At brown university. Finally, we will get consumer data info for march. Jonathan im not sure the fed chair is going to make any news today. She is speaking at brown university. 125 yearsmemorating at brown. Speaking, you is have to listen. Jonathan on this occasion, maybe not. Lets get to the top stories. Payroll is out at 8 30 a. M. 4. 6 will be a Unemployment Rate. Chiefg us is our economist. Although with this is ethan sheis lets pretend delivers the speech and she looks at two things, the payroll report and what is happening. What will be the biggest concern . Ethan its the job market. Weve had the slowdown in the fed has been saying no big deal. We are not concerned about it. That keeps june it very much alive area if we have twoweek job reports in a row, we start to worry. I think its a very close call. If this continues, i think they skip. If we get a pick up in data, i think they hike. Jonathan how much lower would it have to be to take june off the table . Would get two more jobs reports ahead of that meeting. If we are coming in at 100,000 or less, that rings doubt. David what are we looking for . We keep hitting lower and level lowers of unemployment. I think that means we need to once again assess the level of full employment in the economy, presumably that is in the mid 4 range. I dont think we are getting any meaningful data today. David President Trump the said he is more worried about underemployment than unemployment. He is worried about that you six number. Ethan when you hit full employment, you dont go to normal Wage Inflation. That has started to pick up from 2 to 2. 5 . I think we to be patient. We know this is a very slow process. We know the Unemployment Rate is the only gauge to look at. The you six is still slightly high. I think we are at full employment. I think we are getting wage increases and thats what im going to be focused on. David as you listen to the Trump Administration, they take issue. They say we should be looking at the pretense of patient rate, that fewer people are participating than there were in 2007. Are they wrong . Ethan we need to think about who is coming back and who isnt. Have job growth of well over 100000 and keep a stable Unemployment Rate. They are not all coming back. We have to be realistic about the limits of how far we can go. Jonathan lets look of the jobs increases we have had. Last month, we got 98,000. They said this is what to expect, a series of 100000 and then a month later we surveyed the same economists and they gave us an estimate of 190,000. Where are we at . Carl there was whether impact in march. That did impact maybe not so much hiring it. That did weigh on the march report and there should be some spring back as we come into the april report. As we look at that 190,000 estimate, thats in line with the moving averages. Likeis basically a trend jobs report. Jonathan full employment is a technical term. For everyone on main street, we are not at full employment. When you continue to add payroll at a clip of 190,000, isnt there some space to go . Reason economists are puzzling over when the slowdown is going to happen, they are not predicting exact timing. That is very difficult. That is our excuse for everything. At reality is we cant grow 190,000 at a sustained base. We are going to slow down. Who knows when that is going to happen. David we are going to have Danny Blanchflower on. He is up it dartmouth these days. He says we are looking at the numb run numbers. He said its the quality of the jobs. If you look at the quality of the jobs, that has really suffered. Is there a way of measuring the quality of the jobs people are getting . David i think he is right. The quality of the jobs, just look at the Median Income that hasnt kept up with growth for upper income people. This is a structural problem. It is not something that can be fixed in the next two years. Jobse generating mediocre for workingclass people. Jonathan two defense point, what is the federal here . Carl the fed likes to take the easy off ramp when they save your is nothing they can do. This is not part of our mandate. If you continue to run the economy hot and draw in that labor slack, you can maybe not solve this directly with one tool. You start to create those labor shortages which force employers to make smart decisions about retraining workers were offering higher wages than those mediocre jobs and they become better. Jonathan lets explore the argument. Let wages rip for a while and let the economy run hot. Put morethat, you Business Owners investing. Ethan i think the fed is quietly letting the economy run hot. They talk about this is a theoretical thing. I dont think they are very reluctant to say they are running the economy hot here in i think thats what they are doing. They have barely hiked Interest Rates in the face of solid job data and low unemployment and rising wages. Its a good idea. I agree. We should let the economy run hot for a while to make up for it taking so long to normalize. We clean up some of the structural problems with a modestly hot economy. David is this what a hot economy looks like . 2 growth. Got maybe thats a hot economy . David thats the problem. The problem is fundamentally the u. S. And all of other developed market economies cant grow the way they did in the past. Two percent growth will get the Unemployment Rate to drop over time. Unfortunately. S jonathan thank you very much for joining us. Us. Ill be sticking with its an allstar lineup of guests as we are counting down the payroll report, including bill gross and Mohamed Elerian. From your city and the u. S. Worldwide, happy friday. Youre watching bloomberg. David House Republicans finally got what they been wanting for seven years. They repealed obamacare. Thats what they say. How big of a win it was this for President Trump and speaker ryan . What comes next. We are joined by kevin cirilli. How big of a win was it . For thet was a big win house. I spoke with a senior republican strategist who told me this was supposed to be the easy part. Now we all know this was anything but easy. Its onward to the senate and they are going to have to win over again the moderates and the more conservative. You are facing a dynamic where there are several key senators up for reelection and they are looking at this bill on the issue of preexisting conditions and they look at the amendment put forth by the representatives and this 8 billion over five years and they dont take its enough. Legislationof this getting through the senate as it is our murky at best. There is going to have to be significant changes. David they have taken care of the house side for the time being. Can they get onto tax reform . Kevin we heard this in the rose garden yesterday. They are trying to seize moment a because thats what this is all about, momentum. They hope this will help force their hand in the senate. You are right. They are focusing toward taxes. I can tell you paul ryan has been bullish on this as they try to have another political victory and start tax reform. Behind the scenes, the Interest Groups are working with steve mnuchin. People in the Retail Industry and the Business Community, they are looking to overturn regulations as a pertains to tax aversions. Yesterday, you reported one of the issues heating up in washington is this income stripping. This is where we account for certain profits so you can minimize your income tax as a area why is that so hot . Kevin this is rhetoric from donald trump differing from the policy of donald trump. With regards to earnings strippings, this is a portion of the regulations from the Obama Administration as it relates to corporate inversions. Candidate donald spoke out against inversions, saying they should not be changing addresses in order to avoid paying taxes. There is bipartisan criticism of that in congress. There is a portion of the regulations were how they calculate such funds and how different entities of u. S. Base corporations shift to corporate foreign entities. Thats where this gets in the weeds and thats where they are against the notion. The bargaining chip is from the white house perspective, they hope to lower the tax rate to incentivize businesses to stay in the u. S. Givewant to potentially the Business Community a small win by tweaking some of these regulations. David we will check back with you later on. Much is this likely to affect the real economy . Ethan i think what youve seen this year is the failure to get significant new legislation through. We did not get that pickup in growth people were looking for. I dont think the Health Care Debate is that important. It matters a lot to people getting health care. For the macroeconomy, its not a big story. Its about tax reform and later Infrastructure Spending. Stage, we get no substantive reform until the end of the year and we get no Infrastructure Spending until next year. It means we dont get that pickup in growth. David let me give you alternatives. Say there is a more modest form of tax reform. Is that good . Should people wait longer . Ethan if they really want to get tax reform through, they have to simplify the process. They really need to zero in on the biggest problem in the tax system. Inversion,orporate incentive for companies to move their headquarters and a lot of rough its overseas to avoid taxes. We are much higher than our trading partners. If they zero in on that and make this a less bill, i think we can get reform before the end of the year. If they have a copper has a bill, we may not get tax reform this year. Jonathan the size of the Health People comingally on the program and saying it doesnt really matter, explained to me why when accounts for so much of gdp . The Health Care Spending is happening anyway. With these laws, they move money around. Little bit more health care usage under the Affordable Care act, people have more insurance. It takes away from other spending. There are micro affects of shifting spending from what area to the next. Have a bigseem to impact on the macro trend. President you talk to trump or paul ryan, they would not agree. They think theyre going to save money on subsidies because of the repeal that they can use for tax reform. If someone had a good solution, it wouldve happened a long time ago. This debate has been going on for 40 years. It is becoming increasingly complicated. Its hard to deliver Better Health care at less cost. Lets be realistic. Jonathan to wrap things up, one of the chances of the Federal Reserve getting their rate hike in for the year and a balance sheet, is that more likely than the government getting tax reform before the end of the year . Ethan i am more comfortable predicting what the fed is going to do. Things are going as expected for them. Process is a very long way to go. Jonathan ethan harris, its great to have you with us. Coming up is joe 11. Joey 11. The city global head of Commodity Research ways in on a crushed commodity market. Crude is getting battered this week. From new york, youre watching bloomberg. My emma a warning to london. Brexit mayfein said cause the growth to stall. He said that goldman will have as many operations as possible, it has contingency plans expanding in frankfurt and dublin. Has thought about 1 billion in Company Stock is a plan to he sold shares this week. He still owns almost 80 million shares, or 17 company. Crude is coming off its worst day since opec agreed and out but cut. Output cap. Its the lowest level this year as shale output includes. We are down 7 . Joining us is city global head of commodities. Still with us is ethan harris from bank of america. More to the technicals for the last weeks action . Where do you go . It is technicals in part. It is expectations in part. We had a record amount of trading for a couple of minutes. It was all shorts coming into the market. The narrative for the fundamentals says parrish. Jonathan how helpful is this . Ed i suspect this is a great eyeing opportunity. The market is fundamentally typing up. Tightening up. I think there will be a shift in Financial Sentiment in that will boost the price Going Forward and we are expecting a big jump in price by the end of your. David you know this market and i believe you. I want to understand the fundamentals. What about the reports of the shale increase . Back. China dialing there is some softness in the numbers. How are we confident that is not triggering this . Ed part of the trigger was the chinese numbers. They were not negative, but less positive than they had been. Iron ore and copper is a china story. Its not was related to the rest of the macro world. Gold is a different story. The expectation that gold is going to selloff after the French Election, we had gold popping up for no good reason and its back down to reality. Youve got to look to see who is producing what, who is producing what. We had a real cut, the cut is over 1. 5 Million Barrels a day. Inventories will have to respond to that. What opec did is undermine its own objective. September when they agreed to a cut and november when they had an agreement, they they increased by 1. 5 Million Barrels a day. They cause a little bit of exuberance in the market. The price went up. The curve flattened. It was no longer viable commercially to store oil in tankers. That came out of the market. It was a 60 million barrel drop. Also in the first quarter, we had longs going into the market of record length. 951 Million Barrels of that length from where it had been in the fall. That eventually sold off, but it created a pop in the pump price and the shale industry had record hedging levels in the fourth quarter. That prompted a surgeon rates. A surge in rates. We dont know what that surge is going to be. Jonathan we are going to continue this conversation in just a moment. Do they say ins, the next round and we debate the next extension of cuts, i want no part of it . Add the likelihood is low. Who actually cut . Saudi arabia took most of the cut. There was a little bit of a cut in uae and inchoate. They met the quota. If you look at what is happening, nigeria is going nowhere. Iraq is going nowhere. Libya may have some uncertain and venezuela has been losing production of 30,000 barrels a day. They are balancing the market. If you add up expected demand and supply. David you will be staying with us. Ethan harris will be staying with us. Joinup, we have bill gross us after the payroll report to take us to the numbers. We will talk to gary cohn at the white house. This is bloomberg. Jonathan from new york city, on this payrolls friday, im Jonathan Ferro. Futures are going nowhere. 18 seconds away, we are 12 points on the dow down by not only a 10th of 1 . Four weeks of gains for the eurodollar. We are coming off 2017 highs down a quarter of 1 . But the story of the week has been the euros strength as we continue to fade the tail risk. In the treasury market, we are set up at 2. 35. Lets get an update out that the business world. Several Key Senate Republicans say they well the Health Care Bill and the house and write their own version. The decision will likely delay the prospect of many repeal bill reaching president Donald Trumps desk. Theresa Mays Conservative Party on par for a sweeping victory in next months general election. In france, todays to go before the residential Runoff Election between Marine Le Pen and emmanuel macron. Be sure to stick with bloomberg. We will be bringing you special coverage of the french president ial election. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus across the world. Im emma chandra. Jonathan thank you. Full coverage right here from bloomberg from new york and paris as well. There is a commodity bloodbath. Crude breaking through those. Crude breaking through lows. Ethan harris is from bank of america. You watched crude rollover. What does it mean for the reflation debate . Does this play into that thinking . Han this is not a case where the Global Economy is rolling over. We are concerned that at some point, we will see some slowing in china as a titan of policy. But the Global Economy looks ok. It is not sending us a message of some deeper issue. In the margin, rates will go lower, but there is no makro story here. Jonathan i put that question to peter when crude was rolling over and reflation was near 0 in europe. We knew it was a demand story. He was still worried about it. He was worried about what it meant for headline inflation await negotiation. And wage negotiation doesnt matter at all . Were worried about if one be 40 or 60. Both up and down as bad for the economy. As an economist, i do not agonize over the moves we are looking at. David but it is also other commodities like metals. China has a big challenge with the kind of credit they are taking on. At some point, they will have to turn it around. Could this be a canary in the mine shaft . It could be, but i suspect it will not be 2017. David you basically think that the commodities will continue any steady path and not continue to fall . It depends what commodity. David iron ore. Iron ore was the one commodity that had unbelievable spending of capital over the last decade. Why did the price go up . Because of