tv Bloomberg Surveillance Bloomberg November 9, 2021 8:00am-9:00am EST
>> you have to be humble about the structural changes that covid might haven't looked it. >> the growth outlook is pretty good. >> we are going to be looking harder at what is next moment. >> everyone knows the labor market is on fire. >> you have to see robust growth for much higher rates to be accessible. -- to be acceptable. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, it is a simulcast. "bloomberglathere are record
jonathan: here comes the economic data in america. live from new city, this is bloomberg surveillance. alongside tom keene and lisa abramowicz i'm jonathan ferro. on the s&p we are down 0.03%. on the economic data, let's get to it with michael mckee. michael: looks like we are coming in on expectations except core comes in a little bit hotter when you include the trade services. ppi up .6% on the month. that is what forecast. it pushes final demand for a year-over-year basis date .6%. -- basis to 8.6%. that is the same as last month. core goes up .4%, that is little
bit less than the .5%as for theth. on year-over-year basis it is up 6.8%. there is something about trade services, that is your wholesalers and delivery people. but all of that in any get a .4% increase for the month when you're up to 6.2%, which is significantly higher than the 5.9% we saw last month. this report telling us there is still inflation in the pipeline. the good news is much of it is due to energy at this point. one third of the advance in the ppi is due to gasoline prices. maybe we are seeing flattening out but it is still there. jonathan: data on the money back in line with estimates. equity features negative one. down .03%.
in the bond market no trauma. 1.4584 on tens. crude, 81.97 on the day. it is the appetite of the cpi tomorrow morning. let's get the guide tomorrow morning from you. michael: you will be looking for energy increases. those will be something that gets people's attention. a lot of what has happened is all of the focus on inflation, even if you are not buying or the fed cannot do anything about those prices. people are starting to reflect a concern about inflation because it is the focus of the news media. that hurts consumer confidence. we will see if that hurt spending. right now we're looking at a 5.9% year over year rate from tomorrow which would be up from 5.4% and the core would be running at 4.3%.
significant inflation headlines are possible tomorrow. lisa: how important is it that we are seeing the x food and energy come in hotter than expected, given the fact that jim bullard was saying earlier today inflationary pressures are broader than a lot of people realize. michael: it does show you companies are increasing margins , are increasing prices to keep margins going because this is outside of food and outside of energy. those are two of the biggest areas where we see prices rise. you are seeing a broader set of price increases to make jim bullard's point for him. jonathan: thank you. jim bullard making the point the fed might have to move faster if the fomc -- if inflation persists. tom: gregory daco joins us. you take the line this is not
runaway inflation. we just had on francisco blanche of bank of america talk you about $120 barrels of oil. i extrapolated out to a low level of $4.77 where many in america would pay over five dollars a gallon for gas. how is that not inflation of the runaway kind? gregory: if you look at the broad inflationary dynamic, they remain procyclical. that is the key element. if you look at the decomposition of inflation in terms of cyclical and a cyclical components, we still of inflation reacting to strong demand. we coined the term messy inflation dynamics. moderating inflation with sticky supply driven inflation. that means you have an environment in which you are seeing strong demand and supply gradually responding to the strong demand. that is leading to sticky supply pressures and leading to sticky inflation.
we do not expect inflation to fall below the 3% mark before the second half of 2022. there will have to be some patients in this environment before we start to see a cool inflation environment. i would not be surprised to see core cpi inflation continue to accelerate until early 2022. tom: the story of inflation is the symbolism of a fed chairman. for the inflation dynamic of 2022 and 2023, does it matter if it is powell or lael brainard? gregory: from a monetary policy perspective it does not change that much. both have similar views on monetary policy. they strongly backed the new flexible average inflation framework. it may not be the right framework that the right time, but it is a framework that will guide the fed towards more dovish spend than otherwise. i think we have seen in the most
recent communication front a slightly different position. a position that says monetary policy needs to be in a position to act and react to inflation that is more persistent and stickier that otherwise expected, especially if it is driven by stronger demand and stronger employment growth. that is what the fed is trying to do. with the onset of qe tapering it is increasing monetary policy accommodation and putting the monetary policy stance in a position to tighten earlier if needed in 2022. tom: greg, i'm trying to sort this out in my head and i can hear the notes coming in saying we are living inflation. what you say to the average person out there with average wage growth where you are saying wait until the middle of next year or until the middle of 2023? gregory: we all have to understand we are living in an environment where prices are going to be higher at where
wages are also higher. one of the interesting facets of the cycle as we have seen not just an increase in wage growth but a broadening of wage growth. there is 40% of jobs that have seen average monthly increases of .5%. that is much higher than the 10% share we saw pre-covid. we have seen a broadening of wage growth. to some extent there is a real leveling of wages, especially at the low end of the income spectrum. we are starting to see people have more bargaining power in this higher inflation environment. i expect inflation dynamics to cool sharply in the second quarter of this year. i would expect that by the second half of 2022 we will be back in a range that is more comfortable for the fed with inflation readings closer to 2.5% or 3%, which is tolerable from the fed perspective. there is no doubt people are going to be experiencing higher prices, and for some of the
lower end of the income spectrum , that is eroding purchasing power. lisa: what is going to allow prices to cool meaningfully? is that assumption based on the idea supply chain disruptions will abate and we will get a normalization of an economy that may look different post-pandemic? gregory: we have to be careful with the assumption the economy will look dramatically different post-covid then pre-covid. there are changes that will remain in place, but if you look at the underlying dynamics, inflation remains cyclical. as you see less demand for the types of durable goods that have been in high demand, as you see a cooler environment in terms of price increases on the energy front, on the food price front, you will see this negative effect on overall inflation dynamics. we have to remember that in some cases, some of the prices could fall sharply as demand rotates toward services. there is going to be less pressure on supply chains and
supply chains are responding to the stronger demand. everybody is positioning themselves that this could be stickier than expected. there is also a downside risk to inflation at a time when demand is cooling and that could lead to faster cooling of inflation. not a story for h one of 2022 but it could be a story for the second half of 2022 and that'll be a tricky space to navigate because it will have to communicate its intent on monetary policy and avoid the past mistakes of tightening too early in an environment that can generate strong employment growth. lisa: howdy parse out the difference between a good cooling in inflation and a bad cooling due to consumer sentiment that is souring, people not having that purchasing power the way they used to? gregory: it depends on the cyclical dynamics of inflation. procyclical inflation, inflation
is responding to strong demand, that is the good type of inflation. when you see inflation that is not procyclical, that tends to reflect inflation responding to supply shock. that can be a bad phenomenon because that can lead to an inflationary environment where everybody expects inflation to continue to accelerate. in that environment you want to hurry up the pace at which you are spending and that feeds into a further inflationary spiral. that is the risk of bad inflation versus the good inflation that is more demand driven. jonathan: looking forward to cpi tomorrow. greg daco of oxford economics. bloomberg putting out an article on jeffries and mr. darby making a call. he had 4450 and upgrades that to 4450 year end.
despite a record jump in input costs, the largest u.s. firms were able to manage equity costs with impunity. lifting his year end s&p target by 100 points. there goes another one. it has been difficult for people expecting the index level story to be held back i what we talking about for the last 10 minutes. tom:'s corporate suggesting. ge making it very clear she was surprised by the complete split up of g as we win this this morning. jonathan: corporate america adapting. 20 minutes away, jim bianco of bianca research. on a morning like this morning, you want someone's opinion. this is bloomberg. ritika: the giant general electric built by jack welch and
his predecessors will know lower exist. ge says it will split into three companies based on health care, power, and aviation. health care will be split off in 2023. renewable energy and digital businesses will be combined into a separate unit that will be spun off in 2024. the remaining companies will be ge airplane engine operation. spacex has returned four astronauts from the international space station. they splashed down on the coast of florida late monday. the space agency was for -- was forced to alter the launch due to disruptive whether. boris johnson is under fire over a lobbying scandal involving a conservative party lawmaker. his government has been accused of corruption in parliament and even newspapers that are typically friendly took aim at johnson's party. a new poll shows approval rating at a record low.
southwest gas has rejected an unsolicited takeover offer from carl icahn. the company says it is not in the best interest of shareholders. caribbean automotive prices is ipo and has raised is much is $10 billion in a listing that could value the company at more than $70 billion. it would be the seventh largest u.s. on record. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪ tom: good morning.
a very eventful tuesday. powell and brainard front and center. not one but two abramowitz analysis of the options as well. to me it is the market speaking, and so much doubt there. lisa: so much doubt in the bond market, the stock market not so much. first among the meme stocks, the idea that what became a story in the reddit world has become a story in the real world. tom: we will have to see. right now what we have to see is the rebuilding of the hertz brand. there interim ceo is with erik schatzker. erik: i am down in times square, the heart of the nasdaq. i am at with tom wegner, greg o'hara, and mark fields, the interim ceo of hertz.
this trio is responsible for one of the most remarkable corporate turnarounds. last may it filed in bankruptcy and buys night it went public again, giving the company a market value of $13 billion. what a remarkable turnaround. break, -- greg, hertz stunned the financial markets for this order for 100,000 teslas. why make such an early bet on electric vehicles? greg: we are in the travel industry, we have investments all across the travel industry, and providing people with the products they want was an easy decision for us. we know our corporate travelers want electric vehicles to visit their clients and do business. we know our leisure travelers want electric vehicles. a great way for them to try electric vehicles. specifically they want tesla's. they like tesla and they like to
rent tesla. in combination with understanding the demand is there and an opportunity to get a hot product, an amazing product that allows us to put it in the hands of people who want it is an easy decision for us. erik: with the ipo price you tripled your money in the space of four months. as you know there are skeptics who do not believe in your story. they say hertz does not have a firm order for tesla, they say elon musk is dumping model three. what can you say to address some of that confusion? tom: there is no question there is an incredible amount of demand for our products generally. we have a very robust environment for the rental car industry and expect that to continue. we are focused on bringing products into our fleet. we know people want to rent. there is no question they want to rent tesla's. there is no question they want
to rent higher value vehicles. no question it is a move to electrification. people who doubt what we are doing, we would ask that they stay tuned and watch what we have because we think this is just the beginning of an effort to put hertz at the center of mobility in a way to serve our partners and serve our customers to provide a better rental experience and a better corporate partnership with those parties. erik: mark, these other guys are financial guys. you are a ceo, you ran ford. what are the biggest challenges hertz has to overcome in this move to electrification in the transition to what we might call share mobility? mark: i do not look at them as challenges, i look at them as opportunities, because we are sticking ourselves out with a very important place in the mobility ecosystem.
wherever mobility 2.0 goes, as we look to lead electrification, making sure we get our charging infrastructure in place, that is happening as we speak, and then that first mover advantage of learning how to manage these large electrified fleets is going to give us a big competitive advantage, not only in the near term to get customers into these vehicles that they want to drive, but more importantly, in business you have to start looking around the corner. as you think about autonomy down the road, those large electrified fleets, i think we will be well-positioned to work with a lot of partners. >> some people think of this is a tv play for rental car customers -- as an ev play. what is fleet management and why it is it important? mark: it is about our overall corporate strategy. this is not a turnaround, this
is the transformation. you have to look at mobility, electrification, autonomy. we are positioning the company for the things we do better than anybody else, which is manage large fleets. we do it economically consistently all around the world. the ability to manage those fleets, somebody will have to do it. we are the best at that and want to position ourselves. erik: avis was trash talking hertz on the conference call. knowing what you know directly from the manufacturers about the current and future supply of electric vehicles, what are the chances avis or enterprise will catch up with you? thomas: over time we will see all of the rental car companies transition to ev's because that is what we believe consumers want. there is a huge percentage of the population that wants to drive electric vehicles.
we think that will only happen with increasing speed as time passes. it is natural evolution for the industry to take and you are seeing that on the oem site and the product delivery side. you'll see it in ride-hailing. i think this is the first step of large transformation and a process of bringing electric vehicles into mainstream. we are happy to be playing our role. our goal is to bride customers with what they want, and we believe this effort hits the nail on the head in that regard. erik: unless you have been living under a rock, you will have seen hertz has a new pitch man, he happens to be a super bowl winning quarterback. his name is tom brady. why would super bowl winning quarterback choose to star in ads for rental car company? what is it about the hurt story in the transformation plan that
resonates with tom brady? tom: good morning. nice to see you. you have some great guys on the stage with you and i wish i could be there in new york but i have football practice today so i have to do my job. obviously it starts with incredible leadership. i think tom, greg, and mark provide that. i have great faith in the leadership team and i think they are building and reinventing a great business. i've been someone who has been a customer of hertz for a long time and i think there move to electric vehicles is super important. when tom talked about what the opportunity was for him in this business, i certainly wanted to do my best to help promote people who are changing the world in a positive way. we talk so much about sustainability and actions you can do on a daily basis that are sustainable for now and the future. this is one of those areas that
i feel strongly about and i love partnering with a great business , great business team that has a great mission. it is a fun campaign and i hope people enjoy it. erik: you drive an ev, right? tom: i do and i have for a few years. erik: i have had a tesla for about four years. it is the direction the world is heading. for me it was about being conscious about the impact we all have on our planet. the things we can do as individuals to make progress in areas of sustainability. i love the cars. there are a lot of companies that have followed suit. as tom, break, and mark talked about, that is where everyone is heading. it is a cool time to be a car
lover. i certainly am. nobody loves cars as much as thomas wegner, and he keeps me into with what is going on and is on the forefront of the pool aspects of car making. erik: you are lending the credibility of the tom brady brand to the hertz brand. what is it about sustainability that resonates with your personal philosophy and are you deliberately trying to raise awareness around topics such as climate change? tom: absolutely. in a broad scheme of things, is about raising consciousness about what sustainability means. it correlates so many of the things that are happening in my personal life to my business life. i've thought so much about sustainability in my own body, what i need to do to treat my body a certain way so i can
continue to perform at a high level. i think businesses are doing the same thing. people want to understand areas in which they can be more sustainable, certainly to help the environment. raising consciousness through electric vehicles and things we do on a daily basis as we talk about the mobility of where we are all -- of where we all are. i am very mobile. if i can do that in a more conscious way, that is a great thing for the future. erik: tom brady has redefined sustainability as it concerns the human body. you are now in the travel business. his sustainability the new theme, the new mantra for travel. gregory: it is not lost on me the dichotomy between me and tom brady and are sustainable bodies. mine is more disposable than sustainable. one of the things people do not
realize is tom said a lot of things about why he does it. one of the things we can do is financial investors is promote an investment opportunity for people that allows them to invest profitably in the environmentally conscious area. if you look at what we have created, it is an opportunity of a business that creates actual cash flow in the near term, and we can transform hundreds of thousands of vehicles and electrify them. not just that, but turn them into robo taxis. our offer tube or creates better opportunities for uber drivers and we have all kinds of things in the pipe, not only that but the rental car experience has been the same for 50 years. we are going to try to automate that experience so when you get to the airport to show up, hold your phone to the car come and go.
your equity market slightly positive as we count you down to the market open right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: live from new york city we begin with the big issue. >> momentum we see in the equity markets. >> momentum is unbelievable. >> 2021 is a special year. >> we are not going to get 15% s&p 500 earnings growth in perpetuity. >> we will have times of smaller returns. >> you could see flat to negative price returns. >> the return we have captured
inflation-adjusted yields to the negative. jonathan: record low real yields, record high equity market. put those two things together right now. the data has been fantastic. the jobs report, the ism last week, that has inspired another equity market rally. tom: the cautious crew says the revocations will be dire. wearily going to dive into that any moment. i look at all of the sum total of where we are, trying to get to the december 15 and a new fed meeting, and you wonder what the chairman discussion will be december 14 and 15. jonathan: i am trying to work out how different this cycle will be to what we had before the pandemic. that is what we've all got to grapple with, with inflation, with rates. this is what jan hatzius of goldman had to say. "expectations due to pandemic inflation shocks suggest we are on a long road to higher nominal
interest rates relative to the post global financial crisis world." that is a big debate. it will have big consequent is for this market. tom: consequences represent by adam posen of the peterson institute thing for an inflation regime from 2% to a 3% level. lisa, give us an update on powell-brainard. it is like a sporting event i guess. lisa: the larger question is what is the difference between the two. in other words, how loose will lael brainard keep monetary policy versus fed chair jay powell? that seems like an unfair question. you are talking about the potential for an adam posen 3% inflation rate long term. is lael brainard more inclined to try to adapt to policies that actually do allow that to happen, or does fed chair jay powell have the exact same approach as she does when it comes to that? tom: we welcome you across this nation come from $2.90 a gallon gas out to four dollars. i got a huge response on the
four plus dollar gallon crew. francisco blanch, was he saying five dollars a gallon? jonathan: we could get close to something like that if crude keeps climbing. he is talking about triple digit crude right now. it is heller's -- triple digit crude. right now, $82.32. tom: the dow a little bit negative. it is fractional. jonathan: the s&p off by more than 0.1%. we have had a great run the last week or so. eight days of gains on the s&p, five weeks of gains on the s&p 500. these are the longest weekly and daily winning streaks we have had in the year so far. in the fx market, euro-dollar $1.1572. there your nominal yield, 1.45 one cents -- nominal yield, 1.4584% on 10-year gilts.
tom: all sorts of years of experience as being right in trying to figure out where she went wrong, and we are thrilled she could join us in this time of great to mold -- great t umult. can you extrapolate out the three or four year extravaganza to a better 2022? >> i can't. i certainly think that the economy is strong and the profit outlook is decent. i think if we talk about those companies that maybe are not valued yet to do 7% or 10% profit growth next year, i think those are the types of stocks we are buying. but broadly for the s&p 500 index, i think this idea that we are going to continue to compound earnings at the rate that we have is just fantastical, especially as in
this last six week run, we have seen price-earnings ratios expand yet again, and here we are at the point of the cycle where policy is shifting to be somewhat less accommodative, and i know we can debate that, but we think financial conditions ultimately are going to tighten by the middle of next year, and investors don't seem to care. they are hooked on the iv a very low real interest rates, as you noted at the top of the program. jonathan: i am trying to work out what i see end this equity market right now. too easy for me to say the ism was decent, payrolls were good, equity market higher. this year has been phenomenal. you and the team have pointed out. retail participation, passive inflows, this explosion in appetite for short dated call options as well. i am trying to understand what it is i am seeing.
what is behind these moves more recently? lisa s: our perspective is that what happened was essentially in september, right around that little mini correction or pullback we had during september, maybe 5%, 6% from all-time highs, right before labor day, really institutional investors beginning to de-risk in front of the fed tapering announcement. what you saw was just huge cash coming in off the sidelines as retail investors sniffed out that companies were going to probably beat expectations in the third quarter. that now being a pretty prescient forecast that was probably a little bit better than ours. that retail rush into the
indices and into stocks caused institutions to have to change, and as we are getting into year end, a lot of these institutions who are benchmarked to that s&p 500 index could not go into the end of the year underweight that index. so we have kind of been fueled by some flows. foam out, -- fomo, tina, whatever you want to call it. but at some point the retail money does dry up, and we think we are pretty close. we obviously had a good view of that at morgan stanley given the size of our book. we see cash levels right now at about 10.9%, the second lowest we have seen in a decade. typically when you get below 10% cash as a share of portfolios, people are pretty much fully invested. so we think we are pretty close in terms of that retail flow money. lisa a: so what is the trigger
to make them stop buying equities or rivers in terms of looking at financial conditions that are still incredibly loose? lisa s: i think this is going to be triggered sometime either in december or into the first quarter, and it will be triggered by institutions because they are going to be the ones who begin to feel those tighter financial conditions. i think when some of that pullback, repositioning into 2022 begins, that is when i think retail will start being humbled a little bit here. tom: i am fascinated of your thoughts on this day of a separation of ge and i guess they reaffirmation of hertz. we will have that for you in the later part of the hour. we always underestimate corporate decision-making, corporate diamond is a -- corporate dynamism. are we underestimating it once
again? lisa s: i don't know if the market is underestimating it, but certainly from where we sit, we think that the last decade was a bit of a mirage in terms of the complacency not only around issues like antitrust, but quite frankly, issues of capital allocation. i think we are now entering a new business cycle with a level of disruption in almost every single business you can imagine. the challenges come as you noted, whether you are talking about supply chain dynamics, the labor dynamics, are such that the logic for some of the parts in many of these stories breaks down quickly because the challenges that these businesses face are very specific sub industry by sub industry. jonathan: this run in this
equity market has been phenomenal. get to catch up, as always. your equity market this morning is down four on the s&p, negative about 0.1%. morgan stanley a great example of a firm that was coming out of the pandemic to be more aggressive than others, more constructive on the rebound. got the early part of the story right this year, going into the cyclicals, then pulling out of them at the back end of q1, and then struggled with the index call toward the end of the year. we just haven't broken down at the end of level and the way that morgan stanley, bank of america, and others anticipated. tom: maybe three or four years into this great bull market, i hear a lot of humility right now. these are good people and they are trying to do their best work , and the artificiality that i see on the bloomberg terminal right now, i don't know how you make an informed decision.
we are all guessing. jonathan: we are always guessing. i read a great story yesterday from bloomberg news, 84% of companies in their shares below 52 week highs. it has been top-heavy rally. lisa a: we have seen a lot of rotation under the services at this point. i will say, how much of the rally that we see ultimately in the big names are led by big tech, fueled by free money? it is getting freer, and that seems to be the story and the anomaly for people who expected rates to go up at this point in the year. tom: i just feel very strongly that it is about a technology that we see, but we don't see as well. we don't know where we are, but with the overlay of technology. jonathan: we will be catching up with the marriott ceo very shortly on international travel and may be a bounce back in business travel between london and new york. equities a little softer. this blizzard.
-- this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. once mighty american conglomerate is breaking up. general electric will split into three companies focused on health care, power, and aviation. the most sweeping and significant changes for ge since larry culp became the ceo in 2018. the health care division will be the first to be spun off in early 2023. president biden has interviewed federal reserve governor lael brainard for the top job at the central bank. that took place last week, a sign that fed chair jerome powell has a serious rival to his current term that ends in february. the longtime ceo of royal covering -- royal caribbean cruises will step down, but stay on board as the chairman. cfo. panera brands plans to g
einstein brothers bagels. peloton is expanding beyond cardio. they have launched its first strength training device, a $495 set-top box with a camera that guides users through exercises. 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. ♪
you many times want to talk to him, and we went to deliver that. jonathan: trying to get these cities functioning once again. from new york city this morning, good morning. your equity market negative about 0.1 percent this tuesday morning. a day winning streak this equity market has been looking better than good. we are down about 0.1% on the s&p. your next up for this market, ppi, then cpi 24 hours after that. consumer price inflation tomorrow morning. tom: look at the bullard comment coming across. bullard talking up in inflation worry. where does powell go with that? jonathan: we know where bullard is at, it is the hike into early next year.
i keep going back to the three handle for the first quarter of next year. that is some recovery in this labor market. tom: my summary of all the conversation we have is about wage growth and the pernicious nest of that through the system, balancing up against a lot of people that need a higher wage. anthony capuano is with us, the chief executive officer of marriott. you are leading the country with construction, one hunter 66,000 174 rooms right now. i assume that is globally. tell us about the optimism in the middle of a pandemic that gets you to build 1200 projects. anthony: good morning. it is good to be back. we have over 200,000 rooms under construction, and i think that optimism is really based on our beliefs about the long-term future of travel and tourism because of some of the supply chain issues. we are seeing some delays in
construction, so many of these hotels won't open for one, too, maybe even three years. tom: i know jon and lisa have a ton of questions. lisa is looking for a new marriott right where she lives. i am looking at your big impediment, which is the u.s. government. how big an impediment has the biden administration been in their reticence to open up as we improve in this terrible pandemic? anthony: while we lobby to the administration hard to get the borders open, yesterday was a big day for us, seeing international borders open. i have been traveling extensively internationally, and there is enormous pent-up demand from international travelers to come to the u.s., so i think today was a watershed day for the travel and tourism industry. jonathan: the demand is back bedtime. has been for most of this year -- back big time. has been for most of this year. getting the talent back on board, how difficult is it?
anthony: it is improving. one in five of the jobs that were lost in this country during the pandemic were from the travel and tourism sector. the challenge for us is the most acute difficulties we are having are any markets where demand has come back. we thing we had a really compelling offering for marriott associates, and we are seeing good progress in terms of the increases in the applicant pool and the number of folks we are able to bring on board. jonathan: have you had to shift the price to make that happen, or is that something that time has healed over the last year? anthony: there's a bit of wage pressure in the markets that have recovered quickly come about our focus is on career growth, training and develop and opportunities, and in some markets, some one-time incentives to fill those vacancies. lisa: how much have you been able to pass on cost to the
end consumer? anthony: the really encouraging thing we saw in the third quarter, we said that revenue per available room globally was only 26% behind where we were same quarter 2019, but interestingly, average daily rate, which equates to pricing power, was only 4% off where we were in the same quarter of 2019, so we have seen really strong pricing power through the recovery. lisa: when it comes to hiring, i wonder how money people who used to work in the industry said i don't want to work in the hospitality industry anymore. i don't want to have to deal with people when i am still worried about a virus. it will take more than just a higher salary to get me back. how much is that what you are facing when you try to bring on more people? anthony: i spoke at a ceo panel yesterday at the investment conference, and as you might expect, this was the most significant topic, and it was really around the work need to do as an industry deliberately
to identify the perspective -- identify two perspective future employees the opportunities that exist. i think for many years it was viewed as a set of safe harbor industries, and the impact of the pandemic has shaken some of that confidence, so we've got some real work to do. tom: you have provided leadership over the travesty of the boats and the trips up against the basilica san marco. the view from the grand canal room at the saint regis is pretty good. what does it go for a night? anthony: as high as we can go with in reason. it is an extraordinary hotel. i was just there three weeks ago. the renovation is stunning. tom: how do you cut all the population that you want back versus your say venice efforts? anthony: it is an interesting dynamic, and not limited to venice. there are many cities and tourist destinations around the
world that are wrestling with this notion of over tourism. tom: jon, i can see you in the grand canal room of the saint regis with the ceo of marriott. jonathan: this sounds very personal to you, not to me, because we know there's annual visit you make to venice every year around christmas time. tom: it works. jonathan: that's italy, tony. let's put you on the spot a little bit. you have been going around the world, looking across geographies, working out who's got this right right now. you are perfectly positioned to talk about it. everyone has a different policy. who has got it right right now as far as you're concerned, operating a business there? anthony: i am not sure anybody has it perfect, and that is not a criticism. the most challenging thing for all of us trying to navigate this, there's no playbook. none of us were around for the last great pandemic. and it is so unpredictable. you mentioned china.
during our second quarter earnings call, we talk about the fact that china was back to pre-pandemic levels not only in aggregate, but in each of our demand cycles. use awesome outbreaks. you sell 150 cities lockdown, and that had exactly the impact on demand you would expect. so i think we are trying to share best practices, looking at cities and countries that seem to have it right, but i am not sure there's a perfect solution. jonathan: for italy, just give us a break anytime and we will enjoy. [laughter] tom: those gorgeous wooden boat things they've got. lisa: why do i feel like we are a template for his planning a vacation? jonathan: it has nothing to do with a proper interview and everything to do with tom's vacation. tom: could you see me on a gondola? jonathan: i could see you making it happen. tony, good to catch up, as always.
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