The dollar index stronger by about 0. 3 . We are not back at the previous strength. Just one stock to watch, d. R. Horton. If though Goldman Sachs upgraded the homebuilders, it actually put a sell rating on d. R. Horton. Eurodollar, you mentioned what was happening with the bloomberg dollar index. You can see that reflected in the euro. Negative by 0. 4 . The relative growth story out of other side of the atlantic looking quite different at the moment. Weve had some bad german data today when it comes to manufacturing. Initially after the payroll number came out, we spike higher. We since faded that move here and the german tenyear. We are back to flat. Just went to quickly show you what is happening with the brent market as well. A big move over the last few minutes as we start to get details from the opec meeting. We are going to get a 500,000 barrel a day cut, but it looks like saudi is going to shoulder the bulk of that, which probably means this is more of a real cut than the market was anticipating. As a result of which, you can see that spike. Crude trading up by over 2 . Vonnie lets get straight to the jobs report with an unexpected gain of 266,000 jobs created. The Unemployment Rate fell to threepoint shot percent. A pretty good report overall. Lets get to tiffany wilding, pimco executive Vice President and economist. Data positive for u. S. Iconic growth . Tiffany thanks for having me, but i think this report was a strong overall report. The 266 thousand jobs added were boosted by gm workers coming back from a strike in november, but even if you adjust for those , underlying trends and job creation was really strong. We also had upward revisions to the back month. Overall, this was a pretty strong report. Vonnie im going to shift countries for a moment because we had an excellent jobs report in the u. S. In canada, a different story with negative jobs growth, so job decline for canada in november. We are getting the headline that the bank of Canadas Poloz is stepping down in 2020. Usdcad. Big spike for im curious as to your thoughts about the bank of Canada Governor stepping down. Tiffany im a u. S. Economist, so dont focuses much on canada, thecertainly trends in u. S. , as well as in canada, sometimes spillover. Going back to the u. S. , i think one of the interesting things we seen about this labor Market Report is just how strong the. Ervices sector is we were somewhat more worried because we also saw Service Sector net payroll gains decelerating. Even the revisions and todays strong report, that also appears to be accelerating in the u. S. So the u. S. Economy certainly appears to be at least gaining a bit more footing after some more worrisome data early this year. Ultimately, that probably will spillover to some extent to canada, but certainly i focus on the u. S. More. Guy can i rule out a u. S. Recession in 2020 . I dont think any economist would have rule out anything. If we look historically in any given year, theres kind of a 15 probability of recession. I think we would continue to say that that probability is still may be a bit elevated. One never wants to draw too much out of anyone payroll report. I think that probability is still somewhat elevated. We also have to remove her that although the economy has done pretty well, we also have u. S. Trade policy, which is creating some uncertainty. That has kind of ebbed and flowed throughout the year. There have been more positive development over the past several months. Certainly that could deteriorate a bit more and cause some issues in 2020. One never wants to get overly excited about one report. I would say the recession probabilities in 2020 are still somewhat elevated relative to historical experience, although a recession is certainly not our base case. Guy where is inflation . Why arent we getting it . Do you expect it at any point in future . The market seems to have completely ruled out the possibility we are going to get any inflation, despite what looks like not a hot economy, but a reasonably hot economy. Tiffany i think one of the most interesting things about todays jobs report is although average Hourly Earnings came in better than consensus was expecting, it still appears to have peaked. Earlier this year it was running around 3. 4 yearoveryear, and now it is closer to 3. 1 . We are clearly not getting an acceleration in at least nominal wage gains, and that acceleration, we are also not seeing that in the cpi, although there has been some more noise in the cpi because tariff increases are to some extent being passed through. There are some other idiosyncratic things in health care on, but Inflationary Forces in the overall economy look relatively moderate. One of the reasons why that is his weve had secular declines in productivity growth dampening nominal wages, as well as bargaining power. I think theres been some marginal bargaining power, but that will really take its time to work through and to higher wages. Vonnie tiffany, thank you for your time this morning. Tiffany is pimco executive Vice President and u. S. Economist. Larry kudlow is joining next. You do want to see this interview, particularly after this jobs number. This is bloomberg. welcome to bloom donovan welcome to bloomberg tv and bloomberg radio. Jonathan welcome to bloomberg tv and bloomberg radio. For news on the recent jobs report, we are joined by larry kudlow, national, counseling director. Is kudlow the key point america is working. America is working. It is the morer cynicism, the fact is the jobs numbers are actually Getting Better in recent months. Around,d 266 this time plus 41,000 revision from the two prior months, so that gets you above 300,000. Certain is despite a amount of pessimism, the economy is outperforming expectations. Economic policies from the president are working. America is going back to work. I just think that is crucial. You know what, jonathan . I cant remember who wrote the , my pal over at the Economic Institute anyway, america is a happy place when its working. I mean that. Placeerica is a cranky when it is not working. And i think as this new rebuilding of the economy with new incentives from taxes and regulations and energy and protecting ourselves on trade, as the numbers come in, as people come out of the woodwork, as the production workers are getting higher wages or faster wages than their bosses are anyway, all of these things, this is a country that is going back to work, and i think its a happier country as a result. Jonathan one thing you said there, protecting ourselves on trade. Are you saying that the current trade status is helping the u. S. Economy . Is there any reason to pull back these tariffs if that is the case . Mr. Kudlow well, we are in negotiations right now, as the president said in recent days. Constructive, almost roundtheclock negotiations. Doesnt mean hes going to sign the deal. He hasnt seen the final deal yet. But he basically likes what he sees, so we will see how that is. If you want to pursue that in a moment or two, fine. I have Something Different in mind, almost psychological. I think that one of President Trumps most important accomplishments in his first three years in office is to change and clarify the narrative on china. Usa, cannot, the unfair trading practices, either by our allies or nonallies. , innovation, invention, application. As you well know, this is the heart of the american economy. We have the freedom to create, and that freedom is what drives our economy forward at the fastest rate of any country in the world for all these years. So here is my point. His job, as he sees it, is to defend america, to protect the workers, the farmers, the manufacturers, the people working new technology. That is his job. When i say people are happy, i think the country has come around to the president ss narrative. We must be tough. We must be tough with china, and anybody else who thinks they can willynilly steal not just our technology advances, but our godgiven creativity. We cannot permit that, said the president likes what he sees. October 11, the president said, we have come to a deal pretty much, subject to getting it written. It will probably take three weeks, four weeks, or five weeks. That was eight weeks ago. What has the president seen . What has been agreed . Mr. Kudlow the president has seen everything. Strokes are not there. We are coming down to short strokes. Been there. Now some of the most delicate matters have to be adjudicated, analyzed, and evaluated, and it will be presented to President Trump, and he will take a look at it. As he said in london and he said when he got back from london, he thinks the talks are moving ahead very nicely. He likes that they are very constructive, but hes not ready yet to sign, or he hasnt seen everything he wants to see, so we are moving forward nicely, covering a lot of ground, and ive learned never to forecast the outcome. Ultimately President Trump is going to make the final call, as you know. Jonathan that is the story, but i am still trying to work out what has happened in the past eight weeks. On octoberrump said 11, a tremendous deal for the farmers. For the farmers. I would to just the farmers have to immediately go get more land and more tractors. What has been agreed . Was there ever any agreement whatsoever in october that involved 40 billion to 50 billion of u. S. Agricultural product . Youkudlow jonathan, as might guess, i am not going to be specific about these details. They are on the table. Ishink your narrative basically correct. I cant say yes and i cant say no. These are part of the final strokes. Not only agricultural spending, by the way, but also opening up so that we are able to export a lot of different areas they had prevented us from doing so. It is not my place today to these, shall we say, secret or closely held talks, but i will continue to suggest that we are close, progress has been made, great progress has been made, and we will see how it ends up. It is almost roundtheclock discussions right now. Jonathan but the president did reveal that eight weeks ago. I am trying to understand whether that is on the table or not. Perhaps not in such specific terms, has china shown any willingness whatsoever to agree to a dollar amount of u. S. Agricultural product . Mr. Kudlow i sure cant speak for them, and we have not papered you know, we have not codified and translated these lengthy documents, so we will have to wait and see. Ittakes to to tangoe, so ngo,s it takes two to ta so we will see. Im not sure whether it was your organization, somebody reported today that china withdrew some barriers to agriculture as a goodwill gesture. Im not sure on all the details, but if its a goodwill gesture, we appreciate goodwill gestures. Jonathan there any process of waving some telly a tory tariffs. That seems to be some retaliatory tariffs. That seems to be the story. Would your message to American Farmers be to go buy more land, by more tractors . Or should they wait . Mr. Kudlow as a broadcaster and wall street economist before that, we love to make forecasts. I am more cautious now. I dont really want to tell the farmers what they should and should not do. I am going to hold back on that just in case any of them actually follow my advice. I dont want to go there. Iam just saying that what believe the president was inferring is that the discussions that we had a month peoplego with the top forth, that we had those numbers on the table, and our Farm Community have taken theyve been defending this china trade effort. If they get it, they probably will be buying more equipment, and perhaps they should buy more land. I am not good at forecasting farmland. I have been to iowa. I have covered the caucuses several times. It is a lovely place, but i am not going to give them any free advice on how they should run their businesses. Pick up ok, well lets on december 15. If there is no phase one deal by december 15, and we are getting closer and closer to that date, what actually happens . What is the next step . Mr. Kudlow i wouldnt want to speculate on that. On the one hand, as secretary mnuchin said yesterday, there are no arbitrary deadlines in any of this. Hand, december 15 becausey important date if the trade negotiations or the deal or the agreement is not complete, our current law would restore tariffs on a number of items, as you probably know. I dont know what the exact number is. Maybe 150 billion dollars. So december 15 is an important date. There are no arbitrary deadlines, and we will wait and see. These, of course, are decisions that will be made by President Trump, depending on how the talks go between now and then, whether we have buttoned down all the buttons and whether it is a satisfactory agreement that is great for america. It is an important date to keep an eye on, but i dont want this morning with you i dont want to make any conclusions and i dont want to mislead anybody. Jonathan i appreciate that. Lets talk about process a little bit. Theres the december 15 round of tariffs, and there are the october ones that are suspended. With the next move from the white house be to look back at the october round of tariffs that were suspended, or move forward with the december 15 tariffs . How should we be thinking about this . Mr. Kudlow i dont want to speculate. Its all very hypothetical. I was kind of hoping you were going to grill me on usmca. Jonathan i was going to work through china first and get to usmca last, larry, so lets finish with china a little bit. Its not speculating, is it . To try and get an understanding of where the priority is. We look back to october, or is that done with . Or do we go forward with the december 15 tariffs . Mr. Kudlow look, its a day at a time. As you noted, we have certain markers in the process. Marker, butec unfortunately, all of that got canceled, so now we have a december 15 marker. As i said, there are no arbitrary deadlines, but on the by current agreement and law, the president has suggested tariffs might be restored on december 15. That is the arrangement. These are decisions that are up to the commanderinchief. He will make those decisions based on the available information, how the talks go between now and then what is today, december 4 or december 5 . So we have a little more than a week left. Willdent xi on the others go through the same process. One of the things i have learned, and you and i have been working on this together for more than a year, it is very hard to make predictions. Jonathan i dont expect predictions, just a little bit of insight and clarity into the discussions that you are a part of with the president of the United States. We want to understand the minimum condition that china needs to meet from the u. S. Side to avoid that december 15 round of tariffs. If it is not a deal, what is the minimum condition of success, so to speak, to avoid that . Mr. Kudlow i dont think that mr. Lighthizer has ever condition. Minimum we have a discussion of a package that we call phase one. Access, agricultural purchases, intellectual property technology, various tariff and nontariff barriers, ownership, financial services, currency, currency manipulation. I probably left stuff out, but that is the package that is being discussed. There are big chapters in these big documents, as i think you know. I do not a single one out. There is no certain condition. We will work toward phase one, and what is left to be done over time would spillover into phase two. I think it was a very sensible approach. It reflected a change in President Trumps thinking that he was willing to do this in pieces, sequentially, if you will, and phase two could well be out there. But i would tell you and advise you, there is no one single condition that would make or break the talks right now. Many people think perhaps that china is stalling. For the december 15 round of tariffs to be credible, there needs to be belief that the president will actually go through with this. 160s 15 on the final billion dollars of chinese imports that havent been hit from tariffs yet, and they include many consumer items, as you know. From your understanding, does the president have the appetite to follow through on that if the chinese keep stalling . Well, look, the president has proven himself. There can be no doubt that he is a hairy tough negotiator a very tough negotiator. Hes got in his quiver of arrows various tariffs, sometimes sanctions, now negotiations. He has proven to be a tough, canny, wiley negotiator. That is his style. I believe he wrote a book on it, the art of the deal, that you probably read. I read it. I dont want to predict what his moves will be. He will have the best information that our trade Principal Team gets to him, and he will sit down and think things through. I do not want to forecast that. But i think weve all learned that if he is not satisfied with these talks, just as he was not satisfied with the china talks last spring and summer, as you may recall, then he would not hesitate to increase tariffs. Hes shown that to us. Im not saying that is going to happen. Please dont misunderstand. Im just saying, in terms of your openended question, he has proven to be a very tough and wily negotiator. Jonathan what we have found is that when the president is facetoface with someone, that is often when we can get a result. When is the next round of facetoface talks actually scheduled for . Mr. Kudlow you mean with me . Jonathan with the United States and with china. With the president , with ambassador lighthizer, with secretary mnuchin. Does that need to happen again before we get a phase one truce . Mr. Kudlow i dont know the answer to that. At the present time, no plans are on the table between the two leaders. Regarding secretary mnuchin and ambassador lighthizer, so far as i know, they have no plans to travel, but they might travel. , i dont want to emphasize this too much, but i ,ant to put it into the mix, if underscore, you have an agreement, the two heads of state dont necessarily have to leastt or at simultaneously, in the same room. You could begin the signing process at the ministerial level , which i think on our side would be lighthizer and mnuchin. I presume on their side, vice premier liu he. You could do and admit a serial matter. You could do it as a president ial matter. You can do both. Theres options there. I feel i can say to you directly , none of those decisions have been made, and to quote President Trump, lets get a deal first