May Jobs Report Disappointing; Health care Industry Growing; Hillary Clinton Says Trump is Temperamentally Unfit to be President; Firefighters

WITH-MARIA-00

MARIA-00

Clinton Says Trump is Temperamentally Unfit to be President; Firefighters

in Coventry, Rhode Island, Say they're being Asked to Remove U.S. Flags and

Decals from the District's Fire Trucks; Police in Anchorage are

Investigating how the Tires on at least 87 Small Planes Parked at Merrill

Field were Slashed; United Airlines Announces its First Major Product

Upgrade in more than 10 Years; Markets Remain Mixed Ahead of Jobs Report;

United Airlines Creates Luxury Brand for People who can Afford Beds on

Planes - Part 2>

Stuart Varney>

Brenberg>

Donald Trump; Rhode Island; Firefighters; Aircraft; United Airlines; Stock

Market; Fort Hood; McDonalds>

MOORE: Well, just because the price of oil has gone up to now, you know, $50 a barrel, and the oil companies I talked to say they need a $50 price to make money.

So, we'll see if that spurs drilling. But you know, 200,000, let's not forget, 30,000 jobs will probably be subtracted because of the strike.

So, we're going to be somewhere near 200,000, that's a pretty decent number, but where are the big breakout numbers, 400,000, 500,000 jobs you would usually get in the recovery.

We just have not seen that --

BARTIROMO: We haven't, because --

MOORE: Yes --

BARTIROMO: Dagen, we've been averaging 200,000 jobs a month.

MCDOWELL: Right, and the peak is past because you've seen still jobs -- decent jobs growth so far this year, but those numbers have been weakening some --

MOORE: Yes --

MCDOWELL: Moore --

BARTIROMO: Yes --

OTTER: Important to know the journal points out this morning that 200,000 jobs is twice the population growth. So, they said there's only so long you can do that.

Now, that doesn't include, of course, the lousy participation numbers.

MOORE: Right --

OTTER: I'd love to see the unemployment rate tick higher today --

MCDOWELL: Yes --

OTTER: Signaling --

MOORE: Great point --

OTTER: That people are flooding into this market.

BARTIROMO: So, you --

MOORE: Yes --

BARTIROMO: Actually want to see the number go up, because that would indicate --

MOORE: More people --

BARTIROMO: People are actually going back --

OTTER: Going to go for the right reason, of course.

COURTNEY: Right --

BARTIROMO: Yes, and that would indicate a stronger economy that actually people are getting back into the market and trying to --

MOORE: I'll get my 23-year-old out of my basement.

(LAUGHTER)

BARTIROMO: Yes, that's a good point. You know what? Let's get right to Peter Barnes because Peter has the number, it's coming out imminently, Peter Barnes is in Washington right now at the Labor Department, Peter.

PETER BARNES, FOX NEWS CHANNEL: Just 38,000 new nonfarm payroll jobs in May, Maria. Just 38,000 new jobs created last month. Way below expectations. The unemployment rate fell to 4.7 percent, the lowest rate since November, 2007. But because more than 450,000 people left the work force and that cut the labor force participation rate back down to 62.6 percent last month. And payrolls for March and April were revised down significantly by a combined 59,000 jobs, so job creation much slower in March, April and May. Now, the strike at Verizon did affect the payroll numbers for May, cutting it by 34,000 jobs, but even adding that back in, payrolls for May would have grown around 70,000 jobs, still way below the street's expectations for about 160,000 jobs last month.

Wages rose 0.2 percent last month, are up 2 1/2 percent year over year. Job cuts were spread across many sectors last month, mining and logging, which include coal and oil production, cut 11,000 jobs. Construction was down 15,000, manufacturing down 10,000, wholesalers down by about 10,000. Information services down 34,000, and that's the Verizon strike, temporary help agencies cut about 21,000. Some sectors adding jobs last month included retailers, up about 11,000, professional and business services up 10,000, education and health up 67,000, leisure and hospitality plus 11,000, government up 13,000. Maria, back to you.

BARTIROMO: All right. We are all looking at these numbers, Peter, as you're reporting them. One word on the panel was shock. Another word on the panel was, wow. Steve Moore, your analysis here, 38,000 new jobs created. The market is trading down in the face of this. Is there something more to this story? This is way lower than anybody.

STEVE MOORE: It is, and, you know, my jaw is still on the table, and I am totally shocked by this number. It's very rare, Maria, that you see the prediction so out of line with the actual number, 38,000 is pathetic. It's, you know, almost in recession territory. And the thing that's strange about this, this runs contrary to so much of the other economic data which is showing a pickup. So, I have to look at the bottom line numbers, but 38,000 is way, way, way below where we should be.

BARTIROMO: Dagen, I think it's fair to say we're not going to see an interest rate increase in the month of June.

DAGEN MCDOWELL, FOX BUSINESS NETWORK: No, and because Janet Yellen is completely fixated on the unemployment rate. But to Peter's point, you have the labor force participation, again, dropping more than almost half a million people leaving the work force. That's why you saw the unemployment rate fall. Construction jobs down. Mining and logging down by 11,000 in just a month, and manufacturing down. Again, these are the areas that you've got to see some stability. This is not stability.

JOANIE COURTNEY, EMPLOYBRIDGE COO AND PRESIDENT: Yeah, and there's definite -- I think from the labor participation, it's a big concern to see that 450,000. There is another dynamic, which I won't say this is the whole reason the job report is down, but I can tell you from speaking to employers, both in the U.S. and even in Europe, but specifically in the U.S., they are hiring. They do have openings. I think the challenge may be that they're not finding the skilled talent for the positions that they need and there's a gap here, and that is driving part of this.

BARTIROMO: Who is calling me, Brian, is that you or is it Jonathan.

JONATHAN HOENIG, CAPITALIST PIG HENGE FUND FOUNDER: It's me, Maria, let me just jump in for a minute. I mean, the number very weak as some predicted, it was a surprise, but what do you see in the reaction in the markets here? Stocks going down, gold up $14, $15 already, so, once again, I think you're starting to see not only just the wage prices, but also the price increases across the board. Commodities are in a bull market, and I think if I was putting money to work right now that's where I'd be putting money not into stocks which are obviously selling off on this, very, very weak.

BARTIROMO: Yeah. The futures are down about 35 points right now, and we've been seeing a deterioration of futures since this number hit, Jack Otter.

JACK OTTER, BARRONS.COM EDITOR IN CHIEF: Well, what's interesting is that bad news is bad news, which means it's really bad.

BARTIROMO: Yeah.

OTTER: . because this does suggest as Dagen said that a June and July probably rate hikes are off the table, and the market would normally like that, but it's actually selling off which means the initial reaction since investors are actually concerned about the economy no matter what the Fed do.

BARTIROMO: This job growth and the revisions bring the average monthly job gains in the past three months to 116,000. That is a sharp slowdown from the average 219,000 that we have been talking about. President Obama touted his economic performance yesterday. Did he not.

MOORE: Talk about bad timing.

BARTIROMO: . has any heads up.

MCDOWELL: So much for the.

BARTIROMO: . on what we were about to see?

MOORE: I would say the White House is probably as shocked as we are about these numbers. And you know, we talked earlier about construction, what was the number again? It was down.

MCDOWELL: Down 15,000.

MOORE: I mean, all the reports that we've seen is that housing is doing well and that new home permits are up, and that just confounds me. And the fact that we revised downward, this is the worst monthly report we have probably in two or three years.

BARTIROMO: Unbelievable, this is really tough report.

MCDOWELL: Can I just -- it may be -- and this is theorizing. It might go -- what you're seeing is home sales have been strong and home prices have come back. The constructions haven't been there and there's now an inventory problem, but you look at the construction jobs that are being cut. Does that speak to, again, work rules and people who are having trouble hiring in this environment because they're struggling with lending? I'm talking about small businesses struggling with lending, struggling with all of the rules that have been put on them from the government? I don't know. I'm throwing that out there.

BARTIROMO: Yeah. That's absolutely one of the reasons that employers are not hiring, this 100 percent, you hit the nail on the head. It's the regulation story. But, you also mentioned earlier, Joanie, the labor loss.

COURTNEY: Yeah. The labor loss, and that's going to have an impact, I think certainly, when you look at the mandatory overtime now for, you know, someone that has a salaried position, you're going to have to bump people up that might have been making 30,000 or 35,000, possibly to a $47,000 salary or you're going to have to pay them overtime. That is going to impact small businesses, midsized, retail, restaurants. I mean, think about not only the minimum wage from the hourly worker.

BARTIROMO: Right. I'm just going to say, layer on the minimum wage.

HOENIG: Now, you're going to layer this on. So it's absolutely putting things in place. I don't see how that's going to improve the economy. And you asked before, what's the one thing that really could improve things? I believe wages are a big piece of it, but that's not the way to get there.

BARTIROMO: Well, this is up 2/10 of a percent on wages. Brian Brenberg, we're looking at an economy that has slowed down considerably in the last few months.

BRIAN BRENBERG, THE KING'S COLLEGE PROFESSOR: And that's going to feed into the narrative that we see. I mean, this is a crucial month, the month of June. What's the narrative going into some of these conventions, and you're going to see this number now forming that. And this is, again, this is very bad news for Hillary Clinton, coming on the heels of Obama trying to defend his record. This number cuts completely against that, the dollar revisions in previous months, same thing. This is great news for -- this is great news for Trump going into July.

BARTIROMO: Well, something happened in the month of May. I mean, I know that there were some weather issues. I know that there were some strike issues, the Verizon strike, but there's more to this number than that.

MOORE: Well, you know one of the interesting things as we've seen the growth numbers fall, but the employment numbers were better. And now what it's suggesting is that the jobs numbers are following this low growth, rather than the low growth rising to match highs.

BARTIROMO: That's right, and the job number was the one chip in an overall picture bumping along the bottom.

MOORE: Yeah. And, look, I think all these regulations have a big impact. The other one is, remember we talked about this last month when the jobs numbers came up, the small business confidence index has been really negative.

BARTIROMO: Well, that's what Dagen is talking about.

MOORE: Right, it's exactly what you were saying, Dagen, and that's reflected in that NFIB poll, and when the small businesses -- because two thirds of jobs, right, are small businesses not big corporations.

MCDOWELL: And somebody tweeted, a guy name -- who watches the show religiously named Scott Yokin, live in Kentucky, he said I don't know why anyone is surprised. Outside of New York and D.C., it's tough.

MOORE: Great point.

BARTIROMO: The reason, Brian, the reason that I'm surprised was because the estimate was 164,000. I totally agree. I'm not surprised by this slow economy because we've been navigating this and calling this for a long time now. I am surprised that it's so different, that the economists got it so wrong.

MCDOWELL: Right.

BARTIROMO: The estimate was 164,000.

COURTNEY: Yeah, it was a big miss. And the other concerning thing in this report is that the temporary sector lost 21,000 jobs and we've seen a lot of growth. Employers are leveraging talent differently and they're using flexible models to kind of supplement their staff. So that number has been a strong number, really, for the last few years. And this sector cut 21,000 jobs. So that was also a concern that they're not, you know, they're looking to cut costs. They're really watching that SQ and A-line, and not, you know, investing in hiring talent right now.

MOORE: Well, you made a really good point about, you know the fact that there are jobs out there. I mean, it is true, you've seen help wanted ads, Maria, and I think the problem is the skills gap that you're talking about, that today's workers just don't have the skills, unfortunately, to build these jobs. I mean, they're graduating with college, with philosophy degrees and nobody needs them.

BARTIROMO: Yes. You mentioned the regulatory environment. You've got to do Obamacare in that, OK. Obamacare has created an enormous cost for businesses, small and large, and they are cutting jobs, they're turning full-time into part-time. Jack Otter, you want to weigh in now.

OTTER: To Steve's point, the jolts number has been very high, very positive, which means that there are lots of job openings. John Coney has a piece in the Journal today about J.P. Morgan having 123 banking jobs available, 2000 I.T. jobs, which again, probably goes back to training. If there's that many jobs that are going unfilled, because they're not finding people with the technical skills to fill them.

BARTIROMO: Yeah. Well, the technical skills, that's all speaking to the gap in skills.

HOENIG: And, Maria.

BARTIROMO: We need the education part of the story to really connect the dots there. Go ahead, Jonathan.

HOENIG: Maria, I'll just say something quickly, what you said about regulation, I mean, this is what I think what's so frustrating, you almost feel like Harold Hill, you know, being asked at the end of the music man, where is the band, where is the band? Where is the job? There's an unlimited amount of jobs that could be created in a free economy. But, as you said, whether it's Obamacare, whether it's higher minimum wages, they make it so difficult for a small business to hire new people in this type of economy. I'm not surprised that more and more employers, even if they can find the skills, are simply sitting on their hands rather than taking the risk, especially ahead of an election.

BARTIROMO: Yeah. You know, one -- David Morris is tweeting, could this be the slowing of the oil and gas industry? Again, I think this is more than that. We're talking about an economy that has rolled over.

MOORE: Yeah. But, also, of the big oil and gas jobs were lost six months ago.

BARTIROMO: Right, right.

MOORE: So, I don't think that's an answer to this.

MCDOWELL: And you look to the revisions to March and April, again.

MOORE: How much were they?

MCDOWELL: Lower, the total number, but the both months were revised.

MOORE: Yeah.

MCDOWELL: . lower. So again, this doesn't look like -- I know that Verizon jobs go into it, but the Verizon jobs were 34,000 people that weren't working last month.

BARTIROMO: It's the revisions showed employers added a combined 59,000 fewer jobs in April and March.

MOORE: That means that we're negative, you know, that means we're actually negative, 59,000 minus the 34,000 we created, bad, bad, bad story.

MCDOWELL: The overall unemployment rate including part-time of workers stated it was flat.

(CROSSTALK)

BARTIROMO: Wages are not.

MOORE: Unemployment rate.

BARTIROMO: Yes.

MOORE: . 9.8 percent.

BARTIROMO: Nine point eight percent the real unemployment rate. Let's get Stuart Varney to weigh in. He's just standing by right now. Host of Varney & Co., of course you show starts top of the hour. Stu, these numbers are ugly.

STUART VARNEY, VARNEY & CO. HOST: Ugly, indeed. I want to break this down a little, first of all, the politics of it. It seems to be to be extremely bad news for Hillary Clinton. She, after all, is vowing to continue the policies of President Obama. If we do that, we're in real trouble. And it gives the lie to President Obama, and all the good things he had to say about the economy just this week. Secondly, look at the economics of it. Can you say recession? We're certainly trending down. The word recession has to enter into our analysis. And if you look closely the numbers, I know you have, Maria, construction jobs down 15,000, manufacturing down 18,000. These are the high paid jobs which America needs most. And thirdly, the markets, interest rates falling, tumbling on this news. I don't see how the Federal Reserve can raise rates next month or anytime in the immediate future.

BARTIROMO: Yeah, totally agree.

VARNEY: That's my analysis.

BARTIROMO: Stu, that's what were been talking about as well. Let me ask you, Stuart, what do you think Obama was thinking? Earlier this week, come out, and tell his economic, you know, performance. Obviously, he didn't see these numbers beforehand, but he's got to be saying, oops, right now. It's everything he said yesterday.

VARNEY: Yeah.

BARTIROMO: . is put up for question today.

VARNEY: Yeah. I agree entirely, Maria. But he's not going to say, oops. They'll spin this somehow or other. And I don't know how they're going to do it. I'm eagerly awaiting .

BARTIROMO: How do you spin it?

VARNEY: . a statement from the White House.

BARTIROMO: Yeah.

VARNEY: Don't put that on me, I'm not going to spin these numbers for President Obama.

BARTIROMO: I know. You're right.

VARNEY: You asked, what was he thinking? I think he was trying to defend his economic policy and his legacy. In the face of an economy which is clearing declining as we head towards a general election.

BARTIROMO: Yeah.

VARNEY: . that's what I think.

BARTIROMO: It's amazing.

VARNEY: It really is.

BARTIROMO: The economy has been the number one issue, Jack Otter, it's going to be even more so going into November.

OTTER: I mean, I would warn people who want to take this into, you know, the political realm only because what normally happens, and this has nothing to do with the economy, it's just statistics. You're -- we're probably going to see a snapback.

VARNEY: Probably.

OTTER: It doesn't mean that the economy is great. What it means is when you have a very low number, you have a very high number, so you end up with the mean, which is, you know, OK.

VARNEY: It's still a rotten number even if you've got a snapback, it's a rotten number. And, by the way, I just want to add to my comments on President Obama and how he's going to spin this. My executive producer, Justin Mannato is sitting right next to me. He slides a piece of paper across to me and he's says, he'll blame congress. And, you know, he's right. That's exactly what will happen. Oh, where's all the infrastructure spending which will bail us out, where is it, please?

MCDOWELL: You were reading my mind because every single speech that he has ever given about the economy, infrastructure spending is one of the things that he brings up. And you know who started doing it? Hillary Rodham Clinton.

MOORE: If there's a disconnect, the president looks really bad because he just gave that speech the other day about how well the economy is doing. Remember, Stuart, when he was in Elkhart, Indiana, saying, oh, I completely.

BARTIROMO: That's what I'm talking about.

MOORE: . and now he's just look completely out of touch.

BARTIROMO: Right.

VARNEY: Oh, totally so, yes. The man is pure politics and that was a campaign speech. I don't think I've ever seen President Obama, except a couple of occasion, give anything but a campaign speech whenever he speaks in public.

BARTIROMO: Yeah.

VARNEY: It's always the same. It's always the Republicans' fault, its congress's fault, it somebody else's fault. There is never an admission that policy, Obama's policy is at fault here. Never an admission and you'll never get it.

BARTIROMO: Can we pull out any good news from this report? Joanie Courtney, talk to Stuart about the fact that employment increased in health care. That's my glass half full. That's my glass half full.

COURTNEY: Absolute bet. And I don't know if we want to come back to Obamacare being part of the reason for that, but.

VARNEY: Oh, I think it is.

COURTNEY: . 67,000 jobs were created in health care. It's probably the best performing sector. And there is a strong demand. And it's.

BARTIROMO: I don't attribute to Obamacare, Joanie. You're talking about a revolution going on in health care with technology.

COURTNEY: Absolutely, technology. And nursing still is the number one job that is posted on across the board. There's over 400,000 job openings right now for nurses in the United States and there's not enough nurses.

(CROSSTALK)

BARTIROMO: We're living longer, Stu.

VARNEY: Wouldn't it be nice if we had competitive education system capable of pulling out and giving the economy the workers, the technical workers, the skilled workers that it needs?

BARTIROMO: Yeah.

VARNEY: And we don't.

(CROSSTALK)

VARNEY: Dominated by the Stalinist teachers union, you've got a problem.

MOORE: Stuart, the president is going to say, you know, he's going to find a silver lining here. He's going to say, oh, the unemployment rate was down to 4.7 percent.

VARNEY: Right.

MOORE: Because we had a half million people drop out. He's going to leave office with the lowest unemployment rate.

(CROSSTALK)

VARNEY: And he was looking for that number. That is the number, a half million people left the work force.

COURTNEY: Yeah, it's 450,000.

BARTIROMO: It's 450,000, Stu.

VARNEY: Can you say President Trump?

MCDOWELL: Can I say Trump real quick?

(CROSSTALK)

VARNEY: Of all of these candidates, who is going to give us economic growth by cutting taxes at the corporate level and the personal? Who's going to do it?

(CROSSTALK)

BARTIROMO: The tax rate it's going to be unbelievable. And I think that that's going to certainly create economic growth. But how does he pay for this is the question, go ahead, Dagen.

VARNEY: Wait, wait, wait, do we really think that if we end up -- we elect Hillary Clinton or Bernie Sanders, and we raise taxes on the wicked rich.

BARTIROMO: Yeah.

VARNEY: . and we keep regulating that wicked capitalist system of ours, do we really think that's going to give us prosperity? Does anybody really believe that?

MOORE: Unfortunately, there are some who do.

BARTIROMO: You know Donald Trump is tweeting out, by the way. Stu, I know that you're going to have it at the top of the hour. We will see you in 15 minutes, 12 minutes, Stuart Varney.

VARNEY: I took a lot of time. I'm very sorry, thank you very much.

BARTIROMO: Donald Trump tweet right now, terrible jobs report just reported, only 38,000 jobs added, bombshell, Dagen, that's what he tweet.

MCDOWELL: Yeah. And you know what, give the man credit, he's on top of the news, and he's resonating. He's connecting with the American people about the jobs market. And I just want to say something, we always talk about the health care industry and this is the Trump voter that got him the Republican nomination. The person who had a manufacturing job in the South and in the Midwest, the person who had a pension, the person who had a huge safety net that kept them fully in the middle class, and they lost that job, and they lost that safety net some years ago, and they're working as a home health attendant with no safety net.

MOORE: Yeah, exactly.

MCDOWELL: Working as an independent contractor. That's the person he's talking to.

COURTNEY: Yeah, you're absolutely right. There is that switch, and those people are having to try and take their skills and try to find jobs in health care and they might be lower level jobs. They're working for less money on a contract basis. It certainly is a challenge. And I think you're right, that's the voter he's speaking to.

MOORE: You look at the industries where we lost jobs, construction, manufacturing, mining, you know, Maria, those are the Trump voters.

BARTIROMO: Yeah.

MOORE: The people who -- and remember when Hillary said to the coal miners, you know, we're going to wipe you out.

BARTIROMO: Yeah. I just want to recap. We've got the market at the lows right now. A major miss on the May jobs report, 38,000 jobs were added the economy for the month of -- a staggering miss, the estimate called for job growth of a 164,000, and now we've got 38,000. You've had jobs decline, losses in mining, in manufacturing, in most industry. The only industry who actually saw real growth was health care. Jonathan Hoenig, we're looking at a market reacting to this immediately. We're at the lows of the morning on futures. We're going to open down about 80 points on the Dow Jones Industrial average.

HOENIG: Yeah. It's pretty ugly, Maria. I mean, on the flip side of that you're seeing some asset classes, again, like commodities breaking out here. And what I fear is, you know, beyond even how to play this particular number. Moving a little bit forward, especially in 2017, is the period of essentially stagflation, higher costs, higher commodity costs, but slowing economic growth. And just quickly, on the political tip, unfortunately, I don't think that a trade war or trade tariffs are going to help in terms of keeping prices down, whether for Trump voters or any other voters. So that's something to keep in mind as we moved to the political season as well. Prices are going up. The economy is slowing down. It's not good for workers.

BARTIROMO: Jack said no doubt about it.

OTTER: I just -- I had to pull up this quote from Trump because I thought I'd seen this before. He said we desperately need infrastructure spending. And he actually said we can create the biggest economic boom in this country since the new deal when our vast infrastructure was put in to place.

MCDOWELL: Did he just say that?

OTTER: No, he wrote that in his book.

MCDOWELL: Yeah, yeah.

OTTER: A couple a weeks ago he said we need to do it.

MCDOWELL: He talked about, and I actually -- when he's brought it up on the campaign trail, I've hit him on it because, again, it's repeating something that we've heard from President Obama.

(CROSSTALK)

MOORE: We need private sector infrastructure spending. You know, businesses aren't spending, that's the problem.

MCDOWELL: The problem when you hear the president talk about it, he's talking about the government spending money to fix roads. And where's that money going to come from. He thinks that the rich have unlimited resources.

OTTER: With Obama the deficit will get larger. The national debt will get larger.

BARTIROMO: And yesterday he says let's do it, ramp it up, we've got to expand social security benefits.

MCDOWELL: And let the rich pay for it

BARTIROMO: And let the rich pay for it, that's right. Look, we're talking about something really important that you hit on, and you hit on and that is business spending.

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