Higher. Plus, were going to have more opposition it appears to the border tax. The ceo of jc penney says it makes profitability virtually impossible. The Corporate Tax myth, a new report showing many of the american Largest American Companies pay no taxes at all. Within that headline number of course the better than expected jobs report shows private sector payrolls up by 227, construction up 58,000, thats the most in nearly a decade. Average Hourly Earnings up, numbers coming ahead of next weeks fed meeting in which policymakers are expected to raise rates. That construction number driven perhaps by trump rhetoric or policy. Perhaps by a warm weather in february and very little snow across the country. Well, ive got to tell you, i always like to look at where the jobs are created. And ive been waiting for construction. I love construction jobs because theyre such a great ripple effect. Construction punches way above its weight in the u. S. Economy and increase by 58,000. I also like to see manufacturing up 28,000. And then mining has been such a drag. Now, that is not because the epa pruitt just got approved, but i do think the makeup of the jobs is such there will be more jobs coming. Because these are jobs that get other jobs. Thats not the same with health care. Labor force back to 63. The highest since march of last year. Basically matches a the highs of the crisis. Meaning maybe theres a little more slack than we thought. Yeah, i mean, i think people coming back to the labor force is really important because weve been absent. I think that is part of the animal spirits. Now, look, watching this atlanta fed, they keep cutting what they think is the gdp. Im not buying that. I think gdps going to hold up well. When i look at these numbers it makes me think that there are people taking loans and getting things done. Now, you think, wait a second, isnt that too soon since november . Not really. In the process you get a loan, if you have the permits, maybe start getting something done, maybe start doing some hiring, but the weather does matter. And i say that because southwest air one of my absolute favorites just came out with some revenue numbers that were weak and they blamed the rainstorms in california. So lets just say, lets just pause it the idea perhaps this is an even better number given the fact that southern half of onefifth of the country, california, was kind of shut down by rain. Some numbers to go over here thanks to Peter Boockvar whos helpful when he puts all this together. 199,000 private sector job additions averaged over the last three months, versus 189,000 over the past six months and 180,000 over the past 12. So we had picked up over the last three months. But to put it in perspective, in 2015 private sector job adds 213,000 and in 2014 239,000. This may be one reason why were not seeing bond yields skyrocket this morning. Because its not that its additive but not so much you should be freaking out. Right. The take was the bond market was perhaps fearing the worst of the best. And then look, i always feel so im always feeling a little bit sociologically mixed by saw only up six cents for the hourly rate, then think the american worker, six cents and then we got this about how rich people pay taxes, its just two countries. Yeah. You did have an increase in 25 to 54yearold employment which people have been looking for, fairly significant one. Nice. Which is important in terms of the makeup of the labor force. U6 matches post crisis low. People are tossing around threemonth charts of aggregate hours worked coming back to levels that would take you back to 13, 12, that would be good. Look, the economy is better. And were seeing actual i interview a lot of ceos for mad money. Always like to talk about the other shows that im on. I mean, there isnt one that doesnt feel like things are better. There isnt a single one. Now, i have United Technologies today. I really want to hear what they think about what greg hayes has to say. Ive seen greg hayes be kind of a straight shooter over time as a ceo. I dont know if you feel like that. Yes, i do. But i would like to know what he thinks because im seeing on a smaller level lots of people who are involved in distribution. Lots of people involved in well built Important Companies ring the bell, food machinery, whatever, theyre seeing good numbers. Theyre seeing some good numbers. Now, retail is horrendous. I mean, i cant believe that retail cant pull down a country theres so many jobs being lost in retail. Its frightening. Its frightening. Its 10 decline in mall traffic. When you say that, what are you thinking about . Some days we go on and im then left saying, wait a second, jim, the malls dead but childrens place is doing all right. The malls dead but e. L. F. Is doing all right, it doesnt appear to be bleak across the board. Lets take that. What is childrens place doing to increase profits, close 200 stores. Foot locker, close 90 stores plan for profitability. When you see macys trying to improve profitability closing 68 stores, penny, there they go, they got improve profitability, 140 stores. Cigna yesterday actually good number caused a big short squeeze, 165 mall based stores, limited 250 stores, wet seal 171 stores. I had Columbia Sportswear on last night theyre doing well despite rei. Im sorry you look at these and say good guys are closing stores, bad guys are closing stores, look at those malls, the mall reached yesterday they were in a minicrash. Those were really interesting numbers. Im glad you put those together. Now, the omnichannel of course is making up for that, right . Oh, thank you. Youre playing my game here, man. Recode today, amazon registered more apparel sales than any retailer in the u. S. For millennials. Well, its funny because i was going to go back to the comments by richard hain at urban outfitters. Remember were six times the number of Square Footage in europe and japan. David, heres where the rubber hits the road. Last night ulta reported gross margin number that was down ten ticks. Okay. Why . Because their online is doing so well. Richard from urban out fitters gave an incredible treatise about how online is killing offline. Their own online, not just amazon. He is saying, look out, its not additive, its negative. So people are realizing, omni channel, the great omni channel, is killing them. Name three retailers that did really good this quarter. Name me three. Childrens place. Well, there were three that did excellent. Okay. Good relative to what . Did very well. T. J. Not a mall. Tjx according to New York Post whole new leaf here home depot. Well, okay, apparel. So happy birthday. Anyway, listen to me, tjx, burlington and ross stores all did well. What do they not have . Omni channel. Theyre not willing to cannibalize. Omni channel, take this down, david. The omni channel is the donner party of retail. Essentially eating your own foot. They left four weeks too late, got 23 feet of snow and you know what happened there . I do, you mention it so often i had to find out. Brains and couldnt eat your own. No one ever ate their own family. Thanks for sharing that again. I appreciate that. I went down to where donner party happened. Meeting resistance from one of the u. S. Biggest trade partners, canadian Prime Minister trudeau expressing concern that such a tax would hurt both countries economies. He delivered keynote at cera week last night in houston. I think one of the things recognizing of course how much the canadian economy depends on close collaboration and integration with the american economy, anything that creates impediments at the border, extra tariffs or new taxes is something were concerned with. At the same time jc penneys ellison talked to Courtney Reagan about whether or not hes looked at financial models that would assess the damage to retailers from border adjustment. Take a listen. It takes our tax structure as an example from roughly a 34 Corporate Tax to over 170 . So that gives you an idea of the Financial Impact to a company like jc penney. And thats very consistent with other companies, Companies Like best buy, target, kroger, walmart, i mean, you name it, i mean, were all in the same precarious position because we dont have manufacturing capacity that exists in the united states. Does that mean theres no chance for profit . It will be very difficult. Very difficult. In the short run virtually impossible. Fabulous interview by courtney. Fabulous interview. And i will just say unlike the other retailers that he mentioned their Balance Sheet is not going to be able to sustain this decline. You know, tepper made this point the other day on squawk box though, border adjustment tax gets phased in over a number of years, the dollar perhaps does react to a certain extent. Its not all completely clear, even though you get this enormous pushback from retailers that profitability is going to be something they can simply not get to. Theyre having a hard enough time as it is to your earlier point, jim. Right. Look, one of the guys i absolutely i have a lot of ceos i just really love, but i had this guy, tim boyle from Columbia Sportswear, i happen to love their clothes, 49th largest taxpayer in this country by the way. And they were saying, listen, you know, if youre looking at this border tax from the u. S. Point of view, youre really forgetting what happens after we put it through. Because they do a huge amount of business in europe. And he said you think theyre just going to say, hey, thats okay, u. S. , fine. No. Theyre going to do another retaliation. Retaliation. Hes talking about tariffs. Hes talking about 1930like tariff wars. Weve got to be careful. We do. Though im still of the belief were not going to end up with a border adjustment tax as part of tax reform, though we will have retaliatory tariffs from the president to a certain extent. Thats actually a little more logical, i think. You do . Well, look, i think president obama put through a i know no one even remembers that guy, but president obama put through very tough tariffs on china. Yes. And south korea. On steel. And what saved the American Steel industry . It was those tariffs because you could see where a. K. Steel, you could see what happened at letter x. Im not saying that president obama was trying to make America Great again. Thats a trademark. Thats like greatest of all time. Muhammad ali was like a trademark. But tariffs can work. Tariffs can work. Ak steels higher you know, theyre not going to lay off people en masse. Especially if youre serious about shortening value chains, which i dont think theres any doubt the white house is quite serious about that. Yeah. I want to hear from gary. I mean, you know, who what jim cramer w joe kernen was saying, one of the things i would ask, gary call, gary, is that good or bad . Oh, well ask him, we certainly know that. Whether or not well get a definitive answer i think is much more of a larger question. Because its not clear that the administration the administration has yet to coalesce behind a point, a specific point of view on a border tax, right . But when you listen to target look, ellison is a terrific guy. Hes trying to save jc penney. They help employ a huge number, huge, tens of thousands of people. You do not you may have a border tax and that may actually raise some revenue, and then you lose tens of thousands of jobs at jc penney, are you kidding . Where are those people going to get rehired . Coal mines . Checkers . Were getting rid of checkers. Have you seen what this does to the checkers . 3 Million People are going to become, what, Sales Consultants . Youre talking tens of millions of people in retail. Thats right. Lets not forget those are jobs. Theyre not just money coming in. You cant find jobs for those jc penney people very easily. We went to work at jc penney after fulfilling lives. I hear you. Well, february payrolls up 235,000, jim. They can switch to manufacturing, those people, yeah, fine. When we come back were going to talk about that new study jim mentions that claims that 35 Corporate Tax rate is a myth. Plus white house reaction to the jobs number. We will talk to gary cohn, director of the president s economic council, take another look at the premarket. We are halfway through the president s first hundred days in office. More squawk on the street in a minute. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. Duexperience our mostand perforelevated suvs ever. Including the lx, gx, rx and nx. Experience amazing. Its your tv, take it with you. With directv from at t, stream all your live channels, on your devices. Switch to directv and lock in your price for 2 years. New offers starting at 25 mo when you have the new at t unlimited plus plan. The 35 Corporate Tax rate is a myth for many profitable fortunate 500 companies according to a new study. It shows 258 fortune 500 companies were consistently profitable over an eightyear period and paid a 21. 2 effective tax rate. Study also found 100 companies enjoyed at least one year in which their federal income tax was zero or less. 18 Companies Including ge, priceline paid no income tax over the eightyear period and collectively the 258 companies enjoyed almost half a trillion dollars in tax breaks over the last eight years. Not sure this is entirely breaking new ground. No, and remember theres lots of companies that werent just took some losses, didnt necessarily make that much money. To me a much more valuable study is what happened say last year when the economy started getting better. Right. Although they did make the point that those were profitable companies. Right. And i think the debate were going to be having on Corporate Tax reform, these are salient points that are worth paying attention to. No doubt. Not to mention and this has already been done by many people trying to figure out the potential breaks that are going to come from tax reform, theyre already looking at the effective tax rate for many of these corporations and seeing whether in fact they would benefit from lets call it the overall package of tax reform where you get rate down to 20 . And many of them wont. Thats whats interesting. Right. And yet you can imagine why we need Corporate Tax reform because the territorial system and elimination of so many of the potential games that need to be played by these corporations and i say games, theyre legal, moving ip, moving so many other things in terms of what they do to avoid u. S. Taxes would be potentially done away with. General electric in a statement said the report in comment said the report is deeply flawed and misleading but brings us back to the caterpillar news this week in the times. Then again priceline, what, 75 of their business is from overseas. Duke energy, well you know what, a lot of the Utility Companies have very complicated cost structures that make it so they would not necessarily be large taxpayers. And no one ever expected them to be as regulated utilities. So lets take it with a bit of a grain of salt. Caterpillar i am all over. Im spending so much time on that. Its very difficult to figure out whether its criminal, whether its civil, how much of it was at stake, how much was it to get around the repatriation. Very difficult. In the meantime of course business finally got good. Just great that this happens right at this moment. Typically youve had little patience for accounting questions. In this case it seems like youre willing to give them more benefit of the doubt. I would like to know whether the change in the ceo was related to the idea that they wanted to get ahead of what was obviously a longterm discussion over taxes to say heres some good faith. I would hate that to be the case because i like doug a lot. But they made a change and it was never really explained, particularly because business was starting to get better. But a lot of times the government is a quid pro quo, like hey, maybe you make that change, maybe we go lighter. I dont know. Impossible to find out. I am saying vault on that issue. Right. Of course under the tax reform plan there would be repatriation holiday, unclear what the grade would be there, but it would be lower than the 20 that has been discussed overall as the Corporate Tax rate. Right. But cat was just starting to build a head of steam. Yep. When we return well get cramers mad dash, count down to the opening bell. Dont forget white house Economic Advisor gary cohn with us in a few moments on the jobs number and the white house game plan for boosting jobs further. Take another look at the premarket. A nice friday setup. More squawk on the street in a minute. 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