Than expected in october in germany, but the central bank has cut its forecast for Economic Growth. The bundesbank says it will grow 1 , half of what it called for in june. Two hours for not from now president obama will formally introduce his pick to be the next secretary of defense, former pentagon official Ashton Carter. For two years, he was the number two civilian officials at the Defense Department and the militarys top weapons fire. Protests are spreading against the grand jury decision in the eric garner case. Here in new york city, traffic was blocked. Similar protests are planned in other cities. Toew york grand jury refused indict a white Police Officer for killing eric garner, a black man, in staten island. Spacecraft the orion on an Unmanned Mission that will last four and a half hours. Theill make two orbits of earth before splashing down in the pacific ocean. Back to the top story, novembers labor report out in less than 30 minutes. We are counting down. We are joined by Bloomberg Peter coy. s it will be a focus on wages. People care about jobs, putting people back to work, but that is not all we care about. We care about getting a decent amount of money from those jobs. Right. The fed cares because they want to see wage growth because it is good for spending. They do not want to see it get too high because then they worry about inflation. Companies pay more, they raise prices, and you get a spiral. We are nowhere close that. We see wage growth in the range of 2 yearoveryear, and forecasts will show the same thing, right around 2 . We stuckter, why are here when it comes to wage growth . It is a great question and it is a mystery. A broader measure of compensation that includes benefits is up a little more than that. A lot of people are thinking maybe there is a lag in the wages numbers and the hourly pay numbers we get with the jobs report. They look to see if catching up to the eci number. That could happen. That could be in the next few months . I am not predicting it, but that is what people are watching for. The longterm unemployed the good news is that number is coming down, right . It is super important. Victoria stillwell did a look at the numbers with a 29 decline in longterm joblessness people that have been unemployed for over half of the year. That is great news. It shows the slack in the labor market is shrinking. Even people who have been out of work for a long time are finally being sucked back in. Peter, the bottom line is yes, we are creating jobs, likely more fulltime jobs, though were not getting the wage growth. That is the third missing puzzle. For sure. Peter, thank you for joining us. Of Bloomberg Businessweek. Moving and shaking this hour, as theyf uber completed another round of fund raising. Lyfthief chief rival is and it is not a friendly rivalry. Aboutd the ceo of lyft ubers admission that they tried to thwart fundraising. It did not work. We choose to focus on what we are doing end and has worked well. When a competitor names you and calls investors, there is concern about what we are doing and how it is succeeding. We will continue on the path that we are on and we are excited about that. Lets turn down to media news. Cbs says it will not be pulling the plug on content on dish network. Joining us, paul sweeney, the director of north American Research for Bloomberg Intelligence which provides unique Realtime Research on companies. Who will come out on top . It came to a peace agreement, but who will win . Prologue, the networks tend to wind tend to win. If you are cbs, you are in a ergenosition, and charlie said cbs programming is important for his business so he wants to get it done. Ultimately you will see cbs get a higher transition transmission rate. How much higher, paul . Every time they come up for renegotiation, it has been huge increases, meaningful, 20 , 30 , 40 . It is a big cost for distributors to bear, same programming costs go up about 10 per year. That is difficult to handle. They try to pass along as much of that price increase to consumers, but distributors unfortunately are not able to pass along all of them. Moonves isey that les getting, it allows him to make extra bids and cbs is one of the starz channel. The stock fell significantly before the close. And itstion for starz investors is what is the next step . They try to sell the company, a lot of people looked at it, but no deal was able to get done. There are issues about price, some of the longterm hasramming contracts starz or may not have Going Forward, and then there is the issue when you deal with john malone. He doessells an asset, not want to do it out right and pay taxes. Taxadvantage transaction and it is difficult to find a counterpart. Paul, did you watch peter pan live. Now, but i know no, but i know it was a big deal. D ast was not as panne expected. It got mixed reviews. It was a big gamble for nbc. That is right. There are only only so many super bowls, tony awards, and oscars. Nbc has manufactured any event, a live event, and they did it last year with the sound of music. Although that got totally boo ed. Maybe that is good. From nbcs perspective, it was a big audience. We will continue to see the reaction on social media. Thank you so much, paul sweeney, from Bloomberg Intelligence. Much more ahead. Pick to be thes next defense secretary or republican senators stand in the way of Ashton Carter. We are 15 minutes away now from the november jobs report. Here, stayoop in the loop. Well, in a few short hours, president obama will make forcial that we have known several days, Ashton Carter, former number two at the pentagon, is his pick for the next defense secretary. He will face no shortage of issues dealing with the islamic state, russia, and china, to name a few. Phil mattingly joins me from the white house. Was there something specific in carters resume that had president obama with confidence to pick him as the next defense secretary . He has been there during the Clinton Administration. He was the top weapons buying a official at the beginning of the obama administration, and as the number two, you are essentially responsible for day to day management of a sprawling bureaucracy. He is viewed as an independent voice, one with a deep knowledge of the areas that are problematic. While he was probably not the top pick, a couple of people polled their names out, it was probably the most attractive thing that led to the president picking him. You have reported about tension between president obama and outgoing defense secretary chuck hagel. Is that something carter will struggle with have been four defense secretarys in six years. On foreign policy, the insularity of president obamas team is a major problem that you hear about from white house and pentagon officials. Ashton carter is an independent voice, strongwilled, and unlike chuck hagel, he knows the ins and outs of the pentagon benefit anyone else, however josh earnest, White House Press secretary, managed in point. The president remains at the top of the billing. Whoever the person is will be chain ofut what the command is, and the president is the commanderinchief, and he bears responsibility for what happens at the pentagon and the department of defense, and that is been true for previous president s as well, of course. Is not saying anything that is not true, but it did raise high rounds with chuck hagel leaving that the president is the final word on any of those grounds that you mentioned. Think you, Phil Mattingly. For more perspective, i want to bring in congressman mike turner who is also the newly elected president of the nato assembly. That last point by Phil Mattingly is a concern for many republicans he is putting in place another yesman. Ashton carter is not a yesman. I have worked with him. He certainly understands the pentagon. He is an independent thinker. He certainly understands the National Security threat. The problem, as it has been with the other secretaries of defense, the white house can say the chain of command is clear, but the policy is not clear. Unless the president looks to his National Security team, it libya,rmula to deal with syria, and we will still have the department of defense and National Security struggling. We are. What are you going to look for from Ashton Carter to outline this policy . He will have to push the white house, which has been reported to have been micromanaging the department of defense. The president , even today, will not acknowledge that russia has invaded ukraine. That is a basic acknowledgment of what the world is like. He has not mean acknowledge that . He has not acknowledge that. The word invasion we questioned them pursuing false narratives. The reaction has an pretty areh sanctions we undermining the economics of russia. They have not been. President shenko, the of the ukraine came and said i cannot win this war with blankets. I need aid and assistance. In both houses, bills have been dropped calling for greater it. Ashton carter has a tough job. He has a white house claiming they are in the chain of command with undefined policies, reducing false narratives. They too come to grips with what the real challenges are. That is what i mean how will it be different with Ashton Carter . If you look at the time the chuck hagel was there, he certainly had opinions that were different than the white house. He was not as aggressive as i or others would want them to be. Ashton carter has a known record on these issues. Hopefully he will push the white house forward and work on the National Security issues that are a real threat to us today. Do you think he will have any problem being confirmed by the senate . I did not think so. He has had a stellar career. He has really had a number of people on important issues. Of makingreat record the pentagon work. Having been a number two, he will know how all of the people underneath him need to do their jobs and execute the to do list they are facing. It is a long to do list. I want to switch it is jobs day, congressman, and speaking about defense, the Defense Department looking at the number of people employed by the Defense Department, they are the largest employer in the United States. 3. 2 million. Below that, walmart, ibm, and other major, private employers. It makes me think about yesterday, for instance, when the house passed this new right, andget bill, cuts in benefits to the military, but increased a little bit of more aid to some of the hotspots you talked about fighting islamic state, syria. Do the cuts passed by the house, do they go deep enough, or should there be more . At this point, i think we will see increased spending in the department of defense. We are in this twoyear period where sequestration was abated. The president brought forth a 10year plan that had massive cuts to the department of defense, cuts that Ashton Carter has been a critic of. As he takes the helm, he will have to look to the white house to get support for ending sequestration, increasing spending new defense to be able to respond and have the force to respond to the threats that he. Howncreasing spending will that happen in a time of austerity and cutting spending . 50 of the cuts undertaken applied to 18 of the budget, the department of defense. We need to decrease overall backal spending, and look to restoring some of the cuts that have affected our readiness of the military. Like what . For cuts . All across the board. No one wants increased deficits, they want spending that is smart that go to our Important National defense programs. The sequestration policy thisced by pursued by president has affected not only morality, but the readiness of our military. On a final note, your new role at nato, which is a very powerful and expansive role. Tell me about what will be first on your agenda working with other parliaments around the world. Nato is our strongest ally to all right relationship and they have joined us with isis, afghanistan, and certainly the issue of the ukraine. We had a meeting recently and the voices were unified the voices were increased military spending all of the countries were calling for it. Reinvest back into the military, cuts have gone too far. Aggressorrussia is an state. We can no longer pursue the false narrative that they can be an ally and friend and that they are now a force that threatens europe, and understand that isis must be destroyed and stop or the middle east will be destabilized. You, andersonk mike turner, in the studio with us. Much more ahead. What will it be like inside the new apple studio that is being built . We will show you. We are 10 minutes away from the labor report. We will talk to princeton economist alan krueger. You are watching in the loop , live on Bloomberg Television and streaming on mobile and bloomberg. Com. Starbucks is going upscale, opening its first reserve tasting room, the flagship of a chain of Stores Selling highend coffee in seattle. They are trying to elevate the brand. The worlds secondlargest fund manager wants to shake up the relationship between companies, directors, and shareholders. Vanguard wants companies to name shareholder liaison committees which would meet and offer suggestions. Beenew apple studio has called a spaceship. They are building a new stateoftheart theater. It will give apple its own venue for products unveiling. Now we know what they are doing with the cash they are sitting on. It is 26 minutes past the hour, which means Bloomberg Television is on the markets. Equity futures are pretty quiet ahead of the november labor report. S p futures are quiet, up. 10 . Economists estimate we will see 230,000 jobs created in november and the jobless rate for the much steady at 5. 8 . We are on the markets again in 30 minutes. As we mentioned, moments away from the november labor report, where almost as important as the number of jobs created is whether wages go up. President obama highlighted the problem when he spoke to top ceos at the Business Roundtable this week. The area where i have been the this concern is the fact that although corporate profits are at the highest levels in 60 years, the stock market is up 150 , wages and incomes still have not gone up significantly. Want to bring in two special guests that are staying with me throughout the numbers that will break in a moment. Mohamed elerian is former pimco ceo and now a Bloomberg View columnist, and also with us, alan krueger, former chairman of president obamas council of economic advisers and former chief economist at the department of labor. You are great friends and you have debated on job policy before. First off, do you agree with the president that it is a deep concern that wages have not risen . Why are we stuck here . It has been a concern for three decades. Wages for middleclass families have not kept up with inflation, and the economy is getting stronger. I didnt we will start to see wage growth. Clearly, there have been i think we will see wage growth. Clearly there have been forces that have been making it harder. Why is that, Mohamed Elerian . There are a lot of issues, structural and also a cyclical issue that puts the pressure on asset prices, and therefore you get a boost to any quality. Explained that you are saying the benefits we have seen are the benefits from the fed Stimulus Program that have gone toward the markets, not for the actual economy, the jobs market . Correct, and because of that, stagnant wages have become not just a political issue, but an economic issue. There is not enough demand. Growth has gone to people with lower marginal propensity to consume, spending less of the dollar that they make an economy is therefore looking at a demand deficit. This is important from a social and political perspective, and also an economic perspective. Alan krueger, what will be the key you look at . I focus on the Hourly Earnings of nonsupervisory workers. They have been lagging the most and too much attention is paid to total private. It sounds like it should be a broader index, but nonsupervisory workers cover almost 80 of the workforce. It is a series we have had for decades. The other is newer. I think nonsupervisory will indicate where we see pressure in the market, and given the decline in the Unemployment Rate, i think we will start to see a little bit of an edge up in wage growth. Alan krueger stay with me. Mohamed elerian, you as well. We are moments away from the november labor report. Scarlet fu will be standing by with the market reaction. As i mentioned, equity futures numbers, ahead of the but most economists suspect that if we see a surprise it will likely be on the upside. Peter cook is at the Labor Department with those numbers. Inbig number 321,000 jobs november. 0. 4 monthp as well, over month. Revisions make this better. In employment rate holds steady at 5. 8 . The three to 21,000 jobs we added last month, the best number 321,000 jobs we added last month, the best number we have seen. The threemonth averaging out to an 78,000 jobs a month. The average for all of 2014. Tands at 241,000 there was widespread again across the board. Manufacturing, up 28,000, the best number we have seen in a year. Retail, 50,000, the best number since december. Professional services, 86,000, the best number since 2010. Temporary hiring, up 23,000. You would expect that going into the holidays. The Household Survey holding at 5. 8 . In employment rate for dissipation rate Holding Steady at 62. 8 . The number of unemployed and employed Holding Steady. Longterm unemployed holding at 2. 8 million, roughly. Longterm unemployment falls. Some improvement there. The big story beside the headline number will be wages, up 0. 4 . Gains 2. 1 . Ar, they they were up nine cents in the month and average weekly hours were rising. The highest number we have seen since may, 2008. Bottom line, this is a good report. Jobs up. Wages up. Does this move the feds decision up as well as . We will know that december 17. We will know that. I want to bring in scarlet fu. This might be good for the economy, but affordables on wall street, not so. We saw stock futures erased gains, with s p futures down by almost. 10 . You saw a selloff in bonds. The 10year yield is moving higher. 2. 31 if yous to rounded up. That would be a twoweek i. High. Dollarin is strengthening. I want to look at oil prices. Moving, yoularyen would expect a moving oil prices, though it has stayed consistent, negative, under pressure, and there is selling in treasuries. Amy that is a bottom we are starting to see for oil. Maybe that is a bottom we are starting to see for oil. Alan krueger, Mohamed Elerian, your first takeaway. Are usually not overreact, this is a wow report, a terrific report, capping the best year since the 1990s in terms of job growth, and it looks at we are seeing signs that wages are growing and that is good for the economy overall. As Mohamed Elerian said, we have been facing an adequate demand because inequality increased so much an average workers were not getting the income to spend, so hopefully that is a trend that will continue. Mohamed elerian, i saw you taking notes. What was your Immediate Reaction . , in terms of wow its components. It is good news for main street and interesting news for wall street because it raises not just a policy issue in the u. S. , but it increases the divergence between the u. S. That is healing quickly, and on the other hand japan and europe. We will see major movements on the currency market. It will be interesting to see how wall street digests his number. If we thought we had seen divergence, it will be even more to the extremes. Theme fornce is the the Fourth Quarter and next year, and the main issue for all is it correct to allow the currency market to be the only shock absorber in this more divergent world because that is what is happening now. We knowy market from the past that one currency markets move as much as they have moved so far, they tend to break something. This will be interesting in terms of the global applications as well as what it means for the fed. Scarlet fu . I have a question here as i look to the numbers highlighted by bloomberg in terms of various components every number matches or tops the estimate except for the change in household employment, coming in at 4000, instead of 320,000. Alan krueger, is that significant . I tend to discard that because last month it was over 600,000. I do not think it is unexpected. The Establishment Survey is much more indicative of what actually happened. Corks another question here the Unemployment Rate, the jobless rate stays at 5. 8 , even as the other metrics improve. Is that an encouraging sign as well . I take that as not too much information in that the establishment jobs number is really month to month the most telling indication of how the jobs market did. The Unemployment Rate held steady. The labor force dissipation held steady. The Unemployment Rate has fallen dramatically over the last year, lessabout 1. 4 , maybe considering that it stayed constant last month, but it is certainly on a downward trajectory and other measures of utilization of labor improved. It looks like the jobs market is continuing to improve, even though it is not back to full health. I want to get back to the full issue of the fed this is change the game and when they move . Exit it changes the perception of the market. The market was starting to think maybe they will not lift rates. Theink we are looking at summer of 2015 as the most likely time. That is not really different than what was already predicted by the fed. But the market tended to push it back and somewhere same 2016. I think the summer of 2015 is the most likely outcome. I have been expecting the middle of 2015, in part because i have expected wages to be stronger. I do not think the fed will react to this one particular number, but clearly if the next months look like this report, they will certainly update. No chance of seeing anything sooner . There is certainly a chance if they see headline inflation rising, particularly in the gdp deflator numbers, but that seems a bit unlikely. Peter, i want to bring you back for one more look, how will this play on the politics side because for so long that republicans have been hammering the president that he has not been enough on jobs, and we get a report were both economists w wow. Saido have said i have not seen i have nothing John Boehners statement, but i think he will say it is the election, people feel better about the election. Which makes no sense. Of course, but i am trying to figure out how the spinmeisters will work on this. What is striking is the consistency. That number, 10 straight months over 200,000 jobs that is unusual in an of itself that we have had this kind of level rise. What if this number had been out there before the election . What would it have been for democrats and the president . Who knows . You will have questions on capitol hill. Maybe is the fed behind the curve . Check ont fu, one last how the markets are trading. We saw u. S. Stock Index Futures drop, they went negative shortly after the report come but they have turned positive, so perhaps people are weighing in on the side of the economy Getting Better overall as evidenced by this latest jobs report. For s pright now futures. Thank you, scarlet fu, peter cook at the Labor Department. Mohamed elerian will be staying with us. I will let you analyze these numbers. Alan krueger, thank you for staying with me through the jobs numbers. Much more ahead. Continuing coverage of todays strong labor force. Former Federal Reserve vice chair and omb director alice rivlin will be joining me in a few moments, and also weigh in on the possibility of another Government Shutdown and what the fed will do in reaction to this report. We will be back. I want to get back to the big story of the moment yes, jobs, and whopping 320,000 jobs added in the month of november in the u. S. From washington, d. C. , alice rivlin, the senior economic fellow at the brookings institution, former omb chair, and former Federal Reserve vice chair that i was joking that i have the big brain trust on this. Orning around this jobs number i have to have your take. How astonished are you buy this number . It is a very big number, and my reaction was wow, that is great. Economists always say one months numbers do not tell you anything, and that is true, but this is a really good number. What tells you that this is not going to be a fluke . Well, it is consistent with the pattern that we have seen over quite a long time now. We knew the economy was creating quite a few jobs, over 200,000 steadily, but 300,000 is a good blip up. It might be a blip. It might fall next month, but it is hard to make it into bad news. It is very difficult to make it into bad news, but if you look at how the markets are reacting, for wall street, it is not the most terrific news for them. I have always been sort of amused at this, that markets in this situation will go down, at least temporarily, because they think that a better economy means higher Interest Rates, and in the long run it probably does. I do not think this means much for the Federal Reserve. It confirms what they knew, that jobs are growing, but it is also true that wages have been lagging. We have not seen inflation. We still have quite a lot of people who would like to be working more hours than they are. So, it does not change the picture the fed the picture that the fed knew they were facing. You are right. It does not change the picture on wage growth. Even though we have more than 30,000 jobs created, wages, earnings, 300,000 jobs created, wages, earnings, are still at the 2 level. How do you get that escape velocity, as Mohamed Elerian put it . More, haveto invest an Infrastructure Program that will play out over the next several years because that is because we need to grow the economy for the future and create higher wage jobs in the process. Trainingeed better programs so that we can equip people to handle higher wage jobs, but we are in a very competitive world economy, and it is not very surprising that wages are lagging, even as jobs go up. Let me just you mentioned the infrastructure investment. That was part of what the president spoke about at the Business Roundtable. For our viewers, i want to play part of what the president said about infrastructure. Infrastructure is one area where we need to go ahead and make significant investments. It makes no sense for us to have a firstclass economy, but secondclass infrastructure, and that would only not only help accelerate growth right now, but also lay the foundation for growth in the future. So, alice rivlin, this should be a bipartisan issue, but it is not. How can we find infrastructure in a Republicancontrolled Congress . I think are a significant number of republicans that think infrastructure is a good thing and it is progrowth. There might be a deal between republicans and the democrats, miraculous as that might seem, to fund an infrastructure bill. The Highway Trust Fund is running dry. We have not had a gas tax increase since i was part of the Clinton Administration in 1993, way back then. I am not necessarily advocating increase. In fact, i think we could finance infrastructure much better ways than raising the gas tax, but we need to do something, and i hope the congress can agree, both on an infrastructure bill, and, conceivably, tax reform that would help us fund it. All right, alice thank you so much for joining us. Alice rivlin, former omb director, former Federal Reserve vice chair as well. We are staying on the jobs beat. Much more on the over 300,000 jobs created in this country. What does the white house have to say about this . Labor secretary thomas perez joining me in the next hour. It is our big story this morning the u. S. Hired more workers than forecast in november, blowing past most economists estimates. Everyone on the program so far when it the word wow comes to this report. It has blown past anybodys estimates. The jobless rate has stayed at 5. 8 . That is a summary of the jobs numbers, but we will be digging further and further into that throughout the next hour. In the meantime, here is a look at the top tech stories on our bloomberg west radar. Amazon is going to get into the diaper business, producing its own diapers and baby wipes under the brand name amazon elements. It will be inexpensive and available for members of the prime service. Mark zuckerberg is on a mission to connect the world to the internet, using drones and satellites to bring connectivity to remote areas. Speaking to emily chang, he says he has run into a problem he is not counted on. It turns out the biggest hurdle is not either technical or affordability. It is the social challenge, where the majority of people not connected are within range of a network, can afford it, but do not know why they would want to use the internet. Mark zuckerberg is teaming up with qualcomm on the internet project. Coming up, mom and alley and will be back with me, weighing in on not just the mohamed meerian will be back with weighing in on not just the jobs report, but oils big move in the last few months. Also, starbucks we will tell you how much the coffee giant is charging for a pound of its new reserve brew. Hour,minutes past the which means Bloomberg Television is on the markets. Equity futures are rebounding after taking the initial dip on the back of the much stronger than estimated labor report. 300 320,000 jobs created. The jobless rate at 5. 8 . We will speak more about the jobs report with labor secretary thomas perez in the next hour, and much more including Warren Buffett putting his money behind hillary clinton. Welcome back to in the loop. We are 30 minutes away from the opening bell. Here is a look at the top stories the economy added 321,000 jobs, while among above estimates. It was the 10th straight month that employment increased by 200,000, the longest stretch in roughly 20 years. The Unemployment Rate held steady at 5. 8 , a sixyear low. In about an hour the president will introduce his choice to be defense secretary former pentagon official Ashton Carter. He spent two years as the number two civilian in the Defense Department. Theest getting bigger after grand jury decision on the eric garner case. Here in new york city, protesters blocked traffic for two hours. There were similar protests in other cities. The American Labor market the big story. Lets talk about the jobs data and what it means for the feds next move with our special guest, former pimco ceo Mohamed Elerian. As you and alan krueger were both saying, it is wow, but it is not going to change what the fed is going to do. It might not change what they are going to do, but will he change market behavior Going Forward . It will. The best thing is its good news he comes good news if good news for mainstreet becomes good news for wall street, we will get the normalcy that we need. Keep an eye on how the markets react. We need to get to a place where good news for the economy is good news for wall street and this morning was great news for the economy. That is a really strong reporter. Report. Maybe economists were listening to you and alan krueger because international reaction, futures took a little bit of a dive, and now they have made back those losses. Part of it is yes, this is a big number, but not big enough for the fed to move off the timeframe they have already outlined for the markets, right . Right. What validations need is to be validated by fundamentals if you can get an employment report that has both wage growth and jobs growth and is sustainable, that is the best way of validating market prices. So, it is encouraging. We need a few more months of this. If we can validate market prices, the federal label to normalize without disrupting the financial markets. Do you think so far or recent valuations have gotten to ahead of fundamentals . They have, but for good reason. Correlations are broken down. If you look at equities versus commodities, it is difficult to explain. Yes, there are supply issues on the commodity said, yes, cash been put to work on the equity by back, but the extent of the divergence is very large. It is. The divergence you were referencing, the currency market, where the dollar will go versus essentially the rest of the world Nouriel Roubini was on with us and i want to play what he said about the dollar. Everyone else in asia, from taiwan, they are using monetary policy, and now europe and other Central Banks will ease monetary policy. No one wants to have their currency appreciate relative to n. E ye eventually all the pressure goes on the dollar. You agree with that . He is right. No one wants to appreciate. To continues going to move, and that has been the big call for the last few months. My only word of caution is be careful. Large currency moves tend to disrupt something. You cannot have the currency market carrying the whole burden of adjustment for this divergence in Economic Performance and policy. Something else has to come in and so far it has not. Could it be big enough ascensione be enough in the u. S. Dollar that it derails our momentum . I do not think it derails omentum as much as it causes political issues and we started talking talk again about currency wars. That is a concern if it moves too much. It is in the hands of the europeans and the japanese to do what it takes. They need structural reforms, including the third arrow in betternd they need demand, so it is in their hands. Mario draghi did you agree with his assessment, lets wait six weeks before making further decisions on moving on stimulus . The growth and inflation numbers, and i suspect they will revise them down again. They are bringing down expectations, which is important, for both next year and the year after. The second issue is you get a sense that there is real disagreement within the government counsel, and rightly so. I put it the other day in a bloomberg column that it is a loselose situation. They are carrying the burden by themselves. Theyre the only game in town. Whatever they do, they will be criticized. That means it will divide the political system. I have sympathy for what they are trying to do, but the reality is they are made to carry too much of the burden with inadequate instruments. And sounds like the fed essentially the same situation the fed was facing. Correct, but the ecb does not have the benefits of an entrepreneurial, flexible economy that the fed does. That is a big difference. The economy and the United States is much more responsive and flexible than it is in europe, so their dilemma is much greater. Just on a final note, before we get to oil you mentioned the revisions within the ecb isnt it really just germany . What i found interesting was mr. Mario draghi said is not just the National Bank governors. He has a Division Within the ecb. I think it is deeper. Deeper and more broad. Somore broad, and rightly because the risks are fluid because you could take reasonable views and reasonably book could disagree. Stay with me. Nd elerian, from jobs Mohamed Elerian, from jobs to oil what it means for the Global Economy. Stay in the loop. We are back with Bloomberg View columnist Mohamed Elerian, and i want to date back into a topic that has been on everyones mind, oil. You have a good, bad, and an ugly i want to read part of it. Impactd the net overall of this years 20 plunge in oil prices is positive for the Global Economy, but it is not universal and it comes with a negative dimensions the need to be well understood. What could be the worst outcome . The worst outcome could be is if it encourages russia to continue and expand its original adventures in ukraine as a way of diverting attention thatnally from an economy is imploding, whose currency is collapsing. There is a tendency in International Politics that when you have a problem at home, you create something outside. To diverge from that. To diverge from that. Although his popularity rating is high. Very high. The question is how will president Vladimir Putin react . Will he use this as an opportunity to rebase his relationship with the west and remove sanctions . That would be good. Alternatively, with the expand his involvement in the ukraine, give the west no choice but to impose sanctions, which it make russia enforce countersinking, so that is a major counter sanctions, so that is a major question. Judging from his state of the union speech, and his posturing, what do you think we might say, a kinder, gentler prudent if he he isVladimir Putin if pushed to the law . I do not know. It is hard to tell because it is hard to figure out what is happening within russia. It is a big uncertainty. That is the one qualifier in the short term that makes you say yeah, it is really good news for the Global Economy as long as. Were you surprised opec did not cut production . They have a history of this, a history of thinking strategic. They need to give a clear message to nonopec producers. Need to slow down the investment in alternative energy that is going on. How do you do that . By observing Lower Oil Prices for a while. The 1990s. S in every once in a while they become strategic. It should not have been much of a as much of a surprise as it turned out to be. We had dan juergen on yesterday and he had said the same thing. I want to play what he said on the saudis absorbing the shock. A new gaming in world oil. The saudis have almost 800 billion of Foreign Exchange read reserves, and so they could wait this out. They do not want to subsidize , so thatezuela, iraq means they will let the markets sort this out. And 800 billion warchest he is right about that, but what could happen in the meantime . They will have to draw down some of the reserves, but they have massive reserves, so that is not a big issue. The main issue is not what happens to saudi arabia. They will be fine here what happens to venezuela, nigeria, high absorbers people that need Higher Oil Prices . The lowabsorbers, they will do fine. They will have some reduction in expenditures and reserves, but they have so many that they can afford that. On another note, in china, you have seen stock markets rally, over 40 so far this year, but just this week, though, the markets have started to taper off. Im wondering if that have started to become a cause for concern real concern about chinese growth. I am less concerned about china than others are. We are looking at three groups of countries Going Forward. Countries like china that will stabilize at a lower growth rate. They will stabilize and mature. Countries like the u. S. That will accelerate, get closer to lift off but not yet, and then Companies Like europe and china that will struggle. I think china will stabilize and continue structurally maturing. Continue, before we oil gas down below two dollars in some cities. That is a positive for the economy. It is a wonderful tax cut for the consumer and it helps low income people more than it helps highincome people so it is great in terms of a distribution effect. Does it come a little too late . Well, it is better now than than never . Than never. Continueion is can we to invest alternative resources because we have to remember this is a long game. Thank you so much for joining us, Mohamed Elerian, former pimco ceo. When buffett signs on he is an Hillary Clintons camp. Upscale. Takes coffee well tell you about their new exclusive store. We will be right back. Just under 10 minutes away from the start of training on this jobs day. Lets cut you down with the top five headlines right before the bell. Mark is a putter scarlet fu, and Olivia Sterns markets reporter scarlet fu joining us, and Olivia Sterns. Warren buffett has given the maximum 25,000 to the ready for Hillary Super pac, a group of hillary supporters. He has set in the past he does not like to donate, but he is making an exception. He has backed individual candidates, parties, but not to the groups that take unlimited sums. He does not want to see the country moving in that direction, but it is no surprise he is a big democratic backer and a big fan of the clintons. Lisa leiter, our reporter, said he has been known and democratic circles as a political tightwad, supporting certain candidates, but not necessarily putting his money behind it. 25,000 speaks volumes. Is he cheap . Not cheap, selective. You could imagine, once he donates 21, they will all want it to one, they will all want it. Cbs says their programming will stay on dish. It is not surprising. We have seen these negotiations between the and content providers. Lets cbs is still airing on dish cbs is still airing on dish, and even if it was not, hiatus. S they are on what were we told, Charlie Ergen is the cheapest manning media. Warren buffett is also cheap, so there is a thing. Pannt to talk about peter. Olivia sterns, you watch this. I offered to come on in the loop in a costume. This is nbc. Two or three times the viewers that Allison Williams father Brian Williams gets on the nightly news. Hate watch it, and it still draws more viewers. Maybe the fact that it was hated drew in more viewers. Starbucks opening its first reserve tasting room in seattle where it will sell coffee that sells for more than 20 a pound. They will keep the starbucks name out there, which i find interesting. Wife . Why . Mass coffee. Is it is a brand. They did take it off where they took out the word, but it is interested they are branding out. Starbucks wants to build a highend. They are even opening cafes and bogota. Pretty bold. We talk about no inflation this economy coffee prices have gone up and up. It does not get any cheaper. Think about how much more sugar, product you are getting. Four pumps instead of one pump. I am to stay healthy, stay away from the sugar. Now valued at 40 billion, boosting international expansion. I feel like ive said this story three months ago when they had raised another billion dollars. They have gone from 17 billion to 41 billion in about six months, truly incredible. Which raises the question, do they ever need to go public . They do fine on their own. They are not running short of money. Very interesting to see what they do more. People like to point out they are not just called uber, but uber technology. Flu shots. Flu shots, ice cream, and samehave hired googles day delivery because they are with otherompete companies delivering goods to your doors. These would not be uber drivers. Because there is a rideshare part. Lets check where futures did. Shared and you saw a blowout jobs report, 321 thousand jobs created. Equity futures, a lukewarm response. It looks like we are headed for a slightly higher open. Our top story and the opening bell is next. Welcome back to in the loop. Lets get back to the most important stories you need to know before the bell. The number one story, of course, the november labor report. Month. Jobs added last Unemployment Rate Holding Steady at 5. 8 . But i can hear it now, some of the naysayers on the labor market. It seems like all year long jobs are growing but you dont feel it. Some of these jobs are not on the higherend. Also, average Hourly Earnings for this month are double what economists are looking for, so that is an encouraging sign. Four 10 of 1 . Which nowadays is great. That is a significantly positive thing. The threemonth averages 270,000 jobs. Very slight improvement on those numbers that is healthy indicator. It is. However, we sought minimum wage protests we saw minimum wage protests again. Missing out from the Economic Growth story. By peter coy from Bloomberg Businessweek to weigh in on those numbers. We spoke you 90 minutes ago. It was good news, as you just said. Nine cents and hours above trend. That brings the yearoveryear to 2. 1 . Lagging indicator. Received the cost index, trending higher than the average Hourly Earnings. Lets see if the average Hourly Earnings catch up. , great newsching up for workers. It makes it more likely that the fed will start raising the federal funds rate sometime in 2015 as opposed to waiting until 2016. Finance strategists are until i think will be not 2016. Alan krueger, Mohamed Elerian both saying that summer 2016 is when it is going to happen. Elerian tellamed you that this is a great report for main street and interesting for wall street because it highlights the diversions divergence. Cap to that bet after that that people have a couple extra bucks from gasoline my neighborhood. Butill take uber these are ingredients for a very merry christmas. For sure. Gasoline is an even bigger factor because it is so abrupt and dramatic. People worry about the impact of the sharp drop in oil prices for geopolitics. Certainly a concern. If you are just an American Consumer and you are looking to pay for christmas presents, you like that. To talk about how the fed has the dual mandate. Inflation is not a big issue. How do you define full employment . how to know when we reach it will be feted no when we reach it . There are some people who think that we are already at it. Including some members of the fence board. The feds board. Exactly. The middle range is that we are before tad above that we get into the point where it selection of wages and prices started. Saying heto ceos, had to raise wages, the concerns he has is the lack of wage growth. What is going to get wage growth to accelerate . Is it that businesses have to really kind of move on that on their own . We got today is exactly the kind of thing that causes that happened. The fact that longterm unemployment came down. People working parttime for economic reasons coming down. , allmployment payrolls indicators that the market is tightening. What we want is full and claimant without inflation. Full employment without inflation. In spain a halfway 4 unemployment, and the 10 year yield is trading below 2 . Yesterday we heard mario draghi say he would wait until 2015 to reassess what stimulus is needed. Is that going to work . Yendollar hasnt fixed japan. Will it fix europe . It cant all by itself. Has an isolated economy and you can depreciate your currency and help your trade balance you can rob growth from the rest of the world. It is a better the beggars i beggar thy neighbor. It is not the right way to get growth. The right way is to see my domestic demand in europe. Stimulate domestic demand in europe. Can withstand appreciation of the dollar. Our economy is stronger. Thanks so much for joining us. Peter coy, economist at Bloomberg Business week. And thank you to scarlet and olivia this friday morning. The viewing to get from the white house on the big jobs surprise. The labor secretary tom perez is joining us after the break. Airline costs kicking off. Flying high after j. P. Morgan raised estimates for the airlines a few moments into the session. The economy added 21,000 jobs. Bloomberg put out interesting numbers and reactions to this. The pace of job krishan over the last three months continues, it estimated that almost a million jobs will be created during the rest of obamas second term in office. I want to head straight to washington with more on the labor market with the labor secretary tom perez. Secretary perez, thanks for joining us again. Your initial reaction to this report was what . This was a very good report. 365 ev look at the upward revisions. Of job growthnths and this was the highest month in that period to the tune of 11 million jobs. We are on pace for the highest growth level since the late 1990s and the clinton era. To meet what is equally important about these numbers, we have been seeing this for some time. It was broadbased growth. This was not a Holiday Hiring blip. Construction is up, hiring is up. These are middleclass jobs, upper middleclass jobs. We are seeing the broadbased growth that is exactly what you need. If we have ae transportation bill that gets passed. The formula for picking up the pace of growth even further. Mentioned some of these issues that have to get congressional approval. We will have a new Congress Come next month. What could the white house for the president do outside of that to keep the momentum, suite up . 000 momentum skills and iin talked to Business Owners all the time who are bullish. This is consistent with the conversations i have all the time with ceos. They want to grow businesses and help the workforce compete. Investment and manufacturing hubs. I hear from elected officials , i want to manufacturing hub in my neck of he woods. Theres a lot we are going to catalyze the growth that we are seeing across this country. There is a lot more we can do together with congress. There are a lot of issues and possibilities on the table. Until you get congress to work on that, you have got to look to the private sector. Ceos atdent spoke to the Business Roundtable and he pressed them, saying that it is up to you to hire and raise wages. Does the administration think that Companies Across the country are holding back on raising wages and hiring . I was at the meeting with the president and it was a very good meeting and what struck me were the areas where we had 100 consensus in that room. Immigration reform, comprehensive immigration reform, transportation, infrastructure spending. Tax reform. There was consensus on things to do there as well. Months report shows is that the upward pressure on attending labor market will bring on wages as we move forward is exactly what has happened in 2014 that is going to lift wages even more in 2015. Last month was a good month for wage growth. Pace,continue to see this then the tightening labor market is one of the best ways to make sure we have shared prosperity in 2015. Too many people havent gotten a meaningful race. Meaningful raise. To ensure that a rising tide lifts all boats, we did it in the 1990s, that is what we have to do now. With all the things i discussed we can pick up the pace in 2015. Secretary perez, thank you so much. Always good to be with you. Airline stocks are in full flight as the bloomberg u. S. Airlines index shows profits of major carriers have been on a tear, trading your 14 year highs. Matt miller will be diving deep into this move on Market Makers , joins us now. The profits that backup decline backup climbs, anp the analyst at j. P. Morgan calls it unbelievable, but they are really making this money and they have overweight or by ratings on a lot of these stocks. Delta, united, couple of other ones. It is a very interesting call. Airlines have always been a puzzle to me for investors. Airlines go bankrupt every 10 years. You have got to be with the right momentum and get out while the getting is hot. Because of oil prices . Been one ofs have the reasons for optimism in the future. Dont forget, we are seeing 1. 99 at the pump. These prices just came down over the last few months. Reason theye only like these stocks. Airlines have become really adept at me going timing at nickel and diming the customer to death. Sucking money out of you like getting blood from a stone. Way you say it. Doesnt make you they charge for the bag anybody who watches this program knows i hate that. Drives me insane. But they are making money. Matt, good to see you. Thanks, betty. Much more ahead. A new way to find a parttime job using a mobile phone and even a selfie. We will talk to a ceo who helps hourly workers find new jobs. As we have been reporting all morning long, the economy added 300,000 jobs in november. It is a drop in the bucket compared to the more than 900,000 jobs expected to be added just this Holiday Season alone. That is the most 2008. The financial crisis, according to the Retail Economist how are old of these holiday workers finding jobs . Some of them are getting on mobile phones and getting the jobs through selfies. Joining us is peter harrison, the ceo of snag a job. They help hourly workers find jobs during the Holiday Season and all year round as well. Tell us what you are seeing in terms of the momentum as you are going into the Holiday Season. Really seeing strong momentum. We have seen substantial growth from last year, about 20 growth from last year in terms of the total number of parttime jobs being listed. Tremendous uptick in adoption of mobile. What happened in the last 12 months . Long,should not be a slow, painful process. People realize that you can whilely get a job quickly on the phone. Were seeing it fastest in the hourly and parttime sector. I know that through your website and the mobile phone app you are saying it is easier to put pictures up of yourselves and they are putting video selfies up as well. The number one thing we are hearing from employers is that it is attitude, attitude, attitude. What better to convey your attitude that the video selfie . What62nd video clip saying saying whyeo clip you love it. It, howou say love often do they click for the job seeker versus when they dont have that . Five times more likely to invite seekers to apply if they have a video attached the profile. When disturbing trend, though, that weve seen in the jobs numbers, certainly one that still hangs over the job market, is parttime workers, the people who are on your website. We have seen the number of dropped overkers the last two years and that is good news because theyre probably finding fulltime employment. That level is still a lot higher than it was before the recession , which sells me that people are still struggling. They want to be in fulltime jobs third some of them are into her three parttime jobs just to make ends meet. Are you seeing those kinds of people on your app as well . A lot of people want the parttime jobs because they want to fit in with other jobs they have or college or high school schedules. What we are also seeing is more and more employers offering , and thefts to workers workers need more jobs. The average number of jobs that any one employee has its growing. Obamacare . Of we believe so. That is the momentum behind that could great to see you. That does it for today on in the loop. Much more ahead. On monday, billionaire investors and hollywood alist ors like Leonardo Dicaprio and pop stars like miley cyrus are all in miami and we will take inventory of the art scene and the Real Estate Market in miami which is hot, hot, hot, not just the weather. Monday on in the loop. It is 56 past the hour and that means Bloomberg Television is on the markets. I am scarlet fu. Stocks are modestly higher after the betterthanexpected november jobs report. On the one hand, 321,000 jobs added last month is more evidence of a strengthening of recovery. But it could prompt the Federal Reserve to raise Interest Rates sooner rather than later. Does it move the timeline up . Not clear, so it is helping to u mute a positive reaction. There is spent division that the ecb will, with a more defined stimulus package after mario draghi essentially punted during the news conference. 89. 37 for the dollar index. 10. 31 , a twoweek high. For more on the reaction to the financial markets, im joined by stocks editor mike reagan. The burden on the number hung jury, i guess. It was fascinating to watch right when the report came out. The futures, Straight Line up, Straight Line down. Sort of closing with a little change and heading it off to the cash market. We are seeing some modest gains now. Some of the industry moves are pretty predictable. More defensive and heal paying stocks like utilities, telephone stocks, computer staples stocks, are down. Industrial, discretionary are down. A procyclical, type of move. Although, as you said, there are a lot of open questions about the time. Im looking at the biggest movers in the s p 500. Thencials are by and large big winners, gaining almost 1 . What is that tell people about how people are betting on the Interest Rate directions . We talked to jpmorgan and he said you might have to consider the first quarter. First quarter. Well ahead of what the market expects. That is much earlier than what people were thinking. Utilities are tractor for the dividend yields. When you saw the treasury yields spike higher, a lot of competition for dividend paying, Real Estate Investment trusts, that sort of thing. As for financials, lowinterest Interest Rates are good for financials in a crisis when they need liquidity. The Net Interest Margin becomes an issue that is an issue the last couple of years. Traditional cash banks have more traditional, the banks have savings and loans is the business. Part of the reason is that, as well is just a stronger economy and more jobs growth means more people and mortgages. The dollar strengthened and it looked like they are much staying in the same range. That is no longer the main catalyst. We are at the bottom where the bottom for oil prices is is anyones guess. Market amazing to see the market still do mike reagan, thank you so much. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Job shocker. We will show you who is doing the hiring. Highfliers. Airline stocks are soaring could will plunging oil prices offset global slowdown . The game that started an industry. Meet the great disruptors who created the classic pong. I am Erik Schatzker. I have mattll
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