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Everybody wants inflation, wage growth is where you get inflation.
BARTIROMO: Yes, wages is the --
KAMINSKY: You know --
BARTIROMO: Topic --
KAMINSKY: Steve Cortes just mentioned that we're sort of where we were January 1st, although the market rebounded.
Let's see if good news is good news or good news is bad news here. Because that's what especially siding with the bond market is going to be looking at.
SMITH: Yes, and anecdotally, I have to say people are looking for the job participation level to go up, right?
We want to know that people are actively looking for work even if they're out of a job. That's huge and then hourly earnings is big as well.
KAMINSKY: Yes --
BARTIROMO: For a long time, the participation rate was at a 30-year low.
SMITH: Yes, I mean --
COURTNEY: Also over 30-year lows, yes --
BARTIROMO: More than 30 years, meaning people were not participating in the growth. Let's get to Peter Barnes, he's got the number right now from the Labor Department. Peter.
PETER BARNES, FOX BUSINESS: Two hundred and fifteen thousand new nonfarm payroll jobs last month, Maria, 215,000 new nonfarm payrolls added by the economy in March, about as expected. The unemployment rate ticking up to 5 percent from 4.9, as more people entered the work force about 400,000 more, but not all of them found jobs. Hourly wages rising nicely, up 0.3 percent in March, to 25.43 an hour, up 2.3 percent year over year, and thanks to those people who re-entered the work force, the labor force participation rose to 63 percent, the first time it's been at that level since March of 2014. The highest in two years. Nonfarm payroll revisions for January and February were negligible.
Looking at sectors, manufacturing shed 29,000 jobs last month, down 29,000. The biggest monthly loss since December '09. Durable goods down 24,000, mining and logging which includes oil production, down 12,000. Sectors adding jobs, education and health services up 51,000, retail up 48,000, leisure and hospitality up 40,000. And construction up nicely last month, 37,000. Professional and business services up 33,000, government up 20,000 new jobs, mostly in local government, Maria.
BARTIROMO: All right, Peter, great stuff there. Thanks very much. Peter Barnes with the breaking news, and I want to get everybody's reaction here, 215,000 jobs created in the month of March, Steve Moore, that's better than expected. Although the unemployment rate goes up to 5 percent. Participation rate goes up, and interesting to see where the job growth was, health care, education, services, government. Mining, once again we see declines in mining. What's your take?
MOORE: Yeah. So, decent number for sure, you know, this has been a slow but steady recovery, and this is just further signs of that. I want to make one general observation about what's going on, kind of on a macro level with this economy and this report confirms this. So where are we losing jobs? We're losing them in mining and commodities as the oil prices have come down, and I predicted this on your show for many, many months, that if those oil prices come down, that actually is going to lead to more job growth in other kinds industries like restaurants, like retail, you know, like construction, and I think we're seeing that. So, we're kind of moving away from the sector that carried the economy on its back for the last five or six years which is the oil and gas industry, and now we're seeing the shift to other industries that are happening from low oil prices.
BARTIROMO: Yeah. Steve Cortes, your take? It's better than expected when you look at the number of jobs created, Steve, but looks like it's pretty much in line with what you were looking for.
CORTES: Right, and listen, I stick with my theme it's good it's not great, what worries me is the fact that we -- and by the way, oil prices, oil did very well in this first quarter this year, so, I would have expected, actually, a better take from the manufacturing and from the mining sector because of improved commodity prices, we didn't get that. So what worries me and I hear this a lot from Wall Street lately, everybody says, oh, earnings are great once you strip out energy. Well, I heard a lot of that in 2000, once you strip out technology.
CORTES: Heard a lot of that in 2007, once you take out banking, things are fine.
BARTIROMO: Take out everything.
CORTES: I don't think so.
BARTIROMO: Yeah. Gary Kaminsky, we've got a market that is reacting to this number here, in fact, it is worsening. We see the market trading lower this morning, connect the dots for us.
KAMINSKY: Well, if you take -- forget this number, the S&P's are basically where they were two hours ago, sort of neutral in terms of the numbers as expected. Now we're going to focus on what happened overnight in Japan, which was trading at significant lows, major correction over there in terms of what happened with their business survey. And the sentiment survey, so you had the weak -- we look at the board in Europe, so, I think that this was as expected in terms of the March employment data.
BARTIROMO: OK. And march actually improving. We are off of the lows as I want to point out for stocks. Oil has worsen, but stocks.
KAMINSKY: We're essentially where we were on the S&P's two hours ago, so I think this is a net neutral on the employment data. We can't say, going back to the Fed, we can't say that this number is going to have an impact one way or another in terms of the June move by the Fed.
BARTIROMO: Pretty steady, Jack Otter. Won't be long in the bottom. What else is there to say?
JACK OTTER, BARRONS.COM EDITOR: What the bond market is doing, if anybody has that number, I haven't seen it.
BARTIROMO: Treasury yields are up right now.
OTTER: OK. I think it's seen then as a good number.
KAMINSKY: Well, Jeff, in line with Janet Yellen said earlier this week, which is that we will continue to monitor the data, IE, we're possibly going to move again in June.
BARTIROMO: One-eight-one percent on the tenure of 3 basis point right now, Jack Otter.
OTTER: One thing I would say about oil and gas, I mean, just because the price has ticked up a little bit, I mean, that's just going from.
KAMINSKY: Still low.
OTTER: . insanely low, to a little bit low. So recount is not going up, people are not going to hire that industry until you start seeing supplies going down a lot.
KAMINSKY: That's absolutely true.
SANDRA SMITH, FOX BUSINESS NETWORK: The job participation which we were talking about right before the number came out. The job participation rate did jump up.
BARTIROMO: Fifty three percent.
SMITH: Which is something that even the strongest critics of any good jobs report in recent months have said, well, we're not seeing that tick-up. It's moving a little bit. So that's something to point out in hourly earnings.
JOANIE COURTNEY, MOSTER WORLDWIDE SENIOR VICE PRESIDENT OF GLOBAL MARKETS: Hour earnings, too. But you have the job participation rate since September has actually been growing. So to see 400,000 people enter back into the work force, very positive sign, and even though we've seen unemployment tick up slightly, that's actually still a good sign because that's being driven by more people.
KAMINSKY: Do we have any idea how many people could potentially re-enter the work force this year?
COURTNEY: Millions, actually millions. Its millions of people that could enter, you know, that are not participating.
BARTIROMO: How do you get the number?
COURTNEY: Well, if you look at the overall, you know, population of people that are eligible to work.
COURTNEY: . in the United States, and then the actual amount of people that are only participating, there's a difference of, I don't have it in front of me, but over 50 million people.
MOORE: It's about.
BARTIROMO: Go ahead, Steve.
MOORE: I was going to say, I estimate that job -- the drop in the labor force participation rate has removed somewhere between 3 and 5 million people from the work force, so there's still an upside here. Now, the point I was going to make, what took this so long, you know, we've been looking this sort of positive jobs report as the unemployment rate has come down now for three or four years and the mystery has always been, Maria, why aren't people entering the work force as they normally do during the recovery? This is kind of the stalled delayed reactions, wages are finally ticking up a little bit, and we're also seeing finally people reentering the work force, but we're still way behind where we should be.
BARTIROMO: Well, you know, a lot of people are talking about it on twitter. Our viewers having this conversation, our conversation, rich corvette for example is tweeting out, look, unemployment rate up a tick now 5 percent. Pain is still being felt by male dominated blue collar workers. There is a portion of people out there who are not seeing the light of day here in terms of job creation, Steve.
MOORE: I'm sorry. Go ahead, Steve.
CORTES: Maria, I think that's a very important point by the way about men in terms of labor force participation. It has never been lower for men in all of history. So, it's not raining men right now when it comes to jobs even though it's a great song. It's not raining men. So, I think, Middle America, too, look, I think this is draw the dots, connect the dots to politics, this is a huge part of the Trump phenomenon. Middle America has had no recovery or very little recovery.
CORTES: Middle America is still hurting. So.
BARTIROMO: Which is why we're not going to see a lot of rate hike?
CORTES: . it's okay for the stock market, but it's not okay for a lot of Americans.
MOORE: You know where this middle class Americans are really hurting, Steve, is in terms of savings. You know, I think, Maria, the reason there's so much economic anxiety out there, there are some reports that came out, the average middle class family has about $5,000 of savings. They're feeling like they're living paycheck to paycheck right on the edge where anything that pushes them, you know, into an unemployment situation, you know, pushing them into, you know, financial insolvency and I think that's the big problem. It's why you see these thousands and thousands of people showing up at Trump rallies, so concerned about their financial future.
BARTIROMO: Yeah, makes sense.
OTTER: To Steve Moore's point, this is going to be a drag on the economy for a long time because we have seen this savings rate go up pretty dramatically, and one theory is that's where gas savings is going, it's going into the passbook savings account and not back into the economy.
BARTIROMO: Five point six percent is the savings rate right now.
OTTER: It takes very high.
KAMINSKY: If you take a newspaper headline tomorrow, not Barron's, but a newspaper. Stock market has a good quarter, 200,000 jobs were created in the month of March. It's going to send the message to the general public, oh, things are great, but then as Steve Cortes points out, this is why there's such anger in politics because it's not so great.
BARTIROMO: Yeah, not so great. But if you look at the headlines that say it's so great, but when you're feeling it in your own home at your kitchen table, know what, no, no.
SMITH: The front page of Drudge report, literally few minutes ago was, best quarter for the U.S. stock market.
BARTIROMO: Yeah, that's right.
SMITH: . in decades. I mean, so, this is coming across to main street, this is good news. Things are recovering. Is that going to be good for Hillary Clinton?
OTTER: I think, it's sure, anytime you got positive news in the economy, positive news in the market, it helps the incumbent party, I mean, we know that.
CORTES: Of course, sure.
OTTER: I don't think that the market is so happy, not so happy.
KAMINSKY: Take a look, this is clearly -- I said I didn't know if it was good news, good news. Well, good news is bad news in terms of.
SMITH: To your point.
BARTIROMO: That's exactly what you said before the numbers. We've got to talk about wages here, guys, average hourly wages up 3/10 of a percent.
COURTNEY: That's something I think can really be the start of getting our GDP moving because if people are starting to earn more, they're going to start consuming more, you know, products out in the market. And we know, 70 percent of GDP is made up of consumption. People haven't been spending money. As Jack pointed out, you know, their savings rates are up, but it was the gas money they're putting in their pockets and trying to save.
OTTER: Right, exactly.
COURTNEY: So we need wages to really be the catalyst here to get people feeling more confident. I can tell you, we're seeing movement, you know, at monster from our customers across the board. We're seeing customers are having to pay more to get the talent, the market's definitely tightening. Of course it might not be as much in manufacturing, but many of the service positions there's definitely some movement in the wage area.
BARTIROMO: Is this going to be enough to move the needle on economic growth? I mean, look, we've got a GDP report a week and a half ago. What was it, Steve, it was 1 percent growth.
MOORE: Yeah, and this is a conundrum of this whole conversation, you know, this was a good report, and positive signs on wages, labor force participation, a lot of industries had growth. But then, you know, we're expecting a GDP number of 1 1/2percent or less, and that is the concern because as I said before, you know, the previous -- the fourth quarter of 2015 we had, what was the number, 1.3 or something like that. It almost looks like we've shifted down a gear and by the way, if people aren't consuming, if they're not spending money, how are the stores going to sell these products.
BARTIROMO: Right, two-thirds of economic growth is obviously consumption. Look, you had jobs in retail, that's one area we were expecting and that did materialize. Services, health care, and education.
OTTER: Construction is important, too. That, I mean, it's hard to overstate how devastated construction has been since the housing bust. And so another decent paying jobs and for the white males who we're talking about who had a rough time of it.
BARTIROMO: Actually, you're right, construction is the number one leader there.
KAMINSKY: If you pay attention to the Fed, if you just got this number today and you knew what Janet Yellen said earlier this week, does the Fed now go in June? Because clearly the stock market had an impact from December through February based on what happened in December.
OTTER: I think you're trying to isolate everything else. And just looking at this number, you would think, yes, but I would say.
KAMINSKY: Not with 1.5 percent growth.
OTTER: It's not growing. I mean, we have to look at.
KAMINSKY: Steve Moore, I'm not trying to say whether it's the right move or the wrong move, I'm not trying to get even into that. I'm just asking Jack point blank, knowing what we know that they move.
MOORE: I know.
BARTIROMO: And he said no. Hold on, not with this kind of economic growth.
MOORE: Where is the inflation though? I mean, show me, why should the Fed.
KAMINSKY: I didn't say they should.
MOORE: Show me the growth in the economy.
BARTIROMO: That's predicting monetary policy.
KAMINSKY: I didn't say they should.
MOORE: And that's what the Fed should be doing is watching inflation.
KAMINSLY: We're not getting there. But the stock market is down at the lows of the morning because they're reading this as though the Fed is now that much closer to another move.
BARTIROMO: Steve Cortes, look at this market, worsening at the lows of the morning here, down about 70 points on the Dow Jones Industrial average. You said earlier, Cortes, it's good, not great. That means you're a seller in this market?
CORTES: You know, I am. I'm particularly concerned about crude oil right now. I think the rally off the lows was largely about the rally in crude. Crude oil could not hold $40. It's trading very badly over the last week or so. I think as crude goes, so goes the market. So to me, while the jobs report is very important, I think crude is even more important, and I think crude is telling us that we need to go.
SMITH: What's also sending crude oil prices down right now, we're talking about treasury yields going up, U.S. dollar against global currency right now as well. So, that's going to put a lot of pressure on the energy market.
BARTIROMO: But, listen, Sandra, I mean, $37 doesn't look so bad when you consider what we were earlier in the year, right?
KAMINSKY: That's for sure.
SMITH: Yeah. But what good is it if it's a reflection of near zero growth in this country, and so you have to consider that, while it's great thing for the consumer, puts some extra money in -- while in our savings account as you just detailed, but, you know, 37 is that a reflection of just a continued weak global economy?
BARTIROMO: I think so. Go ahead, Steve.
MOORE: It's also a reflection. The thing that concerns me the most about where the economy is right now is business investment because that, to me, is one of the best leading indicators, much better than the jobs report. And businesses -- I mean, look at the numbers in the GDP report of the last 6 months. Business investment keeps following, if they're not spending on machinery, and plant, and equipment, and hire workers.
BARTIROMO: Look at the durable goods numbers, you see businesses are sitting on cash and they're not spending.
KAMINSLY: Bottom line, if you think the stock market has bounced back in march Because of the economy, because of corporate earnings, and because things are good, you're happy today. If you think the stock market bounced back because the Fed got easy on, in the middle of February, then you're concerned right now and you're a seller of stocks.
BARTIROMO: All right.
KAMINSKY: It's as simple as that.
BARTIROMO: Yeah, OK. We're going to take a short break. The lows of the morning right now after the jobs report in terms of stocks. We're expecting a decline in the market today of about 80 points on the Dow Jones Industrial average. Coming up next, which candidate will be best for jobs and the economy? Barron's says they have an answer. It's the cover story. That's next.
BARTIROMO: Welcome back. If you are just joining us, we're looking at reaction to this morning's March jobs report. Take a look at where we stand, the market it's at the lows of the morning, the Dow Jones Industrial average down 83 points as we've been reporting. The number of new jobs created in the month of March coming in at 215,000 jobs. That was better than expected although the unemployment rate did tick up to 5 percent up from 4.9 percent. Barron's.com editor, Jack Otter, with us this morning, and the magazine this morning looks at politics and policy this weekend, and you're saying, John Kasich would be the best president for the markets and job creators, Jack.
OTTER: Absolutely. In fact, I don't think it's particularly close call. I mean, you look at his experience in Lehman Brothers, you look at what he has done in Ohio, you look at the fact that he is literally the only person -- and this is kind of amazing, the only guy whose economic plan actually says he'll reduce the national debt. And think about that, all of these people are sort of deficit scolds, but Trump's plan would increase the national debt by $10 trillion over ten years, even Cruz would increase it and that's because they're trying to lower taxes even more they're cutting spending. You know, Kasich said he wants to bring the corporate tax rate down to 25 percent, that is something that Democrats could agree with. So, people think not only does he have a decent plan, but he'll actually get things done. And finally, he's the only one right now in the polls who actually beats Hillary Clinton.
BARTIROMO: I tell you, markets certainly have been coming off some real weakness in the first quarter. The month of March rallied, really took things back, and as a result, we're looking at a gain here today for the Dow Jones Industrial average. But Gary Kaminsky, Wall Street obviously has been seeing cuts on the trading desk, we're been seeing a lot of lost job. By the way, the IPO market in the first quarter worth noting, the market for IPO in the slowest period since the first quarter of '09. This is something President Bill Clinton was talking about when he was campaigning for his wife Hillary. He was talking about Dodd-Frank, he was urging New York City most influential unions to vote for the former first lady in the April 19th New York Democratic primary, and he basically celebrated Dodd- Frank and the loss of jobs on wall street, listen.
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER UNITED STATES PRESIDENT: Hillary says, look, you know, I know my opponent says that Wall Street is the only problem, but that's not true, there are somewhere between 50 and 70,000 fewer people working on Wall Street today than there were before the crash because of the banks that failed, and because of the bill President Obama signed that I think next to the health care bill was the most important bill to be signed, the Dodd-Frank bill.
(END VIDEO CLIP)
KAMIMSKY: Look, do you know want to know why.
BARTIROMO: He talks about that like it's a positive, 70,000 fewer jobs.
KAMINSKY: You know, the fact that -- OK, I'm going to take -- if there are fewer jobs and there are few people helping individuals, corporations, businesses get credit, go to the capital markets, build their businesses, you know, Mr. Bill Clinton, why is that a good thing?
KAMINSKY: And by the way, the stock market might have rebounded from January, February, is not I'm not breaking any news here. The business conditions, be it the IPO market which you talked about, trading revenues, capital market revenues, most hedge funds, for most mutual investors, it was a terrible quarter, terrible.
SMITH: I don't like the idea of, I mean, a former president, especially, Bill Clinton of all people, considered to be so business-friendly, it's never good news when anybody loses their job for him to let alone go out and boast about that.
COURTNEY: I think he was really boasting about the regulations that they put in place, you know, to protect, but it came across, obviously, focused on, hey, you know, Wall Street lost 70,000 jobs. The truth is, a lot of the jobs that were lost in Wall Street were due to technology.
COURTNEY: I kind of felt like he was taking credit and it was a weird thing that he wanted to get credit for, but it's technology that eliminated many of those.
BARTIROMO: Glad you mention because one of our viewers, Mo Money, is tweeting out, he said, look, technology has taken a lot of jobs, also. So this is a really good point. Is that what people need to do to arm themselves for the right skill sets to actually get the jobs of tomorrow?
COURTNEY: Well, yeah, absolutely. When we see all the job growth today and it's in professional and business service sector, within health care, those are very skilled positions, and even the trade positions, we talked about, you know, men not working, it's not raining men as Steve mentioned.
BARTIROMO: White collar men.
COURTNEY: It's the trade jobs, these people getting skills and experience, whether it's trade positions, professional jobs, technology, science, health car care.
BARTIROMO: Blue collar jobs.
COURTNEY: they need that experience, absolutely.
MOORE: You know, the other thing is that the impact of that, I can't believe that Bill Clinton is defending the Dodd-Frank bill. You just have to go around the country, Maria, you see it day after day in small businesses.
BARTIROMO: And we just heard from Dean Scalia, by the way, about Dodd- Frank, and everybody is pushing back on it.
MOORE: Exactly. The area where I think have the most negative impact is in smaller communities where you have these community banks that are being folding or being bought up by the big banks, and that actually hurts employment because, you know, look, if you're a small business man or woman, you know, you go down to the street to your local bank and it's not there anymore. You know, it's all the big banks though. And by the way, I think he maybe, Bill Clinton was making up for talking about Obama's awful last eight years, maybe that's why he's defending Obama in this speech.
BARTIROMO: I remember that comment. Yeah, you must be right. Alright, short break, final thoughts on the jobs report next. Stay with us.
BARTIROMO: Before we go today. I want to relive a funny moment from earlier this morning. Listen to this.
(BEGIN VIDEO CLIP)
MIKE HICKABEE, FORMER PRESIDENTIAL CANDIDATE: Maria, I'm going to make some big news today. There are four of us who has suspended our campaigns. And you know, we've used that term carefully, suspend, not end. As of today, we are back in. We're still on the ballot, that announcement will come later this morning. And we have decided there's just too much rancor, too much absurdity going on and we will go in to make sure that it goes to the convention.
BARTIROMO: Wait a minute.
HUCKABEE: And we have specifically chosen this day, April 1st, for me to make this announcement.
BARTIROMO: So you're saying April fool's joke?
HUCKABEE: I had you going. You've got to admit it. I had you at least thinking.
BARTIROMO: You're trying to trick me here on April fool's day.
(END VIDEO CLIP)
BARTIROMO: Yes, it is April fool's day, everybody. Oh, he almost had me there.
KAMINSKY: You were definitely kind of like thinking, what is he saying?
BARTIROMO: Hey, no joke, the jobs number a little better than expected. OK, that's no joke. It's sort of more of the same, but.
SMITH: Yeah, but we're in this weird market as Gary alluded to before the report, we don't know when good news is good news for the stock market, and bad news is good news. I don't know. So the market seems to be sorting itself out. Not a hugely positive reaction when it comes to U.S. stocks, but this is a better than expected jobs report.
COURTNEY: A lot of good news, too, with that labor participation rate, with wages, you know. It's not just that headline number. I think if you really dig into this, even looking at some of the revision, even though they were slight, overall, a really positive report, whether Wall Street likes it or not.