tv Bloomberg Markets Americas Bloomberg April 6, 2018 12:00pm-12:30pm EDT
>> jobs numbers disappoint. who can and his appoint -- anticipate what comes next in the next world words because that's between washington and beijing? whether economic growth could be headed in the wrong direction? the united states take sanctions to the next level, going after some of the biggest names in russian biggest personally, including the man said to be vladimir putin's favored industrialist. ♪ vonnie: we begin -- >> the economy adding 103,000 jobs in march, missing estimates. the unemployment rate holding
steady at 4.1%. average hourly earnings rising by 2.7%. a jobs report that fits the fed's slow and steady model. is diane swonk of grant thornton. and carl riccadonna. this just pay back from the strong jobs growth in february? >> more than that, lousy march whether. we saw 700,000 workers who had to work part-time instead of full-time because they literally could not get to work. you saw the effect in the seasonally adjusted construction falling by 15,000 after rising by 65,000 the previous month. not that construction projects are not out there, it is booming, but they could not get
the projects going as retailers were also idle. leisure and hospitality slowed in terms of hiring. all areas you would expect to see with lousy march whether. hours worked came down. shery: disappointing for the month of march. it did pull down the three-month average when it comes to payrolls. the six month and 12 month moving average are still rising. how significant is this? >> not very significant, i would -- i agree with what she just said. the weather curtailment, i am tracking one million workers having shortened hours compared to normally 300,000 in the month of march. clear evidence. even despite these issues with the work hours, if we look at aggregate income created, workers times hours times average our earnings -- we see a written improvement -- we see an
improvement. a lot of fuss about weekend consumers spending and the first ,uarter, but the paycheck trend that is accelerating to the highest since early of 2015, telling us consumer spending may have disappointing in quarter one. it will come back in the second quarter. here, march tens to be a disappointing meet and it meant that expectation by disappointing and we will get paid back in april. david: before we move on, part of the reason we spend time and attention on these numbers is because we look at how the fed might look at them and may it affect their decision-making? anything behind the headlines that might communicate to the fed they should go faster or slower than what they think they should do? >> they will look past these numbers and the noise and the data, underline average hours went up from one year ago, an update from february.
everyone i talk to in terms of ceos at every level of the economy in the last several weeks they have seen a market shift. a mass shift of the trifecta for the labor market. they are doing signing bonuses and increasing wages and complaining about coaching. -- about people stealing their workers. we have not seen this trifecta since the later part of the 1990's. we will see the data come back as we come back in april and may. that will set us up for a june rate hike. i am on my way to see jerome powell speak in a little bit and i think he will keep his cards close to the best because he does not know how to deal with the uncertainty regarding trade. the fed is on track, i think, for four rate hikes. david: youlet me -- let me to my mass -- next question about chairman powell and trade, the world towards
between beijing and washington, 200 extent should the fed -- to what extent should the fed be taking in account the possibility of difficulties on the trade front? >> they already are, he acknowledged in his press , around thehe said table, people were getting reports of concerns about what terrorists could mean and what a trade war could mean. we have not settled nafta. it is looking better. last week, it looked worse. this uncertainty is not good for businesses who do not know how to plan on the trade situation. it is leaving markets all over the place. the fed cannot do anything about it until they have something concrete to react to. the fed chairman has to acknowledge the concerns he is hearing. he is in a tough position, moving from a time where rate hikes were normalized and nobody cared, to where they may bite, where the fed is the disciplinarian.
that is never welcomed in washington. a challenge for jerome powell, he will want to keep his cards and say lessvest rather than more and a knowledge it is a concern. shery: we see treasury yields been suppressed because of this investor anxiety over trade tensions. if hiking rates risks and burning the yield curve, can the fed continue to act? >> sensitive to yield curve inversion, we have heard that from recent comments from the philadelphia fed and elsewhere. powell comes from the private sector and understands the importance of the steepness in the yield curve to private sector banking and does not want to add that problem to the banking sector and credit extension in the economy. if we are really dealing with a flat yield curve, that could keep the fed from executing the fourth rate hike she mentioned. and in the three hike camp
the key will be trade and currency movement. we have seen economics of price indexes for europe rolling over. that is largely payback for the strength we have seen in the euro. if europe starts to back off, that will by default make the dollar appreciate, a stronger dollar than the heavy lifting for the fed. i think they will debate that fourth rate hike but i suspect financial conditions may delay that into early 2019. forecastw much of your -- how much are you making in the tax stimulus package that is supposed to trickle down into the economy anytime soon? >> we are looking at the tax deal, the finance tax cut, the tax reform, and the increased spending that we are seeing in the fiscal year 2018, which has to be set quickly, to add .5% to overall growth this year. about the same next year.
the tax cuts are the smaller part of that. the bigger part, because of the near-term boost from all the spending to get out of the door between now and september 30, is larger. we are also watching, if they do not extend, i expect they will, the increase in spending for fiscal year 2019, with stops on september 30, 2019, they could facilitate an immediate recession in the fourth quarter of 2019, highly unlikely into a 2020 on that can year. -- election year. we are issuing a lot of debt. trying to shrink their balance sheet, ever so slowly. those things together could shift the direction of the yield curve as we get into the year and issue more treasury debt. david: thank you to diane swonk and carl riccadonna. a programming note, jay powell will speak at the economic club of chicago at 1:30 eastern time.
we will bring you those remarks to live on bloomberg tv. markets are falling today, here is abigail doolittle with more. >> we do have declined for the major averages on this friday. dow, s&p 500, nasdaq off roughly lower with the s&p 500 and the dow down 1% or more. the nasdaq is outperforming a little bit but still with a decline. lots of fears around the possibility of a trade war as rhetoric steps up between president trump and china. a disappointing jobs report, not helping the picture. on the week, looking at weekly declines for the s&p 500 and the nasdaq, the dow is on pace for a small weekly gain. a few more hours of trading. p, s&p 500,the ima all 11 sectors are lower and industrials, not surprisingly, some of the days -- industrial
names, biggest, boeing, down, caterpillar, down. financials are lower as rates are falling. health care, utilities benefiting from the fact that rates are falling. the dividends look more attractive when yields are falling. the kleins for all of the sector -- decline for all of the sector. they were stocks in the s&p 500, apple and berkshire hathaway, the two worth -- worst stock from a point drag, nothing new on either but investors not sharing the possibility of this trade war for apple, a lot of their revenue comes from china ad berkshire hathaway is broad measure of the economy in some ways and investors not cheering this news. kohl's is down 3.2%. based, wedomestically
will look into that more. they risk off picture, something very interested, a two-day chart of the 10 year yield, yesterday, we had a relief rally for stocks on the haven bonds sold off. in verse two yields. overnight, on the stepped-up trade war rhetoric, a safety for the 10 year yield and bonds. we see that happening, down on the day i five basis points, confirming the idea that the tone for equities is risk off. shery: yields getting suppressed. thank you. coming up, the u.s. put sanctions on vladimir putin allies. we are live with that next. this is bloomberg. ♪
shery: this is bloomberg markets: balance of power. i am shery ahn. david: i am david westin. >> the european union says facebook has pulled up to 2.7 million people in the 20 nation bloc may have been affected by the data privacy crisis. and eu spokesperson says facebook confirmed that number in a letter. >> it is already clear that this will need further follow-up discussions from facebook on the changes. on the new european data protection rules and broader questions on the democratic process. >> the eu commissioner and facebook coo sheryl sandberg plan to speed by phone next week about how to strengthen data protection. in the u.k., the poison former russian spy is no longer in critical condition. doctors say he is responding well to treatment and improving
rapidly. the british government has accused moscow of being behind me nervous and poisoning on him and his daughter. former south african president jacob zuma was in court to face corruption charges. 16 charges of fraud, racketeering, and money laundering were recently reinstated after being thrown at nearly one decade ago. after the defiant hearing and told supporters that the case against him was politically motivated. in south korea, their first -- former president has been sent its to 24 years in prison, and pizza last year over an influence -- in each last year over an influence and was convicted of bribery, leaking of state secrets, she can appeal the sentence. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. i am mark crumpton. today the united states
impose new sanctions on russia, straight going after individuals close to vladimir putin. including the billionaire industrialist who has a link to paul manafort. joining us from moscow is gregory white of bloomberg news who leads or russian economy and government team. has there been any reaction from the russian government to these new sanctions? >> limited so far with a few complaints from members of parliaments saying these are unjustified and unfair. the russians always have a muted response when sanctions come out because the public line is that sanctions do not affect them. they cannot complain much in public when new ones are added. marker response has been stronger. u.s. addedus on the several publicly traded companies the oligarchs is connected to. stocks wereme
popular among foreign investors have been targeted. a number have taken a beating in the market as investors realize what it would mean to have them cut off from doing business with u.s. companies and banks. that is fueling greater uncertainty in the investor community and among oligarchs and likens. -- tycoons. shery: they cannot react strongly but on the ground, what have you seen in terms of an economic impact from previous sanctions, and what do you expect this will do? >> the impact of the sanctions is hard to measure because it coincided with the beginning of the sanctions with falling oil prices. that has a bigger effect. it through the country into recession. the recovery has been slow and recovery -- sanctions having an economic drag, depending on who you believe, they could be 1% or
2% of gdp, if it cuts off access to finance and technology. as the latest sanctions show tensions are getting worse and not better, that is not going to begin for the economy going forward. david: assuming that the west is right, going after individuals close to vladimir putin is the way to put pressure on him. how important is the multilateral pressure? whether the u.k. should be going after more oligarchs who have property in london. >> that is a tough question because the strength of the early sanctions were right after the you can crisis in 2014 and 2015 with the europeans -- ukraine crisis in 2014 and 2015 and u.s. health together with his european allies, the trump demonstration has done sanctions on its own more. it makes it easier for the russians to try to find space in europe and intentionally friends that way. the pressure is substantial because this misses wanting to
work with the -- businesses wanted to work with businesses on the sanctions list, a big burden. shery: last time u.s. expelled russian diplomats, the russian did the same and expelled american diplomats. when there are new sanctions against russia, what happens and what can we expect from the kremlin? >> tough for them to come up with the retaliation like they do with diplomats because there are not any big american businessman that they could target for sanctions. sometimes, they have threatened other moves, cut off cooperation in areas they think things -- where they may have greater leverage over the u.s. eris -- areas of cooperation in aerospace and agricultural markets where they have tried to cut off trade or restrict it to put pressure on the u.s. they do not have the leverage the u.s. does as the center of
♪ shery: this is bloomberg markets: balance of power. i am shery ahn. david: president trump keep saying how much he believes in the pa chief, even as ethical questions mount. do yousident said, believe that the fake news media is pushing hard on a story i will replace jeff sessions with scott pruitt who is doing a great job but is totally under siege. do people really believe this?
so much of the media is dishonest and corrupt. we welcome our bloomberg colleague who has been covering the scott pruitt saga. i will assume you are not part of the corrupt media. you can report the truth. what is going on? seems to be a fight within the republican party about what he should do. >> absolutely, at least three members of congress -- republican members of congress suggest he should be ousted. hearing atrump is divergence of opinion from his own advisors in the white house. people who are concerned about the barrage of headlines surrounding scott pruitt. by all accounts, the president is among those who is concerned about the headlines. and the criticism his epa chief is facing. shery: give us some of the details. it is hard to keep up at this
point. >> absolutely. much of this started last week when we first learned that the epa administrator had rented last year an apartment on capitol hill, a bedroom about one block from the capital building. from a prominent health care lobbyist whose cousin is an energy lobbyist and his firm had some clients with matters before the epa. that was the disclosure last week. this week, the hits kept on coming. the biggest report and the most meaningful are reports that the epa listed the salary of two of his aides by tens of thousands of dollars over the white house objections. who criticized him were encouraged to move to other jobs or move to other jobs. continuing concerns about his travel which have been the focus for months. david: what is going on?
this is not the only cabinet official who has gotten into trouble. something called the ethics in government office where you can ask where you can do these things, is anybody paying attention? >> absolutely, quite a few folks paying attention. this has got a lot of scrutiny from people on the left. in the white house, there is a concern about the job performance -- about these ethical concerns, contrasted with the job performance. even with the presidents tweet, praising scott pruitt, there are some distinction between the fact that the president and there is white house officials, and even conservatives, support the job and the work scott pruitt is doing at epa to rewrite obama era regulations governing climate change. there is still ongoing concern about the ethical issues, the appearance of conflicts of interest. that does not go away, even if they are happy with the job performance. shery: thank you so much for
that update. coming up, sheryl sandberg goes on a media blitz after facebook admitted the number of users impacted by a cambridge analytica was higher than initially indicated. how the company is reacting ahead of mark zuckerberg's congressional testimony. gaining 2/10 of 1%. -- facebook gaining 2/10 of 1%. this is bloomberg. ♪ retail.
under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. shery: breaking news, we are checking on major averages right now and we see trading at session lows at the moment. manyow is down, losing
parts, reversing sessions of gains, while the s&p 500, every sector in the index's and the right right now at session lows, 1.4% down. the nasdaq is moving 1.3%, and the sentiment is translated in the treasury markets, treasury is rising, the 10 year yield falling at 2.78, and also reversing three sessions of gains. also the dollar index down 3/10 of 1%, while the chinese ,ffshore yuan has been weekend 1% asse of 1% -- 3/10 of trade tensions mount. david: mark crumpton is here with first world news. mark: there are more signs the three nafta nations find common ground. u.s. trade representative robert