report. i would love your initial reaction. a big downside surprise for sec. walsh: under normal circumstances, that would be a great month. we've added an average of over 500,000 jobs per month. we still have a steep climb. we still have a ways to go. another positive number, the leisure economy, which includes restaurants and travel, is up significantly as far as job gains. and more people looked for jobs in the month of april than the previous month. so we are seeing positive signs as we continue to move forward. alix: there seems to be a ton of --jonathan: there seems to be a ton of demand. the conversation we've had since 8:30 is what is holding people back, whether it is the pmi or isn data we have seen this week,

the labor pool is tight. logistics and supply can't keep up. there's a labor shortage. in your opinion, in the administration's opinion, what do you think is holding back the labor market? sec. walsh: in some ways, these industries have gone from zero, ramping up to 100 overnight. i think it is about getting people into these jobs. that is going to be key as we move forward. i also think there are some barriers still. people are still concerned about the virus. we have issues around childcare. we have schools open, but some are hybrid. we have issues around that. we also have the vaccine, making sure that people get vaccinated. so i think there's a little bit in different areas. one of the things that probably concerns me the most is communities of color unemployment rate is nearly double, higher than the unemployment rate average in the

country. those are numbers that really concern me. i still think there's lots happening here, and i think as we get through the next month or so, we still have to see a lot of that clarity happening where people will be going back to the workforce in bigger numbers as we move forward. jonathan: you are well aware of what the governors of montana and south carolina think of this. i will read out some of the quotes to get your reaction to them. "the expansion of federal unemployment benefits is now doing more harm than good." that was the montana governor. the south carolina governor saying it has "turned into a dangerous federal entitlement." that is the talking point coming from the governors of montana and south carolina, and elsewhere in the country, too, and also on wall street from some economists as well. i haven't heard the administration's response to that. what is your reaction to their take on the situation? sec. walsh: we still have millions of americans out of

work, worried about putting food on the table, paying their mortgages, paying their rents, keeping their families moving forward, and there's still concern here. there's been lots of industry in this country that have disappeared. businesses and companies that have disappeared during this pandemic. so we still, as i mentioned earlier, have a steep hill to climb, and we will continue to climb that hill as we move forward, and hopefully we can move forward to get every american who wants to work back to work. that was the goal of the american rescue plan. that is the goal of the administration and my goal at the department of labor to get people back and get the economy moving forward. jonathan: people won't be surprised that that is your position. often when someone comes on this program, i would say to them, how would you know if you are wrong. when we look at the additional $300 a week in unemployment benefits that run through september, how would you know if you are wrong? the childcare issue is clearly an issue.

anyone brought up by a single parent understands that issue, that if the school disclosed, there's a problem getting back to work. that is very clear. how would you know if you are wrong that the more complete picture has something more to do with the additional benefits? sec. walsh: i talked to the american people everyday. there's concerns with childcare, with education, there's also concerns people's personal health. they are concerned about the virus, concerned about their family. and i am not saying that is the only reason, but when i think about the unemployment, thank god we have unemployment because of what the economy, what would have happened to the economy if we did not have the unemployment insurance program, when they gave an additional $600 during the rescue plan. $300 a significantly less then it was when it first went through congress. i'm not focusing on unemployment benefits.

i am focusing on how we get these sectors opened again. we are working to make sure these sectors open up. that is what the president is focused on, making sure open up these sectors. again, there's some good highlights, some bright spots in this report today. we are seeing the retail sector picking up. to answer your question, how do i know, i am not sure i can give you an accurate answer other than knowing that unemployment is still important for too many americans. jonathan: the governors of montana and south carolina are looking to remove these benefits. i don't think it would surprise anyone if other states followed in the weeks to come. have you spoken to them this week? sec. walsh: no i have not talked to them yet. i know they have been having contacts with different people in the administration. the un-limit rate in montana is about -- the unemployment rate in montana is about 3.5%, which is significantly less than we are seeing in the country, so every state has different factors, so there's different

reasons for people, different concerns. if you look at massachusetts, new york, california, the unemployment rates are higher in those places because a lot of those industries are still just coming back. you can't compare. it is apples to our inches, not apples to apples. jonathan: do you think it is apples to oranges to allow each state to have these same additional benefits? next time around, do we need to rethink how we distribute some of those? sec. walsh: in the american rescue plan, the one thing and there is a 2 billion-dollar dollar investment for us to look at the ui system. the pandemic has showed us we have an opportunity to look at what worked, what didn't work, and how we strengthen the system for the country and for individual states and territories. alix: secretary walsh --jonathan: secretary walsh, good to catch up. from new york city this morning, this was "countdown to the open." your equities advanced 0.6%.

this is bloomberg. ♪ >> from the financial centers of the world, this is "bloomberg markets," with alix steel and guy johnson. ♪ guy: a massive miss in terms of the payroll number. it is a little after 3:00 p.m. london, 10:00 a.m. in new york. more than 30 minutes into the u.s. trading day. i'm guy johnson in london. alix steel is over in new york. welcome to "bloomberg markets." a massive miss. wall street got it wrong. the economists got it wrong. and we are seeing the reaction as a result. alix: it feels like one of the takeaways is the economists are just not going to be right on this kind of things. the comps are going to be so hard to understand as well. the market reaction was pretty fast and furious, but it is settling out a little bit now.

neel kashkari said earlier, we've obviously got a long way to go. the initial reaction was buy bonds, buy tech, sell small caps. the tenure yield jumped, now down by about four basis points. the euro-dollar firmly above that moving average. we've got to have stimulus from d.c. all of that way and on the dollar. the nasdaq 101 of the outperformer's, up by 1%, reversing earlier losses we saw before that jobs number. so you buy tech, you buy bonds, you sell the dollar. how much further does that have to run in light of this? guy: absolutely. in theory, you would have thought you would push out the taper, some vindication in some ways of what the fed has been saying. mike mckee spoke to minneapolis fed president neel kashkari about this very subject. >> for all those people who have been saying the fed needs to

normalize quantitative easing, today's jobs report is just an example of we have a long way to go, and let's not prematurely declare victory. guy: mike joins us now. a vindication of the fed, what it has been saying in terms of looking for that outcome. why did wall street get this so badly wrong? michael: that is a good question. a lot of reasons, and you heard marty walsh talking about that. to that i would add the fact that april of last year, we lost 20 million jobs. so the seasonal adjustment factors are going to be off as well. really hard for people on wall street to make predictions, which is why i feel a little bit like "family feud" here. i should say, "survey says." [laughter] it would be one million under that april number. instead it is 266 thousand, which is kind of dreadful when you think about what we were expecting. the unemployment rate you can

explain away because more people came into the labor force. that's good news. labor force participation went up. average hourly earnings went up. we were expecting them to go down because lower paid people were coming back to work. not as many of them did, so we saw a rise there. the service industry jobs is kind of where we saw the confusion because only 234,000 more people going back to work at restaurants and leisure and hospitality, but not enough to make a difference. so we ended up with what turned out to be the worst miss in history. then take a look at the gaps here, between the unemployment rate and the participation rate and where we were. that's what neel kashkari is talking about. a long way to go. yes, we went up a little bit, but not nearly enough to close the gap to where we were in january and february of 2020. so the fed is going to keep the pedal to the metal at this point. we are going to see what they do in terms of talking about

talking about tapering. a lot of people thought they might be doing it by the time of jackson hole, but now probably not. a lot of people think what they will do is put it in the minutes first. so here's your calendar to look at. i don't think you are going to get anything june 16 because they are going to wait and see what happens in the jobs report for may. they probably want a couple of jobs reports. if you are going to get anything setting up jackson hole, it is august 18, the last minutes that come out before that. but neel kashkari was suggesting we could see nothing in the minutes suggesting tapering all the way through to next year. alix: we saw that big whale of a trade being put on in the euro-dollar market. mike mckee, thank you so much. ira jersey, bloomberg intelligence chief rates strategist, joins us now. the bond market reaction off the bat makes sense. money coming in, 10 basis move in the yield. now we are not really doing that much. what do you make of that? ira: well, i think the knee-jerk

reaction was a lot of shorts really getting scared and stops being hit at certain intermediate technical levels. 1.5 4% on the tenure yield was a sort of intermediate stopping point, so you get below that and then you normalize. i think when you look at the shape of the curve, the fact that you have the five-year and the seven year sector outperforming among the curve, that is just a sign that people are pricing out a more aggressive fed earlier. when you look at what is going on in some of the front end markets, where we are no longer pricing for any chance of a 2022 hike, so we have pushed that back to the middle of 2023. so i think this is a region will react a reasonable reaction to an economy that is still going to grow, but not as fast as the market was thinking. guy: what do you think it is going to take for the fed to react? ira: it doesn't do much for taper timing itself, not yet anyway. when you mentioned the

euro-dollar options trades people have been putting on for august and september, thinking maybe at jackson hole they will start to talk about it or lay out a plan that might disrupt the markets, that is still very possible. as mike mckee just noted, we get decent trending numbers over the next three months and the federal reserve could be thinking we could take our foot off the gas a little bit. once that happens, i think that is really when you start to see longer-term interest rates start to go up a bit, tips yields really get shellacked in that scenario because they have been held down in large part because the fed is buying more than net supply of that market. so there is some price -- i don't want to say manipulation because it is not quite manipulation, but the federal reserve is buying a lot of bonds in some areas where there's not a lot of supply, and that is keeping prices higher and yields much lower than they would be otherwise. guy: ira, thanks for the update.

ira jersey, bloomberg intelligence covering the right story. let's talk about the equity story. jill kerry hall is joining us now. does today's number change your thinking in any way, shape or form? jill: i think it keeps the fed dovish, and we are not expecting the fed to raise rates until the second half of 2023, so it reinforces the dovish bias there. overall, we are in the midst of a lot of things right now. monitoring the economic recovery, we are in the midst of earnings season, and our view is the market has been pricing in a lot of the good news. the s&p 500, we are only expecting it to end of the year at 3800, so we've had a more cautious view on the overall large-cap equity market given the bullish sentiment and the moves to valuations we have seen . that said, we still think, given

the services recovery and the overall capex recovery, some of the things we still expect, that you want to be in areas of the market like value stocks, like small caps. alix: what is going to be the next catalyst? typically small caps are going to do well, but they have been stuck in no man's land since early february despite earnings that are pretty strong. what is going to be that catalyst to play that thesis out? jill: you saw a really strong rally off the bottom since last year, but i think now you have started to see some reversal back into some of the larger growth areas that have been winning. you saw some resurgence of covid fears outside the u.s., rotation back into some of these areas that have worked, but i think as we continue to see capex start to pick up, that is typically more correlated with smaller company sales, as you start to see the services economy continue to recover, smaller companies have more exposure to

the pent-up services demand. the continued profits recovery that we expect, i think this should benefit smaller stocks. we could be at the start of a longer secular outperformance cycle for small caps, so this is something that will typically continue to outperform. guy: the fed warning of bubbles, that the market is susceptible to significant a kleins. a payrolls report like -- significant declines. a payrolls report like today keeps the fed on hold. that potentially pumps them up even more. the fed is starting to talk about its concerns. how as a market participant should you listen to those concerns? jill: i think to the point about bubbles, overall we have certainly seen that we are getting closer to euphoria within the equity markets we

track wall street's average allocation recommendation to equities, and we have been inching closer to what has typically been a sell signal on the markets, and that is one of the reasons we are cautious, given how bullish the consensus has become. the lack of reaction to good news. a lot of the good news has been priced in, so i think playing some of those rotations within the market that we expect to resume again, value overgrowth, typically you don't want to rotate back into growth stocks until the profit cycle peaks, and trailing earnings growth we don't expect to peek into the fourth quarter. alix: talk to me about margins here. we had weekly wages rising in the jobs report. the nfib said 1/3 of recipients are going to be raising wages.

how do you invest in the margins world and small caps? jill: overall this earnings season, we have seen inflation expectations pick up a lot. wages so far have not picked up as much as transportation and other raw materials costs, but that is something that could be on the horizon, something that companies are concerned about is the next headwind. so small caps are more labor-intensive, and a lot of the areas of the large-cap market and the consumer focused areas, industrials are very labor-intensive as well. so far, margins are holding up well. we are seeing margins higher this earnings season, so companies, corporate's are reporting results to deal with this, but that is something we will continue to monitor going forward when it comes to labor-intensive stocks. alix: jill, thanks a lot. guy, i can't believe ira said she lacks -- said chillax and

you did not call him out on it. if i had said it, you have said alix made up a word. [laughter] guy: i think chillax is a word, isn't it? i'm pretty confident it is a word that more than one person uses. but i am just picturing ira jersey sitting at home pretty chillaxed. alix: he's a pretty chillaxed person. kate bahn, director of labor market policies at the washington center for equitable growth, joins us now. a big part of her research focuses on the relationship between the aber market and gender and race -- the labor market and gender and race. your reaction to these numbers, where it truly seems like the supply is front and center for the job market rather than the demand? kate: that's true. you've been covering this a lot -- covering this all morning. it is a public health crisis

first and foremost, and even as we are starting to build back a little bit and have more widespread vaccinations, the labor market can only recover so much as we are truly able to adjust to the full scope of the crisis, and address structural inequalities in the economy that made it so fragile going into the crisis. guy: do you think unemployment benefits that have been dished out over the last few months are now stopping people going back to work? kate: i don't think we see evidence of that. if anything, we know from previous research that unemployment has a positive effect on how people search for jobs get to go back into higher paying jobs, jobs that they are a better match for, and likely jobs that they are more able to be productive in. that will help us see long-term benefits for the broader economy , woodworkers have a foundation to go into better jobs rather than workers being desperate and going to jobs that aren't good

matches, having a lot more churn. that may seem more unstable economy, so i think these are positive. alix: what happens in september when the extra unemployment benefits run out? how do you see the dynamic playing out through the summer and into october? kate: and to we are on the other side of this crisis, we are investing in workers, investing in, so that may mean needing to do things like automatic triggers to ensure that we are maintaining high-level benefits until we are at a sufficiently low level of unemployment for all workers. a lot of my work is on gender and race, not just the top line numbers, so to make sure that those particular workers, as long as they need, how that stable foundation. guy: the fed wants to reach out to parts of the labor market to

ensure that everybody is included, that everybody gets picked up and taken aloft by this recovery. when do you think that is going to be? kate: taking a step back, i don't think it is going to happen on its own because of market forces. i think we need policies in the first place to make sure we are helping those workers and giving them the support they need. so it is not just going to happen on its own. we need to invest in that and make a policy choice to establish a robust economic recovery. alix: i wonder if the policies are the right ones. the un-play and benefits is one thing, but part of the issue in terms of the services industries , like you mentioned with gender and race, is if you work on tips, you're not going to make as many because you don't have as many customers. that may not change. so is a subsidy a better option than just unemployment benefits? kate: i think we need all sorts of things. it can help workers search for

jobs and going to jobs. we do need to see small business support to make sure we are maintaining those small businesses. but i think it is not one of the other. we really need both of those things happening at the same time, and in particular, things like food service, those workers aren't going to be earning as much because those workers are higher risk -- those jobs are higher risk right now. i think we want to make sure that businesses can get to the other side, and workers and families can also get to the other side. guy: really appreciate your time today. thank you very much, indeed. kate bahn, director of labor market policy at the washington center for equitable growth. be sure to watch bloomberg television's special on job inequality. this is bloomberg. ♪

♪ alix: quite a market day shaping

up here. the theme as you walk into that job number was weaker tech. a sharp reversal happens on that enormous disappointment for the jobs number. it is a buy tech, buy bonds, sell the dollar story. how much do you have to do that? the forward break even is well below fed's expectations, not matching up with the 10 year breakevens, but we haven't really moved that much. so what does need to come out of the market at this point? guy: i would like to point some thing out. chillax in the oxford enlist dictionary. just putting it out there. expedia sees interest well above 2019 levels. vice and ceo peter kern join us. this is bloomberg -- peter kern will join us. this is bloomberg. ♪

♪ >> we are very pleased with what

is happening there, but as you point out, it is very important that it is not just the u.s. domestic. it is very important that there is international travel. that can only happen when vaccines are rolled out throughout the world, so that people feel safe and governments feel safe to let people enter their country. alix: that was the booking holdings ceo talking about travel recovery. expedia reporting significant improvement in first quarter growth bookings. joining us now are peter kern, expedia vice chair and ceo, as well as bloomberg's emily chang. i want to dive into what you talk about on your call, which is vrbo. it is going to try to get more vacation rentals. airbnb also looking to increase the number of hosts. what do you do to woo those? peter: right now, thanks for the

question. we are just leaning into that. our hosts make more than they do on any other platform, and since the pandemic started, on average, new hosts have made more than $10,000. so it is a really active preposition, and when people understand our proposition, it is not hard to get them across. so we are getting that message out more, and as we lean and more broadly to the vrbo brand and brands around the world, we have been gaining share in our strongest markets, and that is a virtuous cycle that gets us more hosts because they can monetize properties better. so we are just leaning into both sides of that, and so far, so good. emily: everyone wants more color about how that competition with airbnb is checking out. at this point, how big is vrbo is a total piece of the overall expedia pie? peter: we don't break it out

because we have a broader vision for it, which is not just that it remains a standalone brand, but that we can continue to drive vacation rentals through all of our travel brands and all of our b2b partners. our vision is that we are going to drive vacation rentals through all of those touch points, and by doing that, we we will have reached that nobody else has in terms of how they can drive vacation rentals. that is our vision for it, and that is why we don't get too caught up in it. vacation rentals are a strong part of our business, and certainly vrbo has had a great year come up as we continue to evolve our product and make it easier for customers, that is just going to open it up to a larger universe, and i think something really exciting that no one else can provide to a homeowner. emily: so you are seeing rebound at beaches, outdoor

destinations. when do cities come back? when does international come back? the airbnb ceo is pretty adamant that travel to national parks and more regional destinations is here to stay. peter: well, i love brian, but i disagree with him on this one. i think cities will come roaring back. it is just a question of opening and being able to be what the cities were. it is not that interesting to go to new york if you can't go to a restaurant or the theater or a museum. but when you can, it is new york. as far as i know, new york announced they are opening in a couple of weeks, which is really exciting. chicago is talking about the same. hopefully the major cities of europe will be open. i think it is just a question of all the attractions of those places coming back, the openness , and windows are open, people are dying to go to those places. i am sure you have many friends who are dying to get back to europe. it is to go to paris or rome or

london. so i think that will be true. i think national parks are great. i go to them. but i think people will want to get back to the city. i think it is just a question of opening, just a question of comfort. some of them will be back soon. i'm in a big city and it is packed right now. but new york, chicago, san francisco, places like that, it will take longer. but once they open, i think people will come roaring back to them. i'm excited for that. that is going to be the next leg of our recovery journey, major cities around the world and international travel being opened up. emily: when we last spoke, business travel was the one big question mark you still had. you are selling your corporate travel unit two american express. what business travel activity are you actually seeing, and what do you think happens to business travel in the end?

peter: i've said all along i think business travel will be back. i've done some interviews where i said as soon as the first salesman gets on a plane and goes and sells something that the one who stayed home didn't, we are going to see everybody back zooming around the world. i think that is basically true. we are planning potentially to sell our corporate business, but that is really an investment in the future of corporate. we think that corporate combination makes the best company in the corporate space that we can be part of and an owner of, and by doing that, we simplify our own companies so we can focus on core businesses of powering b2b customers and our b2c brands. this is a big addition to our b2b business, so it really fits into our long-term strategy and allows that corporate enterprise to focus on corporate clients. but we believe they will be back. we believe it will be a thriving business again. it may take a little longer, but it definitely comes back.

peter: if sprint --emily: if spring break had sprung in march and april, what does the summer look like? peter: summer is going to be busy for sure. there are places certainly around the u.s. that are virtually sold out at this point. if you look at places let miami, even places outside the u.s. like mexico and caribbean, the bookings now, spring break and into the summer, or just packed. so i think you will see more and more of that. hopefully we will have cities open, and that will give more opportunity for people to travel this summer to new places, but summer is going to be really busy, no question about it. guy: peter, it is guy in london. the summer over here feels a little bit more uncertain. in around an hour and 20 minutes , the u.k. transport secretary is going to be announcing the traffic light system we are going to used to go on holiday

this summer. what are you hoping for from europe? what are you expecting from europe? how will this summer compare with the united states and compare with pre-pandemic? peter: in europe, we think definitely the summer will be more muted. we've already seen the vacation rental business relatively has been stronger, and domestic travel has been stronger because of course, in many cases, people have not been sure whether we can leave the country. as that changes, i am certain we will see more and more bookings for international within europe, and i know some countries are very keen to make sure that happens and that they accept visitors. but i think it is going to be bumpier for europe. i think we are seeing it now with lockdowns in germany. not every country is in the same position, sadly, but vaccines are rolling out, and they will come faster and faster. as the u.s. finishes being vaccinated, more vaccine will be

freed up for the rest of the globe i hope, and i think that will all start to accelerate. we think europe this summer will be bumpier for sure, but there will be pockets of good and pockets are corridors that potentially people should go between europe, go between the u.s. and europe. we are optimistic or hopeful about the u.k.-america corridor. so i think it will start to evolve, and when those things open up again, i think we will see a lot of pent-up demand, people hoping they can get to go, and if it doesn't happen, they will travel domestically. guy: peter, thanks for your time. really appreciate it. peter kern, expedia vice chair and ceo. and our thanks to emily chang. coming up, a tale of two commodities. commodities are certainly booming. copper hitting fresh all-time highs. expectations of a global recovery. yes, we've got that huge miss in the jobs market. what that mean in terms of

the trade as well? we will talk about that next. this is bloomberg. ♪

ritika: this is "bloomberg markets." coming up, jared bernstein, member of the white house council of economic advisers. this is bloomberg. ♪ let's check in on the bloomberg first word news. pfizer and biontech have become the first coronavirus makers to ask u.s. regulators for full approval. that is an important step to making the shot a sustainable revenue source. right now, the three shots approved in the u.s. are allowed only for emergency use. that designation can be pulled

away at any time. a petition demanding that the tokyo olympics be canceled gains support and japan. the government today extended a state of emergency to control the spread of the virus. prime minister yoshihide suga has been determined to push ahead with the games. others want them canceled or delayed. british prime minister boris johnson has dealt a major blow to his chief political rival. johnson's ruling conservative party won a crushing parliamentary victory. the loss is likely to intensify pressure on labour leader keir starmer. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. alix: thanks so much. let's get to some market moves. an outlier is what is happening maybe in the copper price. we are hitting record high. glencore is calling for $15,000

copper because the easy stuff has already been made, but what it is doing in the equity markets is quite interesting. the blue line is the s&p. you can see the outperformance of the commodity index versus the s&p. i question if there is catch-up potential because the s&p is only weighted 2% towards materials, 2% to 3% towards the energy sector. you're not going to get the kind of beta that you might have seen a couple of years ago in that. it also raises the question, if you get these disappointing jobs numbers, are you going to have the strength in the copper world, the oil world, and stuff like cotton and coffee that we have seen? let's break all of that down with mike mcglone, bloomberg intelligence commodities strategist, and bloomberg mckee -- and mike mckee, bloomberg international economics and policy correspondent. there are short-term demand materialization's within spread. the futures market, the paper

market, is still superstrong. is this financial flows, or is this real demand driving a lot of the commodity moves right now? mike: i think it is a lot less real demand. i'm really fearful it is more speculation, people trying to get in on this so-called super cycle and commodity inflationary trade. the last place you should be going is crude oil because typically you will have to pay for contango. it is in backwardation a bit right now, but it was having problems with demand revisions going lower before covid, so crude oil to me as a bear market that bumped up in their range. there's a lot of good upside potential in the picture. it all means demand for copper, but look at what you just pointed out. it just broke above levels from 10 years ago. imagine if we saw that in the stock market. we would see severe deflation. the stock market is catching up a bit. but the world of commodities is on copper's shoulder now.

it has to sustain on the lme or it will have a problem for the whole commodity complex. guy: one of the other things worth bearing in mind is we are continuing to see quite a lot of dollar weakness, and again we got more of that today. i wonder whether or not that is a factor that we throw into the mix as well. you had the equity story. you had the commodity story. the thing about what is happening in fx as well. i wonder how much of that is a driver as to what is going on in commodities. alix: it is a good point because a couple days ago, the question was, what if we see a dollar breakout? euro can't break one dollar 20 since. is that going to put more headwind on the commodity sector versus the upside? so it is a good question to ask. guy: let's ask it to mike mckee. michael: i would say alix is right. dollar weakness probably plays into this simply because commodities are largely priced in dollars around the world, see are getting more for your money

at this point. but it is hard to really separate this out. i go back to what i've said about other aspects of this whole pandemic, that you are seeing a situation where we don't have historical's, so we don't really know what is going to happen with this, how much the dollar plays into it, how much the lack of shipping containers plays into it. all of that makes a difference. that chart shows you what happens with commodities. they generally rise into recessions, and then they fall off very rapidly once demand gets rationalized and supplies catch-up. guy: but isn't this different? this time around, one of the things driving copper is not only a rebound, but also a complete industrial shift. everything is going to get plugged in pretty soon. we are completely shifting the economic model. that's what is driving copper. there are other forces at work here in the economic cycle.

guy: is that really the case -- michael: is that really the case? obviously there is demand for copper in homebuilding, but we were building a lot of computers and electronics before the pandemic hit. there was a lot of demand satisfied during the pandemic because people went out and bought their home office stuff. so it is kind of hard to say how long the demand is going to last because what's really changed in the copper using industries? housing has really changed, really picked up. but do the other industries have a firm glide path that you can say this is going to continue? mike: that is a key factor. building materials, copper is finally lower. but there's a short-term thing that is going on right now. the world's largest producer might be adding taxes to the copper exports, so that might be a blip. the big picture for commodities, you really need a weak dollar. what has been driving at the

last few years? and outperforming u.s. stock market and relatively higher yields. they are in place. crude has always led big picture commodity rallies, and guess what? crude oil is being replaced. copper is part of that. that's why any inflation or environment wieghs on -- environment relies on copper in this environment. alix: lumber at record highs. it added about $36,000 over 12 months. that is a lot of money. when you actually see that coming in through the market in terms of wages, when someone says i need more money because i just added $36,000 to my house because lumber is at $15 -- at $1500. guy: but the flipside to that is interest rates are going to stay low. so the housing market is

booming, but affordability is still pretty good. alix: so how quickly do we wind up seeing commodities, and then the five-year five year breakeven or the 10 year breakeven? there has to be a correlation because it is expectations, right? michael: it is expectations, but it takes a while to get there, and it takes a while to have it sustained enough that it gets there. it took a very last time -- a very long time with the last oil boom to try to get it to spread out just beyond energy. the thing you've got going for you here is it is not just the cost of the timber. fees are up, but then you have the sawmill fees. the sawmills all shut down during the pandemic. now they are coming back online. how quickly do they get back up? and then the homebuilders don't have to pay as much for lumber, and prices don't go up. they've gone up twice, but are they going to continue to rise? that is a little bit harder to predict. guy: mike mcglone, let me ask

you a question about what happens when we start to run short of some of this stuff. prices are going up because you can't get hold of it. there is struggle to get hold of how many feet have whatever lumber size you want. the chinese are certainly experiencing this at a moment. is it going to pull back growth? at some point, does the lack of availability story start to impact what people do with it? mike: pulling back growth is the dream i've had in commodities for about a decade. [laughter] i am glad mike mentioned timber. timber is about the same price as it was 30 years ago. it's lumber. you've got to get those sawmills kicking back in because they have been put away for a while. that is the dream that i don't see because they are switching. for instance, palladium is expensive, you switch to platinum. a lot of this lumber, you can switch to steal. that is a -- to at -- switch to

steel. that is a little bit more expensive. the incentive to produce is the highest it has been in almost a decade. guy: that's the problem. in copper, you're not getting that stuff. you have been talking about this with the energy companies as well. these companies are incentivized to return money to shareholders right now, and not put huge amount of money into fresh capacity. i think that is going to be an issue in key markets. maybe not so in lumber. it is pretty quick to build a sawmill. it is pretty hard to build a mine. alix: governments, you are seeing this right now in chile, they are going to want a bigger piece of the pie. whenever prices go high and companies are making money, the countries always come in and make more of that, not make the costs -- that makes the cost curve even higher. guy: mike mcglone, mike mckee,

thank you. this is bloomberg. ♪

>> cities will come roaring back. it is just a question of opening, and cities being able to be what the cities where. it is not that interesting to go to new york if you can't go to a restaurant the theater or a museum. but when you can, it is new york. alix: that was expedia's ceo peter kern talking to us about cities that will come roaring back after the pandemic. but until they do, maybe you want to go to an rv. you can take your vacation in an rv that sounds huge. propane furnace, three different beds. guy: it sounded really small. i have to say, the prospect of putting two children in it sounds utterly disastrous. i read this piece this morning. last summer i thing i would have

been up for an rv. this summer, i want to go to a hotel. i want to go to something that has four brick walls and air conditioning, etc. maybe the rvs have that as well. but nevertheless come this feels like last summer, not the summer. alix: it is definitely not my thing. however, i just have one kid and i has been, so there's less of it. it feels like if i had to, you get a nice, fancy one, maybe it will be ok. you should check it out in this week's issue of "businessweek." guy: geoff yu is going to be coming with us. alix: my husband can split wo od. [laughter] guy: we are going to be talking about the payrolls number. this is bloomberg. ♪

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♪ >> the countdown is on in europe. this is "bloomberg markets: european close," with guy

johnson and alix steel. ♪ guy: here's what you need to know out of europe this hour. the euro spiking sharply higher as u.s. payrolls deliver a massive miss. yields down on both sides of the atlantic. the u.k. transport secretary will lay out london's traffic light system. british airways and iag delivering guidance ahead of what will be a cautious summer season. the eu split on vaccine patent waivers. spain backing the proposals, but vestige are -- but vestager siding with merkel, and macron saying the priority is giving shots away. let's get back to this big payroll