MORNING WE'RE JOINED BY MATTHEW
WAS ANY WHO IS THE CHIEF US
ECONOMIST OVER AT DEUTSCHE
BANK. MATT GREAT TO HAVE YOU
WITH US THIS MORNING, THANKS
FOR JOINING US JOBLESS CLAIMS
MOVE DOWN TO 444,000 THIS WEEK,
WE'LL GET YOUR REACTION TO
THOSE NUMBERS.
>> SURE THANKS SO MUCH FOR
HAVING ME I THINK IT'S A
CONTINUATION OF A TREND WE'VE
SEEN CERTAINLY THE JOBLESS
CLAIMS DATA. FROM MOST PART
ACROSS THE BOARD WE SAW THAT
CONTINUES A DOWNTREND SOME OF
THESE FEDERAL. UNEMPLOYMENT
BENEFITS
AS WELL. IT'S A LITTLE BIT OF A
CONTRAST TO WHAT WE SAW THE
LAST JOBS REPORT WHICH WAS
DISAPPOINTING LANDING ABOUT
260,000 JOBS. SO IT IS MIX
LABOR MARKET PICTURE THAT WE'RE
SEEING HERE A LOT OF FOCUS ON
WHETHER OR NOT LABOR SUPPLY
CONSTRAINTS THAT BETTER OUT
THERE THAT MAYBE KEEP PEOPLE
FROM GOING TO GET JOBS. BUT YOU
KNOW WE ANTICIPATE IN THE
COMING MONTHS, YOU WILL SEE A
PICKUP IN JOB GROWTH BY THE END
OF THE YEAR YOU WILL SEE THE
UNEMPLOYMENT RATE FALL INTO THE
LOW
4%. AND SO THIS WILL BE AN
ECONOMY WHERE THE LABOR MARKET
IS IMPROVING AND STRONGER IS
REALLY LEADING THAT.
>> OK AND SO GOING FORWARD FROM
HERE WE ALSO YESTERDAY WE'RE
DIGESTING SOME
OF THE F O M C MINUTES THAT
CAME OUT
WITH COURT RELATION BETWEEN THE
JOBLESS CLAIMS IN THE BROADER
EMPLOYMENT SITUATION HOW DO YOU
EXPECT THE FED TO PERHAPS READ
INTO TODAY'S DATA.
>> SURE SETS OF THE FED IS IS
VERY MUCH FOCUSED ON THEIR
MAXIMUM EMPLOYMENT SIDE OF
THEIR MANDATE AND WE PROTECT
POWELL AND OTHER
FED OFFICIALS ONE SITTING AND
HIGHLIGHT THAT WE'RE STILL
ABOUT 8 MILLION JOBS BELOW
PRE-COVID LEVELS ABOUT
10 MILLION JOBS BELOW PRE COVID
TRENDS AND BECAUSE
OF THAT THEY ARE STILL
REMAINING ACCOMMODATIVE THERE'S
A CONTINUING TO DO 100 TWEN
20 BILLION DOLLARS PER MONTH
AND
REPURCHASES AND IT KEPT
INTEREST RATES AT 0 I THINK THE
MOST INTERESTING POINT FROM
YESTERDAY'S
MINUTES WAS AN INDICATION WE
CONTINUE TO
SEE RAPID IMPROVEMENT IN THE
LABOR MARKET AND THE ECONOMY IN
THE COMING MONTHS THAT THEY
COULD BEGIN TO START ABOUT TO
TALK ABOUT A PLAN FOR UNWINDING
THOSE ASSET PURCHASES ARE WHAT
WE CALL TAPER
AND NOW THEY WANT TO SEE A
ROBUST RECOVERY THAT CAME
BEFORE THE LATEST JOBS REPORT
WHICH WAS NO DOUBT
DISAPPOINTING, SO I THINK THE
FEDERAL WANT TO SEE
A CONTINUATION AND THE JOBLESS
CLAIMS NUMBERS ARE GOING TO SEE
EVEN STRONGER JOBS REPORTS OVER
THE NEXT COUPLE MONTHS.
AND IF WE GET THAT WE EXPECTED
THE FED WILL SEND A SIGNAL
ABOUT TAPERING AROUND THE
JACKSON HOLE MEETING IN AUGUST.
>> WILL THAT BE ACCEPTABLE TO
THE MARKETS BY THAT POINT IN
TIME THEY BELIEVE IT'LL BE
ALREADY PRICED IN.
>> YOU KNOW YESTERDAY IN
RESPONSE THE MINUTES WE DID SEE
THE
MARKET REACT. NOMINAL YIELDS
MOVED HIGHER ON 10 YEAR
TREASURIES THAT WAS DRIVEN BY
REAL YIELDS.
BREAK EVENS MARKET INFLATION
EXPECTATIONS CAME OFF. BUT YOU
KNOW WITHIN THE TOP OF THE
TOTAL CONTEXT WE ARE I WOULD
SAY THAT THE RESPONSES WAS
RELATIVELY MUTED OR MILD, YOU
KNOW WE'RE STILL AT AROUND ONE
65 ON THE 10 YEAR
TREASURY YIELD. SO STILL VERY
LOW YIELDS, YOU KNOW I WOULD
SAY IT IS VERY MUCH EXPECTED
THAT AT SOME POINT HERE THE BED
MOVE TOWARDS TAPERING IN THE
2ND HALF OF THIS YEAR. THERE'S
A LITTLE BIT OF UNCERTAINTY ON
THE EXACT TIMING
ABOUT THAT BUT THE MARKET
DOESN'T ANTICIPATE IT NOW THAT
DOESN'T MEAN THERE'S NO NOT
GOING TO BE A THAT TYPICALLY
HAS A REACTION AS THE FED MOVES
FROM YOU KNOW VERY CLEAR I'M IN
A TOUGH STANCE TO STARTING THE
PROCESS OF REMOVING
SOME OF ACCOMMODATION SO I
WOULD EXPECT THERE WILL BE SOME
VOLATILITY AND DESTRUCTION IS
AROUND THAT EVEN THOUGH IT IS
ANTICIPATED BY MOST PEOPLE IN
THE MARKET THAT WILL COME THE
2ND HALF OF
THIS YEAR.
>> NATURALLY WHEN WE LOOK AT
THIS NUMBER TODAY 444,000
JOBLESS CLAIMS COMING JUST OVER
THE
PAST WEEK. WHEN WE THINK ABOUT
THAT NUMBER NATURALLY KIND OF
OUR MIND TAKES US TO WHERE ARE
THE JOBS STILL BEING LOST RIGHT
NOW
IN AND TO THE BEST THAT YOU'VE
BEEN ABLE TO READ INTO THIS
WHAT SECTORS ARE STILL BEING
IMPACTED THE MOST.
>> SURE AND I THINK YOU'RE
EXACTLY RIGHT THERE'S IMPORTANT
CONTEXT HERE WE'VE MADE SO MUCH
PROGRESS ON GETTING JOBLESS
CLAIMS DOWN OVER THE PAST YEAR
SINCE COVID HIT.
BUT AT THE SAME TIME YOU KNOW
WE'RE STILL PROBABLY AROUND
200,000 ARE A BIT PER WEEK
INITIAL JOBLESS CLAIMS RELATIVE
TO WHERE WE WERE PRE COVID SO
THIS IS NOWHERE NEAR AN ECONOMY
WHICH IS GOING ON THE LABOR
MARKET WHICH IS FULLY HEALED.
ACROSS SECTORS. I KNOW THAT
THAT 0.2 MILLION JOBS
PRE COVID THE SECTORS THAT HAVE
BEEN MOST IMPACTED STILL
LEISURE AND HOSPITALITY IS 2.8
MILLION JOBS BELOW THOSE
LEVELS. EDUCATION AND HEALTH
CARE IS STILL BELOW THOSE
LEVELS
AND MORE RECENTLY WE'VE SOME
WEAKNESS IN THE MANUFACTURING
SIDE. THE GOODS PRODUCTION
ACTUALLY DECLINED IN TERMS OF
JOBS
IN APRIL AND A LOT OF THAT IS
SUPPLY CHAIN ISSUES WE'VE SEEN
ON A SUPPLY CHAIN ISSUES OR
MANUFACTURING ISSUES WHICH LED
TO A RETRACTION OR RETRENCHMENT
THE PAST
SEVERAL MONTHS. RESPECT AND
THOSE WILL BE YOU KNOW RESOLVED
OVERT. I'M SO WE SHOULD SEE ON
A PRODUCTION PICK BACK UP
EMPLOYMENT IN EMPLOYMENT PICK
BACK UP. IT'S HARD YOU KNOW WE
ARE REOPENING A MORE THAN
20 TRILLION DOLLAR ECONOMY AND
THERE'S THAT TIMING COMING UP
SPEED IT'S IT'S HARD TO MATCH
SUPPLY AND A MAN ON A
MONTH-BY-MONTH BASIS CERTAINLY
AND.
>> EVERY 16 STATES WE DO KNOW
AT THIS POINT IN TIME HAVE
ELECTED OUT OF FEDERAL
UNEMPLOYMENT PROGRAMS BEFORE
THEIR OFFICIAL EXPERIAN ON
LABOR DAY AND FROM AN
ECONOMIST'S PERSPECTIVE OF A
CHIEF ECONOMIST PERSPECTIVE,
YOU KNOW WHAT
DO YOU KIND OF REACT TO WHEN
YOU SEE THERE. WHEN STATES ARE
ANNOUNCING THAT THEY'RE GOING
TO PULL BACK FROM SOME OF THOSE
UNEMPLOYMENT BENEFITS WHAT WHAT
IS THE IMMEDIATE REACTION OR
THOUGHT THAT GOES THROUGH YOUR
MIND.
>> SURE NOW I THINK THE
INCENTIVE OR THE MOTIVATION FOR
THAT IS THE STATE'S BELIEVE
THAT THIS HEIGHTENED
BENEFITS ARE DETERRING PEOPLE
FROM COMING BACK AND GETTING
JOBS SO THAT
RESTRICTING NEIGHBORS, BUT WE
TRIED TO DO AN IN-DEPTH
ANALYSIS ON ON THIS RECENTLY TO
TRY TO SEE REALLY WHAT
RESTRAINING LABOR SUPPLY AND
UNEMPLOYMENT BENEFITS WAS ONE
OF THE THINGS THAT WE LOOKED AT
I WOULD SAY THAT THERE WASN'T
STRONGER IT'S FROM WHAT WE'VE
SUPPORTING THAT SO FOR EXAMPLE.
IT IS THOSE STATES WOULD
ACTUALLY HIGHER INCOME
EMPLOYMENT TO HIGHER
INCOME HOUSEHOLDS THAT HAVE
SEEN THE BIGGEST DROP IN
EMPLOYMENT WHICH IS EXACTLY THE
OPPOSITE OF WHAT YOU'D EXPECT
IF UNEMPLOYMENT INSURANCE
BENEFITS WERE REALLY
RESTRAINING. EMPLOYMENT
OPPORTUNITIES AT
THIS POINT YOU KNOW SIMILARLY
IN THE APRIL JOBS REPORT WAS
DISAPPOINTING. BUT WE ADDED
330,000 JOBS IN LEISURE AND
HOSPITALITY. ALL THE JOBS GAMES
WERE AT THE LOWER END OF THE
WAGE DISTRIBUTION AGAIN WHICH
WOULD NOT IT'S AN IDEA THAT.
UNEMPLOYMENT INSURANCE BENEFITS
THE KEY CONSTRAINT FORCE
CERTAINLY THERE ARE ANECDOTES
AND I THINK ON THE MARGIN TO IT
DOES HAVE AN SO WE WILL BE
LOOKING ADDED OVER THE COMING
WEEKS AND
MONTHS AND AND THIS GIVES US AN
OPPORTUNITY TO GET A BETTER
ASSESSMENT.
I THINK ON ON WHAT THE IMPACT
OF THE SENATE PLAN INSURANCE
BENEFITS HAVE BEEN ON