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Moments. Meanwhile, European Service and manufacturing data both came and marioicted draghi making the case yesterday why Additional Services needed. Here is the only thing. The Unemployment Rate expected to be 6. 1 . It is Holding Steady for four months and has not gotten any better. That is one of the tensions. China, india, israel, and germany are all closed for various holidays today. This is the 20th anniversary ofs is the 25th anniversary reunification and germany, the east and the west back together. That really struck me today. 1989. It makes sense. Anniversary25th earlier this summer. All of those days the one i remember is Christmas Day of i maybe 1990,1989, the fall of romania. That was church escrow you know what sticks in my mind, mr. Gorbachev, tear down this wall. Nice one. Another president , president obama will be in indiana today at a steel mill talking about jobs. He took that victory lap yesterday pointing to better data here. A data check right now. Equities, bonds, currencies, commodities futures up 8. Crude 90. 90. It is a front page that is very fluid. Tensions are flaring in hong kong. There was a scuffle between protesters and those in the district, across the harbor from the central district. We know civil employees could not get to work because they are still barricaded there. Bigger barricades ian bremmer is out on twitter saying do not go into the government buildings. And the fluidity of the last 60 minutes is a little bit of protest. And you are seeing protests you are seeing live shots from the streets where there are protesters waiting to see how it plays out. We will check in with andrew davis, who joins us from our studio in hong kong. We see the tensions rising. There are scuffles between protesters and i believe middle asian elderly people. Of someemblematic growing sense of dissatisfaction protests are proceeding . I dont know if it is dissatisfaction with how they are proceeding, but there is an element of protest fatigue out there. The occupation has been going on for five days, the protests for a full week now. For People Living in the neighborhood is it has very been for people having in the neighborhoods, it has been very disruptive. So, yes, there is a resentment particularly in those neighborhoods because they really are neighborhoods, much more then the Central Business district. That area. Just amon we also saw people removing barricades today of one of the main thoroughfares that is still blocked, and the protesters coming back and police came into separate. I think that one area has been more violent. Holiday,ne with the people have gone back to work. The numbers have dwindled at the iftests site, which means you are against the protests it does not take too much force to get in there. Police are pushing aside the media, certainly, as they try to break up what had been a scuffle. We also saw shots of the Central Business district where things are a lot colder. Where things are a lot calmer. Are people taking off the weekend, or do you suggest we will see further tensions into saturday and sunday . The way these protests have been going is that during the day they thin out. People go home, they rest, they shower, and then they come back in the evening. I suspect it will stay calm and sunday. Morrow unless things escalate. In the evening is when tensions begin to rise again, and then it goes into the night. The students did not get anything from their ultimatum. The chief executive did not step down by midnight last night. They threatened to escalate. At the same time they are appealing for calm. They do not they are making pleas for the rest of the protesters cannot ratcheted up too much. They do not want to provoke the police and lose the goodwill that they have earned by taking the tear gas last week. They have been offered talks but not on the terms that they want. It remains to be seen what the students next move is. We will be on the watch for that. Thank you for bringing us uptodate on the latest from hong kong. Second frontpage story an update on the date hack attack on jp morgan. It was bigger than thought or reported. August thatosed in took place in june. 70 6 million households and 7 million Small Businesses were affected. Is nogan says there evidence that account numbers and passwords were compromised, so it is not clear that money was taken. Might money get taken in the future . You do not know. And say ito the bank want a new account number, i am going to change my password . Password e a , ii was in hong kong once got a phone call in the hotel. I pick up the phone, it is j. P. Morgan chase from new york saying have you ever been to minnesota. I said no. They said, well, your charge card has. An amex card, for literally three years afterwards, i was getting all kinds of letters about a theoretical wife that i had who had asked for a separate card. A theoretical wife. Lets go to our third frontpage story. You go, scarlett. Warren buffett losing some money. He calls the deal with tesco a big mistake. He has become a car guy because he agreed to buy the largest of auto dealers, privately owned, in the u. S. Announced,e deal not but i am sure it was plenty of cash. It is also curious he is effectively coming back to the u. S. On the same day he is leaving the u. K. What he does expertly, he finds Good American businesses that are growing, and he lets people run them. Retail is tough business. From you for the coverage hong kong. It is jobs day in america. There is a great mystery over what to expect after last months great disappointment. There has been a great jumble of good and not so good data. Ellen is at morgan stanley. She suggests we will not see great wage growth at 8 30. In this particular report, we are looking for hourly average earnings to be up 2 . That will keep the growth rate steady. We have not started to see a celebration or a breaking above the levels of growth we need to indicate that the labor market is getting tighter, but it has almost become a matter of when you are on the Trading Floor these days, you get a sense that the fixed income markets are more focused on the wage data within the report than the headline important than the headline employment, which is incredible. Isnt that the leading indicator on fed policy because of the wage price spiral . Wage growth becomes a prerequisite for the fed raging the fed raising rates. We are in a very different environment today. People are becoming increasingly aware that the fed is not going to be able to raise rates if there is this unsustainable relationship in the economy where wage growth cannot outpace inflation. I want to get your take on president obama. He gave a speech yesterday talking about the economy. He was in effect taking a victory lap for how the economy has done during his time as president. Is he right in claiming victory here . The numbers are better. To temper our expectations on the economy because this is a postfinancial crisis world. His critics would say why has he taken us this long to get back andrevious levels of jobs previous levels of economic activity, and this is a postfinancial crisis world, and those adjustments do take a very long time. Not every sector is perfect. We had an incredible loss of real estate wealth, and even with years of home price gains, we are still trillions of dollars in the hole in terms of real estate. From real created estate really influences the majority of u. S. Households. It is something that janet yellen has focused on. It has led to a lack of better financial expectations on the part of households. Tner, you bring up a good point and that brings us to our twitter question. Is 6 unemployment the new mediocre . We need a multilateral company news this morning. Lets start with general motors, recalling almost 118,000 vehicles over concerned that they could stall or fails to start. This action includes over 98,000 in the u. S. This is now g. M. s 69th recall this year. Radioshack moves to stave off bankruptcy. The Electronics Chain has reached a 590 million refinancing deal that will allow them to restock ahead of the holidays. The lender is a Consortium Led by standard general. And walt disney extends the term of bob iger. The new deal keeps the chairman 2018eo in place until june. That is the it is company news. Content was king yesterday at georgetown university. Lagarde spoke. Up, my conversation with madame lagarde. From new york city, good morning. It is bloomberg surveillance. Good morning. Politicss bloomberg respect,with all due monday, october 6, at 5 00 p. M. On bloomberg television. 31 days. We are 31 days away from the midterms. About all very excited this program, with all due respect, beginning monday, october 6. Yesterday it was the new mediocre, so says Christine Lagarde, the managing director of the imf. Speeche an important yesterday at georgetown university. She spoke to me on the struggle of economic growth. Gave, youech that you said, we will not return to the precrisis world. Are the g 20 nations finally catching up with lagarde . Concerned then and i am still concerned today which is why i talked this morning about the new the risk of this new mediocre. The new mediocrity that is out there how is that different from dr. Elerian or . R. Gross new neutral the new mediocre has three components, if you will. It still has the legacies of the prices. High indebtedness, both sovereign and corporate households sometimes. It has high unemployment in many corners of the world. Those are the legacies. Then we are facing serious clouds on the horizon, and we have a lot of uncertainty. You combined the legacies, the clouds, and the uncertainty, you have the rise of this new mediocre, where we are revising potential growth. Basis, on ass calculus basis i see it mostly a decline in commodity prices. Are economists about what the markets are telling them about the new mediocre . Marketse watching the with a concern and with a lot of hesitation, because there is clearly a discrepancy between the buoyancy of the markets in many ways. The forex is a little bit different. Thee boy nantz buoyancy of the markets is a little bit different. At the other end, we see the real economy, where recovery is not really strong. Fragilereas of very recovery. So there is that discrepancy with the two, which is quite worrying. Mr. Draghi spoke today. I watched how the markets reacted to his nonnews. You need someone besides janet yellen, mario draghi, and the rest of them to step in with a policy momentum. That is your new momentum. Will the will where that come from . First of all, i totally agree with you, that these ladies and gentlemen have done their best. But it cannot be alone. We need the right pace and mix of fiscal measures in those countries the need to continue to adopt their public finance. We need to have serious Structural Reforms in place to unleash the potential that those economies have. Our recommendation in order to address the shortterm demand issue, as well as the improvement in the median term is investment in infrastructure. It is needed across the world. I like how you parse that out about infrastructure. You were critical of the United States, im guessing a year ago, at the economic club. Look at 4 gdp last quarter. Ad you give the United States victory lap . It is clearly one of the bright spots. That the youth that the u. S. Pops out, and the u. K. Does as well. But clearly, on the infrastructure and investment front, more needs to be done. Met him Christine Lagarde or it i spoke to her about hong kong. Here it is front and center this morning. We are seeing live images of a bigistrict, north of shopping area for the hong kong people and also tourists. There is a huge crowd gathering because there are reported scuffles between prodemocracy protesters and some people who are opposed to the protests because it is getting the it is getting in the way of their life. Daily we do not know who attacked to or how it played out. The protests have been fairly peaceful. That no longer seems to be the case. That no longer seems to be the case, and andrew davis was especially telling us that this is starting to infringe on residential district. A shopping north of district. A lot of businesses, very dense. I can see the hotel there. We wantut as deep to be careful here. There are protests going on and scuffling i think is the right word. Some people have reported ambulances trying to get through that crowd. The hong kong, hang seng index up for the first time in five days. We will be monitoring the situation in hong kong and be right back on bloomberg surveillance. Good morning. This is bloomberg surveillance. Im adam johnson, with tom keene and scarlet fu. My morning mustread comes from the wall street journal. The truth always contains uncomfortable elements, and in the cdc news conference, very werencomfortable elements allowed. Sometimes it looks as if everyone in public life is in showbiz. Prepare my talking points cdceems she is accusing the of not being straight with the public. That there are only a handful of people affected. They are trying to manage perception, which bumps up against reality. They are having trouble cleaning and sanitizing the apartment of the person with ebola. No one wants to jeopardize their own health. One can only imagine how unions might respond. It is something we will continue to monitor. There does not seem to be a whole lot of policy. It is testing the agency, isnt it . We are going to continue to cover all this and bring you the twitter question of the day since it is jobs day. His 6 unemployment the new mediocre . bloombergsurveillance. As bloomberg surveillance centerst post morning, i wa is was newspaper says the just . 2d spend billion to resolve that is the most since may. A lawyer threatens to sue google for 100 million, accusing the search giant of profiting from nude images of celebrities like jennifer lawrence. Attorney marty singer says google has done not nearly enough to remove the pictures from the search index. Market is tight when the former fed chairman himself cannot refinance his home loan. Ben bernanke says he received that he recently made an attempt to refinance and was unsuccessful. He said the first time homebuyer market is not what it should be. Those are the top headlines. What is going on here . He does not have a steady government paycheck anymore. He gets a lot of money from speaking fees, but that is not consistent. Someone on twitter said he should die he should dial 1800lloyd. You are using Ben Bernankes own words early after the financial crisis that regulation is a pendulum that swings too far in the other direction. The former chairman cannot refinance. It is stricter guidelines today, and oftentimes for refinances, it depends on how you look on paper. Face tonot sitting down face talking to your banker and the banker saying it is ok, bernanke does not have a steady income but we know that he gets paid incredibly well when he does speak. Abahe president of the talking about those mainstreet bankers. Here are some other numbers we are focused on today. Unemployment comes out at 8 30, and for the seventh month in a row the average work week remaining stuck at 34. 5 hours. Is the chief economist at morgan stanley. How much longer can the economy rs rise andre hou people are inevitable he paid more . It is another sign of when labor markets get tighter. You move more parttime people to fulltime and you see the hours worked per week expand. That would be a sign of tighter labor markets. Also the Unemployment Rate is typically a broad indicator of how tight the labor market is. We have issues with using the single metric to tell us how tight the labor market is are Labor Force Participation rates there. Unemployment rates seem to be stuck for the last four months at 6. 1 . We have seen the decline in Labor Force Participation has slowed, and that will slow the decline in the Unemployment Rate, not necessarily for bad reasons. More people are being counted. Or people are being counted, coming back in the labor force. Or lets just say less people are leaving. I was curious about the confidence numbers that came out prior to the report, that the assessment of labor Market Conditions was so poor. Sometimesonder people go back into the labor market to look for jobs because they thought they were easier to get, and they got a door shut in their face. What is the likelihood of back to back lousy reports . Ody is modeling in another if you look at the data that goes into modeling these highfrequency numbers when you have jobless claims that are incredibly low, indicative of a strong expansion in the labor market, and do not have mass layoffs in a particular industry that we are dealing with this month. That was some of the reason we got a low jobs number in august, was a particular strike that has now been resolved. You look at the fundamentals, and there is nothing that says labor Market Conditions have deteriorated. Onre was the curious report Consumer Confidence where they gave the labor market a thumbs down. That poses risks for today. 4 4. 6 growth gdp growth in the second quarter. That is strong. What is your forecast for gdp growth in the Third Quarter . You average the first half, we are talking 1. 5 growth. We are tracking just above 3 for the Third Quarter, and that is not bad growth. We think we will average 3 . We definitely took some damage, blasting damage, just from the lastinghan normal damage, just from the colder than normal winter. Scarlet, Macro Economic bring it down to 2. 8 . Differently. Es it everyone is going to be focusing on wage numbers in todays report. My morning mustread is from noah smith, a columnist at bloomberg view. Streeters might get paid more for the same reason garbage collectors, plumbers, and m ballmers get paid more. It is a dirty job. This is adam smiths theory of wages compensating differentials. Re does this make sense to you . It makes perfect sense to me. We get paid well for what we do. We devote our lives to the firm, we spend a lot of hours at the firm. We often joke if you divide the amount of hours that we spend that we get paid, we probably get paid the same as other average workers. Job, but we doul it because we love it. At least i do. Market economists are treated like pinata is at most firms. Know, you make that up. You and adam parker jointly s p 3000 up 50 from here by 2020. His side of the equation was compounded corporate Earnings Growth of 6 over the next seven years. What was your side of the equation . My site goes back to that fantastic interview with Christine Lagarde. Toms fantastic interview. Your as a group. The economy does not overheat. Why do expansions and why do expansions end . The link with the rates are rising. Right now we have delinquency rates that continue to a decline. That mediocre growth warrants mediocre Monetary Policy reaction. It warrants low rates for a long time. When you get is a mediocre expansion, but it lasts longer. Mediocre is the new goldilocks. Wantcre may be what we because anything above mediocre and you get a more aggressive response, which always threatens to stop the business cycle. Let me ask you our twitter question of the day. Is 6 unemployment effectively the new mediocre . There are many out there who say that 6 is full employment. Stunning. Acknowledging that the decline is about 2 3 structural. What is the historical average . Five, nehru, it is about 5. 5. We got well below that before the financial crisis. We have a rule, we do not do double toin formulas no formulasugin variable on friday. We have a lot more to talk about. We also want to get your take on our single best chart, which is coming up. It is on the young and the restless, the growing population of men amid a Global Economy with fewer jobs. What does this mean in terms of social stability for the rest of the world . Onthey are not concentrated the 8 30 jobs report. Washington awaits 3 07 p. M. , when the Washington Nationals will begin their quest for the championship of baseball. They are playing the San Francisco giants. Truly the city is fixated with the performance of their nineyearold franchise. Bloomberg surveillance, from new york city this morning, where neither the yankees nor the mets are enjoying baseball this money. Lets go to the single best chart. On the last jobs day before midterm elections, the issue is highlighting the rise of male theions rid this is blue bars show these pop the youth ages 15male to 29. China and india lead the way, africa is a close third. By next year, the number of chinese men who sadistically will never find a wife will reach 20 million. Picture lots of who statistically will never find a wife will reach 20 million. Deal picture lots of men who are notind jobs, married. When you talk to economists, this is a topic this is a demographic. This population shift happens before portugals civil war in in 1300s, the rise of nazism germany. How much do you fold demographics in your work in economics . It is a huge part of Economic Research and forms the baseline of when we sit down to have a discussion about the economic outlook, demographics are always the baseline of what sets that. In the u. S. , we have a problem with youth unemployment. You compare it to other countries, it certainly does not look you could probably map against the number of protests or civil unrest cases, and the graph would probably look the same, that they are higher in those countries with a higher youth population. Idle hands will find trouble. There is a reason why my mother never let me lay around the house. Scarlet, you nailed it. On the right side of the chart, or is the biggest delta there, blue to yellow. Look at africa and think of the arab spring, what happened concert promoter of coins, if they are not kept busy, they find trouble. I had to credit the new york times. You cancash hide that if we try to picture of whether are men in africa who passionately young and restless. In the next hour, we will speak with the ceo of devoid Financial Services about how business is teaming up with that is coming up in the next hour of surveillance. Lets get to these quickly. We are going to start with the harsh with the high an absolutely gorgeous shot. It lasts five days, and it will end october 6. This is a live shot. Life, but it certainly captures the scale. Look at how many construction cranes there are. Criticism of the saudi smassive expansion. You see the gentleman wearing the mask . That is over concerns about ebola. 25 years ago today in germany, east and west germany were reunited. That is why the markets closed in germany. Feeling old, guys. And the number one photo is a personal favorite. In000 walruses gathering alaska, but it is not cause for celebration. Those are walruses . Because of global warming, they are losing their icebergs to float on, so they are going out where they can find land. They sit on the ice because they are not porpoises or seals. They need air. They go down, they eat. The ice goes north because it is warmer. They cannot go down because the ocean is too deep. Deep fartheroo north. I did not know that. All right, some stunning photos. Discuss northo korea as well because secrecy has left many, especially on the internet, to speculate about the disappearance of their leader, kim jong un. Good morning, everyone. Good morning worldwide. This is hong kong across the harbor from the skyscrapers that you know in kowloon. Unrest in hong kong. Right now we have the leadership of hong kong beginning to respond to student demand. What do you have this morning . The chief secretary of hong kong is telling reporters she is concerned about clashes seen in mong kok. Are making preliminary plans for discussions with student leaders. We need to characterize that these are not protests, not riots. I am going to call them scuffles. In contrast, you can see the top shot we have there for you. Admiralty district on hong kongs island. Here, int i understand admiralty, it is effectively just the students, where in this outer area of kowloon, it is more of the older people who are protesting against the protesters for disrupting life. That is what we are understanding. Five or six days into these events. Looked at theas situation in china and hong kong. Your thoughts on the continuing protests in the city echo it will be interesting to see how he responds. Control has been consolidated, but we do not have room for error. For me, i am looking at the larger security situation. I feel that we need to know how to respond. In beijing, a critical question goes to you. In beijing, how much do they link the territory to the west of china or to the southeast of hong kong with the real tensions on the border with north korea . Are they interdependent . For a little bit they are a little bit linked in that north korea is a buffer zone, whereas hong kong is part of china. But north korea Still Matters in that china is an important buffer zone. And of course beijing is hosting a pack as well. You wonder if that will become an issue in the leadership during that meeting. We want to move on to north korea, your area of specialty. Kim jongun has been missing in action for a month. He was hospitalized for Ankle Surgery and is in recovery. Whatever the details, his disappearance from the public eye raises a lot of questions about the stability of north korea. How stable is north korea right now . It is inherently a more unstable situation than during kim jongils time. Particularly since he asking who did since he asking since he executed his uncle. Changed thehas chief of the korean peoples are make five times in the past two years. And you think about the leadership shuffling that has been going on, it is more unstable. And he is 31 years old, and we saw him limping across the stage. There he is again. You have been reading up on his conditions. We are talking about gout here, the ancient rich mans disease. Suffering from these diseases . There are health concerns. High blood pressure, diabetes. There are health concerns. The main point here is that we just do not know a lot about what is going on in north korea. There is a sister involved as well . Is there a follow on to him as well . He has two brothers. A sister in law. He has a sister and two brothers. The younger sister apparently has taken over state duties while kim jongun is receiving medical attention. How much can we trust the south korean newspapers when they report on his latest status . We take it with a grain of salt, but that said, it is something versus nothing. What is the relationship of beijing to north korea . Give us an update. We look at south korea, north korea. What about north korea and china . I think there has been a tactical shift coming out of beijing. With the a summit south korean president , who was also invited to beijing last year for a summit, working jong jongun has not been invited. There has been a technical shift, but i dont think the Strategic Priorities has been changed. Ellen zentner, thank you for joining us as well. Walkingthing we will be the one thing we will be watching is the wages report. If wage growth slows back to 2 year over year instead of the 2. 2 , just to come down a little bit is a big deal. Ellen zentner, thank you very much. The a 30 jobs report coming out. 1. 2619 on the euro. Stay with us. It is jobs day. Stay with us for bloomberg surveillance. The government offices are closed in hong kong as protests strengthen. Occupy opponents pushed back against students. The situation fluid at this moment. It is jobs day in america. We go in search of wage growth. Policy momentum. We talke about americas fiscal mess. Were live from our World Headquarters in new york. It is friday, october 3. Join me, scarlet fu and adam johnson with news. I want to start with hong kong. We have a live shot we can show people of protests there. It looks like there are now protests against the protesters. Was up for the first time in five days. We will go live there with our bloomberg reporter on the ground. The euro area, service and manufacturing data came in earlier today. Below estimates. It is jobs day here in the u. S. Unemployment inspected to be 6. 1 . 6. 1 . Ected to be india, israel and germany are closed for various holidays. In germany, the 25th celebration of the reuniting unification theday. Futures up. The guitar top headlines. Lets get to our top headlines. Protesters scuffling with demonstration opponents. Much of the city has returned to work after two public holidays. These are life photos of whats taking place in the area. Lots of Police Activity and an ambulance was called to the scene. Toeral employees were unable get to work. Working for nbc news in liberia has been diagnosed with the ebola virus. The 33yearold will be the second person treated in the u. S. Are concerned about a lack of screening. Christine lagarde says the Global Economy needs old policies to avoid what she calls andw mediocre period growth. Countries are still dealing with the legacies of their financial crisis. Tom asked her about the u. S. Economy. Its clearly one of the bright spots here and i look at the advanced economies, the u. S. Tops out in much better condition. The u. K. Does as well. Clearly, on the investment and infrastructure front, more needs to be done. The imf will be releasing the growth forecast next week. Very good. A lot to talk about. Hong kong has been unstable for the last three hours. Moving tick by tick. Andrew davis has given us terrific perspective. P. M. Of your 00 friday evening, what has changed in the last two hours . , thee tensions demonstrations this week have always swelled Late Afternoon as more people come down to the site. They have relief and today with the return they have really today with the return of the work week. Dwindledrs have really in the commercial areas. Those numbers of antioccupy people really started to grow, particularly there. There now and they are pulling out students for their own safety. People have been trying to attack them. The images are very dramatic. This has heated up more or less in the last hour. Live images from across the harbor. Hong kong students say they boycott talks with the government if violence is not ended. Is the public behind the students . Is there a discreet distance of the hong kong people from the students or are they united . I would not say they are united. Before these protests started, there was a majority in favor of the idea of free and open elections. I think there was a good chunk of the population in different and a good population chunk that favors china. Initially, when the tear gas was used, its long a lot of people favor and made them question about how the city was being run. How the numbers swelled. Nobody was expecting that. The occupy central people were saying they would be lucky if they got 10,000 people on the holiday and we definitely saw more than 100,000 people out there the tear gas really did shift sentiment. Minority, but they are organized as well. What about businesses . They were forced to shut down because of the protests. Had they started speaking out on their financial losses . Today. Aw some estimates the bank came out and said almost 300 million in lost sales. The number is probably a bit more today. These are big shopping areas. Where the folks are, they are not disrupting sales so much. Off. T traffic is retailers are really taking a hit, without a doubt. The longer this goes on, the worse its going to be for them. This is a particularly bad week for them because its golden week. , thefore we let you go person who runs hong kong, is she under pressure . Is she under pressure from beijing . That aspect has been absent from our coverage. Yes. Its hard to know. If they are not putting out a lot of press releases. Its hard to know how much theyre pulling the strings here. Andrly the chief executive she are both loyal to beijing. Im sure they are under a lot of pressure to get this in hand. I think beijing was probably pretty angry about how they let out the tear gas because it completely backfired. The fact that we are seeing such reallyumbers aggressively going after these protests in a violent way is raising lots of questions about whether beijing is taking the gloves off and having their supporters go out there. Something thats very hard to prove, but people are definitely talking about it. Conspiracy theories abound, for sure. Americas jobs day. The former chairman of the president s we look at jobs day. There is a mediocrity in the economy as Christine Lagarde said yesterday. How fragile is the Global Economy when you see unrest in the hong kong . Will that delay or derail a better American Economy . This recovery has been pretty resilient. It has not been robust, but look at the problems that have occurred along the way. The h1n1 scare in the bp oil spill. The arab spring. The arab spring, tsunami in japan. 5 . Still keep 2. 2 we have worked off a lot of the excess in the housing markets. The u. S. Is poised for stronger growth. We could see movement from 23 growth. , thethin the new neutral new normal, the new mediocrity. Do we reach escape velocity . I have difficulty with the idea of escape velocity. People kept saying we could not keep that 2 . We have for four years. We are continuing to heal. The expansion will continue absent a serious shock from abroad. There is a financial crisis in europe or asia, that can reverberate back your. Sluggishness in the rest of the world hurts our exports. We would be stronger if europe was stronger. I think were going to keep chugging along and continue to make gradual come steady improvements. Has full on improvement moved from 5 to 6 . It will be a lower on appointment rate than 6 . I think todays 6 over represents the amount of slack in the economy. A lower Unemployment Rate. Guest hosteger, our for the hour. Professor at Princeton University and former member of the president s council of economic advisers. We have heard about the numbers of high youth unemployment. A 6 unemployment the new mediocre . This is bloomberg surveillance. Adam has our top headlines right now. Ubs shares fall. The bank could pay up to 6. 2 billion. It helps clients in france it would taxes avoid taxes. U. S. Yer here at the threatening to sue google for 100 million, us accusing the search giant of profiting from images of celebrities. Google has not done nearly enough to remove the hack pictures from the search engines. Mortgage he cannot refinance his home loan. He recently made attempts to do so and was unsuccessful. He said that the homebuyer market is not what it should be. He has his own book royalties. I cannot get a mortgage. I try to get a mortgage for a second property. You are gainfully employed. For pnc bank, they were concerned about the property and they blamed the regulators are guy offered to put down 50 . The rules have become too rigid. I heard bernanke say this a couple of days ago. Its truly remarkable. Rise, ifrest rates do credit loosens up, we can overcome the higher rates. One of the most important essays of 2010 on type one type to construct of regulations. Can you explain what that means . Like sherlock holmes, be careful of what you can see. What cant we see in this new regime of regulation . If you guys can get 100 to 2000 a 150,000 loan. And gotswung too far burned badly in the crisis. Its very difficult for government officials to say ease up because regulators value their independence and they push against that. Difficulta very situation. The strongest way to approach it is for the regulators themselves bernanke was right to bring it up at the fed. They know who i am. They still rejected it. They need to address this on all due respect. Good morning from midtown manhattan. We get ready for the september jobs report due out at 8 30 a. M. This is bloomberg surveillance. President obama yesterday touted the strength of the u. S. Economy. Today, joe biden will be meeting with executives from the Top Companies to help create an action plan to address youth unemployment. , davidthose executives williams. He joins us live from washington. This is an issue thats close to your heart youre part of president obamas initiative called my brothers keeper that focuses on helping young men of color succeed. This is very personal for you. Its very personal for me. I was one of these young men. The opportunity that my brothers keeper in the things we are going to be talking about today create every important for me. A lot of Tech Companies disclosed that a majority of their employees are white, asian and mail. Asian and male what is the impact on businesses and operations . Diverse the is an important issue. Fundamentally, from a business perspective, we all sell thoughts and ideas. Every thought i have seen has been significantly better the more diverse the views are. Its not just racial diversity. Its the way people think and behave. It is making all perspectives relevant. When you put that together and you go and meet with the Vice President , what role does business meet government need government to take on . A partrnment has to be of the partnership of business philanthropy, the communities in which these young men work. We have to deliver on the opportunity and let these young men see that the opportunity can create significant benefits for from great benefits for us a business perspective and also improve our communities and our economy. The government used to have a Summer Youth Employment program. That eliminated a couple of years ago. That provided jobs for hundreds of thousands of youth. Their work commitments by businesses to step in. Commitments by businesses to step in. Essential. Its workforceearch of the in the summer. Of the workforce in the summer. It creates significant opportunities for us as a the notion develop that these folks can contribute and ultimately drive our productivity. We are in the talent business and its important we make sure we get as many people employed as possible. Work that opportunity to over the summer is a pretty significant accelerator. Your capital goes up and down the elevators each morning. I think of the societal links here that have been broken over the recent decades. Loyaltye get back the of employers who unmet toward, not guided, no bond between those that are older and those that are younger . How do we get that back at the business level . Simply, we have to make the community smaller. We have gotten so big, so expansive in what we do everyday. I remember the days i was in that position. It was a mentor, a group of people i work with every day grabbing me by the back of my neck. I dont think its impossible, but i think its more difficult given the way that businesses has evolved that have evolved. Way . Es media get in the i dont think so. I think its our biggest asset. Its a way to communicate. The communication when i grew up was by television or snail mail. The digitalization of the world makes it a different issue that we have to deal with. We have to evolve to it. Unemployment is an issue across the world. We had our best chart that really speaks to how an increase in young men age 1529 is a source of concern. Beld destabilize destabilizing socially. If they cant get married, cant start a family, cant find a job , that can lead to problems down the road. You were just in india. It provides a tremendous opportunity. You look at india, half the population is still living on farms. Thats going to change over the coming decade. You will have millions of people every year moving into the cities. India needs about 10 million jobs a year to accommodate their growing population. Opportunities. It could cut its red tape and improve its competitiveness. Successfullyo placed young men of color in employment situations, what feedback do you hear from them . There are plenty of obstacles along the way. There are plenty, but we cant start knocking those down until folks get a chance to work. At the feedback i now see a vision, a way to get from where i am to where i might want to be. Thats so important. It will drive us to a better outcome. David williams, thank you so much. He will be meeting with Vice President joe biden later on to talk about this issue of youth unemployment. We make it also medicinal, clinical. Its very real. Jobsg up, does a strong report mean the fed might raise rates sooner . Is 6 unemployment the new mediocre . Good morning, everyone. We are excited and hope you are, too. Heilemann this will be very different. Go to Bloomberg Politics fa cebook and you can see a photo of mr. Heilman with hair. They are on facebook. On monday, the launch of their vertical with some smart reporting. Ith all due respect they will dazzle you as we go to the election. They do politics across and smart,nternet short, focused stories and then the Television Show at 5 00 p. M. There was a short, smart, focused address from the president yesterday. Aching a victory lap. Taking a victory lap. Our economy stronger today than when i took office. By every economic measure, we are better off now than we were when i took office. Time, its also indisputable that millions of americans dont yet feel enough of the benefits of a growing economy where it matters most, in their own lives. By every economic measure, you are better off, says the president. Thats good to peter cook who will be breaking the jobs data. We will see where things stand. The president made his case for the obama economy. The economic policies on his watch. Be the rally cry for democrats heading to the midterm election. He probably did there are a lot of republicans ready to criticize him. He said it was not a campaign speech, but it certainly sounds like one. The president making his case that the economy has turned the corner for most of america. Today, we will see at 8 30 how strong things are. 250,000 jobs is the expectation. Eady atyment heading stu 6. 1 . Any sense for what the message will be at the platform . He will make another announcement there about a new Institute Focused working with the defense department. Other competition out there for American Workers to be part of the manufacturing renaissance he talked about yesterday. He will be pretty focused on the domestic side of things. Eventsre a lot of happening outside the u. S. That are dominating the headlines. Scarlet, whats happening in hong kong . Hong kong police have come out to say that its very chaotic. There were some scuffles between protesters and folks protesting the protesters. But have increased officers and district. They have increased officers in the district. There is a lot of speculation there a perfect image that captures what im seeing on twitter. The tension between the students were protesting and the adults sang enough protests. You are being disruptive. Who are these protesters . Some are saying they are hired by china. Scuffles captures it. Friday on into the we will continue to monitor this. Tension certainly in hong kong. A degree of tension here in the u. S. And 8 30, we get the unemployment data. Years. Est in six has not improved in four months. Pleasure to have you with us this morning on jobs data. Suggestssible the data the benefits of the current fed policy, low rate policy might have run its course . I dont think so. I think the fed has done about the right thing. They decided the economy was Strong Enough so that they could phase out their quantitative easing, theyre buying of bonds. Theyre doing that. We dont seem to have had a negative reaction to that. On the other hand, theyre keeping the shortterm Interest Rates very low because the labor market is not fully recovered. We have a lot of people who have been unemployed for a long time or are working parttime. So, i think they have called it about right. We have yuan alan krueger with us today. Lets ask you about kruger. Conomics and w we have to be aware of the structural permanence of this out of unemployment. You agree . I definitely agree with that. I dont think its something the Federal Reserve can do much about, besides not making it worse by raising Interest Rates in the near term. This is a fiscal policy problem. Weve had the budget deficit coming down, which is negative for the economy. Its a little less negative than it was a few months ago. Jobs,d to create particularly for people who have been unemployed for a long time. Would you suggest we need more stimulus or an overt stimulus . I think that would help. When it comes to the longterm unemployed, their problems are different. They have gone a long time being rejected. They face a psychological barriers. I think its important to target are measures at the longterm unemployed like a tax credit for employers to hire someone who has exhausted unemployment insurance. Policyhere a prescription other than allamerican economic gdp growth . There is no magic bullet. We need more gdp growth. We do have a differential problem in the longterm unemployed. I think we do need to invest more before an infrastructure program. Infrastructure. That would help people who have been unemployed. That was front and center of Christine Lagardes argument yesterday. Beene president has pushing for infrastructure since i first met him in 2007. As you know better than anyone, the budget has been looking brighter in the longer term because Health Care Costs have been growing more slowly. Each year that goes on, it seems like its less likely its cyclical and more likely to change in our health care system. What do you see Going Forward . You thatt surprise im not sure what the answer is. We have definitely seen the slowing in the growth of cultures pending. The federal spending for medicare and medicaid wont grow up as fast as the cbo thought it would. We dont know exactly why that is. It may be partly the recession itself. The hope is that it is partly the impact of reforms in the health care system. We are getting more for our money. We need to continue on that the fee move away from for Service System and reward Health Care Providers for value provided rather than volume. There is a lot going on in that sphere. We are not sure how effective it will be. Thank you for joining us from washington on the jobs day. Excellent to have your perspective. The director of omb. The deficit is coming down and thats a negative for the economy. Its ok to keep spending money we dont have for now. We brought the deficit down to quickly and in the wrong way. We want to bring up our twitter question of the day. A 6 unemployment the new mediocre . Good morning, everyone. Critical headlines coming out of hong kong right now. Theou can get us some of images weve been seeing through the morning. There is a key headline. Hong kong police to clear occupations. These are shots of the district. There have been some scuffles, north of we know these protesters have centered on various sections of the city. The exit of William Gross from pimco. Prior to that, the exit of one d. Ll ou all aren betty liu has an Important Program today wrapped around jobs report. Alan krueger will join her. Allen was with us for the last jobs report. He has been reiterating this stance that we have not reached escape velocity yet. To create jobs beyond that average 200,000 weve seen. This is mohammeds first interview since bill gross announced that he was leaving pimco. Shocked the market. Mohammed left pimco seven months ago. The start of this year. Another shocker to the market. We will have our first chance to talk to mohammed about the situation. Not just bill gross, but about pimco himself. Advisor. Chief economic he is very much in the know there at that firm. We know that for now, hes not going back to pimco. Knows a lot of the players. We will ask him whats going to happen with the firm. Theyre going through some changes. They Just Announced that the ceo is stepping down. This was to land anyway because the ceo was due to retire. Anyway. Ed as i understand, yes, that was planned way ahead of time. It just happened to be the timing was suspect. It raised all these eyebrows. There is a lot to cover. We will have other guests as well during the jobs report. Look at this lineup. Perez, the labor secretary. Who may be on the shortlist for attorney general. Betty liu with an allstar lineup at 8 00 a. M. We will be right back on bloomberg surveillance. Good morning. Good morning, everyone. Jeffrey rosenberg will join us from black rock on monday. This is the jobs they. Jobs day. Betty liu will have that at the age 30 announcement. I want to show you a chart that may be chart of the year. At the 8 30 announcement. Labors share of the corporate sector. Alan krueger with us from Princeton University. This is a profound chart. Absolutely. It has been stable for decades. Beginning in 2000, it started to decline. Thats what people are not seen this recovery as much. Why do we see this decline . American greed or Something Else . An aspect of that. Partly that labor Marketing Power is a lot weaker than it used to be and its related to the changing technology we are seeing. Before technological change helped high skilled workers, it seems to be replacing all workers. This is about logical progress. Technological progress. Of thenature Technological Progress seems to have changed. If labor substituting as opposed to labor come plummeting. Or Capital Investment raised wages for workers. We are shifting robots. Thats one aspect of whats going on. This is so critical we review this again. Compensation versus substitution. We invested more in capital and that helped workers. It made them more productive. It made the jobs better and the whole economy benefited. Now come it looks like the nature of the technology is substituting workers. We have a twitter question. We want to get his answer to our twitter question. Is 6 unemployment the new mediocre . Here are the answers. Figure. Soon be a low well done. Great answer. Word, yes. Usa squandered money and opportunity. This goes back to what Christine Lagarde said. Why cant republicans agree . What is holding us up . Republicans have constituents who drive on bridges. They will have to support these infrastructure initiatives at some point. Its a sign of this auction a sign of dysfunction in our congress. It makes a tremendous amount of sense. We need to be more creative. Figure out ways the private sector can get the returns from investing in infrastructure. We had something in the recovery act cold bee called build ameria bonds. Unfortunately, congress did not renew it. How about this answer . 6 is puny. That goes back to that whole participation rate. We dont talk about, but should be. Its still a recession. If youve been so discouraged that you cant find a job. Its a step on the way to full employment. I think we are going to get back to 5 . Its going to take a bit more time. A stepping stone according to alan krueger. Inmy agenda is the situation hong kong. Tensions escalating as prodemocracy protesters are clashing with some opponents. For more, we have andrew davis joining us from hong kong. They have not been violent clashes in this shot. I want to ask about the nature of these protests. They turned violent when police sprayed tear gas. Who is behind these antistudent protests . A very good question. The students say these are organized reactions. Its hard to say exactly who they are. Are normaley citizens who want their lives back to normal. There are a lot of people who got out there very suddenly and very violently and its raising a lot of questions. The police who had been invisible after the tear gas attack are back in the street now. This time, they are protecting the prodemocracy demonstrators from the mobs. Interesting. Instance, today, one of our reporters was out taking and latercauseway bay we saw one of the people that was confronting people in causeway bay saying he was a local Business Owner on the thing onoing the same the other side. That doesnt prove anything, but its curious. From aave headlines jewelry chain. They have shut down their shops because of the violence. Early closings due to these clashes. It turned violent. The police are now protecting the protesters against the antiprotest protesters themselves. Is there any progress between the students who said they want to talk and the number two who said that she would entertain that possibility . Its an interesting question. These announcements came overnight. The press conference was around midnight and students responded after that. Tensions were ratcheting down. The students were quiet all day and now this happens and the students are saying there is no chance of dialogue unless the violence stops pu. But in the ball back in the chief executives court putting the ball back in the chief executives court. I think what we will probably see as more people leaving the prodemocracy people leaving causeway bay. There arent shops and businesses. There is space between them and the rest of the city. Andra davis, thank you so much. Andrew davis, thank you so much. Im focused on ebola. The mathematics and the clear reporting i saw in washington. The number is bigger than 3000 as we see the expansion of the illness. An nbc employee affected by ebola. You wonder where we will be in 10 days. Said, worstcase scenario, it doubles every 20 days. Heres whats on my agenda. Ervice sector pmi its forecast to decline for a third month in a row. Should be be concerned . Its expected to be about 50, which is a sign of expansion, just slower expansion. I would not be terribly concerned. I think the jobs number is going to dominate. Unemployment insurance claims have looked quite good. Companies have been laying off fewer workers. That is a good sign. If you look at the whole range of indicators coming in come the expansion looks like continuing, may be gathering steam. I like that possibility. Crisis. Out of the president has a new tone it to his voice. He has a Foreign Policy initiative, success. Vigor. Irmness and a did you notice this . I think yesterdays speech marks an important milestone. It says the white house is going to sell the economy. The economy has been improving, but we had such a deep hole that we are very reluctant to talk about it. Its a good news story. Its a tough job. If you are listening this morning, alan krueger took a real shot. Thank you so much for joining us. But he will continue the jobs coverage right here on bloomberg willision betty continue the jobs coverage right here on bloomberg television. Good morning. We are live from bloomberg World Headquarters. Day. Job we have a huge show ahead for you as we await september possible employment report. Elerian joins us. Perez, austan goolsbee, and alan krueger. Be joining us over the next two hours. We will discuss the policy for u. S. Politics. We are going to have mohammed al. Rians thoughts this is the first time he is speaking out. Less than 30 minutes away from the economy report. Stocksdicate scott will be higher. It could change after 8 30. The cyber attack on jpmorg

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