Twoyear is now trading, but that doesnt seem to matter. The majority of debt in europe all undergoing this powerful rally, despite the fact that we are going to see horrific unemployment number in about an hour and a half. Lets get you out of the market moving news from our new york team. We want to start with the much awaited u. S. Jobs data out of april for the next hour. Economists now estimating 22 million jobs wiped out in the past month. Joining me now is carl riccadonna, bloomberg chief economist. It is hard to put these into perspective. Help me out. Morning. D these numbers point to immense disruption in the u. S. Economy, on a scale we really have not whichn recorded history, goes back to either world war ii or the great depression. ,o put some context around this this is far more than all of the job losses we saw during the Great Recession concentrated into a single month. If we take the job losses of the last nine recessions, lump them all together going back to the late 1950s, it would concentrate all of that job loss into a single month. That is what we are seeing in the april jobs report. By a is easy to get lost large number. This is telling us there is no vshaped recovery for the u. S. Economy. Support fromd for monetary and fiscal authorities. This just speaks to the difficulty of reopening the economy and getting it back online. The healthcare crisis aside, just having this much of the economy shut down will be very difficult to reawaken. That why the fed funds futures curve went negative yesterday . Is that what we are reflecting, that need for more . Carl i think yesterday was a bit of a technical move, but the fed has made it abundantly clear that negative rates are not coming to the u. S. , not on the yield curve and not on the overnight rate that the fed determines. They dont view that as a viable policy tool, so that was more is a technical reaction coming apart in response to some unexpected surprises in the quarterly refunding announcement from the treasury on wednesday, but which signaled more issuance at the longer end of the curve, some people were unwinding bets. As long as jay powell and most of the folks at the fed continue to call the shots, we are not heading toward negative Interest Rate policy. Alix that sets the backdrop for when we get the numbers, and like you said come the numbers are going to be terrible. What does the market needs to parse through . Carl the focus is going to be on the payroll change, things like the Unemployment Rate distorted by participation issues. Maybe you lost your job, but werent looking while the economy was shut down and shelterinplace measures were being enforced, so you technically arent considered unemployed if you arent looking for a job. The Unemployment Rate might not reflect the full extent. Of things. Things like average hourly ,arnings tend to get disrupted so whats the payrolls number. Team is looking at a little bit more than the consensus when that data hits at 8 30. Alix carl, i really appreciate that perspective. Lets go to the markets. U. S. Equity futures up this morning. Investors weighing economies tradeing, plus developments, despite all of the gloomy Economic Data. Annmarie hordern has more. Ive labeled it the by everything rally the buy everything rally. Annmarie u. S. Equity futures are decidedly green ahead of the open. Part of this is because of the softening of the tone, what we saw between beijing and washington. Robert lighthizer had a call with the chinese vice premier liu he. On that call, they talked about the progress being made to set up this infrastructure to implement the deal. Crucially, part of the deal is in spitethat they said of the health emergency, both expect to meet their obligations under a timely manner. I think that is part of the reason we are seeing this risk on rally, because there has been a big question mark about whether china is going to be able to meet their part of the deal. The agreement calls for china to buy an additional 200 billion of goods and services in 2020 and 2021, compared to 2017 levels. Because of the pandemic, we have seen a lot of those imports dropped. At the moment, they are really behind the pace they would need. Of course, in general we have seen a deteriorated rhetoric between beijing and washington. President really blaming china, saying they did not properly warn the rest of the world about the scale of it and even threatening more tariffs as a punishment. So this call certainly eased some of those tensions, and it was a positive dialogue for the markets. Alix thanks so much. Continue to keep track of earnings season as well here in the u. S. The s p 500 is looking at 80 of companies have now listed results. Based on guidance and lowered expectations, there seems to be very little hope over the nearterm outlook, which continues to question why we see the equity rally. Earnings estimates declined 20 in 2020. Fallts expected to 41 in the second quarter. The biggest losses, you looking at capital one, wynn resorts, and boeing, a breadth of sectors getting hit. Coming up, more of your morning news, trade and analysis of the markets in todays first take. This is bloomberg. Happy friday, guys. Alix time now for bloomberg first take. Joining me from our inhouse team of wall street veterans and insiders is Michael Mckee, Bloomberg International economics and policy correspondent, and Damian Sassower, Bloomberg Intelligence chief emergingmarket credit strategist. I am interested in what part of the market you are looking at most closely today. Damian i heard you discuss it with carl. We are talking about negative fed yield going out to the funds rate. If you need deals in an environment where money market yields are down to 20 bips, you really only have three options. , move out and quality move out in quality. Move down along the curve is two. Seeing some really badly hit emergingmarket currencies rallying here. We are now coming through some levels that give you a little bit of confidence that perhaps this might be the beginning of something bigger. Alix mike, can you pivot off of that . We know jay powell has said no negative rates, but the fed has consistently followed the markets. Michael this is a little bit different situation. First of all, the fed doesnt that negative rates work. And this is negative rates. This isnt just lowering the fed funds rate by a certain amount. It has severe policy implications, and it hasnt occasions for the money markets, which at this point are barely hanging on. Some of the money market funds waving their management fees, and they are working very hard to try to make enough money to keep their net values positive. , thaty were to freeze up would be a real problem for the overall economy. It is not a big deal in japan and europe because they dont really rely on money markets. They dont have the same sort of structure we do. Alix that is an interesting point. Theres a huge knock on effect for that. It would be a repercussion for that . Michael if the money markets arent trading, if they are not seeing big inflows that they have to manage, then you are going to see the money markets, commercial paper, repos, then let that dry up because they drive a lot of that. That will make it harder for companies to fund themselves, and you have severe problems there. Alix we have already seen some money market funds shut down funds for new investors because they cant get return either. You alluded to the fact that that pushes you out the risk curve. India sold bonds today at really low yields, huge demand, but they are the epicenter of the worst part of the crisis on an economic level, and they are also still expanding their cases of covid. Damian it needs a little bit of a different animal india is a little bit of a different animal. It is one of the few economies in the world where inflation is set to rise. That is not by much, and totainly you are also going get Industrial Production on but it speaksia, to the broader emergingmarket landscape and how you are seeing these massive rate cuts. We are probably going to see mexico cut rates another 50 bips thursday next week. Italy will probably resist. A lot of Central Banks in emerging markets and markets outside the u. S. Are really limited to the extent they can stimulate via quant easing, so they go to rate cuts. Alix lets just pretend we still see this trading continuing to happen on the fed funds futures curve, and we are flirting with negative rates. At what point does that give you a shift in how you view where emergingmarket assets are headed . Damian the most important thing youve got to look at is the dollar. What is interesting is the bluebird dollar index the bloomberg dollar index is forming a bullish formation. Investors are snapping up dollars on these down tics. You could have a sharp move to the upside just given where the technical patterns are. You can make the case that people might begin to look abroad to get a higher carry, a higher yield, but i think it is just the dollar thats just the elephant in the room. If we see another sharp move to the upside, all bets are off. Alix we had an options call on bloomberg talking about that we didnt see any reflection in the dollar. Mike, the elephant in the room, the jobs data. Catherine man over at citi had a note out talking about how the stock market rally remains puzzling. However, given that markets cannot be propped up indefinitely, risk ask it risk assets could be fragile once the cold, hard economic reality hits again. What is that cold, hard economic reality . Michael this could be the worst report for any Economic Data in United States history. We may have had worse times, but it wasnt captured in data that didnt exist then. It is going to be absolutely terrible. It has been predicted to be terrible for a long time, and markets have processed that. They are starting to look forward in a different way. The equity markets seem to be looking forward to a recovery. The oil markets reacting obviously to supply and the idea of a recovery, and the bond market seems to be looking the other direction, that things are going to be terrible. Maybe well have a second wave because the futures markets barely turned negative yesterday. Today they are decidedly negative. That is pulling the whole curve down, and we are seeing big drops in treasuries. It is going to be interesting to see how this all sorts out. Thats the yield curve. Forcan see below zero there many months, starting in december. It is going to be different aday because we had will have hugely bad number that everyone is already priced in, so we do get so do we get a real reaction or not . It is just going to be evidence of what we know already happened. You will have to look deeper into the numbers and may be divine something about the futures, but it seems markets have already made up their minds and our trading like the number is already out there. Alix damian, what you thing about that . What do you think about that . Damian the fed seems very willing to lend on a secured basis, but when it comes to unsecured loans, the price seems to be relatively prohibitive for a lot of borrowers. What you are seeing in the u. S. With regards to below Investment Grade debt sales, very challenging environment. You saw United Airlines yesterday. It is going to need to sweeten its offer. Lenders required to place their loans, along with tighter covenants and lower leverage triggers. It is a really challenging environment, and this all speaks to the fact that while theres a lot of liquidity being thrown at the issue, banks are still unwilling to lend when they dont think they can pay them back. I think that a starting to manifest in the yield curve ended the numbers. Alix gm, for example, selling that. They are still Investment Grade, yet they still look like highyield, to your point, which is a great segue from the jobs data to the overall equity market. Luke kawa had a good piece out talking about how the broad markets are pricing in where company survive, not thrive. That could be why you are seeing the improvement of highyield in some cases, and in the credit market versus the equity market small caps, for example. Do you feel like the data has reflected that, the survive not thrive situation . Michael i dont think so, not yet. This is the beginning of that. We will see how broad the job losses are, what categories of jobs, which will give us an idea of how hard it will be for some companies to recover. You see some themes in the markets that are kind of obvious. The tech leadership, the nasdaq, we are thinking that yes, tech is going to lead the way out. Everyone is working from home. You can look at companies in the smallcap space, which is where tech starts and bubbles up, and start to look at Companies Working on things that would be useful in the future. Same with health care, obviously. Everyone is looking for the drug company that is going to produce something that works against this virus. So it makes sense in a broad sort of sense, but the idea of which companies are going to recover the fastest is a little hard to divine at this point because we dont know how long this is going to last, and how quickly we are going to get people back to work. Alix you spoke to mary daly yesterday. I was struck by the fact that she was like, look, no one is expecting a vshape. We are looking at maybe trying to recover in 20. 1. Did that feel more pessimistic in 2021. Did that feel more pessimistic than we wouldve heard weeks ago . Michael shes been pessimistic all along. She said we will see contraction for most of 2020 if you weeks ago. I asked her if she still feels that way, and she said yes. It is kind of interesting because she has the largest geographical district, so when she says she is hearing and seeing from Corporate Leaders stretches a very wide geographic range. So you get a feeling that in the west, which is the home of tech, people are still not optimistic. That doesnt match up with what the markets are doing. Alix totally right. That is such a great point. Hatan, put your traders back on. What do you do . Damian i would just play off the back of what you just said on tech. Weve got some big earnings coming through next week, including tencent on wednesday. We are also going to see interesting earnings from aramco and petrobras. Admittedly, we have gold testing resistance, oil heading for the first back weekly gains since february this week, and as i mentioned previously, this bullish formation in the dollar. These are all really critical levels that are going to tell us where sentiment is headed as we move into next week. Weve got 13f filings, earnings, a lot of things coming through, and certainly todays payroll are front and center. Alix really appreciate it, guys. Bloombergs Michael Mckee, things a lot, and Damian Sassower of Bloomberg Intelligence as well. Any charts we use throughout the show, go to gtv on your terminals. Browse the features, check it out. Gtv. This is bloomberg. Ritika this is bloomberg daybreak. Intel is being accused of comfort rising worker safety with its order to keep making computer chips. People who work at an intel plant ins nsa staff was not isolated from teammates who were tested positive the virus say staff was not isolated from teammates who were testing positive from the virus. Neiman marcus says it expects customers to return after its bankruptcy restructuring. The company has filed for chapter 11 and planes to emerge from the process in the fall with debt up legations of about 5. 5 billion dollars, cut by about 4 billion. That is you Bloomberg Business flash. Alix thanks so much. That Neiman Marcus bankruptcy is likely to be just one of many. We already heard from wellknown names like j. Crew. Jcpenney is signaling it may not be far from it. It just missed another Interest Payment of about 7 million yesterday, the second missed payment in just the past month. For Many Companies, the letdown just made preexisting problems even worse. The amount of debt the u. S. Testified as distressed rose almost 61 in the last two months. Washington is still tossing out life preservers to select industries. Still, corporate bankruptcies are on track to match the 2009 level. Coming up, we will dig deeper into the key data points you need to watching todays jobs report with Constance Hunter, kpmg chief economist. To highlight some of the big movers of the morning, i did want to highlight uber. They have terrible earnings, but they see the business starting to recover. They see their first decline ever in rides, but say maybe we have passed the trough and we are getting a little bit better here. Some of the other movers we are seeing, we have carnival up by about 3 . Some of the beatendown names trying to rebound as we head into that jobs number. Microsoft also higher. It is all about those Big Tech Companies still leading the way. Apple moderately higher as well. This is bloomberg. Alix welcome to bloomberg daybreak. Im alix steel. If i told you we were headed for unprecedented loss in jobs in the next hour, you would not see it in the markets. We are building on gains today as well. The u. K. Is closed for a holiday, but european equities still seeing some upside. Switch of the board, and it is about the bond market switch up the board, and it is about the bond market. We are continuing to build on record lows today. Take a look at the twoyear, down by about one basis point yet again. Well, continuing to i little bit of a bull steepener, but it is a dicey situation. Also, youre still seeing a rally in things like oil, as well as gold. The only thing weaker is the yen and the dollar in the g10 space. Joining me for more on the markets and a look ahead to that jobs report, bloombergs Michael Mckee still with me, and Constance Hunter, kpmg chief economist, joins us now. I want to set it up. Weve already talked about what to expect in a broad sense, but on a really detailed basis, what are the nuances we have to look out for . Michael im glad you asked because there are a lot of nuances in this report that will make it a little bit harder to read because the accuracy of the report may not be what we want. , there arent as Many Companies answering the survey. They sent out a survey, but if the company is closed and nobody sends it back, they are not going to have that data. They said in the march payrolls report, about 10 fewer companies were reporting. That means the error bands are wider because we are working with more limited data. Miscoded responses, this is a big one. When they do the unemployment survey, people were asked whether they were laid off because of covid. If they were, they were supposed to be listed as on payrolls, unemployed, but temporary layoff, which would have kept them in the labor market. Many people werent. If that happens again, it is going to make the denominator in the Unemployment Rate smaller, and we will have a lower and limit rate, or higher Unemployment Rate, depending on how it all plays out, than actually exists. Defining who is in the labor force is still the issue. Are people looking for jobs . Do they have to be looking for jobs . There is some thought that the bureau of labor statistics has dropped that requirement at this point. Hours worked should tell us whether people are being cut back or not, but still on the job. The problem is how do you measure hours worked at home . If you are in the office or on and the simile line, we can do that, but do we know how many hours people are really working at home . The employment report misses gig workers and the selfemployed, so that is an issue. Then, the birth death model used to simulate Small Business creation and disappearance, that is going to be completely inaccurate because weve never had anything like that. It is going to be hard to tell whether the number captures all of the data. Does it really matter, given the magnitude of the losses . Probably not, but you wont be able to take these numbers to the bank necessarily. Alix great set up. It is almost like we planned it. Constance, youre going to have to interpret that data in realtime also. How are you thinking about it . Constance mike brought up a lot of good points, and i think i would say there are three main things. This is going to both understate and overstate the problem because of some of the quirks mike brought up. Another thing is that it looks like there was a great pap datao have weekly granularity and allows us to see the situation from the firm side. Quintile, 35 of people were laid off. In the top quintile, it is only 9 . This distortion is going to make it look like wages have gone up, given thect, it is distribution of whose lost jobs and whos been able to keep their jobs. So there is going to be a lot of distortion. There are going to be corks that are important to know when looking at the data. Mike went over a bunch of them, and i think this disconnect from the headline number and the Unemployment Rate is going to be an interesting quirk. People are used to looking at the Unemployment Rate and having it be a meaningful piece of information, and we are really going to have to dig under the hood. Mike brought us something really important, which is people who classify as unemployed but absent from work last time as employed absent from work last time were missing asked time, so that will be a big upward revision to the number. You are going to have to look at all the notes and not just the headline numbers you are used to looking at because there are so many quirks happening. The final thing i would say is this is just shockingly bad and tragic, and lets not forget these are real human beings who are experiencing this. It is just a very sad situation. Alix and i know many of them also. Constance, no doubt the narrative post 8 30 will be, well, this is maybe the trough. This is the worst it is going to get. We are not going to see as accelerated losses as we move forward. Is that the correct narrative . Something i am worried about or hearing about is also a second round of layoffs, not necessarily from the retailers, but from higherpaying jobs as we try to reopen, and then maybe stutter back and forth. How do you think about that . We have given a lot of thought to that. While this may be the largest single decline in a given month, one of the things we are going to be watching is how many of those people that thought they were temporarily laid off, how many of their firms come back. We are not going to really be are to reopen and you permanently laid off. That is a huge risk. The second and third round of layoffs, we are expecting, unless there is significant assistance to states, to start seeing state and local layoffs starting in december. And businesses that have been even in the summer. And businesses that have been affected, even then we expect continuing losses over the summer, and people are not expected to be rehired swiftly. If we look at the sectors with the largest layoffs, which are leisure and hospitality and retail, the sectors are not going to come back to normal just because the economy reopens. So the rehigher rate of those who have lost their jobs is a really important factor. Rehire is maybe not the right word. 80 of those who were new job losers in march were put on temporary furlough, so that means if we add it all up with all of the people that were unemployed previously, about 27 of the labor force was on temporary furlough. We expect to see similarly high numbers for the newly unemployed said, watching i how that progresses as those people remain temporarily unemployed, or if they move to permanent, is going to be a really important factor in determining how quickly these jobs are going to come back. Michael let me jump in on two points constance made. The furlough point first. Arebls has ruled if you furloughed, you are not getting paid, you are considered unemployed. If you are getting paid, you are counted as still on the job, even if you are not working. And this is only paychecks, not insurance. If you are not getting paid but you are still getting Health Insurance, you are still considered unemployed. This is one area that might be helpful in figuring out where we go from here. If you look at those sectors where the most jobs were lost, and the adp number gives us a breakdown of that to a certain extent, as constance said, andure and hospitality trade and transport were first and second. You can see how broad the job loss was across many categories. Finance lost 200,000 jobs. That would have been a big job gain or loss in any previous month. That is way down the list, as you can see. We can see how broad this was. That gives us a picture of, if the labor numbers match up to this, an idea of how long it is going to take to get back. If we were just talking about leisure and hospitality, we could guess at how many restaurants might close and that sort of thing, but as constance said, it is really hard to get a lot of these things up and running again, and companies are going to have to decide on the people they need. Remember yesterday you were talking to the ceo of papa johns, and he said we are thinking about whether or not we need all of the people we used to have because we have been able to operate without them . That is going to be a key feature Going Forward as well. Alix that is such a good point, and that effects all of the industries. Go ahead, constance. Constance the other thing that one can see in the adp data is business exit. Business dynamism is a really big issue, and mike alluded to this earlier with reference to the birth death model. I think it is going to take some time to dig into that data, but what i fear the adp data is seeingng is that we are people losing jobs because of business exit. They say almost 40 of lost employment can be attributed to business exit. That is just heartbreaking. You becauseword to we saw some really historic moves in the bond market yesterday, as well as record low yields in the two and the five. How do you digest that as an economist when you are the one looking at the data . Constance good question. I guess in terms of the markets, i look much more to the bond market as an indicator than the equity market, and then look into all the different aspects. I dont think the fed is going to go to negative Interest Rates for a multitude of reasons. Thens more effective tools the ecb, and even really than the bank of japan, because of the ways it can lend into the theet, because of stipulations. So i dont think we are going to go to official negative rates in the u. S. But just like we saw in the oil markets, there are some quirks about the extreme this of this situation that can cause temporary prints that are very distorting. Alix good distention for us there. Thank you so much, Constance Hunter of kpmg, and bloombergs Michael Mckee. Tune in later today to get the white house reaction to the jobs number. Larry kudlow, National Economic council director, will join bloomberg at nine for lynn 30 eastern time at 9 30 eastern time here in new york. Lets get an update on first word news. His ritika gupta. Heres ritika gupta. Ritika Prime Minister Boris Johnson will set out a plan for how restrictions will be eased. Bloomberg has learned there may not be a major change until june. The u. K. Infection rate has crept up in the recent days. The top trade negotiators for the u. S. And china have agreed to cooperate on that trade deal. It is the first time they have spoken since the agreement was signed in january. So far, china is running behind the pace for buying more u. S. Product. The uncertainty caused by the coronavirus outbreak could hurt beijings ability to meet those targets. Oil is headed for its first backtoback weekly gain since february. New york oil is up about 24 this week. The biggest producers have been cutting output, and there is more evidence that demand is starting to come back in the u. S. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Alix thanks so much. Yet, oil still trading at just 24 a barrel in the u. S. For more on oil, tune in tonight to hear from analysts and specialists on my coronavirus special tonight at 9 00 in new york. Coming up, some companies are still looking to hire. We will speak to ellyn shook, accenture chief leadership and hr officer. If you have a bloomberg terminal, check out tv. Online, if you missed any interviews, go back and rewatch. This is bloomberg. Alix there are still a lot of companies out there looking to hire, despite the job cuts we are seeing. There are platforms out there to help with that. People plus work connect was created to combat unemployment for both businesses and workers. Its founders are accenture, lincoln financial group, verizon, and service now. Joining me is ellyn shook, accenture chief leadership and hr officer. Can you walk me through how you started this, and how quickly you got the program up and running . Ellyn sure, thanks for having me. People plus work connect was an idea on march 24 that was born out of a conversation that a plants of accenture had with our ceo group of clients of accenture had with our ceo. Call,he dropped from the we were sharing ideas, talking about all we were doing to get our people to work from home, and we realized that the opportunity was much bigger than just dealing with the issues within our own company, and there was an opportunity to make ,n impact, but more importantly i need to do so. So we got on the phone that might to really talk about what we could do, and that is how people work connect was born. It is a platform or companies on both sides of the job equation, those that are hiring, and also that are furloughing or laying off workers, can convene to help people put back to help put people back to work. And that is really the mission of people plus work connect. He platform was designed alix in theory, just to break that down, if i am a business that needs to hire 10 workers, we can meet on the platform and go through and see if it is a good match. It is basically, in essence, what it is. I am curious to how that is evolved in the few weeks in a few i am curious as to how that has evolved in the few weeks it has been up. Ellyn we launched with 10 companies, and we now have over 900 Companies Actively engaged with us. So it has grown tremendously, and now in 47 countries around the globe. Concernedwe were very that we would only get companies who had people they laid off or furloughed on the platform, and we wouldnt have jobs. That in fact, it has been quite even. The First Companies that came on really were the catalyst to demonstrate that at a time like this, during a societal crisis, Companies Need to step up and take care of their people, and people plus work connect provided a way to do that. Expect this tou evolve Going Forward as economies start to reopen . It remainsink that to be seen how quickly people will be able to get back to work and how employers are going to return employees to the workplace, but what we have committed to do is keep the platform alive as long as there is a need for it. We have seen it evolved quite a bit. I think one of the most interesting things is that employers usually hunt for workers and their own industry, but some of the best matches that are being made are being becauseoss industry people have access to new sources of talent that they could have never imagined before. Alix can you give me some insight into what accenture is actually doing in terms of hiring, but also how your labor workforce looks different Going Forward in terms of working from home, bringing people back, and how that plays out for accenture . Accenture is still hiring. We moved to virtual onboarding, which is going great. We are hiring for very specific skills right now, like cloud and security and people who have deep industry expertise, so the hiring continues. As far as when our workforce looks like in the future, we are quite fortunate. Announced in his latest earnings that accenture was the First Company with over 500,000 weree on teams, so we quickly able to move our workforce home, and now we are already starting to see groups and countries come back to work. I think that work will have changed forever, and it would be a missed opportunity for us not to really look at how work is done and how we can take the learnings from this few months and really turn it into something very different for our people and for our clients. Alix it was really great to catch up with you. I would love to catch up with you again as we evolve throughout this process. Ellyn shook of accenture, thank you. I want to break some news for you. According to a person familiar, canada lost 2 million jobs in april. The drop in employment is apparently the largest monthly decrease on record, and that adds to the one million decline we saw in march. The jobless rate also jumping to about 13 in april. The ugly numbers we were expecting continued to roll in. Volatilityemfx relative to its peers. In todaysng up traders take. This is bloomberg. Ke. This is bloomberg. Alix time now for traders take. Joining me is Damian Sassower of Bloomberg Intelligence. You are looking at emfx vol. Damian we are dusting off the ratio. X g7 emergingmarket vol is elevated relative to g7 counterparts. In order to hedge these currencies and offset that risk, volatility has its price. For me, you look at the underlying currencies driving all of this. If you just look at the strength this week in the peso, the ruble, the rand, that is a relatively good sign that things are starting to roll over. But only three of the 19 weeks this year have the brazilian real been positive. It just stands out as having been really weak. Now with the lira rolling over, sentiment is deteriorating across that universe, and something we have to focus on here. Emx i know you are an credit guy, but is the s but is it the same in the equity market . That has to dof with china equities. They comprise a very big portion of the em equity universe. Those are good, cyclically speaking across the em universe. But i agree, there are certain pockets of certain Asset Classes within em that do make sense in this environment, and those are a few of them for sure. Alix i cant let you go without touching on argentina, talking about volatility. One creditor deal extension extends thats the one creditor deal extension ends today. The one creditor deal extension ends today. Damian im not happy for argentina because it doesnt look like a deal is going to get done. Default seems to be the base case, but you we will not know about that until the 22nd. Hopefully we have time between now and then to get something get area i am up something done. Im optimistic. We will see what next week has in store for argentina. Alix all right. Happy friday. Damian sassower of Bloomberg Intelligence, appreciate that. Coming up in the next hour, torsten slok, Deutsche Bank chief economist, will be joining us. We are about a halfhour away from that jobs report as we continue to see this buy everything kind of rally. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. So were working 24 7 toected maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Alix investors for aprils jobs number to reveal the depth of destruction caused by the coronavirus. Top trade negotiators for the u. S. And china plan to follow through on their trade deal and cooperate on the economy and public health. Equities, bonds rise, driving u. S. Shortterm yields toward record lows as forward rates flirt with negative fed funds futures for the first time. Lets see what that actually looks like. Nasdaq yesterday erasing all of the losses for 2020. Equities building on the game today. The yen trading a little bit heavy today as well. In the bond market, take a look at the twoyear. 12 basis points is where we are as buying continues across the curve, 17 basis points for the three year, and 28 for the fiveyear. Watching that as we head into the jobs number as well. The interesting thing here is that the market, at least the equity market, appears to be distancing itself from the underlying Economic Data. It is also a story of bonds versus equities, telling that semler story. Meet with more is torsten slok, Deutsche Bank chief economist. Before we get to this dichotomy between Economic Data and the equity market, lets get to your expectations. What are you looking for . Are of course looking for very bad numbers. This is so unprecedented in so anyways. As you have been covering so well with mike and constance over the last hour, it is really all the details in the report that will be most interesting. The big picture remains at we will have a big jump in the Unemployment Rate, a big decline in the number of jobs, and all of questionsa lot about what is the composition, who are the people losing their jobs. All of those he tells a very important for conversations about the trajectory of the recovery looking forward. Alix so what do you expect to learn from that . If we say that the breadth if, say, the breadth is not as biggest we thought are much broader than we thought, how does that affect your outlook for a recovery . Torsten that becomes important in the details. First of all, the job losses in the march report were mainly lowwage industries, and the concentration was and restaurants and bars. One very important question for in april number is is this primarily lowwage jobs, or does it expand to high wage jobs . The second question is how broadbased is it. This will also tell you about how long it will take and what the shape of the recovery will be. Then the other question will become a well, we all agree that maybe the older generation will be stand at home until there is a vaccine to a more signet can degree than others. People more than 65 years old account for more than 20 of Consumer Spending, so it is clear the older generation may have had lower consumption, so it becomes important to what degree there are jobless is for people more than 55 years old. Willn the worst case, we have the Younger Generation losing more jobs and the older generation staying at home, a double whammy to Consumer Spending and output gdp. In a nutshell mother are so many dimensions that become very important to understanding exactly where the job losses were and what this means for the path of the different components of gdp, most importantly Consumer Spending, 70 of the total. Alix how does that also inform how you look at potentially a second wave of layoffs hitting higher paid working jobs . Whenever going to get a good read on Something Like that . Torsten we will also get some information on that today. Member, as usual, there are two parts to the job report. There is the Household Survey and the establishment survey. The real key issue here is what does it mean to not have a job at the moment. One very important category in the Household Survey is they ask, are you unemployed. The next question is are you unemployed or on temporary layoff . If that is the case, you will become does employed, you will be counted as employed, and only temporary. So this may sound like a nuance, but it becomes quite important when you think about whether job,e are actually in a but have just been not at work at the moment for special reasons, or are they actually counted as unemployed. Ultimately, we have this issue of how many people will be moving from being temporarily unemployed to be more permanently unemployed. Willat sense, how quickly be indicated by whether people are categorizing themselves as whether they are temporarily laid off or more permanently laid off. Alix it is such a great point. I wonder how the world of the wage conversation evolves as you have lower paid workers now deemed essential. Our companies forced to increase pay to get more essential workers in . Does this get more Bargaining Power for those kind of workers to set the stage for a longerterm wage increase, or not at all . Torsten this is also a key issue. We have been discussing for years and years wage growth, and it has been relatively subdued. It has been accelerating up until february, but now the conversation is all about the left, those that are employed. Report,rch and this there does mean theres a compositional change. One important aspect also becomes the debate about the ppp program, and to what extent Small Businesses will be rehiring workers back. Is significant upside risk that as muchated as 50 billion jobs in Small Businesses tend to be lower jobsg jobs 50 million in Small Businesses tend to be lower paying jobs. Small Business Loans could become grants if they rehire back their workers. That will also be important. So there is not only downside risk. This is likely to be the worst employment report we will get, and as we look ahead over the coming months, there are also some upside risks, mostly on the ppp program, that could mean that this was indeed more temporary, and therefore something that will hopefully be turn out to not be as longerlasting as we were worried about. Alix before i let you go for this segment, i want to get your take on what happened yesterday in the bond market, with the record low yields in the two in the five, and the fed funds futures turning negative. What is the real significance of that . Torsten one important debate in rates is this fear in the u. S. About negative Interest Rates. It makes complete sense that u. S. Investors are worried about this. We have seen negative Interest Rates in europe now for a while, and also in japan. So it does make sense that this fear also begins to appear here. It was quite clear the last few days that this is not something the fed not has in mind that this is not summing the fed has in mind that this is not something the fed has in mind. But it was eyeopening that the fed funds futures are now trading, although to earlier , pricingtemporarily and negative Interest Rates. But it does tell you a lot about how investors think about the outlook. Alix youre going to be sticking with me, torsten slok of Deutsche Bank. Coming up, we are going to focus on some of those Small Businesses keeping business running in these uncertain times. We will get more from martin mucci, paychex president and ceo. This is bloomberg. Ritika im ritika gupta with your Bloomberg Business flash. Intels been accused of compromising worker safety in order to keep making computer chips. People who work at a plant in arizona say staff was not isolated from teammates who tested positive for the coronavirus. Intel says it has responded with new policies to improve employee safety. Another sign that jcpenney could be headed for bankruptcy. The struggling retailer didnt make a 17 million interest theent due yesterday, second payment jcpenney has skipped in a month. Bloomberg has reported the company was looking for assets that could finance a backup see. We are minutes away a bankruptcy. We are minutes away from what is likely to be the worst and implement report since world war ii worst unemployment report since world war ii. Rate, bloodment will hit 16 , the highest since rate will probably hit 16 , the highest since the great depression. Alix thank you so much, ready cap thank you so much, ritika. Lets get a read on Small Businesses with martin mucci, paychex president and ceo. I love catching up with you. This day feels particularly important because you can give us a read on what is happening with Small Businesses. How much of them have been able to access the Payroll Protection Program . How many of them are waiting for their checks . Give us some insight here. Martin it looks like about half of Small Businesses. We expected that number to be a little bit higher, but looks like about half applied for the loans. Probably the biggest concern is it looks like about 60 are still waiting for either their dollars, sotheir all of the surveys we are doing are showing that that is still taking some time to get approved and get the money in their hands, which is really critically important. Alix what have they done with their workers in the meantime . Martin the good news is many of the Small Businesses have suspended business and furloughed employees, keeping them on the payroll. Not necessarily paying them, but covering benefits, some of them. The good news is they are ready to start up when things open backup. The good part is that most of that or furloughed are suspended because they are waiting to get their money to pay the rent, the mortgage, and their employees when they get back up and running. Alix do you get the sense that the Small Businesses, once they get the check from the government, will start paying them . Workers and rehire martin i do because the forgiveness part of this require that 70 go to paying your employees. Theres a lot of discussion in congress now to give further assistance by lowering that percentage so they can cover some other expenses, rent, etc. , which is really important to them before demand picks back up, and that may be the loan forgiveness timeframe will also go out a little bit, which would really help as well. Those things being discussed could be a great boost to Small Businesses. That do you have a sense some Small Businesses either didnt apply or gave up because they are not going to get what they need . I think martin theres a lot of confusion. Companies like paychex, we work very hard to provide the information to them a soon as the loan program came out that they could file, but i think theres been a lot of confusion between the banks and the government as to what do they apply. They are afraid that if they take the loan to early, that they were going to have a loan possibly that wouldnt be forgiven. I think theres just a lot of confusion there. Hopefully that will still bounce back. I am hopeful that as things start to open backup again, they will start to get these workers back in and things will start to improve. Idea of thes an evolution you are seeing. We knew that retail and services were going to be the hardest hit, and hospitality, right off the bat. Walk me through where we are now in terms of those that dont have jobs. Martin it is amazing that six to eight weeks ago, the Biggest Issue for Small Businesses was i couldnt find people to fill the jobs. Now here we are facing this large number of unemployed. I think the Positive Side of this is it was a lot of manmade stuff. We closed businesses to protect the employees in this country, and now that should come back a little bit faster. Recoveryhink it is a v , but more of a check mark where it drops quickly and starts to come back. There is a lot of demand for getting back into restaurants and other locations that are not essential as they open up, but i think the workers will be there, and hopefully we will be able to get started pretty quickly when things come back. Are you hearing anything from businesses about a second round of layoffs . They bring some workers back, and demand is not what i thought, and i am going to have to fire. Or i bring out one worker rather than three. Martin that is a good point. Even with those that took the loans and got the money, they may have hired workers back before they really had the demand, before they have people coming into their locations, paying them and helping the employees. There is a concern that will happen. It really depends so much on how fast things open backup, and whether the government will allow the timeframe to be pushed and maybe give a little bit more stimulus to those Small Businesses to keep paying those people until demand comes back. It is a good point we are watching to see which way that goes. We have started to see lawsuits. Intel, for example, a family suing because they are blaming them outweighing health for chipmaking. Of are companies thinking liabilities as they look to restaff . Martin its a great point. We have over 600 that provide hr services to small and midsize businesses across the u. S. , and one of the number one issues they are facing right now is how to open backup. So not so much as there is certainly concern about the liability they have now, but really it is how do i open backup safely, how do i reduce my liability and risks, so they are really trying to look for guidance for the best process to open backup safely for their employees, obviously for the safety of the employees, but also to reduce their risk and liabilities. Alix this question comes from torsten. I appreciate that. Hes asking you to dig into the certain sectors will be harder to rehire. Martin it depends so much on the pent up demand. If it is a Small Medical Office doing elective surgeries, things like that, i think they are going to open up fairly quickly. We are seeing they are coming up with best practices on how to open up and get their patients scheduled. If it is a restaurant, i think it will be slower. We did see leisure and hospitality took the biggest hit in workers and in hours worked. I think those will come more gradually because i think the demand and the requirements, maybe you will open up at 30 capacity, 50 capacity. So i think it is those that will open a little slower, but others like dentists, offices like that that are providing services, they are going to have a lot of demand. I think they will open up pretty quickly. Alix hairdressers, huge. Marty, good to see you. Thank you so much for joining us. Great to chat. Coming up, it is going to take a quick look and how europe is dealing with its owner, challenges. Whatcb, what it does next, it winds up meaning for italy and yields. We are still having some numbers come out from companies. Royal caribbean provided an update here. They see elevated cancellations for 2020. They also have identified about 3 billion worth of capex reductions this year, and they expect to incur a net loss for 2020, yet that stock is still up in premarket. This is bloomberg. We may have to go beyond the normal and conventional pools to use things that are of an exceptional nature, and that have to be with the calibrated appropriate level of deviation and room to maneuver in order to actually deliver on that mandate. Alix that was ecb president christine lagarde. Still with me is torsten slok of Deutsche Bank. Christine lagarde trying to talk up ecb report. Then you have the foreign finance minister for germany saying the Constitutional Court could really rip apart the euro zone here by declaring the Asset Purchase Program illegal. What side of the equation do you fall on . Torsten this is, of course, a very difficult situation. Lagarde also said very importantly that no one is to blame for this crisis. I think that is an important starting point for organizations about what needs to be done, in particular the fed, ecb, and bank community. It is a lot easier for the Central Banks to deal with this because there is no political backdrop as such for the action that is required. That being said, the situation in europe and the virus has rocked back to life a lot of the discussions weve had for many years, and it continues to tell us that we still are unfinished on the european architecture, and this is the debate here also, that lagarde is tiptoeing around these issues. Alix we havent seen the btpbund spread blowout like we did in the last crisis for italy. What levels do we have to get to to make this a more critical situation . Market of course, the is being tested by this, and it just illustrates how complicated the situation is. , andve a situation where this is similar to the u. S. , where the Financial System globally has experienced a lot of stress because of the virus and the impacts you have when you shut down businesses. Theres no cash flow coming into corporates. It does mean that liquidity is needed and funding is needed, and in that situation, we have now had to try to solve that problem first, and that is clearly what the ecb is trying to do and the Federal Reserve is trying to do. The issue now becomes this important debate about, ok, so how does that fit into the other things we have been discussing before the virus came around . I think that what lagarde is trying to do here is make sure that Financial Stability is insured, and this is the same thing chair powell has been talking about, but it is clear that the backdrop for these positions is quite different in europe relative to what we are having in the u. S. , sibley because of the fiscal constraints that europe is under u. S. , simply because of the fiscal constraints that europe is under. Alix so are we talking about an italian exit . Is it this conversation we are talking about in the next six months, or no . Torsten we also had earlier this week the german Constitutional Court and European Court of justice have all of the discussions about whether the ecb can do what they are doing or not. Probablycussions will continue, but for now, it makes sense that lagarde is mainly focused on the here and now to make sure,ying lets just get out of lockdown and then we can debate what should be done. I think that is what she is trying to tell us. Lets have a different conversation now, and we can have the more traditional conversations about europe later on once the virus is more behind us. Alix just get it done, and then we will flicks it again. Torsten slok, thank seller. You will be thanks a lot. You will be sticking with me. We will break down all of the Market Reaction with Subadra Rajappa, socgen head of u. S. Rates strategy. This is bloomberg. Alix where just a few minutes away from the all important jobs report for april. Numbers will be trickling out. You have u. S. Equity futures off the highs of the session, but we are still higher, you are still seeing money flow to the bond market. Two year yield down two basis points at the 10year down two basis points as well. 11 basis points on the two year, right around the record lows. The data is out. Not as bad as originally expected. We lost about 20 million jobs in the month of april. 20 million jobs in the month of april. The expectation was for 22 million jobs. Downacturing getting hit, 1. 3 million, but not as bad as estimated. The overall change in payrolls coming in down 19 Million People as well. Bloombergs Michael Mckee, economic and policy correspondent joining me now. Michael you have the Unemployment Rate popping to almost 23 . I cannot imagine that kind of jump as the Labor Force Participation rates comes down. What is your initial guess on the numbers . My initial guess is there are probably Data Collection problems. You have to keep in mind this survey only includes the week of april 12, so it does not capture the entire month. More and more people were laid off by the jobless claims numbers. The biggest take away from the initial headline, and im waiting for them to post the overall details, the initial take away is we will see a very bad may payrolls report as well. Alix i should point out a distinction. The 22 point 8 was the underemployment rate. The Unemployment Rate rose to 14. 7 . I am struck also by the huge jump in average Hourly Earnings on a year on year basis, up 7. 9 . That seems to speak to the fact that the jobs that have been lost are the lower income workers versus the higher income , and the bifurcation which will only get worse. Michael that is absolutely the case. It is the lower income workers dropping out in the higher income workers staying on the payrolls. That number will be meaningless given the situation we are in. The thing that is also striking is the total revisions. Another 214,000 jobs were lost in march and february, which to 842,000total down , it had been 701,000. We are seeing incredible job losses starting in march and moving into april, and obviously we will see Something Like this in may. Alix just a check on the markets, we are off the highs of the session when it comes to the equity market, but still pushing higher in s p futures. Also take a look at the bond market. We are now trading flat on the long end of the curve, and a little less buying on the short end. 13 basis points on the two year. In a currency market, you are seeing the dollar and the yen picked up steam. To the downside is still the risk on currencies outperforming. In a commodity market, oil is still getting a bid as are other commodities within the space. To hit the numbers once more, april lost 20 million jobs. Private payrolls were down 19. 5 million, manufacturing down 1. 3 million. The Unemployment Rate to 14. 7 . The underemployment rate 22. 8 . The Labor Force Participation rate goes down. Hourly earnings move higher. Weekly hours worked beating estimates, 34. 2. Mike, you are still digging. Has anything else popped out . Michael we now have more of a breakdown. Let me address some of the data issues. According to the bureau of labor statistics, the Household Survey, which measures unemployment, the Response Rate was 70 , which is 13 lower than normal. They are saying the numbers are not necessarily going to be as accurate as they otherwise would be. As last month, they report a misclassification of a lot of people. They set out a new classification, if you are unemployed because of covid19, you should have been reported as on a temporary layoff, which keeps you in the labor force. They say a lot of those responses were miscoded, as they were last month. ,f they had been properly coded the Unemployment Rate wouldve been 5 higher. They are saying we would have had 19. 7 . They do not adjust that for data honesty reasons, but they are telling us that 14 is not the number, it is really 19. Talking about some of the job numbers and the establishment survey. Employment in leisure and hospitality down 7. 7 million. 47 of people in leisure and hospitality lost their jobs. Three quarters of that in bars and restaurants. Employment also falling in arts and entertainment and recreation , 1. 3 million jobs lost in the hotel business. Education down 2. 5 million. Professional and business down 2. 1 million. This is very broad. It is not just in the services sector. Manufacturing down 1. 3 million. Job losses across the board. There is nothing good to say in this report that i can find with a quick look. As the Labor Department says, it is worse than the numbers capture. Yet s p futures still up 28 points. I will give you some time to go through the numbers and break that down. Thank you. Well check in with you later. Torsten slok of Deutsche Bank is with me. Your initial reaction on the numbers . Torsten the point might just made on the number of people that are on temporary layoff, that was of 18 million, and those that were not on temporary layoff was only up 2. 5 million. That means the vast majority of those that are unemployed were on temporary layoff, so in some there are some signs that have more of those people that are unemployed should be viewed as temporarily unemployed, then that does at least tell us there is some chance some of these people might be coming back faster than what we could have feared. , ifother points i would add you look at weekly hours, we expected a drop in weekly hours week, but it a only dropped to 34. 2. People were not working shorter hours. People either got moved out where they were on the job. Those that were working still had better hours than what we were expected. The Participation Rate was much lower, more than 2 drop in the Participation Rate is completely unprecedented. People still in the labor force, are they on the sidelines, to they have one foot in the labor market . The netnet of all of this is there a number of signs that this was an should be thought of as temporary. Most important is the issue of the number of people that were on temporary layoffs. Analysis, how because break that down. We want to bring in Subadra Rajappa from socgen. Your reaction . Broadly speaking, the bond market is breathing a sigh of relief given that most people , especially given yesterdays price action, the expectation was the numbers were going to be weaker than what we got. Yes, there is a lot of noise, but like torsten just pointed out, there are positives in the data. The most important take away is some of these programs the fed is instituting, the government is instituting, is probably working. The ppp, the temporary unemployment is a positive thing , which means people can hopefully get back to the workforce a lot quicker than people expect. The bond market is not overoptimistic, but some of the anxiety seems to have priced out after todays employment number. Perspective,market the move we saw yesterday with the record low yields, is that justified . I ask this question every time. Have we hit the low . Subadra your technical moves are always possible. If you look at the bond market, it has always been a safe haven. Bound,hit the zero lower there is no safe haven asset left anymore. Are still flocking towards treasuries. We have seen treasuries going to negative territory when there is a demand for safe haven assets, and now youre seeing that propagate across the globe. What we characterize as a steamroller affect, where the front end comes under pressure and than the fiveyear part of the curve comes under pressure and so on and so forth as we approach the zero lower bound. I would say yesterdays price action was mostly technical. Investors are probably positioned short into the refunding announcement were getting spooked as we started seeing reports the Unemployment Rate could be as high as 25 . Now that we have gotten the data and things are we are getting more clarity on the job outlook, anxiouset might be less and there might be more of a selloff as we start getting supplied next week. Point. Air on the long end we are seeing just that. Yields up two basis points. This is a great quote from the head of u. S. Economics at renaissance. He says 11 jobs lost for every one life saved is the math that matters. Whether you agree with reopening or not, if you have 5 on the Unemployment Rate that could have been added for those who are not correctly counted, it puts the strain. We have to open the economy up to get people back to work. Torsten absolutely. The calculation is spot on in terms of what the tradeoffs are. And areasiscussions of the country, utah, wyoming, where we did not have a lockdown and nevertheless you have seen the virus curve flattening. Likewise the National Debate august a lot on sweden, where youve seen the virus curve flattening despite not having a lockdown. The question ahead is if we are opening up a bit prematurely in the u. S. , at least earlier than what many doctors would be repping would be recommending , maybe the experiences from those parts of the u. S. And sweden is it does have higher costs and more of life lost, but it has still been possible, at least in those cases to flatten the virus curve. One small piece of optimistic news if you will is those areas of the world that have remained open have still been able, with sufficient social distancing, to flatten of her, so this is why the question becomes to flatten the, so this is why the stion becomes will we see will people be respecting the rules and the guidelines of social distancing . That is in some cases more important than whether we have a lockdown or not. Alix if you wrap that into the market sentiment, you are saying you would probably see selling if people feel less jittery. Are we set for a by equities, sell bonds situations or will it be like yesterday where it was by both despite the fact that you have record deals record fives on the two and the you have rally in tech stocks . Subadra it takes the unknown away from the equation. A better gauge of the consumer side of things given the dramatic increase in supply at the very long end of the 10, the new 20 year, as well as the 30 year. I think you will seen renewed pressure on the back end of the curve. We are sticking with the 530 steepener view given the fact there is a decent amount of supply the market has to take down. You have to see how that plays out. Alix appreciate it. The reaction to this historic jobs number. Thank you very much. Subadra rajappa of socgen and torsten slok of Deutsche Bank. ,o recap some of these numbers 20 million jobs lost in the month of april. The Unemployment Rate, 14. 7 , but if everyone was calculated appropriately, that number should have been 19. 7 . Staggering numbers. We will talk more about this historic number as well as income inequality with a leading voice on the topic, Heather Boushey, Washington Center for Equity Growth ceo will be joining us next. This is bloomberg. Alix the jobs number out right now. 20 million jobs is what the u. S. Lost in april. Unemployment rate surging to 14. 7 . Factor in Everything Else it is 19. 7 . Michael mckee joins me now. Give me the lay of the land. Michael the numbers are truly awful, not quite as bad as the consensus but that is because of the measurement errors. The Labor Department says significant numbers of companies and people did not reply this time, which makes the error bands wider, it is hard to know where the numbers fall. As you mentioned, when you add in the number of people who are misclassified to the Unemployment Rate, it comes out around 19 . 6 may have some problems, but this smooth some of that. 22. 8 . There is obviously a huge problem in this country. I am looking at the breakdowns in terms of unemployment for men 20 years in order, the employment rate is now 12. 4 . In march it was 3. 7 . In february it was 2. 9 . For women, 15 . February. in for blacks and africanamericans , the Unemployment Rate is 16. 7 . It was 5. 8 in february. You can see this is hitting everybody hard, but minorities getting hit worse than whites. Something we definitely do not want to see when we were doing so well before as the Unemployment Rate reversed. Lets get more on the numbers as well as wages and what that means for income inequality Going Forward. We are joined by Heather Boushey , Washington Center for equitable growth president. Author of the book unbound how economic inequality restricts our economy and what we can do about it. I am interested when you see the wage numbers go up so much at 7. 9 , it shows the income disparity we are seeing. How do we recover from Something Like this . Heather it is such a great question and im glad you started there. That was one of the things that popped out of the report to me. So many of the job losses have been concentrated among lower wage workers. We have to take a deep breath. These numbers are so bad and so much worse than anything we have ever seen, the highest Unemployment Rate in the United States since the great depression. We all know this has been the result of this virus in our society that necessitated we shut down all of these businesses, and this is the fallout from that. You asked what can we do about it . There are sets of policy decisions in front of us, including making sure everyone who has lost their jobs has access to Unemployment Benefits that allow them to pay their bills. Until we can get the economy function again because we get the virus under control, that is certainly the most important policy step. Congress has taken some steps along that path but it needs to do more and there is legislation they are talking about to continue to extend the Unemployment Benefits. I also want to draw your attention to the fact that we have seen declines in employment in Public Sector employees, especially at the state level. This is part of the problem happening in the states, where because so many people are out of work, the states do not have the tax revenue to keep the services so necessary to deal with this crisis going. The second thing that is so important is congress extend support to the states so they can help communities cope with the virus and cope with the unemployment crisis. There are a lot of things we can do. Your point, starting with the fact that we have seen wages go up because so many of the jobs lost have been lowwage workers is the starting place for how we think about the policy recommendation. Michael let me jump in with a couple of numbers that support that. Breakdownook at the by education, unemployment for High School Dropouts for High School Graduates 17. 3 , and for College Graduates 8. 4 . There is an educational breakdown for people on the lower end of the socioeconomic spectrum are the ones being hurt the worst. To heathers point about governments, the federal government actually gained 1000 workers during the month, while state governments lost 180,000 jobs and the local government im trying to get the exact number correct, 801,000. States and localities losing an enormous number of jobs. That point, ifto we extrapolate that in terms of wages, we are rethinking what the terms essential jobs means right now. How does that play out within the wage dynamic and the market as we move forward from this . Heather it is such an important question. Who is essential and who can do their job even through the crisis . That lower Unemployment Rate for the most educated workers, those workers have office jobs, they are professionals where they can telecommute. You can do a video call with your doctor, you can do office it is the lower pay jobs, the ones with facetoface contact, the hairdresser, the dog walker, these folks are the ones most at risk of the virus, which is why they are not at work today, but also the ones for whom we need to make sure that if they are working, like Grocery Store workers or rideshare workers that have to get people to their doctors appointments, they need to be protected and we need to ensure they have the protective gear, that they have everything they need to be safe and we need to be sure they are paid enough. Workers are among some of the lowest paid in our economy. Many do not have access to Health Insurance or paid sick days. Alix we have to leave it there. We would love to have you back to talk about how we do that and how the economy rethink that. Heather boushey, washington senator franken oldgrowth president. And bloombergs Michael Mckee Washington Center for economic and bloombergs Michael Mckee. We will be back. Alix that wraps it up for me at bloomberg daybreak americas on this jobs friday were 20 Million People were unemployed in april. Do not forget to tune in later. White house reaction to the jobs report with larry kudlow. In tune in tonight for my coronavirus special, crude in crisis at 9 00 in new york. Oil jobs definitely on the line, particularly in texas. This is bloomberg. Jonathan from new york city for our audience worldwide, good morning. Good this is not 20. 5 million. This is not normal. You may have been expecting it, but there is nothing normal about this. It would be embarrassing for me to start the show like it was any other day, any other payrolls friday. This is not any other payrolls friday. This is not sport. These are peoples lives, peoples jobs. Peoples anxieties that make up the statistic. Pe