anyman. and we'll bring you every word. with tyler mathisen at cnbc global headquarters and sue herera at the new york stock exchange. a special edition of "power lunch" on jobs friday begins right now. good afternoon everybody. welcome to "power lunch." we have three topics to talk about this hour. and none could be as important as these three. jobs, stocks and how the run for the white house changed dramatically today. >> indeed it did, ty. we will hear from president obama about today's weak jobs report any minute now. he is at honeywell manufacturing plant in golden valley, minnesota. if you missed it, the unemployment rate, it ticked up to 8.2%, only 69,000 jobs were created in the month of may. that was well below expectations. now, the market impact is being felt all the way across the board. it is a very tough day down here at the nyse. the dow is down 227 points. almost 2%. s&p 500 is off better than 2% or 26 points. and we're holding at that 1280 level. the nasdaq down 2.25% or about 63 points to the downside today. and, ty, we've also penetrated the 200-moving day average on several of those indices. >> sue, thank you. those are the numbers of course. numbers that affect you and your money. on your screen now are the players as our live team coverage begins. we turn first to scott wapner. >> tyler, thanks so much. a perfect storm really today in terms of a weak jobs report. much weaker than expected here in the united states. weak pmis over in china just underscore that that economy is slowing. europe remains a big problem. and that's what you have. the dow jones industrial average as you see it now is now negative for the year of 2012. 12,161 is where it sits. 12,217 would be flat on the year. dow goes negative for the year of 2012. s&p 500 keep close watch on this today. 1284 is the 200-day moving average. that was breached as well. look here at crude oil. that story continues to unfold below $84 a barrel. brent is a big story, below $100 as well. the china news certainly weighing on the oil picture today. and how about the 10-year yield? we've talked about it almost every day. an initial plunge on the jobs number, guys, below 150 now sitting at 147. it got as low as 1.45. historic lows on the 10-year. june definitely not getting off to the kind of start that many market participants hoped it had. ty, sue. >> thank you very much, scott. the political implications of this latest jobs report could not be greater. our chief washington correspondent, john harwood, is awaiting the president. but we begin with karl quintanilla who just spoke with the republican presidential candidate and presumptivive nominee, mitt romney. carl. >> ty, the background on this interview this morning when the jobs number came out we knew he would have some kind of republican response. it was originally going to be vin weber, but perhaps the number was so weak the team felt em boldened perhapsed to speak out directly. he did just talk to us. said the president made it harder for the economy to recover. said the fed is basically should not ease. that any further easing or qe would not do much good. and said that we can't change what happens to the economies in europe and in china. also talked about comparing today's jobs number to the original promises that the white house made when it began stimulus long ago. take a listen. >> the president's policies and his handling of the economy has been dealt a harsh indictment this morning. and it continues. we've had 40 straight months with unemployment over 8%. 40 straight months. and as you recall from the beginning of the obama administration they indicated that unemployment would be kept below 8% for this entire period. they predicted that by now we'd be in the 6s with our level of unemployment. >> clearly we're not in the 6s. 8.2% now. so we'll keep an eye on what the republicans continue to say about the number. again, a large part of the election this fall, sue, is going to pivot around what the economy does right here in the u.s. >> candidly so, carl. thank you so much. let's head now to john harwood in washington. the jobs report obviously is front and center for the president right now. is there any possible way that he can turn around the negative headline when he comes out and speaks moments from now, john? >> no. but the president can try to address what he sees as the causes of the slowdown. you can expect, sue, he's going to blame europe a lot more than mitt romney was inclined to today. he'll blame congress for not passing items on his jobs program list, his so-called to do list for congress. this is a tough time for a president when attitudes are hardening about how voters feel about the economy. we've had another false dawn for the third spring in a row. it happened in 2010, happened in 2011. we had robust job growth during the wintertime that's now been replaced by this very mediocre and weak job growth slowing overall gdp growth in the economy. and that makes it difficult for the president to say my policies are working, we're on the right track. >> indeed. we will hear from him in just a few minutes. john, thank you very much. the other major story is the all-time record low set in interest rates this morning. the risk-off trade on a global basis is very much in tact today. the flight to safety pushed yields on the benchmark 10-year note to the 4 -- 1.43% at one point. and that has a lot of traders talking about 2008 once again. so let's go to rick santelli. he's in chicago. rick, are those comparisons to '08 fair given what we heard out of china this morning and what we're hearing out of europe? >> well, they're fair in so far as interest rates are lower now than they were throughout the debacles of the credit crisis in '08. and arguably we're not directly of course tied or able to fix europe. as you look at the intradays of 5s, 10s and 30s, realize -- and this is the biggest glaring way to look at the movement graphically, we're at 75 basis points last friday on a 5-year. we're at 62, we were at 1.65 on a 10 at 1.47. we were at 2.85 on a 30. briefly only maturity wasn't below the '08 levels was the long bond that happened briefly when it slipped under 2.50 today. maybe what's going on in europe can't be addressed directly by the u.s., but we could have had a better cushion if we created more jobs. back to you. >> rick, thank you very much. as we move now to some breaking news coming out from general motors. let's go to phil lebeau who has the details. >> tyler, this is a major move by general motors to cut its massive pension obligation. the company announcing it's offering a lump sum payment to 42,000 salaried retirees. the impact of this depending on how many take up the company is that it would be a net charge of $2.5 billion to $3.5 billion in the second half of this year. more importantly it could reduce pension obligation by $26 billion. that's the reason you see a huge spike in shares of general motors. gm retirees have until july 20th to decide on the lump sum payment. guys, this is a major move by general motors to use some of that cash that it has to reduce its pension obligation. guys, back to you. >> all right. phil, thank you very much. this on a day gm reported double digit sales gains by the way. coming up on "power lunch," president obama in golden valley, minnesota, right now getting ready to speak about jobs and the economy. we're going to carry his speech live as soon as he begins. before the break though, according to intrade, president obama's chances of being re-elected drop as the s&p falls. look at that chart. it's very telling. we'll be back in two minutes. sfx: sounds of marching band and crowd cheering sfx: sounds of marching band and crowd cheering so, i'm walking down the street, sfx: sounds of marching band and crowd cheering just you know walking, sfx: sounds of marching band and crowd cheering and i found myself in the middle of this parade honoring america's troops. which is actually quite fitting because geico has been serving the military for over 75 years. aawh no, look, i know this is about the troops and not about me. right, but i don't look like that. who can i write a letter to about this? geico. fifteen minutes could save you fifteen percent or more on car insurance. as we told you, in just a few moments president obama is expected to address people right now in golden valley, minnesota. he's at a honeywell plant. we'll take that live when he does come out. and of course he will probably address the jobs report this morning, which is affecting a number of the markets. the oil market is not immune. it's also reacting to the news out of china overnight. we're down 3.5% on west texas intermediate crude. brent is down 3.5%. and it's trading below $100. so we have the oil market under severe pressure today, ty. >> all right, sue. as we await the president, the headline of course for most americans is that the unemployment rate goes back up. first tick upward in more than a year. now in our 40th consecutive month of unemployment at 8% or greater. that is the longest such streak going back to the late 1940s. so, where is the u.s. economy headed? and is more fed action on the way? senior economics reporter, steve liesman, joins us, and deutsche bank chief economist and cnbc contributor is with us. steve, is there anything in these numbers that cast a positive light on the u.s. economy right now? >> no. this was pretty dismal from top to bottom, tyler. i don't think there was a single economist who made an argument that inside this number there was some silver lining. in fact, bob wrote a piece said a lot of clouds, no silver lining, i think was the best way to characterize it. i think the only upbeat ideas you can have for the u.s. economy at this point would be if europe were to take dramatic actions to get its act together. and then you have at least two tailwinds here, which is lower gasoline prices and lower interest rates right now. of course those two go up against the headwinds of fiscal cliff and europe. >> very interesting points. joe, let me turn to you. you had predicted earlier this month that the may numbers would come in around consensus at about 150,000 new payroll jobs. what did you miss? and right now i believe you're predicting that the second quarter growth rate for the u.s. economy's going to be something like 2.9%. some people might say, what are you smoking, man? >> i tell you what, tyler, they thought the same thing last year when growth was under 1% in the first half. and second half growth averaged 2.5%. so we have to be careful and really getting too nervous about things. a lot of weakness in the first quarter was in defense spending. i don't think that repeats. but the unemployment numbers were certainly weak. it was a surprise for many because the claim numbers suggest job growth should have been better. it was bad. however, i do think, tyler, there is one silver lining in the report. and that is the rising unemployment rate actually was a good thing in the sense that labor force participation went up a couple of tenths. and that was due in part to more people participating in labor market. we had 422,000 gains in the household survey. and unemployment did rise. maybe some people are sensing things are better. but on balance, yes, it was very disappointing. >> more people coming back into the employment market, steve liesman. but fewer people finding jobs than had been the case earlier this year. we mentioned earlier the possibility that the fed may do something. do you think that's a possibility or not right now? >> i do. i think the chance of fed action has increased as a result of this number. but i don't think it's met the litmus test that's out there. i think the unemployment rate going in the wrong direction is something that might bring the federal reserve as well as inflation being lower. we reported this morning 1.9% on the pc. but let me just say, tyler, there was other data this morning that on balance was okayish, i guess is the best way to put it. those who do tracking surveys, in other words they plug the incoming numbers into their mode models, they're still coming up with 2.5% or so for the next quarter. if we keep a 2 handle on growth and get jobs above 100,000, i just don't think the bar there is low enough for the fed to get in. >> all right. steve liesman, stay with us. and joe, stay with us as well. we're going to be talking to you throughout the hour. as we watch this introduction being made, the president should be out in a few minutes. that's ryan sullivan of honeywell making that introduction. when the president comes to the podium, we will take that live. quick thought if we could on this jobs report and the political impact of it. joining us mark morial and john kristi former special assistant to president george w. bush. gentlemen, we may have to interrupt you at my point. mark, i'll start with you. your thoughts on this report and whether or not the president can actually turn this around. it is a very tough market for him today and a very tough headline. >> the economy is in suspended animation. and i think that -- >> we're going to the president as he works the crowd. continue talking and as the president approaches the podium, we'll take him. >> the economy remains in suspended animation. but there have been -- >> why don't you continue your thought as we watch the president work the crowd here? >> yeah. the important thing to keep in mind is that we still have had 26 months of private sector job growth. and those jobs are not being created -- >> hello, everybody. [ cheers and applause ] >> it's good to be back in minnesota. [ cheers and applause ] >> it is good to see your governor here on the way over we were talking about making sure whether the vikings were staying. you know, now that's a hard thing for a bears fan to do. but i was rooting for the vikings second round here. and the governor did a great job. you were praying too, huh? absolutely. prayer never hurts. it helps. the -- you got two outstanding senators. [ cheers and applause ] amy and al, your mayor is here. outstanding congressional delegation in the house. give them a big round of applause. [ cheers and applause ] i thought ryan was really good. give him a big round of applause. [ cheers and applause ] he's a natural. one of the last times i was here was last august. we took a bus tour around the state. i needed a little minnesota nice. stopped for some pie. held a town hall in cannon falls. amy and al were there. i think al ate my pie in fact. [ laughter ] i spent a lot of time talking with folks who'd spent the past couple of years making their way through a tough economy. and today we're still fighting our way back from the worst economic crisis since the great depression. the economy's growing again, but it's not growing as fast as we want it to grow. our businesses have created almost 4.3 million new jobs over the last 27 months. but as we learned in today's jobs report, we're still not creating them as fast as we want. and just like at this time last year our economy is still facing some serious headwinds. we had high gas prices a month, two months ago. and they're starting to come down. they were spiking, but they're still hitting people's wallets pretty hard. it has an impact. and then most prominently, most recently, we've had a crisis in europe's economy that is having an impact worldwide. and it's starting to cast a shadow on our own as well. so we've got a lot of work to do before we get to where we need to be. and all these factors have made it even more challenging to not just fully recover, but also lay the foundation for an economy that's built to last over the long-term. but that's our job. from the moment we first took action to prevent another depression, we knew the road to recovery would not be easy. we knew it would take time. we knew there would be ups and downs along the way. but we also knew if we were willing to act wisely and boldly and if we were acting together as americans, if we were willing to keep at it, if we were willing to roll up our sleeves and never quit, then we wouldn't just come back, we'd come back stronger than ever. [ cheers and applause ] that was our belief. and that continues to be my belief. we will come back stronger. we do have better days ahead. and that is because of all of you. that's because of all of you. [ applause ] i place my bets on american workers and american businesses any day of the week. [ cheers and applause ] you've been fighting through this tough economy with resilience and grit and innovation. hon honeywell's a great example of a company doing outstanding work. i want to acknowledge dave coty here who's been serving on my job council and doing a lot of great work. [ applause ] that's why our auto industry's come roaring back. it's why manufacturing is consistently adding jobs for the first time since the 1990s. [ applause ] all that's happening because of you. everybody here plays by the rul rules. we have our responsibilities. and you deserve leaders who do the same. leaders who will stand shoulder-to-shoulder with you and do everything possible to strengthen the middle class and move this economy forward. that's what you deserve. [ applause ] look, we can't fully control everything that happens in other parts of the world. disturbances in the middle east, what's going on in europe. but there are plenty of things we can control here at home. there are plenty of steps we can take right now to help create jobs and grow this economy. let me give you a couple examples. i sent congress a jobs bill last september full of the kinds of bipartisan ideas that would have put our fellow americans back to work and help reinforce our economy against some of these outside shots. i sent them a plan that would have reduced the deficit by $4 trillion in a way that is balanced that pays for the job creating investments we need by cutting unnecessary spending, but also by asking the wealthiest americans to pay a little more in taxes. [ cheers and applause ] and i'll give them a little bit of credit. congress has passed a few parts of that jobs bill. like a tax cut that's allowing working americans to keep more of your paychecks every week. that was important. i appreciated it. but congress has not acted on enough of the other ideas in that bill that would help make a difference and help create jobs right now. and there's no excuse for it. not when there are so many people out there still looking for work. not when there are still folks out there struggling to pay their bills. it's not lost on anybody that it's an election year. i understand that. i've noticed. [ laughter ] but, but, but, but we've got responsibilities that are bigger than an election. we've got responsibilities to you. so my message to congress is, now's not the time to play politics. now is not the time to sit on your hands. the american people expect their leaders to work hard no matter what year it is. the economy still isn't where it needs to be. there are steps that could make a difference right now. steps that can also serve as a buffer in case the situation in europe gets any worse. so right now congress should pass a bill to help states prevent more layoffs so we can put thousands of teachers and firefighters and police officers back on the job. [ cheers and applause ] well, layoffs at the state and local levels have been a chronic problem for our recovery. but it's a problem we can fix. congress should have passed a bill a long time ago to put thousands of construction workers back on the job rebuilding our roads and our bridges and our runways. [ cheers and applause ] well, since the housing bubble burst, no sector's been hit harder than the construction industry. and we've got all this stuff that needs fixed. remember that bridge here in minnesota? so this