MARIA-03
corporate has to accept lower profits in the future to help workers.
Yellen will raise interest rates just in time. WSJ says government cannot
force noneconomic investments. The November jobs report just out, the
economy added 178,000 jobs in the month of November. That was slightly
better than economist's expectations - Part 1>
Employbridge; Steve Moore, Trump Economic Adviser; Charles Payne, FBN Host;
Stephanie Pomboy, President, Macromavens, Peter Barnes, Charles Payne, Mike
Murphy, Joanie Courtney, Dagen McDowell, Steve Moore, Stuart Varney>
[08:00:00] MARIA BARTIROMO, FBN ANCHOR: Performance in the month of November. The market looks to be down about 20 points. It is all about the jobs numbers. Key votes this weekend in Italy and Austria with those elections happening in the Eurozone.
Major markets there trading lower ahead of that although I should point out that here too you are off of the lows in the Eurozone.
In Asia, overnight declines across the board. The worst performer was Hong Kong and China the HANG SENG index down one and a third percent. The composite down almost 1 percent.
Two Americans die aboard a Royal Caribbean cruise ship. The latest on the investigation this morning. And an unmanned Russian space ship crashes in Siberia. It was headed to the international space station. We will look at it and bring you the details coming.
And Nokia makes a comeback to the smartphone market. With the details on its new offerings coming up. Joining me to talk about it, Dagen McDowell, Rosecliff Ventures founder and CEO Mike Murphy. And EmployBridge chief operating officer and president Joanie Courtney. Good to see you. We'll see what the markets do.
DAGEN MCDOWELL, FOX NEWS CORRESPONDENT: Especially the bond market with a ten-year yield. It was 2.45 percent yesterday. 2.44 something like that.
BARTIROMO: That as a top story in the "Journal". The bond route deepening, hammering munis and emerging markets debt.
MCDOWELL: The upside is investment of that. U.S. corporate debt has not been hammered that way. That yields have not gone up on that debt as they have on the ten-year which is positive.
BARTIROMO: What's going on?
MIKE MURPHY, CEO, ROSECLIFF VENTURES: Momentum is selling in the bond market. What you're seeing right now as money is flowing into the equities market. That's what it's helping this rally. And how long it goes. That's a trend and that's the way it's going. And a lot of it has to do with people realizing that rates are going to be going up. That we seeing less restrictions less government and so a more positive vibe in the overall market.
I think people are seeing that and saying we are going to get growth so therefore rates are going to go higher, sell the bonds, buy the equities.
MCDOWELL: But making borrowing more expensive broadly speaking at some point it will hurt particularly in the housing market the higher borrowing costs at some point. In the might not do it at 2.5 percent on a ten-yea.
BARTIROMO: We'll see if it chokes off but just since that the market is gaining traction.
MURPHY: It may be but I think zero or .25 percent interest rates aren't good for anyone. So, we need to get back to a more normalized interest rate.
MCDOWELL: The bond market is doing what Janet Yellen and company have been hesitant to do. They're sending her a message and saying the economy is getting ready to pick up.
BARTIROMO: We are going to see higher rates on the December 14t, yes?
JOANIE COURTNEY, COO, EMPLOYBRIDGE: Do you think the boost could go real estate people?
BARTIROMO: People might think rates are going up I want to get locked in.
MURPHY: The strong economy is good for everyone across the board. That would spur more home buying.
BARTIROMO: There is optimism about that economy. President-elect Trump touring a Carrier plant in Indiana after reaching an agreement with company to save 1000 jobs going to Mexico. Trump followed the visit by kicking off his Thank You Tour. He's there in Cincinnati, Ohio. He reiterated his commitment to the American worker.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: Now the real work begins. All companies to keep their jobs in America and we will work to make America a better environment for workers and businesses and we will crackdown on all foreign trade abuses that undermined your ability and your company's ability to compete. We are going to defend the American worker.
Look what's happened right here. They forgot about the American worker. They forgot it was the American worker who truly built our country. We are not to forget. Now is the time to unlock the potential of millions of Americans left on the sidelines their talents unused. Their dreams and realized in their aspirations totally forgotten. This is the moment this is our chance this is our window for action. They gear up economic surrender is over. We are in a fight for every last American job. It is time to remove the rust from that rustbelt and usher in a new industrial revolution.
(END VIDEO CLIP)
BARTIROMO: Joining us this morning is Trump economic adviser Steve Moore along with the host of Making Money with Charles Payne. Thank you for joining the conversation. Steve Moore, how do you continue this idea that you want to create jobs for America without going too much on the nationalistic protectionist theme? When does all this talk which was a very uplifting speech, when does it become protectionist and too nationalistic? Or does it?
STEVE MOORE, TRUMP ECONOMIC ADVISER: That's a great question. First of all, I do love that soundbite you played. The perfect message for Donald Trump. As he prepares to enter into the oval office. This is a tricky issue. I would say that my friends at the "Wall Street Journal" I heard you guys talking about earlier on the show.
They basically warned stay away from industrial policy it doesn't work. Now look I agree with that. However, when you look at what happened in Carrier this week. I like to think it wasn't the stick. You are going to stay here in Indiana or we are going to bash you over the head. It was basically telling the Carrier executives good things are coming in America. We are going to cut your tax rates. When you get these regulations of the back of the businesses and so on.
This is a good time to invest in America. The difference in the point I'm making. A big difference between using the stick of government intimidation versus the sweeteners.
BARTIROMO: We were talking about that earlier. That's a debate we were discussing. Charles Payne let's talk jobs. Analysts are expecting 175,000 jobs added to the economy. Unemployment expected to be at 4.9 percent is that what you expect and what kind of an impact might this have?
CHARLES PAYNE, FBN HOST: I think ADP's number is probably going to be closer. It's going be a pretty good harbinger. I would say north of 200,000. I am concerned about manufacturing just because we saw the loss. Remember Chicago PMI this week was an amazing number everything was amazing. Four out of five were up strong. Guess which one wasn't. Employment with the contraction.
The new industrial revolution. There has been a new industrial revolution going on and it is one of the reasons those folks are losing their jobs. Politicians don't talk about it.
BARTIROMO: Technology.
PAYNE: It's hard to ignore that. It's hard to look the other way when robots are so much more efficient. I do think there's opportunities to work around that with the more educated workforce. Thirty days ago, me and Steve got into it a little bit on this very show and I said I would like to see President-elect Trump use it more he's definitely President-elect. It's good to see.
But I also think that the Carrier thing underscores one thing. He was able to save half of those jobs. And now we're talking about being able to only save half those jobs with the company that came to negotiate in good faith. How do you create jobs in that same environment?
We know they are going to be there but I think the economy is ready to explode. We just got to find a way to take advantage of it.
MCDOWELL: Dave Moore in a "Wall Street Journal" editorial that we were discussing points out real job security depends on the profitability of the business and America won't become more prosperous by forcing companies to make noneconomic investments. Is not so much Carrier and again tax breaks to keep jobs here, I think any free-market conservative would have a problem with that.
They would have a problem with President-elect saying something like leaving the country is going to be very difficult. There are to be consequences I think that's where ideologically conservative might go I'm doing the emoji face.
MOORE: I agree with you. Let's go back to the first part of that as you know I used to work for them. The key point was you can't stay here unless it's profitable. So, what Donald Trump is saying let's make it more profitable for them to be here. Let's get those regulations off the backs of business. An amazing statistic we're talking about a couple weeks ago. $18,000 of regulatory cost per American manufacturing jobs here.
I agree with Charles a little bit, I agree with 90 percent of what you said. I do think we can bring manufacturing jobs back to the United States notwithstanding the automation.
PAYNE: I don't disagree with that.
MOORE: By just making this a more appealing place to be.
PAYNE: I think it's brilliant that Trump brought it specifically the number of regulations that were hurting Carrier. So, people could really understand it wasn't a broad stroke thing. There is another bit of news yesterday that dovetails into this. And that was the Howard Schultz news because ultimately, he may run for office. He is sort of the architect of what they call conscious capitalism, and with conscious capitalism shareholders come like fourth or fifth. First come the workers, the customers, maybe even the environment. That kind of stuff.
There is a huge movement of some very powerful people behind that and what I am trying to say is you got people on the left and the right who are saying to corporate American you guys may have to make less money. That is something we don't talk about.
BARTIROMO: You think that is what he is also saying? Wow.
PAYNE: Obviously, that's what you're saying. They are saying ultimately you stay in this country, we can it so you can do better. Al the regulations we don't have to fine you for having puddles of water on your driveway and dust particles. But ultimately you are going to make a little bit less. I think Donald Trump is saying that and a lot of very powerful people on the left are saying that as well.
MCDOWELL: But as a shareholder, at least you have the choice. I have the choice of whether I want to be an owner of this company.
PAYNE: I am saying all companies. Getting used to them taking less money. That is going to be a key component if the American worker is going to keep some of these jobs here.
MURPHY: It is one month into the cycle and we are talking about jobs and we are talking about jobs and keeping jobs in this country. I think it's just the tip of the iceberg. Keeping the jobs here first is most important. And then seeing how profitable it can be. Let's see if we can get rid of regulations.
BARTIROMO: How come Obama never called Carrier by the way?
MURPHY: That is the question Trump asked.
PAYNE: Obama only looked at corporate America just like Hillary Clinton as a place to go and get money and continue his building of the great welfare utopia. He never thought about it a more constructive manner.
BARTIROMO: That makes no sense to me.
COURTNEY: I think we're going to see that President-elect Trump is going to be focused on not only the American worker but the American employer. Looking at both and to your point, Charles, maybe corporate profits will look a little bit different. But when we came out of the recession corporate profits were surging. Everyone thought that the jobs would come back. Guess what. They didn't come back because companies did become more efficient through technology and other things.
PAYNE: The euphemism for the efficiency too let's face it too is laying people off. That is also a euphemism for yes, we fired a lot of people.
COURTNEY: Layoffs were the lowest this month in the last 12 months.
MOORE: This point about how well the economy is doing. If you look at the feds indication of what growth rate, we are going to have in the fourth quarter it's pointing to pointed to about 2 percent. I think we can see buoyancy next year but this idea and they said everything so wonderful. We're not there yet.
BARTIROMO: We will tell you about the conference that Steve and I were just at recently. It was pretty mind blowing.
MOORE: Mark Zandi the liberal economist who said we are going to have great growth we just don't want Trump to screw it up. But I am like come on we've got 40 million people on food stamps.
BARTIROMO: Trump is inheriting the best economy.
MOORE: Exactly, that's nonsense.
BARTIROMO: If you look at the election there is a reason why Trump won.
MOORE: Just one quick point. I think you can't underestimate how important it is for someone who is pro-business in the White House.
BARTIROMO: We are going to take a short break, we've got a lot more to come. Everybody is saying Nokia comeback is one subject on table. The new efforts to resurrect the fallen cellphone brand. We're 20 minutes away from the jobs report.
Joanie is going tell us where the opportunities are. And what the skill sets we need to actually thrive in this new normal. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Two American tourists were found dead aboard a Royal Caribbean cruise ship docked in Puerto Rico. Cheryl Casone with the story now.
CHERYL CASONE, FOX NEWS CORRESPONDENT: The mystery surrounding the deaths remains unsolved. The bodies were discovered Wednesday. Authorities said each man apparently died from natural causes. 62-year-old Joseph Ambrussi of Pennsylvania and then 55-year-old William Forsytte of New Jersey were traveling with their wives on the ship. One of them died while the ship was at sea and the other passed away once it arrived at port.
A Russian spaceship crashing. Just minutes after launch the unmanned cargo ship broke up in the atmosphere over Siberia near the border with Mongolia. It was carrying supplies to the International Space Station. They're trying to find out what caused that crash. You can see the explosion happening about now.
I'm in a move on. It looks like Nokia is making a comeback. The company which used to be the world's top mobile phone maker is working with Google and Foxconn which makes the iPhone. Nokia ran into trouble after it didn't make the move to smart phones. It abandoned the phone market in 2014 after it sold its handset business to Microsoft. It hopes to launch the first Nokia smart phone early next year. The question is can they compete so late in the game.
BARTIROMO: Thank you so much. Were minutes away from that November jobs report. We will take a short break then we will come back with an all-star panel this morning talking about opportunities for you.
(COMMERCIAL BREAK)
BARTIROMO: We are under ten minutes away from the November jobs report.
Analysts are expecting 175,000 jobs added to the economy, they are expecting the unemployment rate to hold steady at 4.9 percent. We want to bring in the President of MacroMavens right now, Stephanie Pomboy. Stephanie always great to see you. Thank you for being here this morning. What are you looking at closest in terms of this jobs report?
STEPHANIE POMBOY, PRESIDENT, MACROMAVENS: I guess to be frank I think the number is a little bit of a throw away because it reflects the world pre- Donald. I think the markets will dismiss a weak number as sort of irrelevant. And a stronger number would just be seized upon as a reason for further enthusiasm. As related to the fed I think same deal. Basically, they are set to tighten in December and I believe as was the case last year when they did their rate hike. It will also mark the peak in the dollar stocks and interest rates.
BARTIROMO: The last time you're here you said we might already be in a recession. Have your expectations changed given the Trump victory?
POMBOY: This is why I think the stock market and the dollar and interest rates will all peak on this fed rate hike is that there were signs that the economy if not already in recession was certainly skating toward it before November 8. And the backup in rates that we have seen as finally being focused on in "The Wall Street Journal" today has been unprecedented to be honest.
I did the one month rate of change of the increase in 10-year yields and the dollar and we've never seen anything like this. The higher rates on a levered economy is not a formula for accelerating growth.
BARTIROMO: But Charles we are expecting an interest rate increase, December 14.
PAYNE: Hopefully they will tell us the next year so we know where we stand and I don't think that is going to disrupt things. I think there is a little bit of ripple going on.
BARTIROMO: We'll see about that. We have that November jobs report right after the short break. We are back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, good Friday morning, I'm Maria Bartiromo. It's Friday, December 2nd, we have breaking news. The key November jobs report out in about a minute and a half. Analysts are expecting 175,000 jobs. Add to the economy in November with unemployment rate holding at 4.9 percent.
Markets right now under selling pressure, although off of the lows. Take a look, the Dow Industrials are now down flat about 12 points here. We have been down about 40 points earlier. That is going to change. Depending on what we see in a few minutes. Here we've got Stephanie Pomboy with us. Before we get this number, Stephanie, what is the most important item to look at?
POMBOY: I guess I would look at the unemployment rate, but specifically the labor force. Last month, you know, the unemployment rate was unchanged, but you had 195,000 people drop out of the labor force and I think this is really going to be the key moving forward, you know, with Trump, is to try to lure people back into the labor force, which initially will probably increase the unemployment rate. But it will actually be a positive sign.
BARTIROMO: But, we look at the unemployment rate, Dagen, and you looked earlier at the u-6. What does the number really tell us?
MCDOWELL: 9.5 percent in October.
BARTIROMO: Is the u-6?
MCDOWELL: People who are marginally employed who want to work more hours if they possibly can hopefully we will see improvement in that and labor force participation, continuing to pick up. It's the lowest level it's been since the late '70s.
PAYNE: I agree a thousand percent with Stephanie and daven. When we say the late 70's we should also put in a perspective, in the '70s it was going up and so it doesn't give the notion of the carnage of people quitting on the economy. Back then it was good news now it's bad news and we talk about it, wages. I'm so afraid of manufacturing, guys, I'm watching it closely.
BARTIROMO: Manufacturing continues to get hammered? Right, Joanie.
COURTNEY: I think that manufacturing -- healthcare is going to come out strong, that's where the jobs, nursing, health care, nursing aides.
BARTIROMO: Healthcare has been a job creator.
MURPHY: A job creator, United Health Care, best performing Dow stock.
BARTIROMO: United Health Care. Let's get directly to Peter Barnes he is at the labor department and has the number on November jobs report right now, Peter.
PETER BARNES, FOX BUSINESS NETWORK: A 178,000 new nonfarm payroll jobs in November, Maria, 178,000 new jobs, about as expected. But the unemployment rate taking a big drop to 4.6 percent, from 4.9 percent in October, that's the lowest unemployment rate since August 2007, the lowest in nine years. The rate went down in part because about 200,000 people left the labor force last month, pushing the labor force participation right down to 62.7 percent, 1/10 of a percent drop. So, this will give the Fed, of course, some more ammo now to raise rates at its next policy meeting in two weeks. But, average hourly wages unexpectedly fell in November by 1/10 of a percent to $25.89. But it's taken a big pop in October, 0.4 percent increase then, so a little bit of giveback there. And it is still -- wages are still up 2 1/2 percent, year over year. Looking at sectors, professional and business services up 63,000, education and health plus 44,000, leisure and hospitality plus 29, government, mostly state and local added 22,000 jobs. Construction was up a nice 19,000 job, mining and logging added 2,000. That's the energy sector. Manufacturing cut 4,000 jobs, retail down 8,300. Information services, including publishing, motion pictures, data processing down 10,000 jobs. Maria, back to you.
BARTIROMO: Good stuff. Let's get reaction here. Not much different than what we've been seeing, Charles Payne. Manufacturing was down again. That's what we expected.
CHARLES PAYNE, FOX BUSINESS NETWORK: Yeah. We didn't expect the retail number to be down. I was happy -- I'm really happy with construction, and mining I'm very, very happy with, we might be seeing some ripples here, obviously that's a key area where Donald Trump is going to do amazing work early, he's focused on it. But I've got to tell you 200,000 people dropping out of the work force, again, that malaise that it doesn't match what we've seen in consumer confidence numbers recently and some of the other things, so -- and all sort of anecdotal, but it's amazing how many people continue to give up on the American dream. Also, it might point to the fact we need to rethink policies where you make a lot more money sometimes not working than you do working.
MIKE MURPHY, ROSECLIFF CAPITAL FOUNDER: That's exactly what I want to say, regulations. You know, if you can make more by dropping out of the work force, you're going to make more, if you're going to do that because that benefit you and your family. So I think if we get the regulations of the American people -- people, if you can make more by going to work and getting a job, that's what you're going to do.
BARTIROMO: Otherwise, you become Europe.
MURPHY: Exactly.
JOANIE COURTNEY, FOX NEWS CONTRUBUTOR: Yean. And I'm surprised that we didn't that wages actually went up. To hear that that was down is quite a surprise because I can tell you from what we're seeing with Americans, you know, are actually making more. I know, we employ thousands and thousands of people across the board, and many of our clients are having to pay more even.
PAYNE: Joni, do you think when they break it down we're going to see some of these like professional services, with this big -- it's bifurcated, aren't some people getting big raises and others not getting anything.
BARTIROMO: Yeah, like lawyers.
COURTNEY: I do think so, Charles. But I also expected that the hourly worker would make more because the trends of all of our data that we are seeing -- it's starting to hit record highs. Employers are having to pay quite a bit more. So I'm most surprised about that number. But overall, I think a decent job report, though unfortunate to see the 200,000 leave the work force, to Mike's point. People may be feeling like, well, if I'm not going to make the money here, I could go on, you know, social assistance programs and stay home.
STEPHANIE POMBOY, FOX NEWS CONTRIBUTOR: Maria, I would add -- I think that this really reflects the delayed impact of the profits recession. You know, profits are the number one input into employment and, obviously, you know, five declining quarters of profit, the surprise has been that employment growth has remained as strong as it has. But we have seen, you know, this is just in keeping with the deceleration in the rate of gain, over the last year and a half. You know, we were averaging, 260,000 jobs a month. Now, you know, its 196, last month this number takes it a little bit lower. So, I don't think this is really surprising in the context of the profits recession, obviously, the question is, you know, does all of that change now that we've got Trump and the prospect of lifting that regulatory burden and tax cuts, et cetera.
BARTIROMO: Right. Dagen.
DAGEN MCDOWELL, FOX BUSINESS NETWORK: This is an economy that is in no way in danger of overheating, at least based on this Snapchat. Where you have 200,000 people dropping out of the work force, the labor participation rates keeps falling, 1/10 of a percent, wages falling on the month, the U6 did fall, by the way, to 9.3 percent. This is a broad measure of unemployment, down from 9 1/2 percent. But the rate was 8.3 percent in the two-years before the recession. So that's an indication of how much -- how much we still need to get people back in the work force here.
BARTIROMO: So is the U6 more reflective of what's really happening in the country.
MCDOWELL: Yeah.
BARTIROMO: . as opposed to the unemployment rate?
MCDOWELL: Yeah, absolutely.
BARTIROMO: It's a better indicator.
MCDOWELL: It points to the sense of malaise, people -- I want more hours, but can't get them. I want to work more, but can't find that kind of job.
(CROSSTALK)
BARTIROMO: Go ahead, Stephanie.
POMBOY: OK. I was going to say. You know, that really segues into the whole health care issue. You know, the small business, and FNIB association did a survey going into the election, which they do every four year, apparently, small businesses, what the top concerns were. And not surprisingly, health insurance was number one. We've got to lift this, you know, dead weight of the Obamacare quickly to revitalize job growth and to give consumers more money in their pockets.
BARTIROMO: Yeah. Steve Moore, hold on, I'm coming to you in a second. Mike Murphy, go ahead.
MURPHY: I think when you look at this headline announcement. The headline looks great, 4.6 percent unemployment, it looks terrific. But if you dig down a little bit deeper, I think if you survey any 100 people out there, you're not going to find that 95 plus out of those people are feeling great about their economic position right now, or their job position right now. So, I'm hopeful that this will start to turn and we'll start to see less regulation that will make people feel better, employers feel better, more jobs.
BARTIROMO: That's been the story for the economy now for a couple of years. Yeah, we're in recovery mode, but nobody is feeling it.
MURPHY: Exactly.
BARTIROMO: You can call it whatever you want, but I'm not feeling it. Steve Moore, your analysis of this report.
STEVE MOORE, THE WALL STREET JOURNAL: So I'll get on my soap box, again, because I said this on so many months in the last couple of years. The most meaningless economic statistic out there is the headline unemployment rate. BARTIROMO: OK.
MOORE: Because, again, we saw it fall -- but it's meaningless because we saw more people drop out of the work force, ladies and gentlemen, that's the reason the unemployment rate dropped. That's a bad reason for the unemployment rate to drop.