Transcripts For BLOOMBERG In The Loop With Betty Liu 20140905

After five months of fighting. Apple is going to toughen up security after the hack of celebrity photos earlier this week. Iphone and ipad users will get email alerts if anybody tries to change the password or login from a new device. That ruling in the gulf of mexico oil change may wipe out years of rockets at bp. A federal of profits at bp. A federal judge ruled that bp was grossly negligent when it comes to the oil disaster. They may face another 18 billion in fines and penalties. After the all important jobs report. Wall street anticipating that a strong report. How strong does it need to be to keep the bond market the bond rally going . Fed will note the change its policy anytime soon, even after weve seen betterthanforecast economic numbers of late. Economics editor mike mckee has our preview of jobs. Its amazing that, after numbers weve seen, we are still sitting here with a 2. 45 10year rate. That cannot last. Start with car sales. The highest since june, 2005. You need to build more cars. Thats good for manufacturing employment. Actories are humming the isn manufacturing new orders index hitting a 10year high. The index reaches a nineyear peak. The nations trade deficit is smaller than expected in july and june and may. That should push secondquarter growth well over 4 and keep this quarter over 3 . It appears we did get that fairly strong snapback from the winner contraction. The winter contraction. Adp is over 2000. Over 200,000. We are looking for 230,000 jobs today. The whisper number is higher than that. What does it mean for the fed . If we get that, will that push Interest Rates higher . Probably not. Not on those headlines. You have to look beyond the headlines to another number that janet has put front and center. Are you getting a raise . Thats what it comes down to. The fed still thinks there is a lot of slack in the labor market. Look how long it has been since average Hourly Earnings went up. We are not expecting a lot of evidence on that front today. Ust 1 10 or 2 10 of a percent of 1 . What if we get a surprise . Market rates will not jump a lot, but the Merrill Lynch move index get some wage growth. That will heighten the drama around Janet Yellens News Conference two weeks from now. People will be pushing her, what does this mean, when do you think about raising rates . We heard these questions for so long. Thank you so much, mike mckee, our economics editor. We are taking an even deeper look into americas hiring picture with the people who make those decisions at the very top. We are joined by three Business Leaders from three very different industries. ,etail, energy, and banking each with their own unique perspective on the state of u. S. Employment. Thomas stemberg sits on the lululemon,rmax, petsmart, and others. Ofo joining us is the ceo the ceo, edison of com edison. It is great to have all of you here this morning on this huge day. Let me kick the conversation off. A very simple question. John, i will start with you. Are you hiring and why or why not . We are. We continue to hire both in florida and new york. The bank is growing at 1 billion every 90 days. We are fortunate to be sitting right in the middle of two of the biggest growth in jens on the east coast of the United States growth engines on the east coast of the United States. We hired about 200 new people last year. Will you do about the same this year . We will probably do about the same. Im incredibly proud of the 15,000 men and women of con edison who have a tremendous commitment to our customers and operate our complex energy systems. We are hiring. We hired 900 new employees last year and 3500 over the last five years. They are High School Graduates with the right aptitudes who we develop into professional Customer Service professionals and crafts. We hire those with associate degrees who come in as technicians and designers. We hire College Graduates with various levels of experience, including our Leadership Development program. It is a rosy picture. What about the companies that what about the boards that you sit on question mark are those Companies Hiring . Companies withhe boards that you sit on, are they hiring . You have to provide health care if you hire them for more than 30 hours a week. You are seeing a lot of new jobs at 28 hours or 25 hours a week. They are not the same quality of jobs you would want to have in a bully and economy in a need ebullient in an economy. You said that obamacare would be a big negative in hiring. And in banking. Every time they make a loan to a fastgrowing business, they have to create more reserves. The lending flow is not what it otherwise would be. What about Bank Regulation . Has that had a negative impact. Negative impact . It hasnt. Many of the jobs weve been adding over the last two years have been to answer the call for Better Regulation and better compliance with comprehensive regulation that weve never seen before. So, you are hiring people in risk . We are hiring people as risk managers. As the company grows, that segment of the company will continue to grow. How about you . Regulation is a big factor in your industry. We are a highly regulated industry. Our employment is more to customer usage. Electric usage has grown modestly, 1. 4 over the next five years is forecast. Natural gas is a real growth area. 2. 8 per year for the next five years, driven by the environmental advantages and price differential between alternatives. Those are the driving factors, as compared to regulation, for us. Talking about this. You might be hiring, but are you really paying more than you were before, or are you paying less . , we are seeing some wage pressure on the upside, particularly in the risk areas that we talked about earlier. They are in high demand now. To be frank, i expect that will continue at least another year. Going back to competitive salaries and benefits, our competition is in the stem field. We are competing against others, including google and other hightech companies for the talent we need to operate our company. Most of our retailers are in high Service Segments of the business and therefore pay well above the prevailing minimum wages. As the various local governments attempt to raise the minimum wage, there is further upward pressure. Over time, you will see less entrylevel jobs. Whatever they are talking about in seattle is not going to give a young chance at give a young kid a chance the way it used to. What do you mean less entrylevel jobs . What does that mean . If you have to pay 15 an hour for somebody because that is the new minimum wage in some jurisdictions, we would normally hire a 16yearold kid and give them a chance to learn the business and make an investment in them. At nine dollars an hour, we might have made that investment. At 15 per hour, many retailers cannot afford to make that investment. Talk about that. What do you make of his argument . We cannot hear him. Tell us what he said. We should fix that. We were talking about the minimum wage debate. He said if companies have to pay more youve seen the minimum wage protests across the country. If they have to pay more, they will not be making the same investment in entrylevel jobs as they were before. Where do you stand on the minimum wage debate . Thats a very difficult argument. We have that discussion all the time. There is such an enormous divide in the United States and the world now between the top 1 and everyone else. It is, it is, of course, going to have an impact on unemployment at some level. It is difficult to make the argument against a higher minimum wage in most cases. It is. As you heard with some of the leaders of this protest, they and it people like you dont want to put you in the hot seat on this, but they say, look, you are making millions of dollars. The very bottom of the workforce are making just nine dollars an hour, 10 an hour. You should be spreading the wealth a little bit more. Its an argument that is getting louder and louder in this country. Do you feel you are in the hot seat when you look at pay . I dont think the ceo comparison is particularly relevant, but the argument that lower income employees have about the cost of living today and their need to survive and take care of their families and grow in this expensive world that we live in certainly is loud and clear. Company now is going to have to hire a whole bunch of analysts to figure out the pay ratio between the ceo and the average employee. This is a doddfrank regulation that is probably going to kick in this year. Having people figure out that ratio is not going to add much to the productivity of the country. It will make some unions happy, but wont do much for productivity. . How about you, john mcavoy have you noticed any kind of disruptions within your own company . Are people saying that they feel like they are unfairly paid or that you are seeing some more activity on the lower scale of the workers at your companies . Certainly, the salary gap is an important debate going on in this country. In our company, we focus on highly skilled workers. Some come with the skills, others with the right aptitudes and we develop the skills. We dont really rub up against the minimum wage argument as much as some other companies. But what about the unions . Are you worried about the unions . Weve last two contracts, had good, collaborative relationships with the union. We are in a good spot, keeping bills down for our customers, but being fair to our employees. I know this is a hot issue for you, tom. I want to play a piece of a conversation we had earlier this week with one of the leaders of these labor protest. This is what he said asked these labor protests. These labor protests. This is what he said. These workers understand that the franchisees dont have enough to pay them 15 billion 15 per hour. But the industry is paying one of the lowest wages in the country. There is plenty of money and power to go around. Thats what these workers are fighting for. Why is he wrong here . Im not sure he is right there is that much money to go around. I know a lot of people own franchises. Some are doing pretty well, some are not. If you add up the costs of obamacare, which is a new cost to many of them, you add up a new minimum wage, you are just not going to have as many jobs, not have as many stores open, and that is going to hurt employment over the long term, in my judgment. Front, whatsing going to be the biggest negative impact for you on hiring . Remember, that technology remember that technology has dramatically changed the Banking Industry and our need for personnel. To run a bank our size 15 years ago would have taken 5000 employees to do the same thing. We are seeing a dramatic difference in the needs and talents that people come to us with. Our Biggest Issue is the quality of staff that we are able to attract and being able to find people with the proper training coming in the door. And looking ahead, whats going to be the biggest factor for you in hiring even more . Our growth. , we continue to grow in markets. If the underlying economies where we live continue to stay healthy and grow the way they are, we will be gaining more. How about you . One of the most important factors for us is the availability of stemcapable workforce. Highly skilled workforce. Very much so. An energyed with tech school that is a collaboration between us and new york city. We have developed the sixyear program, High School Diploma and associates degree, with a focus on energy curriculum. We think that is a good way to make sure we have a steady stream of highly talented employees in the future. Ive heard a lot about Stem Research and graduating kids who have a good background in that. Isnt part of the problem also getting kids engaged in it . Very much so. Thats why we reach out to high schools and universities to tell them about what we do. Our business is really interesting. Its an exciting place to be. There are tremendous challenges and you get responsibility very early in your career. We have to make sure the youth of today and the workforce of tomorrow are aware of that. Tom, you get the final word. Whats going to have to happen in the next 12 months for you to companies look, at more comfortable with hiring question mark we are very fortunate with hiring . We are fortunate that we invest in companies that are growing rapidly and are therefore hiring. I think you want to get a broad scale, aggressive employment growth. Right now, our employment picture is back at the same level of employment we were before the recession. The workforce has grown. While we are making gradual progress, we are not nearly where we want to be. Frankly, getting out of this overregulated, trying to get in everybody past business attitude from washington has to change if you want to have in everybody past business everybodys business attitude from washington has to change if you want to have growth. Thank you so much for joining us. Employmentthe august report is out in just a few moments. We are going to talk about jobs with yet another ceo, who heads the largest pizza delivery chain. Dominos. S, the economist known as sounds off on the moves by the ecb. We have an exclusive interview with nouriel roubini. In and are, moving and shaking as we await the labor report, ecb president mario draghi says the central bank will start securities. We spoke to Bloomberg Ruby me bini spoke to bloomberg in an exclusive interview. It is aesnt matter if public asset like solvent bonds. What they are deciding to do is increase significantly the Balance Sheet so the target is closer to three dollars trillion to 3 trillion. That will have a significant pop Significant Impact over time with other policy. Much more on the ecbs moves and analysis with mohammed l. A. Irene mohamed elerian. The jobs report out at 8 30 a. M. Eastern time. Stick with us for indepth analysis you dont want to miss. Dont go away. You are watching in the loop live on Bloomberg Television. Good morning. Im betty liu. Heres a look at our Bloomberg Top headlines. The biggest shareholders of michael kors are cashing out. They will hold a secondary offering to let investors sell holdings. The designer wont receive any proceeds from the sale. The u. S. Post office is cutting prices. The post office will lower prices by as much as 58 percent on certain Priority Mail packages for customers who ship at least 50,000 packages a year, according to wall street journal. Is and fedex say that usps taking advantage of its monopoly to take unfair advantage. The entertainment world is mourning the passing of a comedic legend. Funeral services will be held for joan rivers on sunday. The comedian and Television Personality died yesterday at the age of 81. Rivers got her start as a guest on the tonight show with Johnny Carson and later went on to host her own late night show. She also starred in a reality series with her daughter and most recently host the show fashion police. She was in many different industries. Rivers is survived by her daughter and her grandson. We are justkets, as a few moments away from the jobs report. With s parkets futures, the tao, and the nasdaq and the nasdaqw, lower. Will we get an ugly report for the markets in 30 minutes . We will get the Market Reaction right after the report. I want to bring in one guest who who has looked very closely at the labor market. He is the global head of research at Td Securities usa and also a former economist at the new york fed. You have your own forecast for this month. Jobs would have been created in august he read you are a little bit above consensus. August. You are a little bit above consensus. Why . One of the things i love to do is to remind people that the margin of error around this number is about 100,000. What we like to do is look at trends. Today,re over 200,000 seven consecutive months over 200,000 for the first time in about 20 years. When i look at the number today, a lot of things are according to what i expected. If you look at the isam components the ism components, the last time they were at this level was in two thousand six. Claims are low. The confidence number is very high. Recognizing the volatility around this number, i still like to think in terms of higher as opposed to lower. To really surprise anybody, it sounds like you are saying it has to be above 330,000 to change anybody cost anybodys game. That would be a very, very big number. If we get anything between 200000 and 275,000, i dont think it change it moves the needle much. There is a 50 chance in june of next year for the last six or seven weeks or so. For the needle to move in, you will have to see something with 300,000. Is it possible . Absolutely. At where thek stock markets are right now, where valuations are, we should be creating 300,000 or more jobs, shouldnt we . When i look at the stock market, i just offer the view that i think it has come too far, too fast. It feels frothy to me. When i look at how it is priced, it is already priced for strong growth. What worries me is that it is not priced for higher Interest Rates and a stronger dollar. What we saw on the back of the ecb is pointing towards not only higher Interest Rates in the u. S. , but also a stronger dollar. I think the headwinds you are seeing in the stock market today are very much a result of that number as opposed to anything in terms of the number today. If we were to price that in, where should we be on the s p . Honestly, i like about 10 higher. But i also recognize that the perception of fair value changes over time. All ofe last 20 years, the ratios have been moving higher. I prefer to see a slight correction. Am a hang on. Hang on. We have complete coverage for you. Mike mckee standing by, scarlet fu with the reaction, i peter cook. Well below our survey of 230,000. The Unemployment Rate dropping slightly to 6. 1 . Revisions make this number even worse than it appears. It snapped the street of 6 months straight. Julyevisions to june and reversed the numbers by 20,000. Most of those job losses coming in the month of july most of the revision coming in june. 2007000, the 12month average for perspective, bidding up to that august number, 212,000. The household survey, 6. 1 Unemployment Rate, dropping from 6. 2 , but not for a great reason. The Participation Rate dropping to 62. 8 from 62. 9 . Total employed, up 16,000. Total number of unemployed in the survey, down 80,000. One piece of good news, the number of longterm unemployed 192,000 to 3 million. Who was hiring last month . Professional and business services. Health care, 40,000. Food care and drink services, up 12,000. Construction continued to see some growth. Lets look at who was firing last month. Retail, down 8000. There was no is because of what was going on with the Market Basket dispute, the employment dispute, affecting food and beverage locations. 17,000 in that particular category. Anufacturing was flat a drop of 5000 for autos and parts. Information Services Group down 3000. Finally, the average Hourly Earnings, watched carefully by the fed yearoveryear, 2. 1 . The average work week, 30. 5 for that. The sixth straight month. A report with perhaps more questions than answers for janet yellen and her colleagues. Wagerely budge on the front. Standby, peter cook of the Labor Department also economics editor Michael Mckee with us, as well as scarlet fu with the Market Reaction. My eyes are not lying, i dont think. We saw futures rebound a little bit. They pared some of their losses. They have cut the losses in half. S p futures off by only 4 points. The weak jobs report could give the argument to those who are looking for more stimulus or lower rates for longer, this idea that the Federal Reserve will necessarily move to raise Interest Rates as early as the first or second order of 2015. You are seeing Immediate Reaction in the treasury market. There is a move lower in yields, to 2. 39 . It is, to 2. 4 it has come back to 2. 4 . Nowhere near the level we saw in midaugust but heading down after a brief move higher in the last couple days. In terms of the currency effect, lets take a look at the end. This is dollar weakness versus the yen. The dollar is dropping versus the yen. The yen had been weakening. It was on a sixyear low because of the bank of japan easing efforts to the are seeing a reversal in that move this morning. Scarletunds like what just pointed out, where bond yields when, that is still in play here. When you look at the numbers underneath it is not that bad. Manufacturing hours actually went out. Average Hourly Earnings came in as expected. Up to 2. 1 for the year. Average duration of unemployment falls and longterm unemployment fell significantly during the month. Those who have been unemployed more than 26 weeks. Janet yellen has been watching the number of parttime workers. A big drop. 300,000 in number as well. We are seeing progress in a lot of areas. A lot of progress in the underlying data that is not reflected in the headline. It leads me to believe that without further study of this, perhaps there is a seasonal question. You have a lot of Seasonal Workers coming on during the summer and maybe drop off, and maybe we are having a little bit the numberadjusting of workers the Labor Department accounts for in august. The headlines dont match up with the progress made underneath. Duties numbers confuse u. S. Well to these numbers confuse you as well . All i was saying it is hard coming on at a 30 and saying to 38, but 100,000 the margin of error 400,001 way or the other, we would see some sort of impact. Goodlot of extremely points made in terms of the duration of unemployment, labor slack. What were seeing is progress made toward satisfying the observing of slack that yellen is focused on. When i look at the headline number, i dont know all the details, but i can tell you this 140 is completely inconsistent with everything that we are seeing in this economy. To put you on the hot seat, what do you think you missed . I dont know i obviously missed something, but i havent had a stronger look at the numbers. There could be a seasonality issue here. Like i said, the margin of error is always very wide. That said, im still very surprised. One of the things i would like to see, yellen would like to see, is more Hourly Earnings growth. When you mentioned the stock futures paring some of the losses, that is being driven by the civil fact that Gross Margins look to be staying high and the fed is not going to be coming in sooner on the back of his number. Futures continue to pare their losses. Eric, i like the fact that you mentioned seasonal effect. Under from Goldman Sachs said that there is a slight tendency for august jobs numbers to disappoint because of the seasonal adjustment. Does that mean we cannot give that much weight to an august jobs report as opposed to a september or october report . Not necessarily. One of the problems with these numbers is that we as a group tend to pick and choose. That said, these numbers are very difficult to compile. There is a lot of seasonality in june, a lot of seasonality in july, a lot of seasonality in august. That doesnt necessarily make them worse compared to september. From my view i would need to see something happen in september. Another report in september for me to give any credence at all that it is much weaker than the effective number it is much weaker than expected number in august will stop when you look at household survey, it is normally very volatile. A few thousand hired and a few dozen lost their jobs, which tells you that theres Something Weird going on in the seasonality here. I was looking at earnings for all workers. Construction worker earnings went down even though we got 20,000 or construction workers. It is difficult to find Quality Construction workers right now. That tells you that any future maybe things have got to change and there is something a little weird in this report. You look at those types of workers in construction, i would add that there is a massive deficit that still has to be filled compared to where we were about a year ago. Going in construction is to stay firm and remain a big source of job growth going forward. , these agree with you numbers in principle dont add up to something that i would want to make a longterm trade on. I think you should look at the manufacturing numbers there. Month of august. Even the Labor Department acknowledged seasonal factors with the auto sector. We have seen strength in the auto sector, dealership hiring july. , retooling in what happens with the normal diving in august, there was normal retiring in august, there is noise that people will focus on. We will have a chance in the next hour, peter, to ask the white house what they think of this report with jason furman. Thank you so much, peter cook at the Labor Department, scarlet fu, who has been monitoring the markets, rebounding on equity futures, Michael Mckee, economics editor, and eric green, thank you for joining us. Coming up, much more reaction and analysis. We will be speaking with jason furman, chairman of the council of economic advisers at the white house. And mohamed elerian, Bloomberg View columnist and former pimco ceo. Breaking news in the midst of all of this on Family Dollar. The board announces it is ecting Dollar General cost Dollar Generals revised higher number. Jobs report moments ago and breaking news in the takeover battle in the dollar store industry, Family Dollar rejecting the revised proposal from Dollar General. Scarlet fu also on that story. This is a twopart announcement year, betty, because Family Dollar is thecting the revised bid, increased data, from Dollar General, for a number of reasons, setting antitrust purgatory constrictions, regulatory considerations, and saying that the proposed deal is not reasonably likely to be approved. At the same time it wants to go ahead with dollar trees did, because dollar tree had promised to divest as many stores as needed to complete the deal. Had promised to get rid of the stores so there will not be any regulatory concerns. Family dollar sees a deal with dollar tree closing as early as the end of november. The dollar tree bid has been lower than the one from Dollar General. Nevertheless, Family Dollar sees less of an antitrust issue. Starlet, thank you so much. Im sure we will hear much more on that story. Yesterday elon musk announced that nevada would be the site for teslas big factory, the massive battery plant which is projected to boost the economy by 100 billion in the next few decades and create 6500 jobs. Joining us with tales on the factory is markets correspondent alix steel. So muchd about how expectation for the spectrum it seemed like nevada was in the running all along. It seems like it definitely was and it broke ground little while ago. It actually was for real. Raw materials line of coming in and the battery comes out. That is the end goal of this factory. Lowers the costs of the lithium ion battery enough to make a quantifiable for you and me to buy to make those parts liable for you and me to buy. The idea is that is you can make it for sale, you can pack more energy into the battery and make it cheaper and you can go longer on one charge. Very appealing. Tesla has said they hope to reduce battery costs by about 30 when the factory comes online. That, going to sell though, this lithium . Isnt it hard to get . It is, projects are hard to come online. Lead. Quite a long within the state of nevada there are 3 areas that might have lithium. First is officially rally fish lake valley. Nowhere near operational. The next is kings valley, showing some runs, but so far basically lithium found in client and you can siphon the lithium off of cl i make it for the batteriesay. The real winner is going to be rockwood, the only producing Lithium Company in the United States. Produces about 46 tons a year of lithium, but not enough for tesla. If elon musk gets what he wants and that is going to equate to lithium a00 tons of year. That is insane. Do they have to import any . According to analysts, they are going to have to. Boon for all the 4 major lithium reduces in the world producers in the world. , thank you so much. Marcus is neiman taking new york city and it is going to be the anchor for the new hudson yards property project. I got a behind the scenes look at a 20 billion project. Just moments ago we saw the august jobs report. 20,000 jobs created in construction, some of which may be helping build Neiman Marcus new and first store in new york city. It would anger the Hudson Yards Development on the west side of manhattan. In about 10 years hudson yards will be home to luxury apartment and retail outlets. I had a chance to walk through the site with the man behind the , where he talked about the importance of getting a retailer like Neiman Marcus to sign on. You see right behind us, 1. 7 million square feet. What we have next to this building is one million square foot, sevenstory retail building. We have been working on different tenants right now im releasing. We have been negotiating Neiman Marcus. You take yourself through the site . When deals are being done, ceos, investors, shareholders all went to come through and touch and feel. This will be one of the largest urban stores and they will not make the decision lightly. Itwhen they come here, is like you want to show and how big the places . You have to have vision. It is creating the new center of new york city. Just hanging out over by central park are people hanging out downtown they are already coming here. It is one of the biggest attractions in new york city. There is a part of fighting 10th and 11th avenue. Park dividing 10th and 11th avenue. The number seven subway line, three stops, si minutes six minutes to Grand Central station. Is why the commercial tenants of the retail tenants know that this is going to happen. Essentially what you want is you want someone to be able to live here, work your commercial. Your company here, have entertainment here. They can basically stay here. This is bigger than most downtowns in the United States. This is a Live Work Play environment. Its an incredibly open environment, unlike anywhere else in new york city. More green space per square foot than anywhere else in the city. We are going to have much next hourg up in the when we talk to the Neiman Marcus ceo about her decision to anchor the retail complex. Is 56 minutes past the hour, which means Bloomberg Television is on the markets, and the markets are on the move. Only 143,000 jobs created, compared to the consensus. Equity futures came off of the lows of the session. The expectation is that the fed is going to continue with the stimulus program. Much more coverage on johns. Jobs. We will have more with mom elerian mohamed elerian. And the ceo of a Company Whose restaurant hires dozens of people a year. We are 30 minutes away from the opening bell on this friday. You are in the loop. I am betty liu. Futures indicate stocks will open slightly lower now. The s p lower three days in a row. In august, thebs fewest 132,000 jobs in august, the fewest so far this year. The Unemployment Rate fell to 6. 1 because more teenagers found jobs. The young, more than found jobs than dropped out of the unemployment picture. President obama is scheduled to hold a News Conference at 10 30 a. M. And we will review any headlines from that. Bring you any headlines from that. The august jobs report shows that the u. S. Added the fewest number of jobs so far this year. Joining us is Michael Mckee and peter cook. Talkedwe have not yet about the political implications of an ugly number like this for the white house. Are there going to be ramifications, peter . Timing is everything in politics. The labor day holiday, americans start to focus more on the Midterm Election and thereafter to be democrats were not thrilled with the number. President has been talking much more effusively about the economy in recent appearances, Campaign Stops with democrats across the country. This makes it harder for them to talk about the economy turning the corner and gaining more traction. There are some aspects of the report that are pretty good but overall, this is an outlier compared to where we have been. 200,000 jobs for 6 straight months. Revisions made the prior months not as good as well. Getting a number of press releases from republicans pointing to this. This is when americans start to focus on the Midterm Election. Had this been a really good number democrats would have been feeling better. There were not have been a big story on the jobs number. Maybe the publications on the politics i. Maybe big implications on the politics inside but it might have implications for the fed. You have people trading on the idea that i bet on this number and it was this number so i have got to cover my that might bet. Theyre not watching the monthly change on on farm payrolls. They are watching other indicators. Wages went up not a lot, but they are up. Hours worked did not change. Manufacturing hours did go out. Did go out. She talks about the number people working parttime who would like to have fulltime jobs. She is worried about the people who have not worked in a long time, longterm unemployed. That number declined. The metrics they are watching suggest that the labor market is getting a bit tighter. Perhaps there was a seasonal effect with the headline number. Obviously, the economy is always the number one thing in the American Voters mine, and for consumers as well. It is not necessarily going to change anybodys mind a couple blocks away from where peter is. Thank you so much, economics editor Michael Mckee, and peter cook, our chief washington correspondent outside the Labor Department. To bring in someone who watches the fed very closely, a Bloomberg View this and former pimco ceo on elerian Bloomberg View columnist and former pimco ceo mohamed elerian. Would you agree that the world is not change that much with this report . Yes, i would. The headline number is disappointing. In terms of revisions however, if you look at the components, longterm unemployment, wage growth, they are getting a little bit better, which means that all these things together, three things as mike says, the fed will not change. Steady as she goes policy from the Federal Reserve. Second, the economy continues to cyclically recover. Velocity. T get escape you have to worry about stagnation. Third, ironically, the markets there will be a sense of relief in the markets. There was concern that Interest Rates may go up too quickly. This will reduce the concern. You saw you have seen, and the last two weeks, yields creep up higher because there was this anticipation that we had good economic numbers, we will probably get a good jobs number, and that will change the feds stance on Interest Rates. Although surly calls that the bond market rally will end, do you think that is premature . If you think about market rally is going to and end because the economy or inflation is going to take off, that is not going to happen. If you are worried that the u. S. Bond market is going to rally because of the limited amount of dispersion you have between the u. S. And europe, and that the currency will start taking more of the burden, that is a more interesting argument. That, where doen you see asset prices riskon asset prices, should say, where do you see them. . I think the love affair with Central Banks will continue and markets will feel that Central Banks are the best friend, even though Central Bank Policy is getting less effective. It will take a lot to shake the markets faith, but my concern is when it is finally shaken, that will be quite a correction. What will finally shake it . It is hard to tell. People are quite extended in terms of the risktaking. Markets have shrugged off also something, from geopolitical issues. We are getting your to the limit but thats getting near to the limit but it is almost impossible because a lot of people are waiting for the term. That is the irony, people are waiting for their turn. When their turn, happens it will be quite a turn, but no one can know when it will happen. If you were in control of the fed, what would be the next thing you would be really carefully watching for . You have this accurate view of the jobs market. I would continue to take a holistic view of the jobs market, and i would continue to look at inflationary expectations. But i would do a third thing, which i dont think they are look at him on of risktaking in the marketplace. Just look at the amount of risktaking in the marketplace. We had interesting remarks from dallas fed president fisher last night. He says he has never seen the credit markets so extended as it is today. I would look at the amount of risktaking because the tradeoff is between immediate Economic Impact and financial instability down the road. You dont want to get the tradeoff to offsides. Too offsize. Do you get a sense that the fed is taken their eye off the ball and asset price bubbles . Off sotaken their eye much as it is a risk they are willing to take. Bubblish prices now because we believe a big assumption, but we believe that it will validate these prices down the road. That is not just a big bet for the Central Banks but society as a whole. You will stay with me through the opening bell. Bloomberg view columnist and former pimco ceo mohamed elerian. The dominos American Dream we will talk to ceo Patrick Doyle about how workers are rising up through the ranks at his teeth the delivery chain and when things of all this pressure to raise the minimum wage. And we look at the white house reaction to the jobs report with chairman of the White House Council of economic advisors, jason furman joining me a little bit later. Today it is all about jobs and with the monthly jobs number , we want to shift our attention to the one company that is hiring an has been hiring. Thenos new employees at pizza chain are encouraged to revise the ranks and become a franchisee, and it is so far working for them. Me,ick doyle is joining dominos president and ceo. Surgery has been outspoken on the economy and labor market in his certainly has been outspoken on the economy and labor market in his 10 year. Also staying with us is former pimco ceo on elerian. Patrick, i know you are hiring and you have been bullish on the economy and the fact that you are creating jobs. But given the number we just saw, it sounds like employers are hiring less. Is that consistent with what you are seeing . We are certainly not. Right now we could probably use 15,000 to 20,000 more people in our stores in the u. S. We have been adding jobs. Our business has been performing well. We are growing, we are looking for people who want to be a part of something special. 90 of our franchisees in the u. S. Started as hourly workers. We feel very, very bullish on our business and over the longterm of the u. S. Economy. Know, for, as you those who are upset and not happy with their jobs right now, or no jobs, they would look at the fast food protests that are going on in your industry and they would send that is inconsistent they would say that is inconsistent with what you just said. They would believe a majority of fast food burgers are very discontented with their pay and labor situation and something needs to be done. We are different. Most of our team members are delivery drivers. They are tipped. They are making up to 15 an hour with tips. Dominos is kind of in a different place. Ultimately, the solution to this ,s if you get the job growth 250,000 to 300,000 per month consistently, that is going to. Olve a lot of issues out there if you get that and you see the average hours worked starting to move up again, i think thats all a lot of the issues the economy that solves a lot of issues in the economy. It is not just about creating jobs. We have seen wages stuck at these levels, and for the bottom 80 of this country, they have not seen wage growth. They have seen wages decline. We have. The Federal Reserve data released yesterday tells you that in this recovery, the average the median household has done worse. It is the top people that have benefited. Patrick, question to you your perspective on the debate about the minimum wage. In terms of the research, there is growing research that suggests that an increase in the minimum wage at a National Level would be a good thing because, one, from the economic perspective, it creates demand, the erodingts social cohesion we are seeing. How do you react . I think the key is that you have got to get people in the job market, you have got to get people the opportunity to start to build skills. The majority of the people who are working who are living in households you have got to get opportunity. I started as a busboy in a restaurant. That was my first job many years ago. I think that is similar for most people. If you get them started, at some point, if theres enough demand for jobs, you are creating more jobs, they will move up income levels. Not to anyone the hot seat that much, but do you feel i workers have been part of these minimum wage protests. Do you believe companies should be doing a better job with franchisees, with your franchisees, to allow workers to move up the ranks . Clearly there is some discontent within the lower ranks of your franchise restaurant. They are moving up through the ranks. I go back to the comment that you started out with, that over 90 of our franchisees started as hourly workers, and the great opportunity have, to become a manager at our stores. Those opportunities are absolutely theyre. Look, i get the frustration out there. The frustration comes from there certainly arent enough jobs, it is not driving income levels the way it needs to come and if you get that moving better, a lot of these issues start to sell themselves. Bottom line, should the minimum wage increased . Patrick . O, it worries me when you have as much slack in the labor market as there is today to raise the minimum wage. Is a fine question, about the fact that it is a fun question, about the fact that vrable season is starting. Football season is starting. Super bowl is your biggest day pizzas. Es of piece absolutely. As we go to the fall, a lot of advertising on television. Uset now we could probably 15,000 to 20,000 more people in our stores around the country fulltime or parttime . Both. We need people who want to comment and work on friday and saturday night and super bowl sunday, and we need people to come in and they are looking for fulltime employment and want to have the opportunity that we provide at dominoes. Is a bigd football fan as well. Thank you for joining us, Patrick Doyle of dominos. Mohamed staying with us to the opening bell. What the Affordable Care act doesnt need, a hack attack. Breaking news out moments ago. Ukraine cost government ukraines government and prorussian rebels have signed a ceasefire agreement. We will stay on this story and bring you all of those details as soon as they come across. In the meantime, heres the top tec storiesh from our bloomberg west radar. Elon musk is closer to his goal of building a massmarket electric car. He has selected nevada as the site of a giant factory to make lithium ion batteries. Hackers have attacked the obamacare website, but the government says no personal data appears to have been taken. The attack exploited a cap server that was never intended to be connected to the internet. It had only a default password. Quick programming note in the dissipated ipo has the potential to be the latest offering in history. Bloomberg television will bring you the story of how alibaba became the worlds first Global Internet company. That will air monday, september 8, and 9 00 p. M. Eastern time right here on Bloomberg Television. We are just a few moments away from the opening bell. The top 10 stories you dont want to miss after the break. Welcome back. You are in the loop. It is 26 minutes past the hour, which means Bloomberg Television is on the markets. Theour after we got surprising jobs report, futures are slightly lower. They rebounded after the report. 142,000 jobs created, the jobless rate down to 6. 1 . On the markets those quote again in 30 minutes. Counting down the top 10, the only stories you need to know about today. Julie hyman and scarlet fu joining me for the top 10. Number 10, shares of this homebuilder rising in the premarket after the Company Reported thirdquarter profits that beat all three wall street estimates. The ceo says he believes that the housing industry is in the early stages of the recovery. Number nine, this retailers secondquarter earnings the estimates but revenue fell short. Shares are plunging in the premarket. Number eight, take two interaction. From maker being cut cut to neutral from buy. The stock is rallying more than 30 year. Pollo loco. Ven, el we like talking about this company. From 5. 5 to 6 this year. Nu 4n to open new franchise restaurants this year. Number six, quicksilver. It posted a second order loss of . 20 per share. Analysts had been looking for a profit of three cents. Pixel but says the late product deliveries negative impact quick silver says the product delivery negatively impacted sales. Number five is mark. Merck. The government approving a new cancer treatment. Shares are rising. Number four is starbucks. Changes are brewing at the coffee chain. Starbucks is planning smaller express stores next year. I here in new york city the company is trying to boost sales by targeting americans in a hurry. Julie, i have had this debate with you. Really suffersks from the long lines. It is crazy at times. The company insists that i not an issue and that we have a skewed perspective because we are in new york city. At the same time, starbucks is bring a small number, 100, more more fancy,res, different varieties to go with your fancy coffee. Doesnt that just mean longer lines . The idea is that it would be more quick. Number three is michael kors. The biggest shareholder can cash out of this value of 930 million. They are catching on because the , almost up in the fourfold since michael kors went public in 2011. Gap. Mber two, sales trailed wall street estimates. It 6 last month, much more than what analysts projected. Old navy had the best samestore sales ever, 2 gain. 2 gain is the best ever. Number one, Family Dollar. The takeover drama and the dollars for industry continues. Family dollar has rejected that bid from Dollar General, again citing antitrust concerns. Increased to 80 a share for the company. And there goes the open, as we are trading on this job stake, 104 the thousand and 440,000 140,000 created in the month of august. He writes in this weeks Bloomberg View coloma i might assume that with this jobs report that among your readers they may want to ride this wave a little longer, right . Collapse they will write it longer because they believe in the fed. Same time they will remain nervous because the economy isnt improving quickly enough to validate these prices over the long term. That data ismean almost irrelevant when you have this sort of attitude that if it is worse than estimated the fed will be there, if it is better than estimated the fed will be there. Do not payean we attention to what these numbers are . If you have overwhelming trust in Central Banks you ignore all sorts of things, including geopolitical issues and including the numbers. Did you feel that way when you took this informal survey of your readers . Did you find that there was an ambivalence to some of the risks out there . Yes, and they admitted it. What i asked was tell me the three lessons of the summer. I was shocked that 90 of the reactions all focused on the fed and how the fed had helped the markets but yet people feel a little bit nervous that this is not a genuine recovery and that on asset prices are based fundamentals arent based on fundamentals. I want to bring up something in the data. The average Hourly Earnings did not show anything in wage growth. But it has been said you have to look at wage growth in private industries as measured by the bea, which shows a 6 rate, as opposed to a 2 rate the previous year. This should be the broadest measure of wage and growth we have in the u. S. Why are we not looking at this more . Those that look at the detail of the report, the headline numbers are not as disappointing as you think it is when it comes to its components. You cited one of them, wage growth in the private sector. The other element is decline in longterm unemployment, the decline in youth unemployment, and the fact that the u2 and you six cannot come at the expense of the rate. Is not ast disappointing as the headline would suggest. That would suggest that this assumption that the fed is going to be there could be flawed. The fed has access to these numbers as well. They are seeing the more Positive Side of it as you are and that means the market could be caught off guard if they are going to tighten more quickly than investors are expecting. Dam i would not go that far on this report. It is not that good. It is not disappointing but it is not exceptional. You need an exceptional report to get the fed move the fed to move earlier. It comes from this amazing the 10 year between in the u. S. And the 10 year in europe. Year ago,und 90 a around 108 at the beginning of the year, and there was a limit to that divergence. I am glad you bring up europe and this gap between the two. We sought ecb yesterday with this surprise news, cutting the benchmark rate and buying out security. With someone who gave his skeptical take on what this latest move means. I want you to listen to this. It doesnt really matter whether it is a public asset like sovereign bonds. Effectively what they decided to the target throws it target slows it to 3 billion. It will have a Significant Impact over time together with other policies, like fiscal policy and reforms. Do you believe it would have a Significant Impact . Havedont believe it would a Significant Impact on the economy unless it encourages governments to do what they need to do. ,nd he made clear what that is fiscal responsibility and structural reforms. Those are the key issues to get a proper growth response in europe. Buy its will do is it will time and it will weaken the currency. The ecbe wake of what did yesterday, a Hedge Fund Manager declared the bottom market were the bond market rally is over. Will believes europe produce inflation. I am not so sure. Where he has a point and where the market hasnt yet focused on this, is that for a long time it was european rates that were governing world Interest Rates. They pulled down the u. S. Rates. There is a possibility that changes and it becomes the u. S. Rate that are behind the driving wheel. That is really important. With us you for staying through the opening bell. Mohammed elerian, former pimco ceo. Also julie hyman and scarlet fu on the big day. The white houses take on the job support, we will talk to the chairman of the white houses council of economic advisers next. The big news is the august jobs report, which shows the slowest advance this year and ended the winning streak of over 200,000 jobs created. The council of economic advisers at the white house joins me now. Six months we have been able to say we created more than 200,000 jobs and the economy is on track. You cannot say that this time around. You have to dial back any sort of optimism on the jobs market. I would not change anything. Numbersdo that when the come in above the recent trend, nor when they come in below the recent trend. Months average 2007000 jobs per month. We have extended the longest private sector jobs streak we have ever had in this countrys history. We have added 10 million jobs since we started adding jobs and the Unemployment Rate is coming back down a lot faster than anyone expected. There is more we need to do. Lets not get too excited or unexcited for any given month. The American Public looks at this number and wonders if this is the start of a downturn in jobs or is this is a lull or is this a lull . We know if this is just based on seasonal factors . What i tell the American Public is dont ever look at one piece of data, dont ever look at just one month. Factorsre some fluky this month. Other data, whether it was isam, consumer confidence, auto sales, all of those were really strong. Put this in context. You say we should be looking at further data and Historical Data versus just one month. The fed came out with this very interesting report yesterday where they said a top income earners, top 10 percent income earners saw their wages increase by 2 over the last three years. However the bottom 80 saw their wages fall by between 2 to 7 rate of under the obama administration, people feel even worse about the labor market and they have seen their income decline. What we have seen in the labor market is the pace of job growth is picking up. You are absolutely right that the biggest challenge we face is inequality in wages. That is a challenge that had been growing for decades. It is not something you can solve overnight. The first step to solving it is creating jobs. Such as more we can do, raising minimum wage, investing in infrastructure, a whole bunch of things that we need to do. I completely agree that that is our potential economic on raising the minimum wage, we have a comment from the former ceo and founder of staples where he disagrees and thinks we should not be raising the minimum wage because it would hurt Young American workers. Hear what he said about that. Governmentserican attempt to raise the minimum wage, there is further upward pressure. Over time you will see less entrylevel jobs. 15 an hour is not going to give the young kid a chance. First of all, there are a number of ceos that have actually raised their rates to 10. 10 per hour and have talked about how it improves it improves the morale, health turnover, and help businesses. They found it doesnt reduce teen employment. The minimum wage teenagers are a small minority of people that get the minimum wage. Of the minimum wage is very much about workers across the age spectrum. Step,a critical highlighted with that study. Certainly more to talk about with the labor report. Jason furman, on the Economic Council of financial advisors. Up, finding a deal. Lexapro russian rebels have signed a ceasefire agreement. It will take effect at 11 a. M. Eastern time. President obama is scheduled to hold a News Conference at 11 30 eastern time. A lot happening. Stay tuned for that. The economic recovery has ground to a halt. The gdp was flat in the second quarter. We saw the ecb coming with further measures to stimulate the euro zone. A luxury retailer is jumping into the u. S. Market for the first time. The markets Group Announced it 200 50,000 a squarefoot Flagship Store at the new Hudson Yards Development on manhattans west side. It will open stores in brooklyn and long island. Why go big in new york . Real estate prices are rising and rising to record levels. She is the president and ceo of neiman markets. Tell me what finally convinced this i am going to make bid on hudson yards. Collect so we had no intentions of building and neiman markets store in new york city. We are extremely well or presented at the corner of 58th and fifth. When we first met with steve ross of the related group and they started talking to us about the revision of what retail were franklyke, we a bit skeptical. How is this going to work . The more time we spent with them the more intrigued we became. Learned about what has been going on in the city and the demographic and psychographic changes is that everything is moving to the west side. A building of residential areas on the westside, what hudson yards is going to do in terms of bringing together Residential Office space. The high line is going to begin and end in hudson yards. We did all kinds of drivebys. After a number of discussions we decided it was worth taking into. Was there any incentive they gave you that made it more attractive financially . There are always in negotiations that go on with these deals. . There are . It comes at a time when commercial space, the prices are going higher and higher. It is a pricey time to come into the new york city market. Why now . I think it is the coming together of a lot of things in the city. The number of International Tourists continues to be on the rise in new york city. Of luxuryence apartment housing on the west side of the city, all of that is coming together. We know how to serve new yorkers and tourists in the city for over 100 years. A good time because of what is going on in hudson yards. Some people would say we are over shopped in this country. Nordstrom is going to be opening in the next few years. Is there concern that there may be too many retail outlets. Of obviously we would not have made this deal if we had believe that. We think there is still opportunity for growth for with the luxury consumer. We just saw the jobs report. Not great. Does that make you worried there could be a slowdown or lull in the market . When our customer should when our customer came out of the recession, they think about things differently. The actual number of luxury customers is growing. It is growing both domestically and from international tours. We are encouraged this is the right time to be opening a store in new york city. The president and ceo of neiman markets. That does it for todays show. On monday we have a big show. This is all on monday. It is 56 past the hour. I am scarlet fu. We are 30 minutes into the start of the u. S. Trading day. The u. S. Stocks posting modest losses. A little chase after a weaker than estimated jobs report for the month of august. That jobs report halted stronger dollar trends we have been seeing. You are seeing dollar index come down to tense up 1 to 8357. At 94. 43. E bond prices are putting pressure on the 10 year yield. Prices are down two fourths of 1 . We are going to look at one bond fund that is just over a year old and eating the big guys. At joinsjoins us us with the success of this debt fund. Fund. S a floating rate they avoid the fixed coupon bonds of your. It is poised for benefit increases . They are looking for ways to protect themselves. This floating rate strategy was the most popular strategy of all of them last year. It breaks and 61 billion. What they are doing that is extra in this extra interesting, they are looking for things that have a lot of asset coverage. This company would have a lot of physical assets. If there was some kind of bankruptcy or trouble you could retube your money. There no question about the collateral. Risk seekinget kind of investment. Haveabout regulators . We heard from regulators about how there may be some froth in the. Eath in the debt markets that makes for an interesting and dicey market. Especially for people who are in this hot seat, how do i protect myself . I cannot push back for better covenants. Him they are looking for it in different ways to protect themselves. These things have actual physical assets. When you talk to the managers of this fund, what do they tell you in terms of their perspective . They think we are in late innings. They added a caveat that we do not know how many more innings the fed will act on. We are kind of nearing the end. I am really delighted we nailed it this year. Even if we did poorly, even if we were not hitting it out of the park i would be ok with that because the strategies so defensive. The mostere one of popular bond strategies last year. How are they looking in 2014 . They are looking pretty good. Looks for a more safety net for investors. You are being more careful and cautious. Is there any debt they flatout avoid . They seem not to like retail. You have this inventory very quickly. Theres is plenty of yield to chase their. Mary childs with the latest and you can read her story on bloomberg. Com. We are back on the markets once again in 30 minutes. Market makers is up next. Live from bloomberg headquarters in new york, this this isakers dang market makers. Recovery hits a speed pump. Employers added the fewest numbers of jobs this year, giving ammunition to those who do not want the fed to take the punch bowl away. Meet the American Shoe designer who is making celebrities forget all about those european heels. And why football matters, in spite of all those injuries an english professor argues the sport teaches us important values. Makers here on Bloomberg Television. A friday morning in new york city. Much to cover this morning. This,s get into it with what a disappointment. The u. S. No doing this in the enough, i will