THIS MORNING, I'M JOINED BY
MATTHEW WAS AT THE CHIEF US
ECONOMIST AT DEUTSCHE BANK AT
MATTHEW IT'S GREAT TO HAVE YOU
WITH US.
THIS MORNING. SO LET'S TALK
LEISURE AND HOSPITALITY, THE
STAND OUT IN THIS REPORT
AND THE SECTOR THAT WE KNOW
NEEDS TO RECOVER TO GET THIS
RECOVERY. BACK ON TRACK.
WHAT'S YOUR REACTION.
>> SURE THANKS SO MUCH FOR
HAVING ME AND YOU'RE ABSOLUTELY
AND HOSPITALITY. WHAT WAS THE
STANDOUT ADDING OVER
350,000 JOBS. WE'VE SEEN THAT
THAT HAS CLEARLY BEEN THE KEY
SWING FACTOR IT HAS BEEN AT THE
UPPER CENTER OF
THE CRISIS. LOSING THE BULK OF
THE JOBS. BUT IT'S ALSO BEEN
VERY DYNAMIC SO AS THE ECONOMY
HAS REOPENED AND AS PEOPLE HAVE
BEEN ABLE TO GO BACK
AND ENTERTAIN SOME OF THESE
SERVICES IS ALSO REBOUNDED
RELATIVELY QUICKLY SO I THINK
THAT
THAT WAS A VERY POSITIVE
ELEMENT OF THIS REPORT AND I
KNOW I THINK IS PROBABLY JUST
THE TIP OF THE ICEBERG HERE WE
ARE STILL 9.5 MILLION JOBS
BELOW EVERYWHERE
PEAK COVID AND AS VACCINE
ROLLOUT CONTINUES AS THE
WEATHER GETS BETTER YOU SHOULD
ONLY ANTICIPATED THESE JOB
NUMBERS ARE GOING TO GET BETTER
THE
COMING MONTH.
>> AND LET'S CERTAINLY HOPE I
KNOW THAT MANY ECONOMISTS
EXPECT THE EXACT SAME
THING MAP YOU IT WOULD MAKE
SENSE UNFORTUNATELY STILL STILL
DO HAVE A LONG WAY TO GO 2024
IS THE EXPECTATION FROM THE
CONGRESSIONAL
BUDGET OFFICE THAT WILL RECOVER
ALL OF THE JOBS LOST THE
PANDEMIC IS THAT THE TARGET
THAT YOU SEE AS WELL.
>> I THINK THAT'S OVERLY
PESSIMISTIC AT THIS POINT SO
THAT THE CBO PROJECTIONS ARE
NOT TAKING ACCOUNT THIS
ADDITIONAL FISCAL STIMULUS THAT
WE
HAVEN'T RAIN. THE BIDEN
ADMINISTRATION'S 1.9 TRILLION
DOLLAR PACKAGE THAT REALLY
SHOULD HELP
TO GET. UNEMPLOYMENT DOWN
EMPLOYMENT UP WE EXPECT THE
UNEMPLOYMENT RATE AT 4.2%.
I THINK IT IS IMPORTANT, YOU
KNOW THIS REPORT WAS STRONGER
THAN EXPECTED. WE SHOULD EXPECT
STRENGTH IN THE COMING MONTHS
AND THEREFORE WOULD BE EVEN
BETTER FOR WORK FOR WEATHER
BACKS BUT AT THE SAME TIME WE
DO HAVE TO CONSIDER THE GAP
HERE WE ARE STILL
9.5 MILLION JOBS BELOW WHERE WE
WERE PREVIOUSLY BEEN INTEGRATED
STILL ELEVATED AT 6.2% WE SAW
VERY LITTLE PROGRESS ON BROADER
MEASURES OF LABOR MARKET SLACK
WEATHER WAS THE U
6 RATE LABOR FORCE
PARTICIPATION RATE SO THERE IS
A WAYS TO GO I THINK WE ARE
ANTICIPATING THAT WE'RE GOING
TO SEE VERY SUBSTANTIAL
PROGRESS IN THE COMING MONTHS,
BUT FROM THE DEFENSE
PERSPECTIVE AND CHAIR, HOW HE
HIGHLIGHTED HE WANTS TO SEE THE
ACTUAL PROGRESS IN
THE DATA RATHER THAN FORECASTED
PROGRESS AND SO WE WILL HAVE TO
SEE THAT IN THE COMING MONTHS
TO HEAR MORE HAWKISH MESSAGE
FROM
THE FED.
>> AND WE DO SEE AND THAT STOCK
FUTURES CONTINUE TO RISE AGAIN
ABOUT A GAIN OF ONE PERCENT
ACROSS THE BOARD FOR ALL 3 OF
THE MAJOR INDEXES THE 10 YEAR
TREASURY, YES, IT IS
HIGHER BUT CUT ITS COME DOWN
FROM THAT ONE 0.6 2% LEVEL
CURRENTLY ABOUT 1.5 8 PERCENT
NOW IT SEEMS TO BE GOING
ON HERE. MATTHEW IS THAT
FINALLY THE JOBS MARKET IS
ADDING TO SOME OF THE OTHER
POSITIVE DATA THAT WE'VE SEEN
WHEN IT COMES TO HOUSEHOLD
SPENDING HOUSEHOLD INCOME
CONSUMER SPENDING. HOME SALES
ON ALL OF THOSE HAVE BEEN
REBOUNDING PRETTY STRONGLY BUT
THE JOBS MARKET WAS THE MISSING
PIECE.
THE PAS SO WHAT DOES THIS DO
FOR THE ECONOMY. THE FACT THAT
FINALLY WE CAN SEE A MORE BROAD
BASED RECOVERY. THAT INCLUDES
THE JOBS MARKET.
>> THE JUDGE MARKET IS IS
ABSOLUTELY
CRITICAL EYE. I THINK WHAT
WE'VE SEEN FROM THIS RECOVERY
IS SOMETHING VERY UNUSUAL
IT WAS INCOME FOR HOUSEHOLDS
ACTUALLY INCREASE SUBSTANTIALLY
IN THAT WAS DONE BY SUBSTANTIAL
FISCAL SUPPORT. THAT'S LIKELY
GOING TO CONTINUE IN THE COMING
MONTHS, WE HAVE THESE $1400
STIMULUS CHECKS THAT THAT ARE
GOING TO GET
PUSHED OUT. THAT WILL LEAD TO
HOUSEHOLD SAVINGS THAT WILL
GIVE ANOTHER BIG BUMP AND BUT I
THINK REALLY THE ORGANIC GROWTH
THAT WE NEED TO MAKE THIS
RECOVERY SELF-SUSTAINING IS
ACTUALLY GOING TO BE LABOR
MARKET AND THAT IS GOING TO BE
FUNDAMENTALLY DRIVEN BY HOW
VACCINE
ROLLOUT GOES GETTING THE VIRUS
IN CHECK AND REALLY BEING ABLE
TO REOPEN THE ECONOMY, YOU KNOW
WE'RE NOT OBVIOUSLY NOT THERE
YET BUT WE'RE SEEING
SUBSTANTIAL PROGRESS ON THE
VACCINE CASE GROWTH IN TERMS OF
COVID HOSPITALIZATIONS HAVE ALL
MADE GREAT PROGRESS SO THE
COMING MONTHS, I WOULD
ANTICIPATE THAT YOU KNOW THE
JOBS REPORT NUMBER THAT WE SAW
TODAY IS ACTUALLY ON THE LOWER
END OF WHAT WE'RE EXPECTING TO
SEE OVER THE COMING MONTHS.
>> ALL RIGHT, LET'S HOPE LET'S
HOPE THAT THAT RECOVERY DOES
START PICKING UP EVEN FURTHER
FROM HERE MACKEY BEFORE YOU
HAVE TO LET YOU GO QUICKLY
INFLATION, WHAT IS YOUR
EXPECTATION AND ARE YOU
CONSISTENT WITH THAT THAT YOU
THINK A BUMP UP WILL BE
TEMPORARY AND INFLATION AS THIS
ECONOMY REOPENS.
>> SO I THINK NO DOUBT THERE
ARE THESE TEMPORARY FORCES
THERE'S WHAT WE CALL BASE
EFFECTS WHICH IS THE FACT THAT
WE HAD VERY WEAK INFLATION
PRINCE LAST YEAR AND THOSE ARE
ROLLING OUT OF OUR CALCULATIONS
SO THERE'S GOING TO BE AS
MECHANICAL RISING INFLATION AT
THE SAME TIME AS YOU HAVE
REOPENING YOU'RE GOING TO HAVE
SOME PRICE PRESSURES IN THIS
CATEGORIES ARE THAT ARE AT THE
EPICENTER OF THE CRISIS WEATHER
WAS YOU KNOW RESTAURANTS,
HOTELS AIRFARES. SO THERE'S 2
THINGS WILL BE PUTTING UPWARD
PRESSURE
ON PRICES. ULTIMATELY WE THINK
THAT THE EXTENT OF THE RISE IS
GOING TO BE TEMPORARY YOU
SHOULD SEE INFLATION MODERATE.
BUT I WOULD NOTE THAT THAT THE
RISKS I THINK THAT FIRST TIME
IN A LONG TIME ARE SKEWED TO
THE UPSIDE. AND THAT'S POST
THOUGH THROUGH THIS SUBSTANTIAL
FISCAL STIMULUS WE HAVEN'T RAIN
BUT ALSO BECAUSE THE FED HAS
SHIFTED THEIR THERE POLICY THEY
ARE NOW
ENCOURAGING INFLATION HIGHER
THE TELLING YOU THEY'RE NOT
GOING TO RAISE RATES
PREEMPTIVELY SIMPLY BECAUSE GOT
A LOWER LEVEL
AND SO WE REALLY ARE SEEING
INFLATION RISKS TO THE UPSIDE
AFTER THE FIRST TIME IN A
WHILE.