Todays cover story. She will have the latest on u. S. Government rules that could change the way we fly. We will have that story coming up. Economic conditions around the nation shows the United States still growing at a moderate to modest pace. Is that enough to get the fed to alter its row graham. The new beige book does not contain any major revelations on the u. S. Economy but it could bolster the view that the economy is gaining traction and could affect policymakers decisions on whether or not to scale back their asset purchases. From the feds 12 districts, early october to mid november, that includes the 16day Government Shutdown. Economic activity continued to expand at a modest to moderate pace. Manufacturing activity continues to expand in most districts. Reports on retail spending were deeper into the beige book, seven out of 12 strips reported modest growth. Tourism is affected in some districts. On manufacturing, the report says it continues to expanded most districts with gains noted in Motor Vehicle and technology industries. Many expressed optimism about nearterm growth prospects. There is also an upbeat assessment of consumer spending. Looking forward to the holiday season, retailers reported being hopeful and cautious. They were reported as moderate to strong. On the key question, what is going on in the labor market . The beige book reports hiring showed a modest increase. Difficulty with qualified workers for high skilled itions was frequently him frequently reported. Inflation was not a problem anywhere. The next big report for the fed to consider, the jobs report. Back to you. We will have more on the beige book coming out. Scott brown, chief economist will join us. We will get his analysis and what is next for the fed as the central bank enters into a new era. Today, president obama outlined his plan. The president speech and what it could mean in the coming months. Calling it the defining challenge of our time, president obama laid out broad plans. What was called a preview of the state of the union address, he called for a race to minimum wage and new investments in research and education. All part of an effort to close a gap that iss a increasingly large. They pose a fundamental threat to the american dream, our way of life, and what we stand for around the globe. Is an issue they have hit on before. Economic equality was the core of their attacks against mitt romney. Today, president obama made clear it would be at the core of his agenda for the remainder of his time in office. Whoited hope francis questioned a society driven by money and called on people to care more about the death of a homeless person than if the stock market went down. All of this has been laid out before. Major roadblocks on capitol hill. Republicans are concerned and have voiced it. An increase in unemployment insurance. A spokesman for john boehner said the president during his six years in office is as much to blame for anyone during the current state of the economy. Incomethan tackling inequality, he has focused on taxing some down. Clearly, no easy answers when it comes to this issue. Still, it is safe to say this will be a primary focus for the Obama Administration in the months ahead. Back to you. United States Military is facing more but it cuts. Hagel announced today that 200 positions will be eliminated from the office of the secretary of defense, but he said there will not be a large number of immediate layoffs. Reductions that i have announced today will occur through a process of natural attrition in order to minimize the impact on our workforce. If the department is forced to one steep sequestration cuts the order of 500 billion, we may need to implement additional reductions. Hagel adds that cuts will save about 1 billion over time. Coming up, the fed says factories are giving the u. S. Economy a boost but the latest beige book data is out. We will look at what else is expanding when bottom line on Bloomberg Television continues in just a moment. Collects welcome back. Lets show you how the equity markets finished. Stocks fell for a fourth day. The longest him in 12 weeks. Investors weighed Economic Data for clues on the timing of Central Banks stimulus cuts. Also watching for new developments in a possible budget deal in washington. Now lets get to the numbers. The market index was down two points. At the Dow Jones Industrial average was down 24 points. The nasdaq composite was up 4038. Onally at the beige book. The central bank credits housing and technology for fueling growth through november. We are joined from his office in st. Petersburg florida. Welcome back to bottom line. Good to see you again. Nice to be with you. Any surprises in the report . Not really. I think we were focusing on what the key headline phrase was going to be. They had used this phrase, modesty oh moderate growth for the previous for the beige book. This is now five in a row. The messages essentially that it is more of the same. Gradualoing to be a recovery. Year, i think the biggest headway has been the federal government. The economy has certainly been once we gethere it beyond that, we do expect the economy to pick up some steam here. If the government to get out of the way, maybe this thing with take off area i think there has been a huge miss focus. N the budget deficit it is really a longterm problem. The key thing you want to do right now is get the economy back on its feet and coming along. You are actually slowing that recovery down. I think it is just misguided policy. We do not expect that to last forever. We are also saying state and local government coming back a little bit more. That may offset the track were going to get. You just mentioned that modesty oh moderate phrase. As you mentioned, the last four days books contain that wording. Should we read anything into that . What does it say about the growth expectations Going Forward . We have seen the fed consistently lower their projections. They have been more realistic. Anticipating that growth will pick up, the key issue for the fed, and particularly with a new fed chair coming in, janet yellen is going to be preoccupied in this guiding and deciding when to taper and how rapidly to taper. More important like, how to communicate detentions to the markets. Landly, the asset purchase cannot go on forever. It has to begin to taper at some point. The fed is still going to rely on the shortterm Interest Rate to support the recovery. The markets have not gotten the message. The markets started tightening. Longterm Interest Rates decided to rise more. Speaking of message, the beige book showing that consumers increase their spending in most regions of the United States. Spending on black friday, that theyll. How do you reconcile this seeming disparity, especially with retailers having to offer steep discounts to get into the stores, only been to see them have second thoughts and not open up their wallets . The consumer has been a real mixed bag this year. End oflook at the upper the income scale, they have money in the bank. Large houses. The stock market gains in the last couple years, the improvement and home prices, that has made them feel wealthier and they have been spending a lot more. The typical worker is running as fast as they can to stay in the same spot. We had seen very little growth. You heard the president talking about it today. You heard the pope come on with a strong statement just a couple of days ago. I think this inequality story will be a major issue for the country over the next year or so. Fast food workers in cities around the country are going on strike for increased wages. What clues does the report give about the state of the labor market then . Hiring had increased modestly. That is not what the fed is looking for in the job market. For the last couple of years, we have seen job destruction economy going relatively low. When you add all of those up, that trend is remarkably low. In a newissue has been hiring. We really will look to the smaller, newer firms to account for the job growth. Those firms are still very much credit constrained. Hiringould help the situation over the course of 2013. We have aut one minute left. On friday, as you know, we get the number four november. What are you expecting . If we see another strong month of hiring, might the fed be introducing at its next meeting . Certainly some strong numbers could lead the fed to taper. It depends on how strong. You have a lot of seasonal issues going on with the labor market because of the Holiday Shopping season. You normally lose 2. 5 million to 3 million workers. Due to that end of the Holiday Shopping season. The numbers can get a bit distorted. There may be some weather affects. The tapering is coming. It is really a question of when. Scott brown joining us from his office in st. Petersburg florida. It is always a pleasure to have you on the broadcast. Thank you for your time tonight. When bottom line continues, you know that person next to on the plane that wont stop talking to you . Imagine that they could talk on their cell phone for the entire flight. To agencies,at how the fcc and the faa are deciding what this could mean for the public. You will want to stay tuned for thats next. Welcome back. This is bottom line on Bloomberg Television streaming on your tablet, phone, and bloomberg. Com. Maker ofinas largest phone equipment is pushing back against u. S. Scrutiny of a south korean contract. Roddare poised to provide band equipment for that u. S. Ally. Megan hughes has the details from washington. Last month, Regional News huawei wasported that work with south korea. A spokesman said, our dear is worldproven and trusted, connecting almost one third of the worlds population. The motivation of those that might report otherwise are punishing. Who raised the concern . Senator Dianne Feinstein and senator Robert Menendez who was on the committee of Foreign Relations. Last week they sent a letter to chuck hagel, john kerry, and intelligence director james clapper. s said that hauwei involvement could increase risks andthe u. S. Korea alliance that the Telecom Infrastructure is critical there. This also comes at the same time Vice President joe biden is including stops in both asia and south korea. The white house has not responded to the letter but it could come up in meetings. As for south koreas response, it was actually a subsidiary of seoulbased lg. Says the value of the contract has not been determined and they havent considered ending the contract because of u. S. Concern. All theyre getting from the company is equipment and they will have no access to network operation. The back to you. Also tonight, Vice President biden and the chinese president met in beijing as tensions over chinas decision to enforce a rattled thense zone region. We have the details. Vice President Biden did not directly address chinas air defense zone after his meeting but there was little else people in the region have been focused on. They are in the midst of walking a diplomatic tightrope. It is something biden made clear as he sat with xi after the meeting. Call complex relationships for sustained a highlevel engagement. That is why the president of United States asked you to be here. U. S. Officials say behind closed doors biden laid out the Obama Administrations objections in detail and called on him to reduce the tensions. It is acial said territorial dispute in the region. He was going to hear biden out. What he decides to do it that remains an open question. Shred ofng came with a positive news. It came from the chinese government. An offer to set up Communication Channels between china and japan. It would be a shift for the japanese who have refused to acknowledge the air defense zones existence. What continues to suck the oxygen out of the broader economic agenda, both he and xi expressed the view that 2013 has been a positive year. Biden, in his public remarks able toar that they are solidify the relationship and the possibilities are endless. The need for trust and the relationship is something from the Foreign Relations committee that was reiterated multiple times in his statement. Consequentially bilateral relationships that will play a significant part in affecting the course of the 21st century. From air defense tensions to flying the friendly skies, the federal Communications Commission is considering new could allow you to phone a friend while up in the air. Bloomberg has more on that story. Week, couldas next follow the lead and give the green light to a wider use of smartphones on flights. The proposal brought forward would allow passengers to make cell phone calls, send text messages, and use other mobile services but not during takeoff and landing. Consumerwould expand access and choice for inflight mobile broadband and modern technology can deliver mobile services in the air and the time is right to review our outdated and restrictive rules. The current dan dates back to 1991. The sec proposed modifying the and with little success. We will give it another go at their next meeting where if approved, it will be open for Public Comments followed by rule making. It is unclear how quickly this will all happen. Higher demand could lead a faster response. We are more attached to mobile devices now than we were a year ago years ago. Is it still up the discretion of individual airlines . That is right. That is the big question. The debate is not about technology but politics and pushed back. Delta airlines have said they are leading against this. A survey of customers found that 64 found the ability to make on board calls would have a negative impact on the flight experience. Flight attendants unions have said they are opposed to the idea. Hen tom wheeler said preferred not to hear his suit made on the phone but because there are no technical reasons to continue the ban, he wants to leave the decision up to the airline. Thank you. Coming up, ironic its ready to return to the International Oil market. Gets ready to return to the International Oil market. In just a moment. Welcome back to the second halfhour of bottom line on Bloomberg Television. Thank you for staying with us. As we hit the bottom of the hour on this wednesday, december 4, the slugall street start to the mug. The losing streak in two months. Adp reporting u. S. Businesses last month added the most jobs in the year. Down a little more. The Dow Jones Industrial average falling as well. State kerry will present the outlines with palestinian leaders this week. The proposal will mark the first time that kerrys directly intervened in the talks since they began in late july. A wintry storm pushing through the rockies brought victory cold temperatures. It threatens crops as far south as california. The storm is blamed for at least six deaths. Of the windchill was expected to drop to 30 degrees below zero in parts of montana while wind chills of 20 were reported the nebraska panhandle. In the denver Area Temperatures were expected to drop below zero over the next several days. Online shopping went to a record on cyber monday. Many consumers snubbed physical stores and took to the web to buy holiday gifts. Internet retail sales rose to almost 2 billion. At that committed the heaviest web spending day ever for the fourth straight year. Almost 24 billion has been spent on the web since november 1. That is an 8. 4 gain from the same time frame 2012. That is a look at the top stories this hour. Join us for a special bloomberg west this friday. We will show you how you bay has evolved from an Online Auction house to a tech giant, surviving and thriving after the tech bubble. Do not miss it. U. S. Crude inventories declined for the first time in weeks. Closed at 97. The spread between wti in brent was at its narrowest in nine days. Opec is content with these prices and has agreed to maintain Oil Production at current levels. Bloomberg is in the end that with highlights from opecs latest meeting in the commodity report. With the price of crude in north america, the bti surprise that the opec decided not to cut production today and keep things how they are. Going or word, things might be very different. Demand for opec supply is set to least as a few of the producers intend to produce more oil in the coming future. Perhapserestingly, iran. The Biggest Development at this opec meeting is iran returning as a potential big player in the oil markets. That is not to say the minister was Walking Around with any kind of swagger. That sanctions might be removed and iran could reenter the oil market in a big iraniansmean that the could talk to International Oil companies about how they do that. In fact, they are already preparing. International Oil Companies bp, conoco phillips. Tothey also sent a signal saudi arabia today, asking it to make room for iran should iran reenter the oil market. Interesting, considering they are archrivals in the gulf, in fact on opposite sides in syria. Will arabia says it welcome iran returning to the market. Iran says even if other countries do not cut production, they will ramp up theres two 4 Million Barrels a day. That is a lot more than the market is getting right now. Still ahead, ford is giving the Police Cruiser a facelift. Police interceptor is the fastest cop car on wheels and incorporates bulletproof armor that could withstand a hail of