THAT’S ALL VERY IMPORTANT TO NOTE.
NOTE. >> THE SEPTEMBER JOBS REPORT OUT
TODAY PUSHED THE MARKETS NEARLY
400 POINTS HIGHER.
IT WASN’T ALL GOOD NEWS.
WE WILL RUN THROUGH THE NUMBERS.
THE HEADLINE NUMBER, 3.5%
UNEMPLOYMENT.
UNEMPLOYMENT. THAT’S A 50-YEAR LOW.
WOULD YOU RUN US THROUGH ALL THE
NUMBERS WE GOT THERE THIS REPORT
TODAY THAT MATTER?
>> SURE.
>> SURE. THAT’S THE COMPLICATION WITH THE
JOBS REPORT.
JOBS REPORT. YOU HAVE A LOT OF FIGURES.
THAT’S BECAUSE THERE’S DIFFERENT
SURVEYS THAT THEY USE TO
CALCULATE IT.
CALCULATE IT. THE TWO NUMBERS -- THE THREE
NUMBERS TO PAY ATTENTION TO.
FIRST ONE IS OVERALL JOB
CREATION, 136,000.
CREATION, 136,000. THAT’S PRETTY CLOSE TO WHAT THE
MARKET WAS LOOKING FOR, WHAT WE
WERE FORECASTING AS WELL.
IT SHOWED THAT JOB CREATION HAS
SLOWED FROM WHERE WE WERE THIS
TIME LAST YEAR, WHERE WE WERE
SEEING MORE THAN 200,000 JOBS
BEING CREATED EACH MONTH.
IT’S A DECENT PACE.
THE SECOND NUMBER CAME IN AT
3.5%, WHICH WAS A DECLINE FROM
WHAT WE HAD SEEN LAST MONTH AND
A 50-YEAR LOW.
THAT IS GOOD NEWS.
THAT CAME FROM A DIFFERENT
SURVEY.
SURVEY. DESPITE THE DROBP, WE DIDN’T SEE
WAGES RISE.
WAGES RISE. THAT’S THE THIRD NUMBER.
WHEN YOU HAVE A DROP, A
TIGHTNESS IN THE LABOR MARKET IT
WOULD PUSH UP WAGE GROWTH.
YOU DIDN’T SEE THAT.
WAGES SLIPPED A BIT.
>> IF SOMEONE IS SAYING, WHAT
SHOULD I TAKE AWAY FROM THIS?
WAS THIS A GOOD REPORT?
WAS THIS A BAD REPORT?
>> IT WAS KIND OF BAD AND GOOD.
IN A SENSE THAT IT SHOWED
SLOWING IN JOB CREATION, WAGES
WERE SOFT.
WERE SOFT. WE HAVE A PRETTY DECENT LABOR
MARKET.
MARKET. THE UNEMPLOYMENT RATE IS LOW.
PEOPLE ARE NOT GETTING FIRED.
>> THAT’S A GOOD THING.
>> THAT’S A GOOD THING, YEAH.
>> AREAS THAT WERE WEAK?
>> WE DID SEE A CONTRACTION IN
MANUFACTURING JOBS, WHICH MAKES
SENSE GIVEN THAT’S AN AREA OF
THE ECONOMY THAT’S BEEN SLOWING
THE MOST GIVEN THAT’S MOST
VULNERABLE TO THE TRADE WAR AND
THE GLOBAL SLOWDOWN.
RETAIL TRADE IS ANOTHER AREA
THAT HAS BEEN CONTRACTING FOR A
WHILE.
WHILE. THAT’S A STRUCTURAL CHANGE.
CONSUMERS ARE NOT GOING TO BRICK
AND MORTAR.
AND MORTAR. RETAIL JOBS ARE NOT AS
PREVALENT.
PREVALENT. SERVICES PRODUCING JOBS, JUST
OVER 100,000 CREATED.
HEALTH CARE, EDUCATION, THAT’S
VERY STEADY AND SOLID.
>> I HAVE A SHORTER TERM
QUESTION AND A LONGER TERM.
THE FED MEETS AT THE END OF THE
MONTH.
MONTH. HOW DOES THIS IMPACT WHETHER WE
THINK WE WILL GET A RATE CUT?
WHAT IMPACT WILL THIS HAVE?
>> THE FED IS GEARING UP TO CUT
RATES AGAIN.
RATES AGAIN. THEY CUT TWICE IN THIS CYCLE.
THEY HAD CUT DURING THE
RECESSION.
RECESSION. THEY CUT RATES AND THEY STARTED
TO NORMALIZE IN 2016, 2017 AND
2018.
2018. NOW THEY STARTED CUTTING AGAIN.
I THINK IT WILL PROMPT THEM TO
DELIVER ONE MORE CUT IN THE
OCTOBER MEETING.
OCTOBER MEETING. PROPERTY MORE THAN THAT DOE
PENDING HOW THE DATA PLAYS OUT.
MY BASELINE FORECAST IS WE WILL
SEE A CUT IN OCTOBER AND
DECEMBER.
DECEMBER. THEN THE FED WILL SIT ON LOW FOR
2020.
2020. >> WHEN YOU TALK ABOUT CUTS,
PEOPLE WORRY ABOUT THE KEY.
WHAT DOES TODAY’S JOB REPORT
MEAN IN TERMS OF A RECESSION?
DOES THIS ADD TO THE NOTION?
DOES IT NOT?
WHAT DO YOU THINK?
>> IT’S NOT A RECESSION REPORT.
THE FED ISN’T CUTTING BECAUSE A
RECESSION IS HERE.
THEY’RE CUTTING BECAUSE THEY
WANT TO PREVENT THE RECESSION.
WHAT THEY ARE SEEING IS AN
ENVIRONMENT WHERE THERE’S
DOWNSIDE RISK, GROWTH IS
MODERATING.
MODERATING. THEY WANT TO GET AHEAD OF IT.
THEY WANT TO BE EARLY.
THEY WANT TO PREVENT THE
RECESSION FROM KICKING IN.
I THINK WE’RE SEEING A SLOWING
IN GROWTH.
IN GROWTH. BUT WE’RE NOT SEEING A
RECESSION.
RECESSION. THAT’S AN IMPORTANT DISTINCTION.
>> PEOPLE HEAR THOSE WORDS AND
THEY THINK, DO I NEED TO WORRY.
NOT SOMETHING YOU EXPECT TO S
IN THE SHORT TERM?
>> YOU KNOW, LOOK, WE ARE MORE
VULNERABLE TO RECESSION.
WHEN YOU HAVE A SLOWING DOWN IN
THE ECONOMY, WE ARE IN LATER
STAGES, VULNERABILITIES ARE
HIGHER.
HIGHER. I THINK WHAT’S BEEN CLEAR FROM
THE DATA IS WE’RE NOT AT A POINT
WHERE CONSUMERS ARE CUTTING BACK
OR BUSINESSES ARE FIRING.
THE FED IS NOT CUTTING BECAUSE
THEY SEE A RECESSION.
THEY ARE CUTTING BECAUSE THEY
WANT TO PREVENT IT.
>> THAT’S WHAT IT IS THERE FOR.
>> THAT’S IMPORTANT.
IT’S A REFLECTION OF MARKETS.
THE STOCK MARKET UP TODAY.
THEY SAW THE SLOWDOWN IN JOB
CREATION.
CREATION. >> SO, TELL ME IF I’M
CHARACTERIZING THIS CORRECTLY.
SOMETHING TO MAYBE BE AWARE OF
BUT NOT TO WORRY ABOUT JUST YET?
>> YEAH.
>> YEAH. I THINK THAT’S EXACTLY RIGHT.
BE AWARE OF, HAVE YOUR EYES
OPEN, TO MONITOR WHAT’S
HAPPENING GLOBALLY, TO THINK
ABOUT WHAT’S HAPPENING IN TERMS
OF BUSINESS BEHAVIOR.
AT THIS POINT, INCOME IS STILL
FLOWING.
FLOWING. JOBS ARE STILL BEING CREATED.
>> THANKS SO MUCH FOR BEING WITH