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21:29Carol Massar:So that decline in the supply, which is now growing at like two tenths of a percent year over year, if we sort of smooth it a little bit for three months. Right. That is the denominator in the unemployment rate. And this is really, really important. we could keep growing at this pace, unemployment rate's going to stay about where it is. So the, but as Ira was saying, consumption's going to weaken because if you think about jobs growth, that's one of the things that feeds consumption growth. So there's a feedback loop where this slows consumption, slows demand, slows growth, and they're going to need to cut just to maintain that 4.2, 4.3 % unemployment rate.

22:07Carol Massar:But they probably need to cut a lot less than the market is thinking, given this shrinkage in supply. And if you ask me, that's what caused the big turnaround in equities today. People dug into the details of this number and realized, wait a minute, because of this shrinking supply, they might not need to cut as much. So what does that mean to you? 25 basis points in September and then that's it until 2026? Oh, I think it's hard to know the exact timing. we think at least another three cuts over the next six months. It's going to depend on how sticky inflation is. What we've seen in core services, that's been remarkably sticky.

22:44Carol Massar:So we're not even talking about the good sector where we're seeing price increases, but everybody anticipates, dare I say it, it is going to be transitory. But the dirty word in economics, but it's that core good stickiness that I think if I were a Fed governor or a voter on the FOMC, that would keep me up at night. Ira, I mean, is Jay Powell, though, feeling incredible pressure right now? I don't know. I don't know. I'm not sure if he, you know, I can't get into his head, right? I met Chair Powell a couple of times, but, you know, mostly in passing at events. But I would imagine that the Federal Reserve is trying to be as, you know, neutral as they can and trying to look past a lot of the rhetoric coming out of the White House.

23:31I mean, you can't completely ignore it, right, for sure. But, you know, you look at Secretary Besant, and if you look at his Wall Street Journal op-ed, which Mike just talked about with Austin, yeah, they were talking about, in there, there's some, I think, legitimate criticisms of what the Federal Reserve has done over the past 15 years. But it also misses some of the reasons why the Fed did some of those things over the last 15 years. Like, you know, like, yes, the government should be, you know, doing things from the fiscal side that, you know, back during 2007, 2008, we were waiting for Congress to do something.

24:10Congress didn't do anything. So the Fed had to step in because there was no action out of Washington, right? So, and, you know, should the Treasury Secretary be more involved? Sure. Yeah, absolutely. Congress should maybe give the Treasury Secretary additional powers in times of financial emergencies and financial shocks to try and stabilize those so the Fed doesn't have to, right? And some of those were built into some of the reforms that have happened over the last few years. So it's not exactly... So I agree with some of what Secretary Besson said, and then other parts I think are much more nuanced.

24:42But nonetheless, like Fed reform, the Federal Reserve has not been seriously reformed for many decades at this point. And the world's changed, right? The financial world's changed, the markets have changed. So maybe there needs to be some type of, you know, a shift. Now, should it be a complete overhaul? I don't think so. But could there be, you know, nuanced changes that Congress considers? Sure.

25:05Carol Massar:All right. One thing I want to get to, you mentioned Secretary Besson, another member, a key member of the president's cabinet joined Bloomberg surveillance this morning. We're talking about the Commerce Secretary, Howard Lutnick. He addressed reliability of the data coming out of the Labor Department. Here's what he had to say to our team. It makes it crystal clear you should have fired the person who was running that group, right? Because if you didn't fire him two weeks ago, you sure as heck would be firing him today. So they need new leadership in BLS. That's for sure. They need new tech in BLS.

25:36That's for sure. And Donald Trump needs to rely upon the numbers. America needs to rely upon the numbers. You can't have these bent former administration people who have a view and who want to harm the president. We need accurate numbers coming from BLS. And finally, we'll have new leadership to deliver. You fire the person. What do you learn? You learn that their technology is just, oh boy. But we'll fix it. We'll fix it.

26:02Carol Massar:That was, of course, U.S. Commerce Secretary Howard Lutnick this morning on Bloomberg Surveillance. Mind you, he does not oversee the Labor Department. He is head of the Commerce Department. But what we care about, Constance, is U.S. data, economic data, has been the gold standard. Is the data coming out of these departments still reliable? Yes, I think it is. I think it's going to take, yes, it's still reliable. And the person, by the way, who is the acting secretary, Bill Wierichowski, he has been acting secretary in the past. He has been there a number of times. This glitch that we had, while worrisome and concerning, but is not unusual in a world of technology.

26:44Carol Massar:Who amongst us has not experienced technology glitches? I'm not saying it's acceptable or that we need to not have a very high standard, but I think that is the wrong thing to attach to. And if we look at the individual who's currently leading BLS, he has had this role in the past and there've been no problems or complaints. So it is a very robust system of the way we collect data. It's very robust in how we follow up with revisions. And the reason we have the revisions we have is because we want a timely read. That timely read is 90 % directionally correct, right? And so it's valuable. Yeah. Well, and I'm glad you went to revisions.

27:29Carol Massar:We've only got about 30, 40 seconds left here. I mean, we are going to get a bunch of revisions next week, which will maybe show what about the U.S. labor market. Will our narrative change again? Just quickly. No, it's still going to show some probably some weakness because a lot of these revisions tend to be pro cyclical. So as the as the market turns and the economy turns and gets weaker, then you wind up with weaker revisions and then vice versa as well. Right. We get upward revisions when the markets turned upward. But I agree. Like I think generally speaking, the data that we receive is a reasonably high quality.

28:02The challenge is, is that the way that we collect data now has to be different because, again, Again, the world's changed. And Mr. Lutnick does produce, his agency does produce a significant amount of data, like the Bureau of Economic Analysis, GDP data, the PC report, all of those types of numbers come out of commerce.

28:19Carol Massar:Let's not forget that. Folks, thank you so much. Great, great analysis on what we got early this morning and still continues to impact the trade. Ira Jersey, Chief U.S. Interest Rate Strategist at Bloomberg Intelligence, and Constance Hunter joining us right here in studio. She, of course, is Chief Economist at the EIU. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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30:45Carol Massar:This is the Bloomberg Businessweek Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Of course, a lot of focus on the jobs print. It's been a lot about the big miss when it comes to non-farm payrolls, increasing just $22 ,000 in August. Revisions also showing on the unemployment shrank in June for the first time since 2020. Yet a deeper look into the stats show that women's participation in the labor force is also declining.

31:23In fact, as of last month, hitting the lowest since December of 2023. Misty Hagenes watches these stats, and one's not from the BLS very closely. She's associate professor and associate research science, scientist at the Institute for Policy and Social Research at the University of Kansas. She's also a former principal economist at the U.S. Census Bureau. She's the author of a forthcoming book. It's out in January called Swiftinomics, how women mastermind and redefine our economy. Professor, good to have you on the program. I know you weren't surprised to see participation fall for women because, as you found, working moms with kids are leaving their jobs in this economy.

31:59It's something we talked a lot about during the pandemic, but that seemed to be to reverse in recent years. Why is this happening again now? Yeah, thanks so much for having me, Tim. You know, there's a lot of reasons why it might be happening now. I was just looking at the numbers that came out in August for women aged 20 plus. And this, you know, past August, we had 2 million fewer women age 20 plus in the labor force compared to August of the previous year. So there's a lot going on with women where it's becoming very challenging for them to stay engaged in the labor market, to continue working.

32:37When you think about the environment that we're in in 2025, you know, all of the return to office, all of the federal government rifts, all of those types of policy decisions that we made early on in 2025 appear to be negatively affecting women.

32:52Carol Massar:Why is this happening now? Yeah, I mean, it's a great question. And, you know, again, I think we need to think just about policies in general, you know, across institutions. We need to look at how employers are engaging with employees, the type of protections that they're offering employees. When the environment and work becomes really inhospitable to the way in which we live our lives today, there are a lot of caregivers who are just going to leave the labor market either out of force because they can't make it work or out of choice because it's just too exhausting. What are the specific policies that are pushing women out of the labor force.

33:38Is it policies at offices like return five days a week, for example, or clamp down on hybrid work or is it coming from the government? What can you cite specifically here? Well, I mean, the one thing that I'll say is the government is a leader generally. And so businesses usually look to the way in which the government is structuring its policies around, you know, its HR policies and policies around employment. And so when the government requires everybody to come back to work five days a week. Private business employers follow suit. And a lot of the rhetoric in early 2025 was really focused on telling employees that they were going to have to return to office.

34:18There's still a lot of businesses who haven't actually fully started that process. But just the fear of knowing that it's coming and your employer telling you that it's coming means that there's a lot of women out there and a lot of caregivers who are going to adjust even before it actually comes into full effect.

34:39Carol Massar:You know, the sad part is, while we did feel like we had some gains coming off of COVID, we did have some gains coming off of COVID. It does feel like these are problems that we have been talking about for a really long time, Misty. And I just, I don't know, it's a bigger rethink in our society to value women, childcare. There's like a bigger thing that it feels like needs to be at play here. 100%. You know, one of the things that gives me hope in all of this environment is we actually know now what it takes to really, you know, get women back into the labor market. I think the pandemic really showed us that when we do, you know, that employers, you know, it is possible for employers to allow for flexibility.

35:19And, you know, the roof isn't going to cave in. They will still be productive. They will still be able to produce, you know, the goods and services that they're producing. And now it's just a matter of choice. So we intentionally in early 2025 made a choice that we were going to restrict a lot of these flexibilities. And we have seen now what has happened. And, you know, the flip side of that, which maybe could give us some sort of positive reframing is that we know how to fix it. So if we want women's labor force participation to go up again, we need to look seriously at providing a work environment that isn't hostile to family life.

36:01So, yeah. Well, I'm wondering about the book that you have coming out in a few months and the research that you did for the book, specifically the type of work that's not necessarily measured by official data, the stuff that does disproportionately fall on women. I mean, we're talking child care, household work, oftentimes falling on women in the house. How do you how do you quantify that? Yeah. So, you know, the book is coming out in January. And also, I've developed a dashboard of statistics of economic statistics all around care and caregiving. It's you can find it at the care board dot org.

36:38And the statistics that we've developed there, we basically said, OK, if we went back to 1940s, and instead of having, you know, older white men who tend to have lots of care privilege, and by care privilege, I mean they have other people cooking their meals for them, ironing their clothes, etc. If instead in 1940s, economic statistics had been developed by caregivers, what would they look like? And that's what the care board is. And it's incorporating the amount of time caregivers spend in unpaid domestic load and domestic activities for their families. So cooking meals, washing clothes, all of these type of activities, we count up all the hours that caregivers spend in those activities, and then we put a price tag on it.

37:24And then we fold that in to some of the economic statistics that we all are very familiar with, like labor force participation, GDP, etc.

37:34Carol Massar:It's so funny. I was talking to somebody about the growth of economics and business news and just like this concept that there really is a monetary value to everything that goes on in our world. And it's how we value things. And it just shows how much we don't really necessarily value caregivers and so on and so forth. And until that changes and we put a value on it, it's hard to get policy to change. Listen, I don't know, what's the government's role that needs to be maybe more aggressive in this to help us out? Yeah, I mean, I think it would be great if, you know, the government were to create some sort of official statistics around economic productivity and growth that incorporated the value of some of these activities.

38:18You know, the the VEA does produce a satellite GDP estimate, which incorporates household production, like cooking meals at home. So we're moving in the right direction, but we still there needs to be more awareness. We need to, you know, really start thinking seriously about this. And one of the other reasons why we need to start thinking seriously about this is just because of the high levels of educational attainment that women have these days. High levels of education mean that women are focused more on having a career versus having a job. And that, you know, ties in more strongly to personal identity.

38:56It makes it more difficult when women are trying to think about, you know, do I start a family or do I continue down my career path? And if we can't figure this out of how to make the workforce less, you know, hostile to this idea of wanting to have a career and having a family, you know, it's only employers. It's only the economy. It's only all of us at large who are going to lose out from that.

39:18Carol Massar:We're just not going to get married and have kids. That's it, guys. That's bad. That's that's bad for the economy. Just in 10 seconds, is there a country that's doing this really well around the world in your view? Well, I think a lot of the Scandinavian countries do actually have quite a robust system of social policies that, you know, provide affordable and high quality daycare, you know, that encourage fathers to also take, you know, parental leave. So there are there are examples in some of the Nordic countries. All right. Got it on. Misty, thanks so much. Misty Hagenes, associate professor and associate research scientist, Institute for Policy and Social Research at the University of Kansas.

39:56Carol Massar:She's got a new book coming out, comes out in January, Swifty-nomics. Love it, love it. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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42:14Carol Massar:You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. I'm driving in my car. How about you let me drive? Oh, no, no, no, no. This is not a toy. Who's going to drive you home? Honey, please, I'll do the driving. Drive home. Excuse me, I want to drive. You drive, say you crazy. It's the question that drives us. You drive me crazy. This is the drive to the close. The punk to music will drive us till the dawn. On Bloomberg Radio. All right, everybody.

42:55Carol Massar:TikTok, just about 18 minutes to go until we wrap up the trade for the Friday session. Also, the week overall. It was a shortened holiday week. It didn't feel that way, did it? No, it wasn't yet a shortened holiday week. It is still a shortened holiday week because we are still here, my friend. We are. We are. All right. So, too, is Louis Navalier back with us. Chairman, founder, CEO of Navalier. and associates joining us from Manalapan, Florida. How are you? Good. Good. Short and sweet. And that's it. That's all the time we have for you today, Louis. Listen, we saw stocks actually moving up earlier, but they've been down for most of the day.

43:35Carol Massar:Are investors more worried about an economic slowdown rather than being enthused perhaps about rate cuts? No, I just think it's a Friday and people like to clean out their inventory before the weekend. Fridays are seasonally weak, especially in the late hours, especially if the weather's good. Everybody has to go to the U.S. Open or something like that. Wait, is it that simple? Really? You're thinking it's just that? It's just clearing out on a Friday? Pretty much. Alcaraz is up 2-1 over Djokovic, but Djokovic is up. Advantage, Alcaraz. Now I know where your focal points are. Hey, Louis brought it up.

44:12I've got to mention the score.

44:13Carol Massar:Well, Louie, to some extent, would you not be making any big bets until we get through the Fed meeting or do the jobs report? Did that kind of clinch it for you? Help me out here. Oh, it more than clinched it. I mean, it's obviously the Fed should have cut in June. And that downward revision to June to a negative number for the first time in four years was a big deal. Unemployment being at the highest rate in four years is a big deal, even though I think 426 ,000 entered the workforce. So, yeah, it was a weak payroll. We were all rooting for a weak payroll because we want the Fed to cut and hurry up and catch up with market rates.

44:52Market rates, of course, have come down dramatically this week. Of course, the long bonds spiked early in the week. But, yeah, we're going to get a rate cut. I guess the only question next week is inflation. Now, PPI, I'm sure, will be fine. The month before, it wasn't because of higher wholesale diesel costs. That was a freak thing, mostly due to the West Coast. I spent a lot of time in California. They want green diesel out there. They don't like diesel from oil. So it's very complicated. They're shutting a couple of refineries down. So that's California's problem, but it showed up in the numbers.

45:31And then, of course, the CPI, we just hope and pray that all the weak real estate and everything finally shows up in owner's equivalent rent, even though it only shows up in rentals. But there is a glut of rentals, and hopefully we'll get some relief, and we'll be boarding on deflation because we've got falling crude oil prices. I want to hit on the data, specifically the BLS data. We did hear from Commerce Secretary Howard Lutnick on Bloomberg surveillance earlier today. A reminder, he runs commerce, so he's not running labor here. but he did weigh in on the data. He said, Donald Trump needs to rely on the numbers.

46:13America needs to rely on the numbers. We need accurate numbers coming from BLS. Do we have accurate numbers from BLS? Not when they do the wild seasonal adjustments. I mean, I think the worst month is January where they automatically increased at 600 ,000 for seasonal adjustment. I hope they're going to stop doing that because that was, you know, the holiday shopping and all that stuff. So I really hope they start just giving us the real numbers, not the seasonally adjusted numbers. But but you can but do you have any reason to believe that the numbers that are provided to us by the government right now when it comes to nonfarm payrolls in this country are incorrect in some way that they weren't during a previous administration, as has been alleged?

47:01I don't think it has anything to do with administrations. I think it has to do with the seasonal adjustments. And I think we just have to have fewer seasonal adjustments and then we'll go on. But yeah, I mean, I remember when the June payroll came out, we were suspicious because they were all teaching jobs, but teachers get laid off in the summer months. Maybe it was just a line number, but we were all suspicious of it. Like, no, that's not right. Those people get laid off for a couple months. So that's the kind of thing that freaks us out. We just want raw data. You know, we get it from ADP. I don't know why we can't get it from the Labor Department.

47:39Carol Massar:Hey, one of the things I want to ask you, because you think it's already the Fed has been too late in terms of cutting rates. And you talk about what we're seeing in the labor market. Having said that at the end of the month, you know, Bloomberg reporting others how U.S. consumer spending rose in July by the most in four months. And so we were seeing resilient demand still among consumers in the face of stubborn inflation. And then there's the concern that the president's tariffs, that that is ultimately going to impact something. It's either going to be Americans paying more for things or companies continuing to kind of eat it.

48:12Carol Massar:And that's going to buy into, you know, kind of eat into their earnings. So I'm just curious how you factor that in, the resiliency that we've seen in consumers and that maybe the economy isn't as bad as everybody thinks. No, it's not as bad as everybody thinks, but there's no doubt that the trade numbers are distorting the GDP numbers. And we've got to get rid of those distortions. Obviously, we had a preliminary trade number this week that's going to impact GDP and to the downside, actually. So I just think that the dollar should be appreciating here sooner than later. We hope the dollar's appreciation is going to largely offset the baseline 10 % tariffs.

48:55As far as the reciprocal tit-for-tat tariffs, there's no doubt that they're still haggling.

49:02Carol Massar:How's the dollar going to appreciate, Louis, if we're cutting rates? Because we're the last to cut. Europe's cut eight times last I looked. The other thing is America's not shrinking like Northern Europe is or Asia is because of a lack of household formation. You know, Japan has the highest birth rate in Asia, and they're still shrinking. Okay. And so we're still pro-family in the South. We're still pro-family in the Mountain West. We're still younger than everybody else. And we do assimilate our immigrants. I realize that President Trump wants, you know, the legal ones. The rate on the battery factory, I think, is pretty controversial.

49:44Those people were working. You'd think they could just get extensions. So, you know, I think, you know, it creates an interesting tone. But the bottom line is we assimilate immigrants in America and we welcome them. We need them. Yeah. So we're just going to grow faster than everybody else. But our rates are going to be higher than they are in Europe. And we're the oasis. You don't want to go to China. I mean, my goodness, the rates are below Japan and they're going to have a currency devaluation soon. So, yeah, we're in the play.

50:17Carol Massar:We're going to wrap it up on that one. All right, Louis, thanks so much. Louis Navalier, Chairman, Founder, CIO of Navalier & Associates, joining us from Florida. This is the Bloomberg Businessweek Daily Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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