Picture of a u. S. Economy still broadly expanding but not in overdrive will stop the retail sales number will be interesting, given what we saw earlier today. Anecdotal evidence suggests overall, National Economic activity continued to expand during the reporter reporting time from november through december with most districts reporting a moderate growth. Dallas reported that growth slowed slightly. Many are talking about the effects Lower Oil Prices could have Going Forward. Consumer spending increased with most districts having modest gains in yearoveryear sales stop thats not consistent with what we saw this morning in the actual numbers. Slight to modest gains reported in austin dallas and philadelphia. Boston, dallas and philadelphia. Moderate to strong growth travel and tourism picked up broadway was a bright spot for new york, up 10 in terms of ticket sales. Manufacturing activity expanded most sectors but Real Estate Sales and construction were largely flat across the districts. Commercial real estate expanded. Demand for Nonfinancial Services varied widely but growth was moderate. Demand for business and Consumer Credit expanded. As for labor market conditions, labor and inflation, all important factors right now, payrolls in a variety of sectors expanded moderately. Significant wage pressures were limited to workers with specialized technicals gills technical skills. Jobs increasing, no real wage or inflation pressure reflected in the beige book. That is what janet yellen and her colleagues have been looking at. Anything in the beige book that might move the feds liftoff date . Nothing i can see it here that will surprise them or alter their outlook as they continue to watch what is happening with the data and Inflation Expectations and of course what is happening with wages. The numbers we got this morning on retail sales were a disappointment. The anecdotal evidence suggests Something Else is happening out there. My guess is they will put more stock in the actual numbers they got this morning. What about investor anticipation of what could come . Scarlet fu is at the breaking news desk with the fallout in the financial market. Good afternoon. Even before the beige book, we had the selloff in what he as investors anticipate what is to come. Remember lets show you whats going on here. This is the dow, the hype watermark came at about 10 15 a. M. Since then, it has been downhill. Supporting losses of at least 1 . For the s p 500, this is a onemonth low. For the dow, 28 out of 30 members lower. The worst performers are jpmorgan and Goldman Sachs which has yet to report earnings. We looked at whats going on in the commodity complex. One big disappointment was the drop in oil prices and gas prices has not translated into increased spending. Nevertheless, we see oil prices recovered just a bit here. Copper has taken the baton from oil as the commodity in focus, down more than 5 as investors fret over a weakness we might be seeing in china this year. The world bank reduced its gdp forecast for china this year. We also see a recovery in gold up about 4 this year. And we have to mention bonds will stop there is a rally taking place with yields hitting a record low today. Yields for government bonds in u. K. , france and canada all hitting record lows. Scarlet, thank you. The fixed income strategist at Janney Montgomery scott in philadelphia joins us today. Welcome back. Good to see you again. The beige book notes most districts reported a modest to moderate paced pace of growth. What does that mean for sustained momentum Going Forward in light of todays week retail Sales Numbers or december . I dont have a count in front of me of all the time the fed has described headline growth as modest or moderate, but thats the only phrase i can or member them using throughout the last couple of years of this economic cycle. By the qualitative measures the fed uses, it seems Economic Growth is trodden is chugging along relatively stable he. That seems like a contrast with what we saw in the retail Sales Numbers. We expected the wall capacity to open up from lower gas prices to go into gifts for the Holiday Season data indicates it did not. Manufacturing activity expanded most districts. Will that translate into higher wages for middleclass employees who make up the oak of the manufacturing workforce . Keep in mind manufacturing here in the u. S. Is less than 15 of all employment. In truth, even if wages do rise it only represents a portion of wage increases. Its not going to hit a large swath of the consumer economy. At some point, you are just running out of workers to hire so that requires wages to be able to improve for Consumer Spending to rise. Thats the question right now we dont know workers are generating enough productivity for a one or two or five year horizon. The beige book report demand for business and Consumer Credit grew and overall low demand saw a slight increase in a richmond kansas city, and dallas districts. Will the employment numbers we are seeing me more americans will be able to access credit this is one of the great ironies of the poster session era policymakers were criticizing banks for not opening up credit spigots, but what we have seen is consumers and businesses have not been demanding credit to the same degree they did in the prerecession era. Perhaps it was the first time borrowing came back to bite them. The Banking Industry remains slow to moderate but there are some bright spots, for example auto sales. 39 consecutive months of increased borrowing under the Federal Reserves credit index for auto loans. Thats a strong bright spot in the shortterm. Lets circle back to decembers retail Sales Numbers. They missed by a wide margin. Were you surprised the weakness was evidenced across a wide range of meaningful categories . That is quite surprising. Categories like Building Materials dont usually fall into the holiday gift category. Who gives their mother lumber for christmas . Nonstore retailers and online retailers also negative numbers. The broadbased nature of that weakness is troubling. That said, its only one months a to point. We talk about consumers wallets opening the cousin of lower prices, but it only happens with 10 or 20 over a fill up. Im still hopeful consumers will see some increased spending as gas prices remain low. I would be remiss if we did not take a turn overseas. Are the headwinds in europe is facing, particularly as the discussion among mario draghi and the ecb is is that going to make its way to the United States . Will that headwind causes trouble . Our base expectation is that the ecb underwhelms will stop in order to get quantitative easing push through, mario draghi has to sacrifice to the point where its no longer effective will stop no longer effective. What the dollar is doing right now, rallying versus major currencies, thats creating a headwind from these international slowdowns as we import deflation back here into the u. S. Back here into the u. S. Thank you so much for your time. We appreciate it. Have a great afternoon. Still ahead, the u. S. House of representatives moves on changes to the doddfrank law. And still to come, retail sales did not see a santa claus bump. We will tell you why when bottom line on Bloomberg Television continues in just a moment. X is president obama and the republicans are going to get anything done this year, one man who can help us tom donahue. As the ceo of the u. S. Chamber of commerce, he may be the most powerful lobbyist in washington. In a speech today, he spelled out the chambers priorities were 2015 and afterwards, he sat down for an interview with our chief washington correspondent, peter cook. We are having a technical issue. We will get to open we will get to peter cook in just a minute. Bottom line continues in just a moment. As i mentioned before the break, we had a technical problem. Heater cook sitting down earlier today with tom donahoe, the ceo of the u. S. Chamber of commerce. He outlined in his speech today the chambers priorities for 2015. There is a lot of talk about what can get accomplished with divided government in washington. Is this going to be a wasted year or can you get something done . Historically, divided government has been able to be productive. Look at the election that just happened a fun little change was driven by the fact that the American People wanted competent government and people who would Work Together to solve their problems. If you look at what 2016 looks like especially in the house if they fail to do that, it would be a not very satisfactory election. I believe the house and senate will Work Together with the speaker and majority leader in a way that will cause more things to happen. That doesnt mean we are going to do huge things but they will get stuff done that will show progress. So much talk about business tax reform, the areas of agreement, this white house and congressional leaders is this too heavy a lift . I dont think with the president ial race on top of this, with the lack of experience among those in the congress before we can do to before we get into a president ial election, theres no way we are going to get it done. You can do a lot like change the tax on medical devices and do things to prepare to do this in 2017, but remember, the Business Community is blitz on tax reform. Are you going to be a haute or hundreds here . We are going to be a help. Theres a fundamental difference between the Business Community and white house. The white house have articulated the view they want a tax reform deal that gives them a trillion dollars in tax greek in tax income. This is an area where you can bring to bear to help this president. Is he going to get trade authority . Absolutely. Hes already arranged to send the cabinet around to talk to people. They are the biggest problem, its his own party and the labor issues have blinders on and this could create massive jobs for them, but he will get it and the trade rep is doing a great job. I think we are really close to having an agreement on the pacific deal and weve got in short order, a couple of years weve got to get the atlantic thing because the european economy is in the can and they are our largest broadbased partner and we have to help bring them up. What is your take on the highway funding bill . Will we see a bill that can pass the senate and house . Particularly an increase in the gas tax . Youre going to have some sort of bill because if you dont fund the Highway Trust Fund in one way or another, you are going to put a lot of people out of work and you are going to cause more accidents and congestion and we have a real problem here. It is an opportune time because the average gallon of gas is down to a dollar 45 or a dollar 50. A time or two dimes there, if you index it to inflation, do you think there is the political will for that . X all that is needed is a little courage. We havent done it in 20 something years and its a two day story. The truckers, the aaa, the Business Community local communities, they all want this done because 50 of building a roads federal funds and the other 50 is divided between the state and local community and they are going to put their money in the bank if we dont show up with hours. You talk about economic populism in this country. How big a threat is that . More specifically, how are you with Elizabeth Warren and the popularity shes enjoying right now . Elizabeth warren is a nice person. She has a fundamental view we this agree with. Fortunately most americans dont agree with her. She thinks the government should own and manage the country. Thats a simple way of talking about populism. I want us to be aware of that and deal with it and i want us to put forward the system that has worked to build the greatest economy in the history of the world, and thats an enterprise system with an appropriate engagement of government. It seems like the 2016 campaign has begun in earnest. Is that going to impose a problem for getting stuff done here . The campaign started early. It wont make it easier but it wont take away the reality that 24 republican senators are up for election in 2016 and only nine democrats. It wont take away the reality that americans send people to the house and senate this year with a very clear mandate do something to Work Together to fix the problems or we will put somebody else here. Thanks for the time. Our chief washington correspondent, peter cook, joins us from washington. Mr. Donahue talking about engagement and government. Is he optimistic about the year ahead . He sounded optimistic today both at his speech and in his comments to me. There will be some big disagreements but the few areas of potential cooperation between this president and congress are areas where the chamber is on the same page. Getting trade Promotion Authority for president obama, thats something the white house wants to see. Other issues out there, and other big push could get done and they could be a bridge elder. He could be a critical player in washington. Also in the nations capital, house of representatives has passed a bill to soften doddfrank, the landmark law raining in wall street. The measure now goes to the u. S. Senate where it will face strong opposition from liberal democrats like senator Elizabeth Warren. Phil mattingly tells us that president obama is sharpening his veto pen. Sharpening his right thats a number of veto threats weve seen in the first two weeks of the 114th congress. The president has vetoed a total of two bills in his six years so far. What we have seen is an array of bills coming out of the Republican Led Congress including things like the keystone pipeline. Todays bill was a big vote in favor but its missing two thirds of the house. Thats what it would take to override any veto. As of now, does look like this bill, even though it moves in the senate, will find any type of law. Has the white house influenced any vote taking on the floor . There is no denying that when you talk to white house officials behind closed doors that Elizabeth Warren has helped elevate this issue. For a long time since the law was enacted, wall street reform was not the primary focus of anybody in town. Elizabeth warren has changed that was powerful floor speeches in making this a major issue right now. The white house is not only forced to listen to her but take action based on what she wants. Coming up, retail sales in the United States slumped in december. We will take a look at last months broadbased retreat and get an outlook for the Retail Industry in 2015. Stay with us. Bottom line continues in just a moment. Welcome back to the second halfhour of bloomberg bottom line. Lets get you an update on the equity markets. Seeing an uptick this afternoon the Dow Jones Industrial average is off the session lows, down about 1. 25 a 220 point drop for the dow. The s p is lower and the nasdaq down nearly three quarters of a percent. Time now for the commodities report with my with su keenan. We are seeing as what can only be described as insane losing energy. What one veteran trader called insane. Oil is up 5 after being up 2 . Lets start with natural gas. You see a doubledigit climb. Chicago is the heart of the cold weather market. Only three degrees earlier in the month. I called steve swartz who said what we are looking at is a shortterm imbalance. A light of private urologists saying Colder Weather is ahead not just at the end of the month, but in february. You have a lot of traders shorting gas betting it would go lower and now they are turning around on the wrong side of the market and buying big time. Now its go to the other Energy Market because you see a similar pattern play out. Oil actually down, right at the 45 mark. So was the rest of this market happening right as we head to close without any major headlines. They say had gone down to far too fast. Those who were short betting meal complex would go lower are buying back in a big way. Lets go to metals because you see major moves there with copper leading the way down. It hit a six year low with Lower Energy Costs combined with negative Economic Data in china is driving the move. Commodities had sunk to the lowest level in more than 12 years. That may have been a contrarian signal for many to buy now. Where do we go from here . Its difficult to say. Goldmans top analyst was talking about undershooting to the downside. Goldman said 39 is where they might go, now they are amending that. Opec has lost market power in one of the key reasons is the supply curve for shale is incredibly flat. Its like producing paperclips. Opec took oil off the market, production would go up. A lot of questions on where the direction is right now but its going to take a while to settle. A big, big day. Thank you. Retail sales fell in december by the most in almost a year. Why the National Retail federation says overall Holiday Spending rose 4 , the december report raises questions about how much lower gas prices can boost the u. S. Economy. Julie hyman has been talking to economists and they have some explaining to do. They do because they really got this wrong. If you look at the number including the effect on gas stations, its down. 4 , but the surprises when you back the numbers out. You still