing with a lot of policy difficulties that make them wait further in terms of announcing tapering. you do not know whether the delta variant is going to impact back to school, september employment data. even for the hawks, september employment data seems pretty important. two, the fed will not know the fiscal situation in the september 3 meeting. chuck schumer has set a september 15 date to pass th

kathleen: that was cleveland fed president talking to michael mckee.g a look at the taper plans after the plans at jackson hole. haidi: we do have some breaking news when it comes to earnings. for your income coming in at $10.3 billion there. that number coming in at 16.3 8 billion final dividend being declared at 2.11 aussie. will speak to that ceo later on to get her gauge on what the men out of china is given that we have seen some volatility in that market on account of the environmental curbs. also coming through and saying they see the four-year iron or shipment at 180-1 hundred 85 million tons. maintaining that expectation. -- 185. just getting a little more flesh around those numbers when we speak to elizabeth gaines. miners shipped more in the third quarter than the second quarter according to estimates early on. lots more to come on "bloomberg daybreak: australia." this is bloomberg. ♪ >> the criteria we put in the statement about what would it take for us to begin tapering, i think we are pretty much there. >> weasel have a fair amount of en

there with her preview is michael mckee will be going on a plane on tuesday. g for? michael: it may be more interesting than we thought. alix: you never say that. michael: we figured there would not be anything on tapering but now they may have to incorporate covid. i did do my own jackson hole meme. the fed tapering plan. this is the michigan sentiment, this is philadelphia fed, that is the empire index. you can see the how it is going now part all of take a dive on covid concerns. therefore the fed may have to worry about it. the big news for you is jay powell is going. he will talk virtually from washington to the conference. you can probably stay on nantucket are out of the hamptons. alix can go back to montauk. he will be live on bloomberg at 10:00 eastern time, 8:00 mountain time. guy: mountain time. that sounds very glamorous. i think will be a great deal of fun. michael's not going alone. important people are going. i had forgotten about montauk. what else do we have coming up apart from the big storm that will hit montauk? tuesday, lie harris is in asi

we want to bring in michael mckee. the fed was blamed earlier for the selloff in asia. did the fed actually say? michael: the fed said dog bites man. there's nothing i am going to tell you that the markets didn't know, which is why it seems very unusual that people are brimming the fed for the market selloff. this is a key phrase that came out of the minutes yesterday. most dissidents noted that, provided the economy were to evolve as the anticipated, they judged it could be appropriate to start reducing the pace of asset purchases this year. what we will see is continued drops is in the unemployment rate and inflation start to roll over. none of that is really happened yet. this is when last year, the pandemic began in february, so all of this data is what we saw beforehand. and as you can see here, inflation is the only one that is above where it was at the time it began. the unemployment rate is still above where it was, and they want it to be closer than that. the black on implement rate still way above it was. they are looking for those employment numbers to come d

michael mckee, a good friend and colleague, asking some version of the same question, which is what canr 120 billion dollars per month in asset purchases that we cannot get for 60, 50, 40, maybe we can't get for 10? david: well less than what we originally got but monetary tightening is monetary tightening. if you go from you are buying 10 million per month and move to $5 billion per month, that is monetary tightening. that is my opinion but i don't think that's an opinion in terms of monetary policy has an effect 18 months to two years down the road, and any economy that is adjusting, you need to help it to adjust. so more is better, less is worse, so i think marginal things are impacted, but a small change downwards is tightening in an economy that is trying to recover. so the answer is maybe not a lot but why would you -- then how hard would you like me to kick you? you say i would like you to not to not kick me at all. lisa: there is a question about how much this is affecting one of the key metrics that the fed and other economists are looking at, the participation rate in the u.s.

tom: that is one of the worries and we are tuning up for michael key -- michael mckee at jackson hole. the backdrop here, and others this week, david constant, talking about up we go, you agree? >> i do agree, and mostly this is predicated on what is happening with bond yields and the market and the massive liquidity that we have and the caution of the fed. you have to be in equities, and recovery is here, and the unemployment picture will get better moving forward. it is clear that the rolling off of unemployment insurance that -- in the 26 states has been a benefit to those unemployment numbers and we will see the rest for the rest of the country as teachers go back to work. we are really moving forward despite this mysterious delta variant which seems to have a 45 day spike, very strange. it appears to be rolling over in the question is is if it will smack the northeast in the autumn, and that is the risk. other than that, markets and liquidity. jonathan: a couple of pieces to the puzzle. let us start with your call on the labor market. how expensive will it be, thinking about wage

next week, tom keene, lisa abramowicz and michael mckee leading our conversation in an odd delta variant jackson hole. we are very aware. we start strong with arguably the most important interview we are going to have before we travel to wyoming. vincent reinhart owns the research of the american economy with 24 years at the federal reserve system, he is the one who literally codified and invented modern research at the eccles building. he is with mellon, their chief economist. vince reinhart, explained to radio and television what jackson hole really is. a bunch of phd's dissenting to dead serious papers. describe what really goes on. vincent: it is the biggest concentration of central bankers. central bankers love to talk amongst themselves. that is the opportunity for them to address what they are all concerned about and what they are all concerned about now is how the global economy is going to pull itself out of the pandemic and moreover how they are going to pull themselves out of the unconventional policies they have got themselves into. tom: i had the honor of sitting on the lawn

we heard that from robert kaplan and michael mckee a few days ago , the beginning of the idea of houseces up, real estate up, rents up, and that falls into inflation. lisa: the idea we see the red component really pick up dramatically and we will get the housing data in about 2.5 hours. honestly, you have to think, how this affects the economy. does this lead to broader inflation? can it without wages going up? not really. it can crimp consumer spending and depletes your disposable income. this to me is the question, is this a negative indicator for the economy and growth or does this indicate resurgent inflation in the labor market? i think that really will determine the transitory -- i hate using netware -- aspects to inflation. tom: taylor has never heard the word before. taylor: what does it mean? lisa: in the afternoon, every time you say transitory, you take a drink. tom: it is too early here for a spread. i'm looking at case-shiller, and i'm rounding up the numbers, from 70% year real estate left to 19% per year. those are taylor riggs unusual numbers. taylor: and echoed similar

not our own michael mckee because he is busy and he will be interviewing esther george the, the kansas city -- george, the kansas city fed president, the one hosting the event. key question for her, how much is the delta variant weighing on the decision august 20? how does this color this conference? 8:00 a.m., we get jobless claims and the expectation is for an ongoing decline. eliza winger at bloomberg intelligence pointing out the fact we continue to see a downtrend in this elegant chart highlights the main problem finding the workers. will they come? that throws the emphasis on the friday and the labor market report we get then. at 12:00 p.m., we have general motors ceo joining our own david westin in conversation on bloomberg television. i am interested in this conversation for a couple reasons. first, the supplies chain disruptions -- supply chain just ructions. you see auto companies acting like tech companies. you saw for delaying plans to work from the office. they are competing with big tech for employment, for some of the workers who can program their cars. are car companies

tom: ferro channeling michael mckee here with a jolt of the jolts.r of jobs out here is stunning. it is basically unmeasurable. jonathan: it speaks to that fantastic demand we have in america right now. the big unknown is how they supply will heal for the u.s. still to come. will prices get it done? we can talk about that with ellen's and their of morgan stanley just a moment. -- with ellen's and her of morgan stanley -- ellen zentner of morgan stanley in just a moment. let's head over to remain. romaine: united airlines will require all workers to vaccinate . that is in november. remember, the vaccine approvals are for emergency use which raises a lot of questions about people who have medical conditions. it is expected that the fda will move to make that approval, which basically means it is safe for everyone, and united says that's all of its workers need to have that vaccinations. about 90% of its pilots are already backs and -- already vaccinated and about 85% of flight attendants. there will be some exceptions if documented for medical or relig

we'll go to michael mckee at bloomberg tv. >> chairman, i wanted to ask you a little bit about your tapereline in the sense that you said you want a couple more months of data, and the statement says that the fed is going to evaluate the developments in two markets, in jobs and inflation, in coming meetings. does that suggest that we wouldn't see anything before september or november in your meetings? i know a lot of people on wall street have basically felt you're going to lay out your taper plans at jackson hole. is that the plan or are we not going to see anything until the fall? >> we haven't made any decisions about the timing. and i did not, if i said we're looking at one, a couple more months of data. i'm not meaning to suggest anything about a particular time at which we might taper, because we really have not made that decision. all i'm saying is that we're not at substantial further progress. there's a range of views on what timing will be appropriate, and those views ultimately track back to people's views about the economy and what will happen as we make progress towards our g

latest kinks in the corporate plans, lubricant and national economics and policy correspondent mckee. michaelyou can bring me in on this because it is the economy that is going to be affected by unfortunately, this is the kind of american exceptionalism we have now on the covid side. the red line is the fed met. the covid cases have just been surging since then. that has changed the whole calculus for people, including folks in the markets about whether or not the economy is going to slow. companies don't know, but a lot of them are delaying their return to office and telling people maybe we stay out for a little bit longer. you can see all of these companies in the last week or so say and not time to come back yet. as you said, ibm, state street also keeping people out of the office for now. that is bad news for much of the economy because then the people who make their living off the people who come into the city to go to the office don't get the business, especially restaurants and shops and things like that. some talk about how madison avenue in new york, a lot of stores going out of busi