Transcripts For KQED Nightly Business Report 20170603 : vima

Transcripts For KQED Nightly Business Report 20170603

Coming to you from the new york stock exchange, were stocks closed as records. The dow, nasdaq, s p 500 all at their highest levels ever tonight, despite a mixed jobs report. Investors apparently remain encouraged by global economies and corporate profits that are showing signs of strength. As a result, theyre plowing more money into stocks. The closing numbers, the Dow Jones Industrial average added 62 points, finished at 21,206. Nasdaq was up by 58. The s p gained nine. It was the second straight week of gains for all three major indexes, sue. Bill, now to that jobs report, which was a bit of a head scratcher. The jobless rate hit a 16year low. Thats the good news. But hiring slowed in may with the number of jobs created coming in below expectations. According to the labor department, nonfarm payrolls increased by 138,000. The Unemployment Rate fell to 4. 3 , the lowest since 2001. So after a strong start to the year, job creation has cooled a bit over the past few months. Hampton pearson explains why. Reporter the may slowdown in hiring was not the only surprise in the latest government jobs report. Downward revisions for march and april pushed the threemonth average to just 121 new hires per month, a sharp decline from the 181,000 average over the last year. The economy has to shift what its doing from after the financial crisis and bubble. And thats a slow process. And thats just where we are. Reporter there were enough new hires to push the Unemployment Rate down to 4. 3 , the lowest since the spring of 2001. It happened because of a big jump in the number of persons who stopped looking for work. But the Trump White House points out the broadest unemployment gauge, the u6, fell to 8. 4 in may, the lowest since the fall of 2007. Were not worried about slowing job growth. When you look at how many people we brought back into the workforce and you look at the u6 number, the fact that the u6 number is down by 1 since inauguration day, were clearly bringing people back in the job force. Reporter health care and restaurants produced nearly half of all the new hires. Construction added 11,000 new workers. And stabilizing Energy Prices helped create nearly 7,000 new jobs in the energy sector. In contrast, Government Produced the biggest job losses. Wages remained stall, up 2. 5 over the last 12 months. That, leading economists say, gets back to the issue of slow growth. Were still down a couple of million jobs from where we should be. The economy still has a long way to go in terms of a complete recovery. I think weve got room to grow. Reporter but most wall street economists still expect a fed rate hike and monetary policymakers meet in two weeks. Economists say even at mays reduced pace, hiring is running ahead of population growth. And the Unemployment Rate could fall even further. For nightly business report, im Hampton Pearson in washington. Lets turn to anthony chan for more analysis on todays jobs report and what it might mean for the fed and any rate hikes the rest of this year. Anthony is chief economist at chase. Good evening, sir, how are you . Great. There are those who feel that maybe were seeing a lagging jobs increase number each month because we have a tight labor market, in other words employers cant find enough people qualified to hire. Is that whats going on here . Thats certainly part of the picture. When you get that Unemployment Rate down to 4. 3 , you really are stretching to find more workers. But i think the fascinating thing about todays employment report is that the Unemployment Rate actually went down, not because were gaining more jobs. The survey used for the Unemployment Rate reported a decline in the number of jobs by more than 200,000. But it was rather the plunge in the number of people that are in the labor force by over 400,000. I think that thats the reason why the Unemployment Rate went down. Thats usually not good news for the lower Unemployment Rate. And for wages, i think the reason why wages are not rising faster is because were starting to pull from that underutilized labor. You saw the number of people that are working parttime but would rather be working more hours. That number went down 53,000. But more importantly, it is down 1. 2 million in the last 12 months. Thats actually good news, because we can continue to expand this labor market without necessarily seeing so much inflation that the Federal Reserve will panic. What do you think about the sectors of the economy, what does it tell about you the economy as a whole for those sectors that actually did see job growth . Well, im encouraged by the fact that all of those people being hired on a temporary basis are now starting to find themselves permeating into the regular economy. Thats very healthy, it gives employers to socalled test drive these employees, then they sort of become fulltime employees, thats more ingrained out there. Im more encouraged with the health care sector. Thats a sort of growing sector out there. With regard to retail, theres that transition as you move away from brick and mortar, more towards the internet, so youre going to see that transition, im not overaly concerned about that. Youll once again start to see jobs gains closer to 200,000. This was a little bit of a pause. We look at these numbers closely because we know the fed watches them carefully. What do you think they think about these numbers, and how will it impact fed movement we might see the rest of the year in terms of rate increases . Right now the economy is humming and doing pretty well. The atlanta Federal Reserve has done research on how accurate they are, theyre looking for 3. 4 growth in the second quarter. Thats almost three times faster than what we saw in the first quart even after the upward revision. If youre going to get anything close to 3 in the second quarter, guess what, on june 14th the Federal Reserve has only one option, that is to raise short term Interest Rates irrespective of what we saw in the report today. Maybe a rate increase on flag day, well see. Thanks for joining us tonight, anthony chase. A pleasure. Bill, that labor shortage is hitting americas classrooms. The need for teachers is growing nationwide. Thats especially true in detroit. Kate rogers reports. Hows everybody doing today . Reporter detroit native Donovan Gardner is following in his mothers footsteps as a special Education Teacher in motor city. It was something i knew i could wake up every day and do and do well. Reporter but working in the citys Public School district, which is is 250 teachers short at this time, according to the Detroit Federation of teachers, is challenging. Gardner is working with 25 special needs students each day. I Service Students from second grade all the way up to eighth grade. So i have a pretty huge caseload. Reporter detroit is also competing with other nearby districts for talent and is at a disadvantage due to its conditions and compensation. If we can provide a competitive wage for our teachers, i think that will help to attract quality teachers, high quality teachers to our school district. Reporter the issue extends far beyond motown. Each year some 300,000 Public School teachers are needed around the country, according to the American Federation of teachers. But a shortage is intensifying nationwide. If these trends continue, well basically be 100,000 teachers short for every year after 2025. Reporter the aft says the shortage is amplified in rural areas and cities like detroit. The types of teachers needed run the gamut from science to math and more. Part of the problem is funding of Public Schools, as well as perception of the profession. One reason behind the shortage is compensation. Last year the National Average Public Schoolteachers satisfactorily was 62,000 a year. Benefits vary according to the location, level of education, and role. Salaries for teachers in detroit raise from 37,000 to 65,000 annually, according to the citys union, which is hopeful the new board of education will usher in change. Were finally at the point when we can Start Talking about the turnaround. I surely hope the issue of class size and lack of Teacher Service is an issue of the past. I look forward to working hard with the Current School district to alleviate this issue. Reporter but despite the hurdles that come along with the job, back in the classroom, the gardner says the impact hes making is well worth it. Thats what the most beneficial to me, the love i get from the kids, and seeing them develop and actually teaching them. Reporter for nightly business report, kate rogers, detroit. You can read more about the Teacher Shortage on our website, nbr. Com. Still ahead, taking stock. With the market at alltime highs, it may be tough to find companies to buy. Our market monitor has some suggestions for yo illinois could become the first state to be given a junk rating. S p warned the move could come next month if it doesnt resolve its partisan gridlock. The state has not had a budget for two years because of a standoff between the governor and legislature. Pensions and other entitlements are making it hard for illinois to close its budget gap. Theres been a lot of talk about coal lately. Today the Energy Information administration reported that the amount of coal used to make electricity was at the lowest level in more than 30 years. Cheap natural gas has been eating into kohlcoals share. That is being felt especially hard in kentucky were most of the coal mine goes to produce electricity. The new York Attorney general is accusing exxonmobil of misleading shareholders on the issue of climate change. The accusation was made in a legal filing. Its the latest development into the investigation into the companys role in accounting for its potential cost. New yorks attorney general claims exxon used secret internal figures that were lower than public numbers between the years 2011 and 2014, when the current secretary of state Rex Tillerson was exxons chief executive. Exxon called the allegations inaccurate and irresponsible. No secret that twitter is trying to get more people to tweet these days. Its also trying to attract more advertisers to increase revenue. To do that, it has to give brands what they want. And they want information. About you. So twitter is trying to figure out who you are and what you like based on things like your browsing history. And it uses that information to create your profile which you can now look at and update. And with so much personal data out there already, you would think that they would know all there is to know about you. But thats not always the case. They think im single and a single parent. They think im retired. Number of children, one. Got that wrong. Big city mom, corporate mom, female head of household. This is hilarious. Reporter are you a big city mom . No. Reporter are you a trendy mom . I am not a trendy mom. Reporter whats interesting is they dont know that youre a mom. They dont. Im a corporate man . Its relaxidiculous. Im a bit of a gadget geek. Reporter they think youre a baby beboomer w boomeboo b who speaks spanish. Nascar super fans, thats us. Reporter really . No. Reporter are you healthy and fit . I dont think so. Reporter do you own a gmc . No. Reporter vacanolkswagen . No. Reporter are you an auto parts buyer . I dont even own a car. Reporter look at how many auto things. Are you in the market for a car . Hes always looking for cars. Reporter they think youre a fashionista. Theyre out of their minds. That i need oral care, that one is really disturbing. I would consider myself a very good brusher and flosser. Reporter i would agree with that. Eric joins us now. And they thought i was a millennial that buys a lot of milk and eggs. They got part of that right. How do they get it so wrong . Because this is what happens with big data. Its what youre doing with credit cards, what browser sites youre looking at, whats on your mobile apps. Some of of it is right, if you a particular pair of jeans. But then they try to infer the rest of it, they put equations together and it doesnt necessarily work out the best. Whats the upside for twitter . Why give access it was highly entertaining, but why give us access to all of that data . So its a good point. So when we talked to the company, their statement said were leading the industry in privacy, we want users to see how were using their data, they can change their categories or opt out of the whole thing. The other real upside for them, though, theyre hoping users will do the work for them by saying, look, im not a millennial but maybe i do want to get ads about eggs and milk, so i can check on another box. Theyre hoping especially the younger people out there that dont mind the privacy issues, that theyll help twitter sell them better. How long have they been doing this and how much do they get right . They get it right, about a quarter to a third. Theyve been tracking you all this time. The only thing thats new is now you can see how theyve tracked you. Theyve just opened up these settings a couple of weeks ago. But the tracking has been happening for years. Nothing about bourbon . That doesnt make any sense. They missed a lot of the important stuff about you. Yes, they did. Eric, thanks. Plus he helped me update my settings. Shares of canada goose fly high. Thats where we begin tonights market focus. In its first Earnings Report since going public in march, the company known for luxury jackets recorded a smaller than expected loss. Canada goose expects sales for the year to rise in the mid to high teens on a percentage basis. The share soared 15 , 21. 64. Merger talks between conhag are an and Pinnacle Foods have reportedly fallen apart. After the bell last night, reuters reported conagra, which makes the likes of peter pan peanut butter, approached duncan hines about a possible combination. But the deal is already off the table due to disagreements over price. Conagra shares fell almost 1 to 39. 59. Meanwhile, shares of Pinnacle Foods got hit harder, falling 6 to 61. 92. Buffalo wild wings ceo is stepping down by the end of this year. The announcement follows the chicken wing chains annual meeting where shareholders voted to add three members to its board of directors, all proposed by activist investor marcato capital management, who has been urging for the ceo to resign. Shares rose 1 to 152. 35. Bill . Meanwhile, so Home Improvement retailer lowes raised its Quarterly Dividend to 41 cents a share. The yield now stands at 2 . Shares were lower to 82. 22. Shares of workday got a lift after the Cloud Software developer reported solid quarterly revenue. The company beat analysts profit estimates and raised revenue forecasts for the year. The new outlook is for Strong Subscriber growth. Shares were up 2 today to close at 104. 41. Time for our market monitor who likes stocks he says are reflective of whats happening in the economy right now. Joining us is barry james, Portfolio Manager of the james balanced golden rainbow fund. Welcome back, good to see you again, as always. Glad to be with you. Lets start out with your first pick, which is western digital. Well, any time we look at a stock, its relatively cheap compared to the market as a whole. We want good or growing earnings and we want to see the price of the stock going up. Its also in a niche that we know is going to continue to boom. That is Storage Space on your computers. Weve all seen that we run out of space all the time and we need more. Western digital can supply that, and, you know, in a growing economy, thats likely to be one of the stocks that can do pretty well. Barry, youre looking at a growth of Construction Spending in this country. And therefore you say, ergo, you like united rentals, right . Thats right. The economy, as your earlier guest was pointing out, is probably going to be okay. One of the areas we need to really take advantage of are companies that are involved with infrastructure or with, you know, the industrial area. United rentals is the largest rental. I was talking to a landscaper today, he says he never buys, he only rents. They meet the same criteria, being fairly cheap. The company is run fairly well, has a good balance sheet. It hasnt gone up a lot this year so maybe youre getting it a little cheaper than you might some other stocks right now. And well finish up with trinity industries. Yes. Trinity is a real, you know, great stock in terms of meeting the criteria that ive already talked about. But its into railroads. Its into wind energy. Its into road construction. If theres anything, you know, being constructed out there, theyre involved with it in some way, shape, or form, it seems like. We think theyve got their eye on the prize, as it were. Theyre running things lean and mean. Theyve got a ways to go, especially in the guys in congress do something in the next 40 days, i bet theyll spend more money and probably on infrastructure. Certainly one of the leaders in this market has been technology overall, especially the f. A. N. G. Stocks, the big guys, the amazons, the facebooks and so forth. Is that encouraging to you or does that worry you . It worries me, to be quite frankly. What weve seen is this kind of upside down market where stocks that are really very expensive have very poor earnings, and they havent shown a lot of price appreciatio

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