tv Power Lunch CNBC December 6, 2013 1:00pm-2:01pm EST
unusual call activity. >> steve weiss. >> tbf like the third time. >> murph? >> sticking with the gen worth, great way to play housing. >> bakes. >> deckers outdoor. >> that does it for us. have a great weekend. we will see you on the other side. follow me on twitter. "power" starts now. >> "halftime" is over. "power lunch" and the second half of the trading day starts right now. >> all right. 203,000 jobs created in november. that, of course, is the headline. unemployment down to 7%. the big question then, is what does this all mean for the fed and for everything else? here's what it means for the markets today. right now the dow is up 178 points at 15,999, a tick below 16,000 againp. and, of course, there are 18 shopping days left before christmas and if that has you stressed out, some big name high-end stores may have a solution. they're putting in bars as in
places where you can shop and drink. and sue takes us inside the tallest hotel in the united states, it will be your first look. it's supposed to open in the next few weeks. before sue moves on up, she is at the nyse. hi, sue. >> yeah. we'll go uptown in a few minutes. we'll take you to the. top floor in about 30 minutes. let's talk the numbers and big ones on wall street today. tyler showed us the dow jones industrial average up now about 178 points on the trading session. the s&p also firmly into the green territory. it's up better than 1% at 1804.25, significant it's once again above the 1800 mark. in terms of the nasdaq the last trade, we're up about better than three quarters of a percent or 34 points on the trading day. and the ten-year in terms of the yield, it was all over the board after the employment report this morning. right now it's at 2.87%. keep in mind, everybody's looking for the three handle
near term in the ten-year. there are three questions we're asking on today's jobs number. one, is the good news, good job report, really finally good news? number two, is the economy stronger than free money from the fed? and number three, can interest rates and stocks both rise together? jim and jeff are in chicago. okay. guys nice to see you first of all. >> hey, sue. >> is good news finally really good news? jim you first. >> yes, it is. unfortunately yesterday, i hadn't arrived at this conclusion but i've been convinced today it piz. good news is good news because the market realizes that we're washing liquidity probably at a point where more than we should be based on the economic condition but the fed is hamstrung and going to be difficult for them to walk back. the fed knows since the fed's hands are tied let's celebrate while we can. good news, as long as it doesn't get too hot, i hate to say goldie lock's people said before me, not too hot. >> all right.
moderation in all things. what do you think, jeff? >> sue, certainly adding jobs to the u.s. economy is good news, but i'm going to disagree slightly to my friend mr. your rio here. we saw that underscored on the nonfarm payrolls, we saw it go to 293 and the pits all of a sudden started selling and then crickets. why the equities not dropping here and then they started buying the treasuries. we see uncertainty out of the if snead uncertainty for ten minutes, it takes about an hour it figure this out and come to a reasonable conclusion. >> fair enough. >> but to the point of -- >> occurred -- >> brings us to the point of whether or not the stronger economy is stronger than free money from the fed. go ahead. >> if you beamed yourself to this point in time right now and all you had was a current economic data, you'd say is the fed's policy appropriate and the answer to that is absolutely it's not appropriate. but the fed is worried about where we've been the last five years trying to shake the paradigm of people trying to
draw in risk. this is one of the reasons the stock market is celebrating. the fed's hands are tied and can't get out of the hole. >> they are painted in a corner. but the liquidity, the fed liquidity, this qe is stronger than these fundamentals. precrisis, if we came out with a 203,000 plus jobs number people would spit on that. we're in a new normal but let's be honest and real here because a lot of you are confused right now. >> i have about 30 seconds. we're up 180 points on the dow jones industrial average, but we're also at 287 on the ten-year yield. so can we see interest rates and stocks rise together? jim? >> yes, with two caveats. one, that rates don't start to rise too fast leaving the market to believe it's out of control and two, that they don't go too high. i think we can go up to 3.4 in the ten-year and have the stocks not worry too much about it. >> this is turning into a love fest and killing me. it's about velocity. the move in the ten-year if we
get above 3% we will see 3.25 print. it's all about the velocity of this move and it's going to happen soon. >> all right. guys, thank you so much. appreciate it. have a great weekend. >> take care, sue. >> ty up to you. >> here's the one that we really haven't talked about yet. sure the jobs number was decent but investors are also very closely watching those budget talks down in washington. headlines, "deal getting close" as john harwood reported day before yesterday. what's the latest here? >> the latest, tyler, if the market likes the jobs number, they may like the idea of a budget deal if they care only about the fact that republicans and democrats do something. but we can't overestimate enough that this is a baby step deal. we're talking about $90 billion, split evenly between domestic and defense cuts being relieved from the sequester offset by some revenue and entitlement cuts elsewhere.
however, there's very little long-term deficit reduction in this deal. we're talking about putting off decisions about raising taxes or cutting medicare and social security. we also have a last-minute hangup over unemployment benefits, the extension of unemployment benefits. democrats want that, republicans say they're not that serious about it, it's not clear whether or not democrats are going to put their foot down and say no deal until then. what i think we know is that there will not be a deal today. house leadership aide told me he expects early next week a deal to be announced by patty murray, the democratic chair of the budget committee in the senate. paul ryan, the republican budget committee chair in the house. then the house and senate pass it before christmas. they leave next week actually for their christmas break. so they would end the year on a positive note. it would dramatically reduce the risk of a government shutdown in january and does not resolve our long-term budget issues. >> does it resolve the debt
ceiling deadline which is some time in early february? would that be taken care of here? >> don't think it would be taken care of in this deal, but the fact that they would be making a deal, means it's much less likely that you would have a showdown over that. i think the odds of either a government shutdown or a debt limit brinks manship crisis would go down if they strikes this deal and pass it through both chambers. >> one of the possible impacts of the jobs report may very well be showing up already in the mortgage market. diana olick in washington to explain. >> well, tyler, rates today are about level with where they were yesterday, despite the better than expected jobs number, and there's a reason for that. take a look if you will. the bottom line, we knew this was coming. we got some good economic news last week, which pushed rates slightly higher and then another surge this week with the adp jobs report, so the bond markets were in a defensive position today. matthew graham at mortgage news daily told me bond traders got
exactly what they expected. still, rates are decidedly higher now from where they were last week. what does that mean for housing. affordability is shrinking no question with rising home prices. that's the bad news. the good news in the jobs report is this. residential construction jobs grew in november taking the biggest monthly jump since july. more younger americans ages 25 to 34, first-time home buyers, went back to work after a dip in october although their emts employment is way too low. job growth in clobbered metros, those hard hit by the housing crash was ahead of national growth. that will help slow foreclosures further and boost home buying. hate to say it, tyler and sue, rates will not go much lower. they will likely go higher. >> diana olick in washington, thank you. and while washington focuses on the budget, wall street sets its sites on today's job number and the fed taper timetable. in a "power lunch" exclusive,
bring in ceo shawn mathews. good to see you again. welcome back to the program. >> good to see you. thank you. >> let's start with the jobs report. the debate down here on the floor is when the cutback on easy money from the fed will come, the so-called taper. what's cantor's view on whether or not this report pushed forward the taper timetable? >> i think they'll probably wait for one more report and start to look to taper in the first quarter. remember tapering all it's doing is take something of the massive excess liquidity in the marketplace and still have fed funds at basically 0 for still a protracted period of time. >> so q1, what does that do to stocks? we're at levels certainly, we see interest rates up today and stocks up today and we have seen them in the past historically be able to move together. are we in that same type of environment right now? >> i think you still have an anchored fixed income market. when you look at the treasury market, close to zero interest rates on the front end of the
curve which means there's significant carry out there and available to people. until you see a next wave of growth, i think there's going to be natural buying in that low 3% area on tens, which will bring the market back in. i think we're range bound in fixed income world which means that the equity world can continue to rise. >> you know, it also brings up, though, the fact that we have a stock market today that's moving up with interest rates moving up. seems as though good news is now solidly good news for the market again. >> i agree with that. part of the reason is if you look over the last two years, most of the expansion has really been multiple expansion in the equity markets. the equity market is looking for revenue growth on the top line basis and if it sees its sights and can see growth, it's going to make another move higher. so that's why the equity market is looking at this as positive news because top line growth has to drive the next wave of price appreciation. >> shawn, i'm going to bring in kayla tausche. she's been following an issue a
lot of financial executives such as yourself are looking at and it regards the volcker rule. >> tuesday regulators are expected to approve a final draft which limits how banks can trade their money. the linchpin of this newest draft something called ceo certification. this means if a bank's trades break the law senior management takes the blame. jack lew said the right, quote, tone at the top creates a culture of compliance. it's not the first time regulation is put in executive on the hook. the exchanges require managers of broker dealers to attest they have the appropriate trading supervision. sarbanes-oxley requires management to submit an end of-year report certifying the company's financials. the sec settled with fifth third over faulty accounting on commercial real estate loans. the settlement named dan poston because he signed that certification. neither admitted or denied wrong doing and poston is still employed at fifth third but the question is a lot of executives i talked to say having this
hierarchy in the volcker rule is unfair because they can't know everything that happens on a trading floor. i know cantor complies with the rules on the exchange that have you as test to the supervisory controls. do you find this to be an effective tool and do you find it to be a fair one? >> you know, from our perspective we're a private partnership so in reality it's our money that's actually circulating within the firm so we have to know what's going on. and, you know, that's why we look at it different than other people. so i'm not sure why it's an issue for other firms but from our perspective, you know, it's our money at work every day. we want to take care of it and have great customer relationships and grow our franchise so it's kind of how we operate anyway. >> shawn, let me turn to you where you see opportunity in the market right now. we're at record highs in many of the indices and people are looking around for either value or growth. where does cantor see that? >> i think people are looking for growth and that's going to be the driving factor.
if you look at growth stocks they've done tremendously well and continue to do well. people who are going to outperform earnings estimates will continue to see massive benefit because you're still going to be in a low interest rate environment which means that people will pay four that growth story. >> all right. shawn, thank you very much. sean mathews. >> thank you. >> all right. up to dominic chu for a market flash. >> hey, sue. so nokia is on the rise here. jpmorgan's reinstating coverage of this company with an overweight rating and price target of 10.80 a share. its analysts noting the substantial potential the company has to monetize its patent portfolio is there, and so those shares could become more valuable in the future. tyler, back over to you. >> thank you very much. if you haven't been hit by a winter weather this week, it may well be on your way very soon. this is video from oklahoma yesterday. icy roads out there, scores of accidents from east to west. the storm has moved now into arkansas. it did that early this morning. schools and businesses throughout parts of the state
are closed. missouri getting hit as well. here is the weather channel's jennifer delgado. >> certainly a busy day at the weather channel. we are tracking a big storm out there producing snow as well as freezing rain and sleet. anywhere you're seeing on the map in blue, of course, we're talking about snow, but the area in concern pink and purple. those are the areas we're going to be looking at icy conditions. and that includes parts of the midwest as well as even into parts of the ohio valley. as we go through today, tonight, see that precipitation slides over to the east. pittsburgh, you will be tapping into some of that snow and this as i said is going to be a threat for today as well as even through saturday. now as we talk about some of the ice accumulation, the area that we're really concerned about is going to be from parts of northeastern texas including dallas all the way over towards louisville. anywhere in this purple area we're talking about the potential where we could see a quarter inch of ice or more and that means we could see some of these power lines coming down from the weight of all that
freezing rain. back to you. >> all right. jennifer delgado, thank you. if you are a u.s. soccer fan and haven't heard news of the draw yet, down in brazil, prepare yourself. it's not particularly favorable to the u.s. team. the u.s. is in a very tough bracket for the world cup. the u.s.'s first match against ghana on june 16th. u.s. has lost to ghana in the last two world cups. it also plays portugal, rinaldo plays for them, that is a tough team, they won the euro cup a couple times ago and germany, a perennial power. only two of the four teams in the group advance to the elimination round. it's going to be tough. the bioteches have had a great year. check out the chart up 47% year to date. many of the analysts we've been speaking with are in agreement about the year ahappened and we'll tell you what they're saying when we come back. moving on up, sue is in the newest and tallest hotel in the whole united states. take a look. >> we are in the tallest hotel in america with fantastic views
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helping to push the dow higher for the year and very nicely so. there you see it. year to date the industrials. one sector that has been on fire this year is biotech, not many of them in the dow, none of them, stocks in record territory outperforming the biotechs. the markets for the past two years. they're on track now for the biggest yearly gain in that category and more than a decade. so, can the run continue? show da dharmarajan is at the nasdaq looking into it for us. >> hey there. feels like every day i'm here talking about the biotech index hitting a new record or stock hitting a new high, the question is am i going to be here in 2014 talking about that same biotech outperformance if several analysts that we have spoken to say yes, a lot of the sector trends that have helped the biotechs go forward are still going strong. they talk about the example of the fda approval process, streamlined approval process and say that halo effect is still
happening. drug approval now at a 16-year high. and also you have to talk abe the changing demographics. these aging baby boomers mean more need for drug discovery and a ready market for drugs already in the pipeline. steve silver from capital iq tells me when it comes to this pipeline, drug companies are looking very strong and very robust in healthy pipeline and the fact is the companies have been executing really, really well. so yes, stock prices have been running up but he says look, growth projections for these companies are running up as well. so in 2014, where should an investor put their money? ubs for one says keep your eyes on the large cap biotech names. names like gill lee adand cell gene and biogen. take look at valuations, not that stretched, some trading at 40% discount compared to their peers. programs a good buy going forward, tyler. >> thank you very much. after a rough week the party is back on on wall street for today.
the dow is zooming, stocks are up, basically across the board. bob pisani standing by on the floor and we'll get to him next where he'll show you some of the big individual movers on this powerful move to the upside kind of day. we'll be right back. sue will take us to a hotel on the top of the world. >> we are on the 35th floor, beautiful outdoor space at the tallest hotel in america. it costs upwards of $300 million to put together, and we'll show it to you next on "power lunch." . how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
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triple digit advance of almost 180 points. trading action with bob pisani, he joins me here at post 9 on the floor of the nyse. we posed the question this morning, is good news finally good news. >> yeah. >> the market is acting as if it is. but it's an interesting reaction. >> it's a surprising reaction. first of all not the number that's sdprising. a lot of people thought 200,000 would be the number. okay. they're right on that. but they're wrong on the market reaction. i'm surprised as well. so remember all week we've been struggling on somewhat better economic news except the retailers and the markets have been down, interest rates have moved up on taper fears. suddenly the mother of all good news, a strong jobs report, and the stock market goes up big and the bond market hardly reacts overall. look at this. the dow up 176 points. no reaction in the ten-year note at all essentially. it's largely on the flat side. and i think people are rather surprised about that.
now, the argument, sue, people have been making, we've been moving up the last month and a half in the interest rate scenario so the ten-year note 2.5% in october, now 2.8, towards 2.9%, an increase. the market is partially trying to price in a taper. this is all explanations after the fact. i think people thought that the ten-year would be over 3%. i know rick mentioned it yesterday. i felt that would be a right reaction as well. >> but is that, is 3% going to be the number that spooks the stock market or has that been factors in. we've heard so many talk about we're approaching the 3%. >> classic revisionist argument some are arguing maybe we're wrong about this. all year long we've been saying the big story for 2014 is going to be tapering is going to be a real headwind for the markets. maybe that's wrong. maybe the whole theory is wrong. this is what some people are trying to argue today. maybe tapering is not going to be the major headwind. maybe the economy is strong
enough to withstand a moderate amount of tapering. >> turning bad news into good news. >> on its head. >> and some trying to argue yellen will be able to thread that needle, tapering is not tightening and change the forward guidance. >> doesn't it depend on what kind of a honeymoon period the market gives miss yellen. certainly her questioning on clig was not aggressive at all in terms of those who were questioning her. she was very confident in her answers and i just wonder whether the market is going to give her a honeymoon period or whether or not they're going to look for her to automatically reinforce mr. bernanke's stance on easy money. >> i think they'll get a brief honeymoon period but a lot of people feel she's got to do something dramatic to make it clear that tapering is not tightening and how do you do that? so a lot of people are floating the idea change the forward guidance to say okay, we're going to now go instead of 6.5%, to 6 %. to somehow reinforce, cut this
knot that tapering is tightening somehow and they have to do something. i want to point out how broad the rally is today. >> how's the volume? >> cyclical, consumer, doesn't matter, we're up, all the major sectors in the s&p are on the upside here. even those interest rate sensitive stocks, for example, emerging markets they're having their best day in several months now. that's that eem right at the top there. >> yep. 2.5% gain. thank you so much. appreciate it. to the bond market which everybody has been watching in today's trading session. rick santelli is tracking the action at the cme. hey, ricky. >> hi, sue. yesterday i thought if you see 2 you would see 3, i was wrong. headline was 203, private payrolls 196, darn close call. intraday we did get as high as 293 about 7 basis points shy as you see on the chart. we did come back a couple extra days. these will be the highest yield closes since the 13th of september. what we did find were the yield
curve and a little early flattening which really means traders may be thinking a little more snugging, coming a littles closer, didn't last long. look at the intraday of 5s versus 10s but see year to date it's been all about steepening. last chart the dollar index, still hovering below a key level. one final thought, maybe the biggest reason we didn't hit 3%, the fed's had a lot of buybacks this week, listen you might not agree with the policy but they're very good at understanding how to control rates with these buybacks. back to you, tyler and sue. >> all right. gold prices getting ready to close just moments from now. sharon epperson is tracking the action at nymex. >> very fascinating move here in the gold market. initially we saw a $19 plum after the jobs data came out. gold hit a low of 1210 an ounce, only to recover almost all of those losses and right now we're looking at gold right around 1230 an ounce. keep in mind traders are as bob
saying, interpreting what all this means about the taper and when the taper will take place and how much impact that will really have. in fact, analysts at commerce bank, the commodity strategists are saying gold can recover and get back to 1400 an ounce by the end of next year. they say yeah, we may see the tapering happen some time in march or april, but then the market will stop having pressure on gold and we'll see those prices start to come back. so there's a lot of jawboning about where gold will be headed in 2014. we are looking at a recovery from the sharp slide initially. back to you. >> okay. sharon, thank you very much. marriott set to open the tallest hotel in america at 68 stories high, right in the heart of new york city. officially known as the courtyard and residence inn manhattan central park it's two hotels in one with the courtyard on the lower levels and residence inn occupying the upper floors. show you what it looks like. >> this is the residence inn part of the hotel.
behind me, magnificent views of central park and midtown manhattan. if you're doing business in manhattan, for an extended period of time, this suite also has a fantastic set of amenities. including a microwave, a refrigerator and a freezer, one of my favorite things, a dishwasher, and basically everything that you need to make yourself at home for a long period of time. we're in the courtyard side of the hotel now and a beautifully appointed bathroom which includes a full size shower and a full size bathtub. you don't get that in many manhattan apartments. as a matter of fact, i think this is bigger than most manhattan apartments. each different section of the hotel has a different theme in terms of color and art. the art was done by william debillsen. we're here in the lounge and as you can see from the beautiful mural from behind me, it's a black and white theme. he has implanted different pieces of memorabilia in this mural of the new york skyline. this is the main lobby that
services both hotels. and when they're up and running and open for business, they'll create about 165 jobs. so joining us now first on cnbc to discuss the property is janice millham, the courtyard's vice president and global brand manager. nice to have you here. >> thank you, sue. great to be here. >> congratulations on the hotel. i see some of the beautiful artwork right behind you, so i think you're down in the main lobby there. >> i am. >> tell me why you decided to combine these two different brands? they are distinctly different but seem to work very well together. >> they do. you know, both of these brands have already been very successful in new york city. we actually opened opened our first residence inn in manhattan, the same owner, several years ago and it's been wildly successful as well as the courtyard which is on times square. so when this site came available it was a natural to extend these two brands in this great location. >> how much of it does have to do with the location? new york, obviously, is a fantastic city but it's also a very unique market that has a
huge business trade but also almost an equally big, perhaps bigger, tourist trade. >> that's right. that's what makes this such a great location to grow our brands in. you know, you've got the business clientele as you talked about which is really perfect for the courtyard hotel, and then you've got the leisure customer as well as the business customer that are on long stays which is really the perfect target for our residential inn hotel which has the suites as you did your piece earlier. >> how much pricing power do you have in terms of room rates? we've been talking about the economy, it's getting stronger, but certainly it's not where everyone would like it to be. how much pricing power are you going to have on room rates? >> you know, new york, is really a strong market for us, so it really i think even having this hotel opening with 600 -- over 600 rooms shows you there's demand for hotel rooms in the market. we are going to command some really nice rates here at this
hotel. >> all right. want to give us a hint quickly, janice, about what would like a residence inn suite go for? >> so a residence inn typically is a little higher priced because it is all suite so probably between 300, $400 depending on the season and what's going on here in the city the courtyard is probably going to be around the $300 range. >> janice, best of luck with the opening. appreciate it. >> thank you. >> ty, up to you. >> and shopping under the influence. higher-end clothing retailers like nordstroms are opening up some bars in their stores. a little mid-shopping cocktail help juice sales this holiday season? why not. plus another crazy sign that luxury is on fire. what you got, robert? >> there is a run on animal hides, demand for leather bags, alligator watch bags. so high luxury companies can't get enough material. we'll tell you about their creative solution coming up after the break. twins. i didn't see them coming.
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glitches may have marred the release of its video game but web bush analyst is keeping his outperform rating on the stock and his 12 month price target of 30 bucks saying the problems wouldn't delay the release of another version of the battlefield series. quick check on the dow, up 178 points near those session highs. tyler, back over to you. >> thank you very much. dominic chu reporting for us. two interesting trends involving the state of wealthy consumers. high-end clothing retailers now popping up in-store cocktail bars and the boom in luxury goods creating a run on special materials. think crocodile's skins. robert frank and cnbc's kelly grant are here with us. robert, you first. on the shortage of materials afflicting some of these luxury brands. >> one of the fastest growing segments of luxury is leather and that's creating a run on the animal hydes they use to make them. animal skin, calf hyde, are up.
luxury companies are buying up the top suppliers to secure product and retain that competitive edge. if we look at channel yesterday announcing it's buying a tannery in central france famed for lambskins used for chanel's leather bags follows deal with hermes buying tanneries. they're snapping up crocodile suppliers, used in watches and handbags. they bought a controlling stake in helping long, a crock supplier in singapore. exotic skins of the highest quality have become critical and profitable. this hermes maxie box bag in crock skin for $47,400. now a top quality croc skin has to be smooth and pristine so they're given special oils and they're kept in a calm relaxing environment so they don't get scratched. all these companies have to follow strict guidelines on the
treatment of these animals but right now these are very short ply and all the companies want to get more. >> robert, thank you very much. let's turn now to kelly. this brings new meaning to the term shopaholic. lots of retailers or at least quite a few, adding bars to their retail locations. what's going on some. >> it's an interesting trend we've seen. nordstrom in the past year say they've doubled the number of dining options with full service bars, tommy bahamas testing a separate bars in its stores, think about free drinks, get an eggnog martini and do your shopping. >> i would think so local merchants, restaurant and pub owners would object to this. >> this actually started with a lot of local merchants. it's something we've seen for years in really good men's wear boutiques and designers. >> come to think of it that's right. i go to a men's store in my town and he sometimes serves beverages. >> this is a trickle up effect. >> trickle up effect and stay in stores longer.
>> i would think gross receipts would rise in direct pre portion to the number of beverages consumed. >> that's what they're hoping for sure. i mean, it's a little bit of a balance. they have to see if this is going to be a good use of the space versus having merchandise there. the hope this is some place you can park your husband for the laid employees, have a beer -- ladies, have a beer, or cocktail, watch a game. they hope you will take a break in between shopping instead of leaving. >> who's trying this? >> big players nordstrom, sachs, urban outfitters trying to do it in brooklyn, tommy bahama. >> we'll find out and we'll be watching. sue, down to you. go shopping, have a beverage. >> yeah. that would be a disaster. all right. not too weak, not too strong but strong enough. big rally on the street following the latest read on the jobs market. is this a good -- is this good report really a good report or a bad report? and what happens in january?
will we see continued improvement or perhaps slower jobs growth? and should we raise the minimum wage to 15 bucks an hour? we'll talk about all of that. the dow up 184 points. we're back in two. e of business. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach. if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million? 3 million? the answer is... 3 million homes. by 2030, investments in energy efficiency
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in today's yahoo! finance question of the day, the latest jobs report is better than expected. do you think the jobs situation is finally improving? 21% of you say yes jobs are coming back for good but 52% say no, strength in the jobs data won't last. 27% say i'm not sure either way. very interesting results. >> really is. we're going to tackle that and more in our power rundown. it is all about jobs. here with us bill rogers public policy professor at rutgers university, and in philadelphia, is joe watkinss, republican strategist and former white house aide for president george h.w. bush. let's start with that november jobs number. joe, why don't you take it away. employers adding more jobs than
expected, unemployment rate at %, is this good, too good to be true or what? >> well, those are good numbers. i prefer to see the rate of unemployment number go down instead of going up. you have to look at what's behind the numbers. the labor force is not growing and the fact that labor force is not growing means that now we have to create fewer jobs in order to keep the rate of unemployment level. so at one point a few years ago we needed to create about 150,000 jobs a month in order for that rate of unemployment to stay even. now we only need to create about 100,000 jobs a month in order for that rate of unemployment to stay flat and if we exceed that as we've done this month the last couple months, last few months, a downturn in the rate of unemployment. the labor force participation rate is the question, is 63% still, it was 63%, four years ago or -- in 2007, it was at
67%. so that gives you a little indication. >> let me let bill react to that. the good news is people in the labor market are having better luck today finding at least some job, whether it's the full-time job they want or the high-paying job. that's beside the point. but to joe's point, what you have is participation going down. a lot of people have dropped out. that suggests that the economy is not fully healthy. >> that's right. and, you know, i think why people like this report, for the very reason if you compare over the last three months it looked pretty good, but i still think, you know, 200,000 new jobs over the last month, we're moving in a sideways economy, sideways economy, and to what joe was saying, when you look over the last 12 months we're still at a point where there hasn't been much improvement and i've been talking about we have the bifurcated recovery and you see it with the education breakdowns, the college grads they did okay, even over the
last 12 months, have done okay. if you're a high school graduate you have a great -- >> very quickly, you've been on the inside of the labor department. there have been questions about the integrity of the jobs numbers. a big cur kerfuffle last fall, reports recently about errors and people being told to go ahead and make it up and so on. did you ever see that? is that something you're aware of? what's the margin of error here. >> during my time at the labor department, two stints as chief economist in 2000 and assistant to the chief economist in 1993 and now i also serve on a technical advisory board to the bureau of labor statistics, when they do revisions, these revisions are very, very typically very, very small, you know, in the order of a tenth of a percent. >> did you have political pressure to juice the numbers some. >> i did not. i will be clear, i was not in the -- i was a political appointee. i served as that kind of conduit between bls and the secretary. >> you would be the guy doing the pressuring. >> right, joe?
>> all right. let's talk -- joe, let me turn to you, in that yahoo! poll we just ran, 52% of the respondents said they think the numbers aren't really reliable. job strength and data -- job data strength won't last. what do you think? >> i agree with the 51% or 52% that it won't last. we may see some continual -- some continuing slight downturn in the rate of unemployment, but as long as you have all these other indicators, i'm not feeling very, very good. look at the long-term unemployment rate which still is hovering over 13%. that's not a good indicator. look at the sluggish incidence of business in terms of business investment. all these are indicators. look at wages. wages continue to move sluggishly, very sluggishly and spending power only increased by 1.3%. consumers don't have a lot more money to spend. these are all signs that i'm not looking for anything really any
really great movement going forward in the next month or two. >> very quickly. >> i'm encouraged by these numbers. but i -- the reason i'm encouraged, we have seen some decent growth and some solid excel her rags and we're also starting -- when that happens we start to change what we focus on and it becomes about the quality of these jobs. the flcio wants to talk about the wages. >> let's go to the question of quality and wages. minimum wage front and center this week, fast food workers striking this week, recently a vote out in seattle that hiked the minimum wage around sea-tac airport $15 an hour. if it were raised substantially what would it do to employment and incomes? >> this clearly is a question where beauty is in the eye of the beholder. obviously if you're at the bottom rung and a nonskilled worker you want the minimum wage to be raised $15 an hour. that would give you an income of maybe about $30,000 a year.
certainly you can provide better for your family but that's a bill that has to be paid for by employers and any republican will tell you and a lot of democrats will tell you, employers will have to pay that bill and you have to look at the burden born by small businesses, by the folks who -- >> it's not just employers paying that bill. >> consumers would be paying it. >> we as a society pay that bill. here in new jersey, we have about a third of our families that are we call asset limited constraint and employed, households that are earning -- not earning enough to make a living in their community. a paycheck away from losing their job, if they lose their job they're a paycheck from losing their house. so these are families that, you know, have been struggling, they've been playing by the rules, but it's been -- but public policy has not moved in a direction that helps these families out >> we have to leave it there. appreciate it. good as always to see you, bill great to see you again. >> we didn't solve the minimum wage question but i think it will be around for us.
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it's a strong day for wall street. moments ago we bumped our head up against the 200 plus point mark on the dow jones industrial average at 16,016.64. that is a gain of almost 1.25%. and it's a broad-based move in the s&p and some of the confirming indices we watch including the transporting. the transportation average up .75% and that's a 51-point gain for the transports and those who follow technical moves follow transports to confirm a move in the dow jones industrial average. they're feeling pretty good down here on the floor of the nyse. nascar's leading lady danica patrick taking to the open road
and jane wells joins her in long beach, california, with more. ladies? >> hi, sue. we're here because can am is unveiling its 2014 spider which is this three-wheeled unusual vehicle made by the canadian firm brp and danica patrick has been brought on to sort of unveil it for them. how do you like it? >> >> i love it. it was my first time driving it today. >> any problems? >> no. i didn't have enough space to go faster. but it was cool. like it's like i sat on it and felt so comfortable and confident from the first time i sat on it even though i basically have never driven a motorcycle before. it's ready to go. like you sit down and you're ready to go as long as you know how to start it. >> this is not for off-roading. this is only for streets. >> right. >> i guess in this one -- >> touring. they make touring bikes as well that have a real second seat behind it and a little bit of storage. >> who's going to buy this? who are you aiming for? >> i mean i think anybody that enjoys driving around and anybody that likes to look at
the sights, see the sights and somebody -- i mean for me, it feels so kind of relaxing and at the same time, there's a thrill to it too i think. >> it's open air. >> exactly. so i mean i feel like it caters to a lot of people. obviously you have to like driving. >> well you dop. let me ask you about four wheels how would you sum up your performance this year in the sprint cup? >> well, you know, maybe six wheels would have helped me do better, i'm not sure. >> what are your goals? >> maybe i should try three wheels. >> it was okay. started off well with the pole at daytona and a couple high points but at the end of the day it was -- i wish it would have gone better but it's a rookie season and sprint cup is so hard. everybody in the series is so good, so, you know, i take those rookie stripes off for next year and it means that i have that year of experience. >> as we get on, prepare to leave, i want to ask you about go daddy, with you a long time. >> that's what i need. i need a spider that's all green
and orange like go daddy. >> they're toning down the sex appeal. they have jean-claude van dam. what do you think about that? >> i think it's awesome. from the very beginning, i loved when we made things funny and now we do that. there's a funny element to everything. >> all right. >> instead of like an oh. >> like oh, no what's happening. let's be funny. >> let's do it. >> i don't know how to put on a helmet. >> let's do it. >> jane, you are the most awesome person. i'm so jealous. >> the only lady with the young hottie, let's do it danica. >> hold on. >> file like we're going fast already. >> hang on. >> hang on. >> thank you, ladies. thank you, danica.
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gee strong market day. keep your eye on 1805.81 that's the number for the s&p which briefly went into positive mode for the week. electronics arts, campbell soup and marathon three winners. >> that's it for today's "power lunch." "street signs" begins now. ♪ ♪ higher higher higher >> taking me higher ♪ >> guess what? good news is finally good news once again as a much higher than expected jobs number has stocks soaring. what happened to that thing we call the federal reserve? welcome to a big "street signs" on this up across the board friday. along with the markets your other hot top picks at this hour, a not so glamorous look at revered yahoo! ceo marisa mayer, tracking a storm our winter