MARIA-00
McDowell, Cheryl Casone>
Rick Scott; Haiti; Donald Trump; Hillary Clinton; Pound Sterling; Juan
Manuel Santos; SnapChat; Jobs; Economy>
BARTIROMO: I did not hear you say mining, Peter. I know manufacturing was down.
BARNES: Yeah.
BARTIROMO: . and we were expecting that. Mining also take a hit in terms of job?
BARNES: mining, which includes the energy sector, zero, no new jobs for the month.
BARTIROMO: Which is what we expected, OK, Peter, thank you very much. Reaction from the panel, Charles, it worse than you expected, however, you got it right in terms of where the job growth was, you were right on services.
CHARLES PAYNE, FOX BUSINESS NETWORK: Yeah, and construction. And you can see a pent-up demand in housing market. Check out the 11,000 from government, so we're closer to about 170, almost identical to ADP. It just shows a bifurcated economy. You know, where professional businesses up 67,000, but, again, manufacturing down, mining unchanged. We've got two different countries and it's reflected in the electoral map as well.
DAGEN MCDOWELL, FOX BUSINESS NETWORK: And average hourly earnings only up 2/10 of a percent, expectation was for a 3 percent gain, 2.6 percent year over year, it's not as bad as it could be, but, come on people, we should be looking at 4 percent plus in terms of wage growth in this country. It's disgraceful that we've had to put up with that for so many years.
BARTIROMO: Big disappointment for you on wages?
KEVIN KELLY, RECON CAPITAL CIO: Yeah, I mean, right before Peter Barnes took the hit, we've said 2.7 percent was really the expectation, 2.6 percent will fall in line, people will be fine with that, I don't think it's really a big shocking number, but I think the construction number is lending credits to the housing starts numbers. We are seeing here on the domestic economy when it's trickling through in the real estate market.
BARTIROMO: Jack Otter, look at these markets, completely reversed course. Earlier, we were expecting a decline of 30 points, now we're going to see a gain of 30 points. Is this all about anticipation of the Federal Reserve not raising interest rates because once again, the jobs market is slow.
JACK OTTER, BARRONS EDITOR: I think so. Because one of the things that has step in put a damper on the markets this week was not only Deutsche Bank, but also the this talk that maybe the easy money flow is going to start to slow down. The ECB not being quite as open with money as everybody loves in the markets and all of this inflation. The market, I think -- I think that's what's going on. But, to me, what's interesting is the unemployment rate ticking up.
BARTIROMO: Yeah.
OTTER: What I want to find out is why is that? I hope it's because more people came into the jobs market. I mean, one of the.
(CROSSTALK)
OTTER: One of the really weird things right now is, I've got the jolts numbers here and the job openings are at all-time highs and people are not taking them.
KELLY: Well, it's not necessarily taking them, but it's a skilled labor that's not there. So people are applying for these jobs, but they don't have the skill, so employers aren't doing that because employers are focused on profit margins. They want to have somebody in there that can actually produce, and they're going after.
OTTER: Definitely part of it.
BARTIROMO: Yeah.
OTTER: I mean, there's no question there's a skills gap, but the numbers are too big to be skills gap alone. There're clearly people who could be working who are not working.
MCDOWELL: It shows a tiny bit of optimism, I know Charles will agree with this, but the labor participation rate, as Peter pointed out, we were looking at it 62.9 percent, it's up a little bit.
PAYNE: hit the bricks.
MCDOWELL: Two are coming out saying, hey, I'm ready to look for work. Although, there weren't enough. That's why the unemployment rate ticked up because there weren't -- there weren't enough jobs out there for those people looking.
KELLY: To go Maria's earlier point, there was a 64 percent chance of Fed rate hike in December before this, so we'll have to look at the Fed fund future market and see where that pegged at now. I'll be surprised at the move down significantly. I think the Fed has already talked and walked the market into a Fed rate hike.
PAYNE: I'm glad you're brought that up there, what is the Fed looking out there? The Atlanta Fed has now marked a growth for this quarter -- for the third quarter, rather, at 2.2 percent. They're probably take a lower now after this jobs report. We were looking at almost 4 percent growth on their initial assumption. So what is the Federal Reserve looking at? What robust economy do they see that average people don't see.
BARTIROMO: Yeah.
PAYNE: . and even their own peers don't see.
BARTIROMO: A good point.
KELLY: To answer your question I think they're looking at the market. You see their policies they were a wealth effect. They wanted the stock market.
BARTIROMO: Yeah.
KELLY: . to go up. And that's was with their policies were directed at. That's what monetary policy has done, when they've done bond buying purchases.
BARTIROMO: OK. Let's look at this market right here.
PAYNE: It doesn't move the needle on Main Street.
BARTIROMO: We're losing it quick, OK. Futures went all the way up better than 30. Now, as you see, the major averages are around breakeven here, and the industrials only up 15 points. July's payroll were revised. Steve Moore, your reaction to this report?
STEVE MOORE, HERITAGE FOUNFATION: You know, it's perfectly consistent with 1.5 to 2 percent growth, Maria. We're in this zone. We haven't been able to break out of this zone now for six or seven years. When you get 150, 175,000 jobs you're in that kind of slow, moderate growth range, and just politically I just don't think that's enough for the American people. The other point I want to make on wages. I've made this point on your show before, but it's worth repeating. That wage number is average wage. There's a big difference between an average wage and a median wage. So, what we're seeing in this country is people at the high end, Maria, are getting pay raises and they're doing really well. The people in the top 20 percent. This doesn't mean that middle class wages are going up, and in a lot of areas middle class wages are going down, whereas at the top they're going up.
BARTIROMO: Jack Brewer, your thoughts?
JACK BREWER, THE BREWER GROUP CEO: I'm a small business owner, and I think that was reflected today. You saw, you know, the number came it where it was, I was almost dead on. I expected it to be here, you know, I'm hesitant into this election until I understand really what taxes are going to look like in this country. You know, it's tough to go out and continue to employ, when you don't really understand the future.
BARTIROMO: Jack, is it more important for you as a small business owner to see regulations rolled back or the corporate tax story get more favorable? What's going to really move the needle on small business? Because you look at these two economic plans on the campaign trail, and Donald Trump keeps talking about rolling back regulations as the real secret to moving the needle on jobs.
BREWER: Regulation is big, you know, for my business it's huge. We have to have, you know, some common sense regulation reform, but we do need to roll back. I think we've hit it aggressive over the last seven, eight years, and now it's time to let our economy grow. And I totally agree with Trump on that. I don't agree with a lot that he says, but in regards to regulation, I definitely agree.
BARTIROMO: Yeah.
KELLY: I think the major point that needs to be taken here is that the U.S. has one of the highest tax brackets in the developed world right now. We're starting to see the sterling down 17 percent this year. That's why you're seeing the footsie 100 up. You're also seeing them move their tax rates down. In order for us to be competitive and add more jobs, we are going to need tax reform, as well as these -- remove some of these regulatory overhangs, and that will add more job to the economy.
MCDOWELL: Can I raise one issue. Are our employers more hesitant to hire when you're coming up on a presidential election? I mean, if you have a need to meet demand, if it's the holiday shopping season, that's something altogether different, but if you think that the world is going to look different.
BARTIROMO: Yeah.
MCDOWELL: Differently in terms of policy in a few months.
BARTIROMO: I agree with you. I think there's that certainty issue, where once they have certainty, a lot of stuff's going to come off the shelf. There's a lot of things right now that are on the shelf, whether it be deals, whether it be investment plans, once they know -- and that is whether it's Hillary or Donald Trump.
KELLY: You don't know if the minimum wage is going to go up. So, if you're a small business owner and you're trying to hire, you don't know if minimum wage is going to be hike up, you don't know what's going to happen with Obamacare. If the cost.
BARTIROMO: That's right.
KELLY: . increases. So, you can't make business decisions until you know what's going to happen with this administration.
OTTER: And I've got to throw in a 45 percent tariff on China. That would affect some business decisions, too.
KELLY: That's a little unfortunate because that was disingenuous that people are stretching it. He said it could go up to 45 percent.
MOORE: It would still have to hit congress. Already, do it and have to get to congress, but still it wouldn't.
KELLY: Yeah. He said it would be up to it, he was using hyperbole just to reinforcing the fact that.
BARTIROMO: Well, let's ask one of his economic advisors.
KELLY: Yeah.
BARTIROMO: What is he going to do with tariffs, Steve Moore. This is the problem.
MOORE: Yeah.
BARTIROMO: . with people who want to support Donald Trump, but they don't like his position on trade?
MOORE: Well, you know, it's funny, he hasn't really used the T-word, tariff in a long time. I don't think we're looking at tariffs under a President Trump. I think what we're looking at is using tax reform and regularly reform to make America a more competitive place to bring businesses back. I mean, Donald Trump, remember, Maria, made this point in the last debate that, you know, we have a tax system that encourages people to move off shore.
BARTIROMO: Yeah.
MOORE: . because you know they tax our stuff when we bring it in there and we don't tax it when it comes in here. Through tax reform, I think we can deal with about 80 percent of the problem that we have with trade. And remember, I'm on record, we're going to get 4 percent growth for five years, that's.
BARTIROMO: Beginning when?
(CROSSTALK)
BARTIROMO: How soon in do you think Donald Trump can see 4 percent economic growth? How many years will it take?
MOORE: No, no.
BARTIROMO: Steve, we're at 1.4 percent.
MOORE: I know. But I think we can jack it right up in 2017. I mean, you get those tax rates down, you get some of these regulations off business, you put the coal miners back to work, you build the keystone pipeline. There's a lot of pent up growth.
BARTIROMO: Wait a second
MOORE: . I think business will.
BARTIROMO: Did you say we're going to go from 1.4 percent to 4 percent in 2017?
MOORE: In 2017, you've got it.
BARTIROMO: Wow.
OTTER: How can you do that, Steve, in a world -- the globe, even including emerging markets isn't growing at 4percent.
(CROSSTALK)
BARTIROMO: That would be a beautiful thing.
KELLY: There's no way congress can.
(CROSSTALK)
MOORE: You guys are skeptical. But I'm going to give you one statistic just to think about. We had quarters of growth on a Reagan of 8 percent growth. So, when you unleash the economy, I know it's pent up. That's my point. The reason we've got such low growth is business are ready to expand they just -- this is the point Dagen was making, they're ready to go, they're just waiting to see the change in policy.
KELLY: I think when it comes to trade, I mean, this has been brought up by Wilbur Ross and it's brought up Donald Trump a lot. A lot of these trade deals are littered by special interest, written by special interest and put it -- so they're not full fair trade. And what Wilbur Ross has said is, he said why don't we have lookbacks in this and re-adjust those trade agreements? And that -- when it comes to the trade policies, that's what they're really looking at.
BARTIROMO: We had Stephanie predict a recession in '17. You've got Steve Moore predicting corporate and economic growth.
(CROSSTALK)
MCDOWELL: And yet, the economy is really -- be on a rocket ship to 4 percent growth if the Federal Reserve start's raising interest rates.
PAYNE: Steve said Donald Trump hasn't used the T-word, he has used another T-word and that is tough. And, you know, do we actually punish businesses that can make money in industries like small cars? Because, if you go -- that's why Wall Street and some businesses, to Dagen's point, are concerned on Hillary Clinton side, obviously, they're concerned because that means another avalanche or continued avalanche of taxes. By the way, Hillary Clinton wants the American public to give her the right to go and take money off corporate balance sheets, and also, I think.
BARTIROMO: That's right.
PAYNE: . it's another line on the income statement. Not taxes, but a different line, a sort of social responsibility line. Keep an eye on that. That's part of the larger conscious capitalist movement that she's a part of. It doesn't work.
BARTIROMO: Another tax?
PAYNE: But the only way.
(CROSSTALK)
BARTIROMO: Don't get me all fired up. Another tax?
PAYNE: Yeah.
BARTIROMO: Remember the social responsibility tax, Charles?
PAYNE: Absolutely.
MCDOWELL: Yeah, she -- remember, she didn't name Uber, but she talked about the gig economy and the contract economy. She wants -- when she talks about people paying their fair share, she's not talking about individuals. She's also talking about corporations, about sharing profits.
BARTIROMO: Uber.
MCDOWELL: Again, never underestimate the willingness of a liberal to basically try to take control of industry.
KELLY: She wants to increase payroll taxes, and she hasn't taken that off the table, so that's another policy. So, every day, workers will be feeling that, even if they do get that minimum wage increase.
OTTER: Or just make it so that everyone pay and there's no cut off.
KELLY: No, increase.
BARTIROMO: Oh, I thought you were going to say everybody pays their fair share, I was going to go nuts off you.
(CROSSTALK)
OTTER: There's a cut-off.
KELLY: No, no, no, increase.
OTTER: Increase?
KELLY: Yeah, got it from Grover -- already.
OTTER: What is it?
KELLY: I have to look.
BARTIROMO: You got to look on Donald Trump.
(CROSSTALK)
BARTIROMO: Navigate this market. What the heck is going on in these markets? We were down 35, up 35, now we're flat. Can you explain this.
PAYNE: This is like watching an NBA game before the tip-off. Like this practice they've just don't -- you know, I like to assess these things like even the next day, but I think the stock market needs good news to be good news and because of valuations, not necessarily because of what the Fed is going to do.
MOORE: I agree.
PAYNE: I mean, the market can deal with the Fed raising 25 basis points if it's justified. If it's not, then that's when you get the issues. And Rosengren last month started to talked about hiking rates, it didn't jibe with the data and that's why the markets sold off. But we need a better economic back drop to justify stock valuations.
KELLY: What's going to move these markets is earnings season coming up.
MCDOWELL: That makes me want to want your show tonight.
PAYNE: Thank you very much.
MCDOWELL: I'm serious, that was just so spot on.
BARTIROMO: Well, it's making money.
MCDOWELL: Yeah.
BARTIROMO: It's all about making money.
MCDOWELL: Not that I don't watch it every night.
(LAUGHTER)
KELLY: You DVR it, what probably you should do.
OTTER: I say, in one week.
BARTIROMO: She's sleeping.
OTTER: . you've might be hearing about raising rates despite a lack of good reason to do so, would be the dry powder argument. I mean, if Stephanie -- is right and there is a recession next year, the Fed really wants to be able to do something.
BARTIROMO: What are they going to do, the Fed and over the Fed?
KELLY: It exacerbates the problem by tightening into a slowing economy. So that would be -- that would be counter intuitive. But the most important thing for market is earnings season is coming up. Look to guidance from the companies, they will tell you exactly what's happening.
PAYNE: What's good for corporate America is because is comparisons, right? So, as we're going to get to a point where earnings are going to be better year over year because they've fallen so much in the last 6 or 7 quarters. But, Jack, I tell you what, you're hearing whispers about the U.S. Fed being able to buy -- do like the Bank of Japan, buy equities and things like that. That would be a bigger arrow in their quiver than extra 25 basis.
(CROSSTALK)
PAYNE: Hope they never do.
MCDOWELL: Because people on twitter and the loyal viewers of this show always kind of lose their minds if you don't talk about the U6 unemployment rate.
PAYNE: Nine point seven percent.
MCDOWELL: Yeah, right, it stayed the same. It hasn't budged in the last 3 months.
BARTIROMO: All right, we're going to take a short break.
MOORE: It's 10 percent, right?
BARTIROMO: Steve.
MOORE: It's 10 percent, isn't it?
PAYNE: Yeah.
BARTIROMO: We have not forgotten about you, and we haven't forgotten about Jack Brewer. We'll take a break, but you got to do me a favor, during this break think about what you think is most important, the most critical issue in this report, and what's most critical in terms of creating jobs. Where are the jobs? That's next. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. We are monitoring the developments as Hurricane Matthew prepares to make landfall on the coast of Florida, as the state has gotten battered by strong winds and rain. That continues right now. We are looking at our other top story right now. That is the September jobs report. Markets have been quite volatile after we learned that the economy created 156,000 jobs last month. That missed economist expectations which called for job growth of 175,000. The unemployment rate ticked up to 5 percent this morning. We're talking about it on our panel. Let me get right to Steve Moore. And Steve, before we went to the break I said to you what's most critical about this report, and what's most critical in terms of creating jobs and where are the jobs? Take it away.
MOORE: Yeah, so, I thought the manufacturing number was again, disappointing. We lost more manufacturing job. We lost a million and a half manufacturing jobs over the last decade. That's making Americans very nervous. And I got to tell you, Maria, I've been travelling around the country on the campaign trail, and you learn a lot from just going to places like North Pennsylvania, or Grand Rapids, Michigan, or Rockford, Illinois, and just talking to real Americans. And I've got to tell you, they don't believe a lot of these statistics.
BARTIROMO: Yeah.
MOORE: You know, one of the biggest laugh lines when you tell people the unemployment rate is 5 percent. Dagen, they think you're right, the unemployment rate is closer to 10 percent, that U6 number. So, there's a sense out there that I get when I talk to just middle class, working class Americans, they're very nervous about this precarious economy, and they're just not buying -- they don't see the love for this recovery.
PAYNE: You know, I just.
MCDOWELL: I just wanted to add to that because a lot of politicians go out and they ask people questions, but they don't listen. And that's kind of the difference in this election. It's like they are playing the role, but they're not prosperous.
(CROSSTALK)
BARTIROMO: Same ear, same ear.
MCDOWELL: In the words of Judge Judy, put your listening ears on.
PAYNE: I think the best line for Mike Pence in the debate is when he said go ask the people in Scranton.
BARTIROMO: Yeah.
PAYNE: That echoes what we're talking about right here. Fort Wayne. That was his best line in my mind, with respect to this election.
BARTIROMO: We could actually ask Jack Brewer, he's a small business owner, he's with us today. And, Jack, you're dealing with all the challenges that we talk about every day in terms of small business. It puts limitations on your ability to grow, no?
BREWER: Yes, it does. I mean, we have to recreate opportunities for the middle class to get back into the job market. I mean, at this point, I mean, for me, personally, as a business owner, I need some answers on what corporate tax rates are going to look like. I need to understand what capital gains taxes are going to look like. And right now there's just no answers. And so, you know, when you hear the Clinton campaign talk about all the tax increases, and then you hear, you know, the total opposite on the Trump side, I mean, for me, it brings fear, it brings worry, I don't know what the future holds. So, you know, we need answers, I think there're jobs in there, a thriving economy that's just on the side line right now, that's just ready to erupt. You know, but let's get a flat tax. Let's create, you know, a little stability in the tax code.
MOORE: Maria, Maria, I've got one piece of good news.
BARTIROMO: You've got to respond to that, flat tax, Steve Moore.
MOORE: You know that 22-year-old talking about that's sleeping in my basement, he got a job this month.
(LAUGHTER)
BARTIROMO: All right, Kevin.
KELLY: And I think everybody need to step back and look at Jack Brewer. Jack Brewer is part of the backbone of this economy.
BARTIROMO: That's right.
KELLY: He's a small business owner. He's also giving back to the communities, focus on the -- and these are the type of businesses we want to enable and thrive in this type of economy. And we need an administration and a congress that will pass those types of laws to actually enable the small business owners to actually kick start this economy along to the next leg.
PAYNE: Yeah, I'm surprised Hillary Clinton has not offered an extremely lower tax to small businesses. Having said that.
BARTIROMO: She said she has.
PAYNE: Yes, she does.
BARTIROMO: She keeps saying that.
PAYNE: I hear that, too.
BARTIROMO: She keeps saying that, and then I look up the numbers and I'm like, how does that jibe when I know that you're raising taxes. So where does this come from that she's helping small business, Steve?
MOORE: Well, look, it's ridiculous. I mean, this is a very simple proposition, we're going to cut businesses very substantially for -- cut the taxes for small and large businesses. I look at her plan, what I'm seeing is higher capital gains taxes when she raise taxes on the rich, those people are small and medium sized business owners. And let's not forget the other one that I think is a killer for job, she wants to raise the estate and debt tax to 65 percent, that's higher than Sweden, Russia, any communist state.
BARTIROMO: All right. Steve Moore, Jack Brewer, thank you so much, gentleman. We're going to say goodbye to you. But we've got an all-star panel back here at headquarters. Steve, Jack, we will see you soon. Thank you, gentlemen. We'll be back with Charles Payne, Jack Otter, Kevin Kelly, Dagen McDowell. Stay with us.
(COMMERCIAL BREAK)
BARTIROMO: We're calling the very latest developments out of Florida, right now. Governor Rick Scott holding a briefing momentarily and we will that, that briefing live. First, we want to get their final thoughts from our all-star panel this morning on the September jobs report. Your take away this morning, Charles Payne.
PAYNE: Yeah, disappointing. I think the idea is that we need to unleash the potential of America. Steve Moore was spot-on with that. We're low in terms of entrepreneurship, and business investment and everything else. It is there. We are still the greatest country in the world, but we could be so much better.
BARTIROMO: Jack Otter.
OTTER: I'm going to challenge Joni Courtney who can't be here because of the hurricane. She's always point to a temporary number, and that's a 23,000 which is better than all the other months I have here. So, she would say that's a good sign because what's businesses is doing they bring on these temporary workers in the hopes that they can make them full-time. Let's hope that's true.
BARTIROMO: By the way, we are going into the period where we're going to see a lot of temp. hires because of the holidays.
OTTER: Right.
BARTIROMO: So, that's going to be one positive. Kevin Kelly.
KELLY: Yeah. I would like to thank Joni because now I'm here because of the hurricane, and she couldn't make it, so thank you. I think the most important take away is actually 2.6 percent wages up, I think that was actually stabilizing the market, that's why you're not seeing a selloff. People were focused on that. The 150, the 175 number.
PAYNE: Would you call that goldilocks, then?
KELLY: No, it's not goldilocks, but if it was disappointing that would further reinforce that the economy is slowing not increasing, and it's reinforcing the services PMI we saw earlier this week.
BARTIROMO: Not too hot, not too cold, it's been the story for a long time, that goldilocks economy.
MCDOWELL: And I want to make a point about the hurricane, and politics, and point back to Hurricane Sandy in 2012, where it was an influence on the election because a lot of people who were Republicans blamed Chris Christie -- Mitt Romney losing that election. And you might think I'm insane, which is fine.
PAYNE: Donald Trump already told Rick Scott, no hug.
(LAUGHTER)
MCDOWELL: President Obama and Chris Christie, hugging it up on the president when he visited New Jersey. That was a pivotal moment because of the optics of it. Because, again, people love government.
PAYNE: You're right.
MCDOWELL: . when it involves money
BARTIROMO: There are people who still do not forgive Chris Christie for that hug.
MCDOWELL: No, no.
BARTIROMO: Great panel today. Who doesn't love jobs Friday?
(CROSSTALK)
MCDOWELL: You know what I love more? Maria Bartiromo.
BARTIROMO: Dagen McDowell, Kevin Kelly, Jack Otter, good to see you. Have a great weekend, everybody. Stay with Fox Business, Varney & Co., begins now and here is Stuart.
END
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