mike mckee, thank you so much.e will be speaking live with joann hsu from the service of consumers director now for incident analysis. you can found that on live go on your terminal. turning to the markets, let's welcome in kim forrest. let's talk about earnings season. 87% of s&p 500 market cap has reported to this point. it is pretty punishing. you look at the companies that have managed to beat expectations. it feels like they are not getting rewarded as much as they might have been a couple of quarters ago. if you missed expectations, good luck. kim: absolutely. whenever i try to describe my job, and it's so crazy. we look forward to earnings season. we have to admit we don't really care about what happened in the last quarter. we only care about happened in the last quarter as to what informs the future. this specially looking at arm -- gosh -- shopify and some of those, they had some pretty good earnings and then they were killed. we always have to remember that today's data, and that could be the data we jus

mike mckee has all the details. mike: we have some numbers making the fed bank, what is going on here? contraction territory. the forecast was down from 50.3, so a much bigger drop than anticipated. this is not good news for the fed. we are seeing a resurgence in inflation, in the manufacturing area. the employment number goes to 48 .6, slightly higher from 47 point four, but it is still below contraction. we do see another decline in job openings. so, at this point, we are seeing fewer job openings and fewer people quitting. first drop in five months. fewer people quitting and fewer job openings. also, less progress towards economic growth from the ism numbers. the fed will definitely take note of that. katie: a busy day. thank you to mike mckee. let's turn to the markets. joining us is the cohead of investments. a great to see you in person. let's talk about sentiment because it feels like it has soured. off by 4% last month. even though you have amazon up 3.5%. >> a continuation of what you have seen for years. th

jonathan: mike mckee, you are sitting down with goals be later. ou know, in the past jay powell has said they get the numbers in advance when they have a meeting that week. i want to find out if that is true, because that might explain why he was so dovish and confident that inflation would continue to fall, even though wall street was having a bit of a heart attack. so, that, and then where does he think inflation is going to go? and why? is it monetary policy pushing inflation down or are we going to see these one-off ski popping up? jonathan: looking forward to the conversation. still with us, jeff rosenberg hand mohamed el-erian. mohammed, what are you looking for from the fed speak going into next week? mohamed: first want to thank mike for reassuring me and thank him also for wearing blue after the mets' big win yesterday. that is really important. look, i would like to hear other federal officials reiterate what chair powell said. lisa: what about you, jeff? is that basically your takeaway too? you are now going to wait to hear what other fe

joining me to discuss that interview is mike mckee, write to my left.'s start where yellen ended, and the commentary on currencies. we've all been watching what is going on with the yen. she made the point that g7 nations should have market-determined currencies. a lot of speculation over whether intervention has and is taking place in japan right now. mike: she went further than i would've expected for a treasury secretary. you know they will not say anything about intervention except that she laid out the g7 policy that currency intervention should be rare, limited to times of excess fluctuation. maybe that's the case that the japanese could make given they pass their record low in recent weeks for the yen. she didn't excess more is coming on but admitted this is a key topic and is being driven by interest rate differentials which are being driven by the u.s. fed keeping rates higher for longer. it didn't sound to me like she would say this is a time period where we would completely rule it out. katie: speaking of u.s. interest rates, she also made th

mike mckee asked the former st. louis fed president jim bullard about the fight against inflation in the wake of the jobs miss. >> it's a good problem to have. the committee has been very successful. the economy is growing at a good pace. the labor market is very strong in today's report, a little softer than the last time. but still a very solid report. inflation is above target, but mark -- not nearly as much as it was. most people think it will head back to target going forward. >> for more let's bring in the pimco chief u.s. economist tiffany wilding. it is kind of like a national holiday these days for bond traders looking at the bond support. when you saw softeners in the labor market it was pretty stark relative to what expectations were on the consensus. when you see this weakening, what is the risk things we can at a faster pace than people expect? >> it is funny. when we look at labor market data in more detail today we see what was a still reasonably solid report underlying all of the bond market reaction

mike mckee has the number. good morning, mike.s is what the payroll processor says were created in april. that compares to come as you mentioned, 184,000 last time, which has been revised to 208,000. so, significantly under for adp, and adp does not consider itself, it says, a predictor of payrolls. goods-producing jobs, 87,000. construction, 35,000. adp had been finding a job losses in some of those categories, but they seem to be strong. 145,000 in service-providing jobs. it looks like a very strong jobs report from adp. remember, they only measure private-sector jobs, and that sets the stage for this friday. it does suggest we are going to get a stronger report. jonathan: it is good they don't consider themselves a predictor. three months average -- three-month average is really punchy going into friday. can you go through some of the estimates for us? mike: right now what the bloomberg survey is suggesting is, we are going to see for friday's number an unemployment rate of 3.8% and 240,000 jobs. we will see when 90,000 in the

let's get to mike mckee who has all of the details. michael: for those worried about the u.s. economy will see a rebound today that might change their minds about the course of the economy. i suppose this could get us some reaction in the markets. what we are getting is the consumer confidence headline number, a big move up. the present situation goes to 1.4301. the expectations index goes to 74.6. obviously people feeling a lot better about where things are at the moment. one other number i want to get to the data point on is people tend to watch this index for what people think about the labor market. next week we get the may payrolls number and in terms of the employment numbers, jobs plentiful, falls to 37.5, jobs hard to get falls. people still feeling the labor market has some strength in it. the change came not so plentiful but people don't think it is jet -- hard to get jobs and they feel it will be another factor for the fed to consider when they think about how strong the economy is and what they need to do next. katie: we are talking about small moves but a little b

with economic data is mike mckee. morning.nt claim story. 208,000, a drop from the last week. if the revisions come through. revisions are 208. no changes at all in initial jobless claims on the labor department. continuing claims to come in exactly the same. what are the odds of that? 1,000,770 for two weeks ago, 1,000,774 this week. right on. non-foreign productivity is a bit of a disappointment. up by 3/10 of 1%. the forecast was for half of 1%. last quarter it was 3.3%. that's the quarterly rate. unit labor costs rise four point 47%. up from a 4/10 gain in the prior quarter. 4% was the estimate. so, what we are seeing there is some compensation wage pressures that would bother the fed. trade balance, 69.4 billion, basically in line with 64.5 billion in the initial report on that. trade balance narrowing a little bit. good for growth in the u.s., but jobless claims and activity numbers for the fed. jonathan: rocksolid. wage pressure and wage growth tomorrow, yields are the appropriate time to have the conversation before we

mckee. like, what have we got? mike: nothing at the moment. here comes now.irst numbers just dropping are the jobless claims numbers. 219, as you said the forecast was for 217. we are certainly within that range. the continuing claims number, one million, 791,000. so, no real change in jobless claims. that story remains the same. gdp comes in as forecast, up 1.3%. this is a revision to the first quarter number, and that is down from one point 6% that was originally reported. a bit of that is consumer spending, personal consumption at 2%, down from 2.5% initially reported. the gdp price index is a little bit lower. 3%, from -- from 3.1 percent. that is a quarterly number. not what we get tomorrow. pce on a monthly basis, which is what the fed is going to want to see. at this point not a lot of change in the gdp numbers. i will take a look and see what the breakdown is and jobless claims, no real change at all. one other number, advanced trade for april, the trade balance is a -$99.4 billion. that is up from -$92.3 billion in march. so, a little bit of bad news

we have bloomberg's mike mckee with the details. michael: if you are trading on the economy slowing down, keep doing it. the ism services number comes below 50, the line that is supposed to demarcate between contraction and expanses. services pmi 40 9.4, lowest since december. a rebound on for the moment. production at 50.9 and new orders at 52 point two, both down a little from where they had been. employment comes in at 45.9, still below 50 and just confirms what we saw in the services and overall jobs numbers that we are not seeing a huge job gain in the recent months. the one thing everyone wants to look at, 59 point two come up from 53 point four and the same pattern we saw with the ism manufacturing numbers, the overall number went down. let's talk about the jobs numbers. that is what everyone will be focusing on today. coming in later than expected, 175,000 jobs created in may according to the establishment survey. april was revised up to 313,000, a total of a -22,000 revision all in march. unemployment ticks up to 3.9%, but

. >> that was the chicago fed president speaking exclusively with our colleague, mike mckee, following u.s. jobs sprint. it's not just the optimism we had in the u.s. equity session on friday and over the course of last week, but something else that could hurt asian equities is what we get in china because we had mainland markets that were shot for the past three sessions last week. golden week holiday of course. and during that period, it was a very good run-up for hong kong stocks in particular actually entering a technical bull market. it seems perhaps we have found a footing for the chinese economy, some science perhaps that consumption is picking up somewhat. really, things seemed a little bit primed for hong kong stocks or chinese stocks looking to ride on hong kong's coattails perhaps in the session later this morning. haidi: one of the other things bloomberg intelligence is looking ahead to is the delay to be held in july. it was supposed to be held by the end of last year and any kind of policy cues from that could see the extension of this optimism that we are finally seeing

and what mike mckee always says that it is a chance to potentially have a tweak of a policy or make a statement. jonathan: we two to dot plot and american airlines. yesterday closing lower by 13.5%. we asked the question, is this an airlines problem or an american airlines problem. based on the communication we have from them and united in the last 24 hours it sounds like an american airlines problem. lisa: there is more intel on what happened to the chief commercial officer being fired. there was a scathing report about how he interacted with some of the corporate travel agents that basically were shunned from the whole process. he tried to do a direct to consumer process that completely failed. this highlights how frail the overall pool of capital is. if you don't grab your share, you will have problems and that is a different type of moment. annmarie: the ceo was at a conference and he said the forecast revision is due to a softer domestic environment. then you would think potentially this is an airline wide problem and then he says we were expecting and our performance within that

mike mckee joins us with the details.hs alum, she left in february. >> it's not clear she was attempting -- intending to leave goldman for cleveland. she is 52 years old, has been on wall street for 30 years. her recent role was head of gold -- financing at goldman. her previous roles of the firm included global treasure, head of short-term macro trading and global head of repo trading. she left in february, that was at a time when a number of women were leaving goldman complaining they were being passed over for top jobs. she had been thought of as a potential cfo for the investment bank, she took the current role in 2021 and the idea she would work up to it but she got passed over for that job and while she did not say that's why she left, that was the inference that a lot of people took away. she was head of the treasury borrowing advisory committee, a group of wall street traders who talk to the treasury department on a regular basis about what's going on in the markets and help make the policy for financing for the u

jonathan: we will catch up with mike mckee. more beneficial saying the same thing.he believe that and by the fed seems to take a completely different view of that question? i would say the rates policy is very restrictive. we are seeing the impact of that on levered companies. that is why small caps underperformed. they are not really growing because of the inversion of the curve. we are not collectively. when you compile -- when you combine the deficits and all the liquidity provisions put into place, some of it is delayed to pay for the fiscal spending. the policy collectively is not nearly as restrictive as perhaps the fed would like. it makes their job harder to get inflation down and it makes it harder to get the economy to slow, which is their goal. slower in a way that they could start cutting rates. i believe that we need rates lower to broaden out the participation but also from a consumer standpoint. harvey need to be lowered. mid-level consumers are believe struggling. jonathan: it sounds like you do not have that level of confidence. if we were to walk a

mike mckee is with us. mike: 231.00, quite a change from what we had in the previous month. the continuing claims at this point looked like they have gone up. i am waiting to get the change from the revisions. and they are at 1,785,000. the initial print was 1,000,774. 209 is the revision so we go from 209 to 231 and from 1,000,768 to 1,000,785. not a huge rise, but a big proportional rise in the initial jobless claims number, but we have been here before. jonathan: we have gone up to this and then dropped again. the question will be asked versus the estimate of 212, what is the difference between a welcome cooling and unwelcome deterioration? let us turn to the prize action and get to foreign exchange. equities are positive off the back of this and unchanged on the session. bear in mind where the bond market was, yields were higher by a basis point or two and now we are lower by a basis point on a 10 year. we unwind some of that move, and on the two year down a single basis point. all of this is marginal stuff. the e

jonathan: mike mckee, five but it's away from breaking down economic data. not just one number.i, a lot of retail sales. all of that is just around the corner. first-class lamp stop equity futures trading water. live from new york, the data is up next. ♪ do you want to close out? should i? normally i'd hold. but... taking the gains is smart here, right? feel more confident with stock ratings from j.p. morgan analysts in the chase app. when you've got a decision to make... the answer is j.p. morgan wealth management. you know what's brilliant? boring. think about it. boring is the unsung catalyst for bold. what straps bold to a rocket and hurtles it into space? boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady. all words you want from your bank. for nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled... which is pretty un-boring if you think about it. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "

mike mckee still with us. final word on this one? >> a couple quick points.my. they won't cut rates, they might it inflation is falling because then the real rates go up. but there thing is they won't get to 2% before they start cutting rates. they will start cutting rates before they get to 2%. which may mean we don't get to 2%. but then both sides will be more or less happy for the time being. jonathan: equity futures positive amid session highs of three quarters of 1%. some stories elsewhere this morning, here is your bloomberg brief. dani: wall street firms are facing our work from home and finra wants you to know it is not their fault. an official said on wednesday that there is notable requiring employees to come into the office five days a week. in fact, the new rules that will take effect soon are meant to preserve workplace flexibility. the statement was in response to announcements from firms, especially barclays that are weighing return to office mandates five days a week. the justice department and a group of states say that they will sue livenati

mike mckee, we go to the quiet period into next week. no more fed speak.wing wednesday? michael: in no way, shape or form does it change anything. it shows there is progress. the economy is slowing but not falling off a cliff, which is what is supposed to happen with the fed raises rates. they will say we are on track. this is what we expected. kit tells us inflation is going down but we need to continue to see more progress. we are only at 2.8%. we need to get to 2% or maybe 2.4% or 2.5%. you can ask our guests what they think the starting point will be. jay powell has said we will not wait until we get to 2%. lisa: i like what jon says, a meat is the new beat. there is this miss in terms of personal spending. people want to see cooling and spending. what do you make that revisions are so frequently downward these days that we get these data points that are revised sometimes significantly, sometimes not, but usually in a downward fashion? michael: there was a rule proposed by larry meyer. if you get a surprising number, the revision will surprise the same

we will discuss this with michael mckee and ira jersey. mike, set up the stage here or -- of what we might see this week. we had this idea of data supporting lower rates moving forward. but it will be tested in the market this week with issuance coming at the 10 year and 30 year end of the curve. mike: first we had the interview last friday with austan goolsbee and said it's not a question of hawks and doves, it's a question of the data dogs sniffing out what's going on. in terms of the data dogs, a lot of them are barking this week. we have a number of out speaking fed officials. they started with 10 or 15 minutes from richmond and from new york. then earlier this morning we had rafael bostic from atlanta put out a paper. tomorrow, neel kashkari. wednesday, a whole bunch of them. thursday and friday the same. but they are not -- you can see it in the graphic there, the ones in yellow are the ones to pay attention to, they are talking about monetary policy but there is not much data for them to sniff out. consumer credit wholesale, jobless, mic

sonali: we now go outlive stanford university, where michael mckee is standing by with former st. louis fed president jim bullard. mike? mike: thank you very much and welcome to the campus of stanford university, to all of our bloomberg viewers and listeners worldwide, and to jim bullard, the former st. louis fed bank president. now a dean at purdue university. when you look at where we are, if you were on the committee today, what would you think needs to be done? james: i think the amount of disinflation that occurred in the second half of 2023 was a lot. 200 basis points on the core pce 12 month inflation rate. so, that is big. that is the kind of thing we have not seen on that variable in many, many years. so, very successful, but, as you know, the january, february, march reports stalled out a little bit. but you are still sitting at 2.8% on a 12-month basis. i think the challenge for the committee is to somehow take that disinflation on board, because it does mean you should have a lower policy rate without signaling that you are giving up on the last bit of inflation, 80 basis points you need to get back to 2%.

mckee has the details. you've had 90 minutes to go through the details, what was behind we saw in april? mikewe saw some of the areas we expected to see get some disinflation back including used cars and housing but not by very much. it was a moderate victory for the anti-inflation crowd with pce falling 0.2% for the core and 0.3% rising. no changes year-over-year. we saw a slowdown in spending which went from 0.7% in march 20 point 2% in april and incomes did not rise as fast as they have been, led by wages up only 0.2%. at this point, it may give us some evidence that the debate among fed officials of whether they are tight enough is falling on the side of maybe tight enough. katie: let's talk about real personal spending. it was expected to rise about 0.1% but it dropped by about one -- 0.1%. should i be worried at that? mike: i don't know if you're trying to find something to worry about but this is not something to worry about. it's expected that spending would slow because the fed is tightening credit and trying to slow the economy and inflation is coming down. there is less of an infla

mckee. we got a lot of data today which suggested different things. what will john williams address in particular? mikewe've got his advanced tech so he's talking about the general economy but he's talking about it very generally in the way he has been doing and saying he doesn't think the slow down in inflation in the first couple of months of the year is a break in the decline of inflation. he thinks it will pick back up again. we still have solid economic growth any thinks they will get to their 2% target but he is not putting any time frames on these things. one thing people were looking to see is whether he talked about if potential growth and therefore the neutral rate of interest or what economists call our star is higher. that would maybe imply that rates are not high enough. he kind of avoided that but he did mention that you cannot just look at the stars. if you look at it in a broader context, in the behavior of the economy over the past year provides ample evidence monetary policy is restrictive in a way that helps us achieve our goals. we are seeing clear and consistent signs that the imba

mckee. dani: you have said so much so mike, we have to talk about whether or not we're going to get anotheray. economists think it'll be less than last month. michael: less the highlight of the week and unfortunately for the fed, jay powell speaking before cpi comes out but we are going to take our direction from what happens with cpi and after four months of having inflation go the wrong way, we are now going to have it in theory, starting to go back the right way but not a whole lot. at least in the right direction. i don't think it changes the fed a whole lot but you were talking about volatility. dani: if there is one thing we know for sure, it is that there will be volatility. lisa and i were talking about this idea that rental inflation, housing inflation, people have said it is going to show up in this report. is the lack of finally going to show up -- is the lag finally going to show up? michael: i'm not putting a prediction on that. the fed is hoping so. they don't have any explain nation for why it wouldn't. -- explanation for why it wouldn't. some on pennsylvania avenue point out

michael mckee here to break down the numbers. mikee prior month in terms of orders, with their orders don't always match up. we get a 7/10 gain for durable goods orders in the month, after a nine tens gain the month before. it had been revised significantly lower. transportation up .4%, and capital goods orders up .3%. that is the one that matters to economists and the fed, because that goes into gdp. up .3% after a negative .2% in the prior month. orders for capital goods up .4%, which is going to be an -- in addition to gdp for the quarter. we have good news there as well. lisa: you actually are seeing something of a reaction in bond markets, considering the fact that this is not often that significant of an event. i know you are laughing, but i'm not wrong. mike: i'm laughing because they had to come into the office before they head to the hamptons, so as long as we are here we are going to train on something. lisa: there you go. that means selling off treasuries. 2-year yields, four point 5%, not necessarily a dramatic move, but a

right now we are getting that data, michael mckee is here to break it all down. mikeise is the headline number, from 2/10 the prior month, and for the core also half of a 1% rise. the core extra trade as well, up 4/10 of 1%. these are all significantly higher than had been forecast and infinitely higher than last month. year-over-year, the final demand goes up to 2.2% from 2.1%. that is as expected, 2.4% or the core, the same as the last month forecast where it was defaulted 2.3 and the core extra trade at 3.1 from 2.8. here's an interesting revision. headline ppi, revised down last month to -1/10 from 2/10 of a percent. the headline, core, also revised down from 2/10 to a -1/10 percent. what it leads us -- leaves us with his index values not as high as the month change would imply, but still significantly higher than anticipated. so, we do have some inflation in the producer price area and i'm guessing, lisa, we have some reaction in the markets. stay close as you parse the details in a very detailed report that we will get into in just a second. you can see the init

mckee joins me with more. jobless claims higher than expected. there are extraordinary things going on. moments with school recess. how do you read into that? mike: this is not a surprise if you follow jobless claims on a year-to-year basis. new york city public schools sent their kids on their spring holiday break usually in april which is what happened at the end of april and so the first of may numbers reflects the thousands of new york school workers who can file for unemployment. when they are on vacation. we got a big jump up. probably back down next month. 231,000 is the number. well ahead of the year today average. continuing claims rose a tiny bit. they are also below the year to date average. it does not look like a deterioration in the labor market. what is going to matter is next week when we get ppi on tuesday. wednesday, cpi and retail sales. also tuesday, we have jay powell speaking in europe in a moderate conversation which means he could say just about anything and make news except for the fact he will not have the retail sales numbers and those are good -- those are the ones that are going to matter to the markets. it is hard t