good morning, everybody. welcome to "squawk box" here on cnbc. you're right, joe. mac is not here. he's on vacation today. he doesn't have to commute with all the traffic today. i'm becky quick along with joe kernen and andrew ross sorkin. don't adjust your calendars today. it is jobs thursday today. tomorrow's july 4th holiday moves that june unemployment report up to 8:30 eastern time today. the polled forecasters say the economy probably added about 215,000 jobs last month. if that's the case, that would mark the fifth consecutive month of job gains of at least 200,000. the unemployment rate is seen holding steady at 6.3%. the average hourly earnings are expected to have increased by 0.2%. we have a lot on the line for the markets today. in the lead up to the payroll report, dow and s&p both closed at record highs again yesterday. there's only a half day of trading today ahead of the holiday. the stock market will close at 1:00 p.m. eastern today. if you take a look at those futures, you'll see at this point at least we see some green arrows. dow futures up by 19 or 20

points. s&p up by close to 2 points above fair value pt and the nasdaq is up by 3.5 points. andrew, tag, you're it. >> thank you, becky. we have corporate news for you this final thursday morning before a long weekend. we should tell you that lululemon's founder and advisers, the one that was kicked out, you might recall, chip wilson for those comments about who should be wearing those pants, he's reportedly talking to some private equity firms gauging their interest in a buy out of the yoga wearmaker. "the wall street journal" reports there is no deal in the works. a buyout would face a number of big issues because the premium that would be needed over the company's $6 billion market capitalization might be too high. but that is what people are talking about this morning. also, volkswagen denying the report is planning a bid for u.s. truckmaker paccar. earlier today. two analysts, two research analysts noted included the head of domino's truck unit saying

that he has been told that volkswagen wants to take over paccar. there you go. paccar, tomato, toe mat toe. >> are you concerned over what the impacts are? >> so today is the final thursday before the weekend. >> it is the final thursday. >> there's like two or three of them -- >> before the three-day weekend that we're having. >> it's the final thursday before the weekend. >> the next story could matter to you, maybe. do you have a gmail account? >> no. >> no? >> no. >> okay. >> very few of these things relate to me. >> okay. i think someone in the audience might have an account. goldman sachs has a bit of a problem because it says google is blocking access -- what is going on over there? i don't know what you're blocking. apparently google is trying to block access to an e-mail that contains confidential client data that a contractor of

goldman sent to a stranger's gmail account by mistake. a bank argues that the error threatens a massive breach of privacy. goldman sachs filed a complaint in new york state court but didn't say how many clients were affected and wants google to delete the e-mails. you know when you get an e-mail and at the bottom there's that language that says this is confidential, if it's not for you, you have to destroy it? >> yeah. >> that's what this is oddly all about. >> so a contractor at goldman sent some confidential information to some stranger. and now the stranger wants it back? >> i can't remember if they want the strangers or lost the strangers and they want google to delete the e-mail. >> but wouldn't the person have seen it at this point? >> potentially. unclear. >> maybe they printed it out so maybe it's too late. >> so the question becomes, can you actually get your e-mail back? >> is this different than the family story woog go going to

talk about later? >> we're going to talk about stan o'neal in a little bit. >> and it's different than the facebook trying to figure out user emotions? >> yes. that's a different story. we talked about that yet. >> these are all too strange to me. >> how is that even legal and binding? it's your fault, you idit. you sent me the e-mail and now it's mine. finders keepers. >> you should be the judge. it's the final thursday before the weekend. i got it. in the washington news -- obama on npr. >> was he on npr? >> yes. >> that is a match made in heaven. president obama is calling for additional financial reforms. in an interview yesterday, he said janemy isn't needed to make risky betts that can pay off for a phi n

a few. >> i didn't get this interview. i didn't understand -- >> dodd frank. >> the dodd frank anniversary. that was on july 21st and there is segue this is him getting ahead of whatever criticism is supposed to come. >> there are some people still making too much money in essential indices. >> i'm surprised you feel that way. >> an oil company has completed the first expert deal to allow limited energy sales overseas. voters are setting two singapore based traders, saying enterprise product partner has sold a cargo of the u.s. to an asian trader. no word on the price. so it's the end.

it can be treated with an antibiotic. >> spongebility. >> but in this case, apparently the -- they are selling things now, but we need more natural gas. >> i don't know. it's charlie lumber who first raced that idea. >> highest gasoline prices ever. >> right. >> ever? >> ever. drivers in the u.s. will be paying more for gas in the coming days than on any independence day holiday -- oh, since the record high of 2008. >> good thing we have you here. >> yeah. >> keeping us honest. >> potentially stretching budgets. >> all right. let's get a check on the markets this morning. yesterday, you did see the dow and the s&p 500 closing higher. the nasdaq was down, but this morning it looks like you have green arrows for all three of those indexes. right now, the s&p 500 looks like it would open by just over two points.

energy prices, down about 43 cents for oil which is trading wti at 104.05. and crude oil was down yesterday, too. it hit a three-week low yesterday. the ten-year note at this point looks like it is yielding 2.63%. so we did see a little bit of pick up in the yield. pressure on prices yesterday. this was a two-week high yesterday when it closed at 2.62%. so the yield picked barely high they are morning. the dollar at this point looks like it is trading up across the board. euro is trading at 1.3652. dollar/yen at 101.93. and gold prices, which continued to push higher yesterday, settled at the highest level since march 21st. yesterday it's giving back some of that today. $1,323.60. we are counting down to the monthly jobs report a day earlier than usual today. 6 607.32, 33, 34, 36, 37 -- you're counting up.

you have to go the opposite direction. >> oh, i can't -- that takes some practice. >> we need a counteddown clock. how about one hour and -- >> oh, yeah. two hours and 21 minutes and did she so we're counting down -- oh, there's more to this story than we're just counting down to that. for some inside into what we might expect, we are now joined by james o'sullivan, chief u.s. economist at high frequency economists and kevin cummings. in terms of counting down, both of you expressed that you both feel it's going to be at 8:30 when we get the number. >> now you know. >> we could end the -- >> early a couple of times. >> in terms of useful information, do you guys have anything? >> if you give us a margin of

error -- will you bet your life it will be over 2 let you know,0know 200,000? >> my life? no. >> will you bet a knuckle? >> how about a nose hair? >> i think it's almost 50/50. >> really? so you're not confident at all. >> it's maybe 40/60. 60/40 that it will be over. the trend has been a little over 200,000. >> and where will the -- >> the first has been lower. >> the rates have been going down? >> it took a four cent drop in april, paused last month. remember the 7% in q4. so 6.3% in six months or so is pretty good. >> even though people find a million reasons not to believe it. >> yeah. if it changes down, not up. but even a pause -- >> great participation rate and all that stuff. >> there's all the production rates have been flat so far this year. even with that, the unemployment

rate is down from 7% in q4. >> kevin, will you bet your life it will be above 200,000? >> i would not bet my life on it. >> none of you guys have any -- we're really not going kill you if it's below. how likely will it be above 200,000? >> i think there is a pretty good chance that it will be above 200,000. but in any given month, like jeff said, the first print can be plus or minus. >> if it's down 2.9, we now know how much pent up demand there was after that -- you know, the weather really did affect the first quarter. so there should be some pebt up hiring here. >> yeah. and if you look at job growth through the first five months of this year, you're averaging $214,000 a month. >> and yet you're not willing to -- so i think there's some conviction. >> basically, is the 535.

>> our forecast is 215 on barrels. >> and what about the rate? >> 6.3? >> we have it ticking down at 6.2%. there's been downward pressure there and that's more than enough job growth that you need to push the unemployment rate lower. >> so the fed is going to feel comfortable with maybe accelerating its exit? >> well, for now they just keep their dovish talk, for sure. they're talking 2015, it's in their numbers, but they don't want to talk about that just yet. >> we're not that far from 2015. >> but they still don't want to talk about it. you have the ten-year treasury yield. it's the wage numbers. as long as the wage numbers are the same as they are, then it's easy for the fed to keep talking dovish. but you start seeing the wage numbers creep up and i think the tone changes significantly. >> that's the other argument, there really is no slack in good jobs. they're having trouble finding people. you know, yesterday the ni came

out with the ters of firms. >> we did get a strong number from adp yesterday. it was quite a bit stronger than had been expected. but adp had been lagging the jobs report. if the market is expecting to get a better number because of adp, they could be disappointed. >> consensus didn't change yesterday, rightly or wrongly. i think people have shied away from using the adp to change their payrolls forecast. people talk about upside risk, and i did b with as well, but in general, people didn't change their forecast yesterday. >> if we get a good number, how does the market react? >> i think, as jim mentioned, one of the keys will be those average hourly earnings data and implicationses on wage growth. the one caveat is if we get

congress supgz. a year ago, you get a 134 in june. even if a -- you may not see the year on year pay. it may not be a real game changer here yards to the wage data. 6:13. you both say it's going to be at 8:30? you agree on that? >> yes. >> excellent. worth bringing you guys in for that. >> thank you. >> keeping him on the edge of the chair about those 8:30 numbers. >> they were at 60/40 on 8:30, i think, right? >> i think we're 100 on that. 99%, anyway. coming up, when we come back, we are tracking jobs and the storm. we're going to get a forecast on hurricane arthur's paths. but first, texas governor rick perry is putting away the

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. morning, everybody. right now it's time for the executive edge. google has removed results under europe's right to be forgotten ruling. in a notable one, an article about the ousting of stan o'neal has been expunged from certain searches. that story was written by one of the uk's journalists. this is what we knew was going to happen after that european ruling. >> i didn't know about the european ruling. >> we've talked about it. you can remove any critical stories or positive stories that -- >> why is this not like the tiananmen square? >> because it was for news that was irrelevant, no loerpg pertinent. >> it's all in the eyes of the beholder. >> exactly. >> but you can go to google

yourself and make a claim. it's not the most critical article ever written. therefore, the question is why was it removed. and now earn is going to find the article, hay. >> it's getting much more attention. you have to request it yourself. >> maybe they hired w. because he -- we know, remember, he -- he said he was. i'm the decider. eye decide. i'm the decider. apparently this is about how it's going to we implemented. it's hard to decide, what is art, what a pornography. >> that's a job for ken feinberg. >> i know pornography when i see it and i know art when i see it.

this guy who sold a messy bed for $4.5 billion, he is an artist. >> he is a conartist. >> no, exposedly not. have you seen a picture of the messy bed? >> i have one at home that he can buy if he'd like. >> is it just the covers are messed up or is it -- >> i don't know. that's what i'm -- yonl. >> in the past, there have been crazy stuff. shocking stuff, crucifixes, weird, bizarre -- >> but i think that was just a messy bed. have you ever gone into a hotel and the bed is not made? in florence in one of the most famous museums, there was a -- like a man kin leaning a stream. is it looks like a real person

and this was considering look are a real maefrt pose. >> i'd love to do messy beds and telling them to anyone for like 40 bucks. >> you feel for google. they fought this ruling. now they're getting tarred for taking off things people say is relevant. they didn't want to implement this rule to begin with, so they're in a difficult position at this point. texas governor rick perry. he says maybe boots aren't made for walking. he is dropping his state's beloved cowboy boots saying they made his back problems worse. some are suggesting this could be part of a new look for romney

saying if he's going for softer shoes, he's trying to appeal outside of sox. the. >> jo buy it. i am going to take the at his word. >> the shoes impact the back.. i would suggest wearing the boots would be helpful, not hurtful. >> no, no, they have heels on them. >> no, helpful in terms of the campaign and the authentic image and being -- the idea that he would be trying to, you know, not look like he was from texas seems very strange to me. >> yeah. i will tell you, it's not easy on your back if you're walking around in heels. >> really? >> yeah. >> do you know about that? i do. it's too early in the morning. >> every morning it is. >> in fact, if you are tired this morning, our next story is

for you. a new study finds young adults who xerzed vigorously before bet get vigorous sleep. >> there's somebody who wants -- >> snib that works this shift is not obsessed with sleep. >> that's not what we're talking about. >> what are you talking about? >> exercise before you go to bed. >> you sleep so well. they put that in there just to see what we would come up with. exercise. come on, becky. >> she pretends as if she has no idea what we're talking about. >> in fact, with us, because we go to bed at 8:00, everybody is

still up when i go to bed, everybody. so you know what? there's nothing happening. >> there's not enough exercise before you go to bed? is that what you're trying to say? >> there's nothing going on, no. but some people do work out or do push-ups or something like that. >> i actually thought about it. if you're exercising and working out at night, it means you're not drinking. >> anything in moderation. maybe a glass. >> or three. when we come back this morning, as we track the economy, storms push up the east coast. we have our forecast coming from the weather channel in just a moment. this is humira. this is humira helping to relieve my pain. this is humira helping me lay the groundwork.

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good morning. i'm joe kernen with becky quick and andrew ross sorkin. today we have the jobs report because tomorrow everything is closed for july fourth. polled forecasters say the economy likely add 215,000 jobs last month. the unemployment rate is seen holing steady at 6.3%. while average hourly earnings are expected to increase by 0.2%. can you tell me, is it possible to take something that i tweeted last year and retweet it?

>> yeah. >> how do you do that? >> retweet it. >> it's my own wheat you can't retweet it. to me, you know, july 4th is an important day. but for democrats, your day is april 15th. >> you know what? you can copy and paste the whole thing and retweet it. >> do you have to copy and paste? >> everybody radio for the tweet. >> in the meantime, let's get you caught up with corporate news this morning. on the front page of the wall

strooel street journal, "the wall street journal" now reporting the facebook team behind its mood experiment operated with apparently few limits until recently. for example, if the researchers worked for a university, they would have been required to get consent from participants. so facebook is now dietening its guidelines for research. if you are a customer of the company, they assumed that when you signed off on the terms and conditions, they could basically do whatever they wanted. that's creepy. you automatically signed up for any research. scientists were concerned that there were so many tests being done, that that would mess up the information they were

receiving. >> so weird. now is everyone going to have to opt in snm. >> i don't know. i think they've changed some of the terms and conditions. sexercise before bed is what it's taucalled. in other tech news, amazon proposing to fight the ftc on kids in appear purchases. apple agreed to a $2355 million fine in january over a similar matter. everybody here has children. my children now know how to go and buy a movie on the iphone. >> they do? >> oh, yeah.

they figured out the password. they can do it and ding. >> in my e-mail, i have a sony play station charge every two or three times a day i see sony play station. constantly. it's a real issue. on my iphone now, when i run, i can listen to a shuffle. there is like one every 40 songs i can stand lynning to. but there's like 280 songs and they're all bad. and they're people i've never heard of. >> the new apple operating system is going to allow you to confirm the purchase of your child. >> and you have to sign up and click on it? >> and it will pop up on your screen .you have to say yes. >> in london, they handed the

ipad to a kid when they were at a party. and the 5-year-old downloaded 1200 pounds worth of material while they were sitting there ae a didn't job. in ool, i used to go on a bbm boat. and i accidentally left the modem connection on. i have to call buffalo to get on the to the things and i left it on for two days straight. and i think it cost like 1,000. my data was not the camper. >> another kumbaya moment. while we wait on the jobs report, t kre b will roll out

its own decision on interest rates. geoff cutmore joins us now with a preview from frankfurt. is the ecb going to steal or thunder this morning? >> i don't think so. we have a negative deposit right, try and encourage the banks to go out and lend. we've been bold about this tellco, this monger term, looking at specific areas of the yes. you're knotting supposed to be able to use it for house purchases. but it hasn't even started. the two things, though, that mr. draghi will be very aware of.

the economic conditions continue to be very weak here. we have some business growth numbers today. that shows business rates at its lowest in three months. retail sales numbers were flat and no indication that consumption is picking up here in the our row zone. i know you guys are all big fans of soccer, what we here is called football. he's playing 5-4-1. basically, it's the long ball game. he's hoping the one strike e at the end is going to do something for him. we don't have full blown qe here. we don't have anything like we saw from the fed or the bank of england. there are those in the market that is you're getting the result you're getting because you haven't played up front and gone for full blood qe at this point. >> i get it.

i get it a lot. you've reach other limit in terms of understanding the actual strategy. >> i understand it. >> they're not just randomly running around after the ball? >> no. although the american game the other day, yes. >> that is a good analogy. >> i like it, joe. and he would have never tried that before with us. arthur, a is the first led of the alphabet, right? we'll see what happens. arthur sganed hurricane strengths and it's heading towards the north carolina pass. move people have it moving east.

>> most likely, that will occur. but i can't completely rule out zero impact there for some of the bigger cities. it will be less lab that wet of capefield,.of whienidening. look at those outer bands making their way on to the south carolina coast. we've seen some downpours there and some winds gusting, at times 20 miles per hour. at this point, winds on the gulf coast are anywhere from 5 do 20 to 20e78. >> use it now. and thp the couple.hurricane

warnings. why is it heading? well, computer models, they're very, very much in line. all these different lines showing up, these are different computer models. there's plenty of confident on where this thing is going to be headed. northward motion now, twurning wafrdz and. you see in relation to the east coast, continuing to pull further and further away. then by the weekend, we could be dealing with it getting into portionses of november have a scioscia. talk to you. >> i just saw the boston pops scheduled show will be tonight instead of tomorrow. >> it's better to be sooif than sorry.

do you remember 2005, we went through the alphabet. i'm just wondering, when is the heaviest part of the season? were all those in july and august and september? >> it was towards that sort of late july, august, september time frame. i generally start to see things peeking in that time frame. >> so we shoobts take any -- we yoontd relax because it's already july and we're on a. >> oh, no. it has no bearing on the rest of the season whatsoever. >> but the water is warm because the gulf stream is warm. >> yes. >> thank you. all right. i did something. "squawk box" tweeted this -- >> and you repeated it. >> and i retweeted it. so anybody who follows me can now see it on my -- >> desktop. >> and then they can retweet it. >> it's a good picture. >> wow, i was young. i was young.

>> how did you meet him? >> we talked about him a lot on "squawk box." his people watched and appreciated it and i was invited to meet president reagan out in century city in his office. we shared jelly beach. >> he's one of the lait eest. that's a pe jjorritive in my vi. but i think it was like 1997 o 1998. he was in the throes of -- >> and you could tell? >> yes.

the soul was still the afablt, wonderful ronald reagan. so it was pretty cool. and i had some pictures in silhouette where -- just happened to be because i had a photographer. i'm reaching forward, it looks like i'm advising him on, like, something important. and -- >> how about that? >> it might tweet that out. i was not advising him. i want to let you know all the good things, appreciate that. when we come back, protests going on in hong kong. eunice yoon is in from beijing and she's going to join us on the set right here to give us a round of what's happening inside the economic powerhouse. that and a lot more in just a moment on "squawk box." you know what i love america,

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how long are you in for? welcome back to "squawk box." every day, there are stories about china ma. today we have a special in studio appearance by eunice yoon. she's often abroad in china. how long are you in town for? >> i was here for two eex. >> here for two weeks? >> yes. >> last year, i was chasing a chinese tycoon around. >> but he is gone. >> yes. but he's left collateral damage. >> eunice was in the new york post because they were taking pictures of this guy trying to hand money to strangers, which is a funny thing. >> before he left, he took a picture of himself with $20 million in bricks in china. he wanted to replicate that in central park with real money and security said that probably wouldn't be a good idea. >> he wanted to show up with $20 million? >> in a brick wall.

>> help us just with what's going on in china right now. two things, we teased a little bit of the protests going on in h hong kong. pmi, we've seen some numbers, but i don't know if we're supposed to believe them or not. >> right. we are seeing a better services pmi. earlier this week, the manufacturing data looked pretty good, showing new orders are also looking better. but so overall, it's positive. going forward, people are wondering about what's going to happen in the second half of the year. stimulus measures seem to have taken hold. landfill figures dropped by 30% in the quarter from a year ago. so even the premier has said that you're seeing more and more downward pressure. and it's probably one of the reasons why so many people were closely following what was going on with the data here with the jobs report, with all the excitement over 17k, you know,

is this actually picking up? could that help to buffer some of the softness we're seeing in china. >> do we not believe necessarily the numbers that are reported? >> we believe the trend. and that people always talk about how thoor guiey're guidel but it's hard. gdp is difficult because you can always recalibrate them. that's one thing that's difficult to now. >> we calibrate ourselves. . >> does it feel like a gold rush a little bit? >> no. in some respects it does in that it's big and there are a lot of customers there. so there are a lot of companies that want to make money off that. but at the same time, it doesn't feel like a gold rush. people say the easy money isn't there. there's definitely more repressive and more difficult environment for a lot of foreign

companies. and so that is one of the main complaints. >> and what are we supposed to make of these protests in hong kong overnight? >> that is interest. but now it's gotten more defiant. they wanted to just remind hong kong that they are not fully independent. beijing itself is becoming more oppressive, more controlling, and whether it tolerate these people. will beijing accept that? here, i've been completely od'ing on google and gmail. it's been so hard to get into my

gmail account. even though you try to find ways to access the interim, they slow the whole thing down around sensitive topics. so i was having a meltdown on june 3rd bus rifs like, they slow the whole internet down. especially if you when you to when he can your e-mail -- >> so you have gmail examine everything. all of those >> want. >> i'd go to my yahoo! account. and sometimes my work account doesn't work, either. i would go into the company's vpn and it just stops, everything. so then i have to redo it, and gmail or something via yahoo!.

>> eunice yoon, thank you. next time you're in beijing, tell us these stories. it's fascinating, the sort of practical realities of being on the ground and what that actually means. >> nau, thank you. >> are you going goes going out on a barbecue? >> yes. >> oh, you mean the actual fireworks? yeah. >> we'll see. anyway, thank you. >> thank you, eunice. when we return, a special patriotic edition of chairs. we have a parade of stories getting ready for the big weekend. more squawk right after this.

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welcome back to "squawk box." we are in the "chairs." we have not been in the chairs, guys -- >> quite awhile. >> i want to say like six months. >> we've got three minutes. we miss that music. >> here's a story i'm focused on american apparel deal gives power to hedge fund founder. this is the craziest story about the ceo of american apparel. he has now teamed up with standard general, so that he owns 43% of the company. remember he's been kicked out -- >> 23% or 26%? >> he owned 27% himself before. so he's now teamed up with them, they bought the rest and now

they own 43%. so the question becomes whether he gets to take over the company. >> he needs another 7% to join him -- >> right either people are going to join him or he needs to keep buying. but it's kind of a crazy, crazy story for a guy who has this crazy history and why a hedge fund would hook up with him and what kind of implications would -- >> they're getting it cheap. >> i don't know. >> anyway her name is tracy emen, in london -- >> you're talking about -- >> we're going 0 to bring it up. went for $4.25 million. that's the bed the work of art she did on tuesday. she was there for the auction. it was a record for the artist. she applauded and whooped delightedly. >> i bet. >> 15 years ago was the first time my bed was auctioned at saatchi. it's a startlingly human element of the work, which include discarded condoms, stained sheets, it caused a sensation about someone actually had the gall to question what was --

what was and was not art at the time. but, she had transformed her bed and the connected detritus from a depressed period in her life. and in looking at it now, it takes her back, she says i feel quite sad. it's like a fragment of time. but this is the head brent gore very the head of christies that sold this said in this case there's a very discerning element to the market that they're selling into now. it's not frothy at all. people are really making distinct choices. it's a very -- these are very smart and savvy -- hold on. >> where would you put -- >> he gets a commission from what he sells. >> where do you think the bed goes in your house? >> i don't know where you'd put it. >> do you put that in the living room? >> her name is tracey emmen. if she were to marry -- >> she'd be tracy eminem. or if she married eminem himself she'd be tracey emmen eminem.

she'd be tracey emmen eminem who has $ >> what happened if you bought the bed and you decided to sleep it in. are you allowed to? >> ew, you're ruining the art. >> discarded condoms, stained sheets, all right -- >> i assume there's vials on the floor. >> i don't know. >> under the bed? >> you guys are talking about getting reimbursed in hotel rooms for like potato chips that you found in the bed. if you were -- >> gross. >> this you can actually find in down in any bowery in any town you can find a $20 motel with a bed just like this. >> we got to find the guy who bought this. because we'd like to meet him. we have some stuff to sell him, too. >> he's very discerning. >> when we come back on "squawk box" will the jobs report provide fireworks or a washout like the weather along the east coast? we're tracking the storm, the employment data and the ecb. we'll also be getting some help for the forecast from moody's

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welcome to this special edition of "squawk box." jobs in america. as the country gears up for july fourth fireworks the labor department is lighting the fuse a day early. the countdown to the jobs report is on. and "squawk" has a preview and predictions. plus, the american revolution started in massachusetts. with the shot heard round the world. now the state is home to a industry on a hiring spree. get out your stars and stripes, salute the flag, and get ready for fireworks. the second hour of "squawk box" begins right now.

good morning and welcome to "squawk box" on cnbc i'm joe kernen along with becky quick and andrew ross sorkin. it's jobs thursday. the stock market closes early today ahead of the july fourth holiday. trading will end at 1:00 p.m. eastern. but there's plenty to do before then. starting with the june nonfarm payroll report at 8:30 eastern. forecasters are looking for 215,000 jobs in june. it would mark the fifth consecutive month of job gains of at least 200,000 and that's something we haven't seen since the end of 1999. just before the dotcom bubble burst. the unemployment rate is seen holding at 6.3%. while average hourly earnings are expected to have increased by 0.2%. the futures are indicated up 20,

22 points or so. they've managed to close higher yesterday after the nice day the day before, and the dow is only 23 and change, 23 points away from 17,000. the ten-year did uptick a little in yield yesterday, after the adp report was strong. and there it is today at 2.626%. we'll have more on the jobs report in just a minute. but there are some other top stories today. one involving, i know -- you're going to talk about la la la >> pat car. >> how about lululemon. >> first i'll tell you about lululemon because the founder dennis wilson reportedly exploring a possible buyout bid for that firm. we all know who this gentleman is. he said certain people shouldn't wear his pants. "the wall street journal" says wilson's advisers have been talking with private equity firms about buying the yoga wear

maker. volkswagen denying reports this morning that it's trying to make a bid for u.s. truckmaker pakar. they had closed the daimler executive as saying he'd been told a bid was in the works. he is the truck chief and was a volkswagen executive from 2005 to 2007. and it's going to cost you plenty to fill up your car this july fourth holiday weekend. according to aaa a gallon of unleaded gasoline will cost an average of $3.67. about 20 cents above last year's prices. >> adp's private payrolls beating expectations but the question is will that strength and hiring show up in today's government jobs number. joining us is mark zandi, chief economist at moody's analytics. also jared bernstein, a senior fellow at the center on budget and policy priorities and also a

cnbc contributor. mark the numbers yesterday were better than we expected but adp had been a little bit behind the jobs numbers. so what are the odds you think that that sort of strength shows up this time around? >> well, adp numbers unbiassed. what that means is some months it's higher, some months lower, but all averages out equal. could be a little high this month. but you know if you ask me what's my job estimate i say it's 280, the adp number. >> would you raise it after you figured out what the numbers were for adp? >> we were with the consensus. you know, based on all the other date fa we were seeing. >> closer to 210? >> 225 i think, i raised it to 280. >> the number's unbiassed. >> the number is unbiassed. >> the person that puts it together is very biassed. >> i've got a computer model -- >> i like that we're putting you up against bernstein. wow, this is going to be, whoa, boy, sparks flying here when these guys -- who's going to be able to enable the administration the most here? >> i'm unbiassed, too.

>> i know. that's exactly my point. >> i want to get that out on the stable. you on the other hand are biassed. >> compared to you, i will acknowledge -- i will -- >> thank you. >> you can see me for defamation of character. >> okay. >> jared how about you? what numbers are you expecting? >> well, i'm right at the consensus. i was a little bit higher than the consensus. but the consensus bumped up a little bit so i'm right around 215. i will say that there is an upside risk based on the adp with apologies to mark who really is unbiassed. i tend to downweight the adp when it's an outlier. i find that just gives me a better forecast for the bls number. as mark suggested, overall they tend to average out in the wash. and remember, there's 100,000 job confidence interval around these monthly changes. so we're all in the same ball park whether we like it or not. >> the broader point is, you know, some months it's a little

high, some months it's a little low. you look through the volatility get to the underlying trend it really feels a lot better today than it did six, twelve months ago. >> i like what jared said, he takes it almost as an outlier because of the idea that it's going to bounce up and down a little bit. so just because adp came in better doesn't mean you should necessarily look for a stronger number. >> no. of course, bls bounces up and down as well. but the underlying trend feels like it's north of 200,000 per month. >> north of 200,000, this will be i think the fifth month if that happens right now. >> right. >> if that's the case when does this start putting pressure on the fed to admit that they are going to have to raise rates at some point? >> i think awhile because there's still a lot of slack in the labor market so the unemployment rate is still 6.3%, well above full employment. you have a lot of part-time workers working -- that would like to work full-time. you have a lot of people that stepped out of the workforce that will step back in. you add it up it's 2 percentage points of the labor force. even if the labor force picks up, we're looking at two years before we're back to full

employment so there's awhile here for them to -- >> if i could add a point to that. first of all, you definitely don't want to forget about the fact that the labor force participation rate, which i'm going to be looking at carefully in an hour and a half, is still depressed. so that biases the unemployment rate down a bit but the other vierian that mark did mention that we know chair yellen is looking at is wage growth. and wage growth has been really quite we esent, stuck at around 2% nominally. she's as much as said we'd like to see a little more action on that side before we think of any sort of liftoff. i think that's smart. >> you are starting to see some wage growth percolating. if you look in parts of the country where conditions are better or certain occupations you can feel wages starting to lift. i think wage growth probably will pick up a little bit before we actually get to full employment. >> it seems like we're really looking at a tale of two job markets though. we talked about this jared, the idea that at this point there

was a recent survey that showed something like 26% of firms had positions that they were having trouble filling. and apparently the last time that happened was when you were looking at unemployment the national level, at 4% to 4.3%. so, is this a situation where the good jobs, it's really hard to find qualified people for, but there are a lot of people who can't be fit into a skill set for a job? >> perhaps. you certainly hear that story a lot. that employers will often say we just can't find the quality of the workers we're looking for. and i wouldn't be surprised if their pockets of these sort of labor shortages. but i think they're really not very deep pockets. i think for the most part, the job market is still characterized by a lot of slack, and again, if you look at the wage numbers, you just don't see the kind of pressure that would lead you to believe that there's any kind of a deep labor shortage. so, i think that the key to understanding both the job market, and the fed, is chair

janet yellen's emphasis on labor market slack. and sleaze not a newcomer to that. she's been talking about that for actually years now. it's very important to her. and to me, as well, frankly. >> but it seems to me like that's a position, mark, where the fed is going to have much less impact. i mean that's a situation where you're talking about big structural problems. you can't fix that with a blunt hammer. >> no, you can't. although she is saying, at least implicitly saying that she's going to remain aggressive with monetary policy. keep interest rates low for a longer period of time, in an attempt, i think, to address some of these issues to keep the pressure on the labor market. you know, get a lot of growth. even tolerate inflation above target for awhile to allow for us to address these long-term structural issues. >> that's an important point. let me just echo that a second or amplify that a second. the idea that inflation hits 2%, or wages begin to grow, doesn't mean that you go get the fire trucks and put out the fire. you actually have to be above those targets to help generate a little momentum. the key for the fed is expectations.

they need to stay well anchored. >> that's a necessary condition. so inflation expectations start to rise i think they raise interest rates. if inflation expectations remain at 2% where they've been for 15 years now then i think they allow -- >> and wage growth is the secret to that because you don't generally see inflation without the wage growth. >> you don't see it. right. right. >> okay. jared, thank you very much for joining us today, great talking to you. >> you, too, thanks. >> mark's going to be with us for the rest of the show. >> next, testing the strength of this rally. it's been a strong month between jobs reports. is there anything that can stand in the way of the bulls? that's next. plus, the biotech industry is booming especially, as it always has, in massachusetts with all the great schools, and 128 challenge is finding skilled workers. that's coming up at 7:30 a.m. eastern sometime. "squawk box" is coming right back. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today.

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welcome back to "squawk box," everybody. it is the last trading day of the week and a half trading day at that. take a look at the futures, you'll see we do see some green arrows after the s&p and the dow both closed at record highs yesterday. right now the s&p futures look like they would open up by 2.5 points. dow futures up by 20 points. and the nasdaq looks like it would be up by 3.5. our head lines this morning, strip mall vacancies fell slightly. retail mall vacancies were

unchanged at 7.9%. growth remains below the levels seen at the start of the recession. >> thank you. >> the markets are on a bull run ahead of the day's jobs reports. sort of, not melting up yet but certainly inching higher. in a interesting way because so many people have -- even more recently we've heard more calls that this is, you know, getting out of hand, and we need a pullback. and you know, we had a 100 point move just this week as we close in on 17,000. what could help or hurt the rally in coming weeks? rebecca patterson, bessemer managing director and chief investment officer is here. have you been surprised? i will tell you, rebecca, that we said you don't short a dull market. this was about two weeks ago, remember? we were just talking about that. there's no good reason for it to go higher. what was it that came with the 2.9% gdp? something came out that was better than people thought, and it really helped and merger and acquisition activity. but suddenly it looks like it's sort of on a roll again that could, i don't want -- i mean it

doesn't look like it wants to pull back, looks like it wants to keep going higher doesn't it? >> yes. we've been overweight equities for a couple of years now. and overweight u.s. equities in particular. and we've ridden through that. i mean january hurt but we thought it was temporary so we held onto our positions. when i look at the second half of the year, mrs. yellen just this week, with her conversation with christine lagarde in d.c., she didn't suggest she's overly concerned with equities. we're not getting any sense that the fed is about to change course. that would be one risk. the economy seems to have momentum, all the leading indicators are ticking higher. i mean, i think the threat would be a sudden change in rhetoric from the fed. which would probably come with inflation. but that doesn't seem very likely to me in the near term or maybe if we have a geopolitical shock that pushes up oil from a supply side point of view that pushes up gasoline prices and hurts consumer confidence. that's always a risk. >> right. >> and certainly it is something that could happen. but how do you dime that? how do you probability weight

that? so for now we're sitting on our overweight and just watching it grind higher. the vix is very low. if you look at the options market there are plenty of people who have protective options on their portfolio. people are protecting themselves against a pullback. it's not that the market's overly complacent. >> if you have cash on the sidelines and you missed the bus. >> yep. >> are you supposed to get on the bus now, or wait for it to circle back? >> i feel like we've been asking this question for months. >> you have to. you have to. and we have -- >> what's the answer? >> i think pardon me you get into a diversified portfolio. do you just buy equities here. i wouldn't. but would i get into a diversified portfolio that includes equities and maybe some defensive assets? whether it's credit or fixed income or even a little bit of cash? i would be invested. i certainly wouldn't wait >> does that mean 60%? would you -- >> you know, you're going to hate my answer, because i'm putting on my little private banking hat. it depends on the person, what your goals are, what your risk tolerance is.

in general, an average client, you're probably going to be roughly 70/30. 70% equities, 30% bonds. i'm clearly oversimplifying it but you want to have money in equities. >> you're figuring someone who has at least five or ten years before they really have to worry about this. >> oh, my gosh, yes. you should be invested. would i put all my money in the s&p right now this second just one country, one asset class? never. because that's taking inherent risk. >> do this differently for me. we're now almost july fourth. >> yep. >> are you anticipating some form of a pullback that's more than 5% between now and christmas? >> statistically. >> yes. >> it's likely, right? during a calendar year you almost always have at least one pullback within the year that on average is around 8%. so, we've had one pullback the beginning of the year. could we have another one the second half? easily. but it depends what causes it if you should be worried about it or not. if it's -- if it's you know janet yellen wakes up one day

and says something the market interprets and you get a two week pullback you buy that dip. >> longer run question, if i invest in stocks today, five years from now, what's my average annual return? >> i think you're easily going to get mid to high single digits. >> the high. >> yes. now, over the next five years could we have a next recession? that's likely, too, statistically. we're in year five of this economic recovery. faux recovery in modern times has lasted more than ten years so over the next five years could we go into a recession? absolutely. absolutely. but for the next two or three, i think the fed is biased towards what the wonks would call a type two error. that they're too easy for too long. they try to use macro prudential measures to fight bubbles, we keep rates relatively low and equities can keep grinding higher. so i think you've probably got another year, two, maybe even three of this. i'm invested and i'm happy to stay that way for now.

now we're tweaking. we've gone neutral on commodities. we've started trimming small cap in favor of large cap. >> because you've seen small caps such a run? >> yeah. and because when you start getting inflation in its early, early days large companies are better able to push those prices through than smaller companies. >> so why get out of commodities -- >> we're not getting out. we're adding. >> when you talk about the possibility of recession you said there's never been a bull run more than ten years. what has happened historically after a severe crash like we just had? because we had a guest on i think two days ago who said that we're just in the beginning of this new cycle. >> that's a great question. that's one of the questions right now. because of the depth of the recession, and the magnitude of the recession, could this time be a little different in that it could take us longer to play through that cycle. so maybe instead of 8 or 10 years it's 12 or 13. it is possible. >> that seems likely though, right? >> it's very possible. especially if the fed's going slow. >> cycles end when the economy hits capacity and you get inflationary pressures and still

five years -- we're five years in and still a long way from that happening. >> agreed. that's what comes back to today's payroll. the payroll number matters but i think people are going to look as much or more at the bottom half of the report. the participation rate. the wages. >> here's the thing i don't get about stocks. so you know, earnings, profit margins, economywide are at record highs. barring no other period in time. so it's hard to see how earnings grow faster than the economy. if the economy is growing 4% or 5%, doesn't that suggest -- even if profit margins stay where they are, earnings growth is 4% or 5%, and if p/e's, price/earnings multiples are at record highs how do you get much more than that? >> p/es aren't at record high. >> they're very high by historical standards. >> no, we're above historical averages but just barely getting above historical averages -- >> if you ask schiller -- >> but that's different. that's cyclically adjusted so we're taking out the cycle and just looking at the last ten years of history. so you know this as good as

anyone, depending on what you're starting the end points are that can affect your average a lot. >> the ps are going to increase from here? >> i think they can. one thing i watch carefully, so we have later today the service sector business sentiment index, and what you do see often is p/es or multiples will track confidence so people will pay a higher premium for that stock based on future growth expectations which are captured in those pmi surveys. >> just to push you a little bit more. ps are tied to interest rates. >> right. but based on zero interest rates is why p/es are not stretched at this point. >> right. but -- >> looking -- >> that's why the fed is so critical, right? if we have a slow gradual grind higher by the fed, so interest rates rise but at a snail's pace that gives you more room for multiples to expand further. if the fed is slow, but then suddenly say oh, gosh, inflation caught us off guard and we have a quick catch-up and rates rise dramatically that's a big risk to watch. i don't think that's a 2014 risk.

>> the market a lot of time -- most of the time the early beginning of rates going up makes sense. >> stocks keep going up. >> they keep going up because it's indicative of a stronger -- >> as long as it's growth fuelled. >> he's fully invested in stocks. >> no but i wonder where you get your info that these are all-time highs -- >> no, no, no -- >> has made the argument -- >> not all-time highs. >> depending on where you're beginning to start it is based on a ten-year -- >> they're on the high side of fair value i would say, right? >> the stocks today fully valued. fully valued. i wouldn't say based on a p/e today u.s. stocks are rich. i also think there's a huge amount of discrepancy within the market today. it's not that every stock is rich. you guys talk about this every day. there are some tech companies especially before april that were ridiculously overvalued but there's still some good bargains out there. >> what was the s&p earnings for 2013? what's 2014 expected? you have a number? >> i am fortunately on the buy side i don't have to give a

number. >> all -- >> i thought it was 16, 17 on trailing earnings. >> the p/e. >> the p/e yes. >> well that's low. >> on the high side of fair value. fair value is 15. >> most, you know, any decent stock you hope gets to 20 times earnings at some point, don't you? >> and in -- you get 22, 23, 24 times earnings, at the end stage of a bull market. >> i don't know if we'll get there but it is possible. certainly possible. when we think about stocks not just today this week but over the next 12 months, keep in mind the m&a activity supported for confidence and supportive for the market but the buybacks which are i think slowly trending out of that towards m&a and ipos those are helping by reducing supply. so growth matters for equities but last year, growth was less than 2%, s&ps up 32%. growth is not the only thing to watch. it's also the supply and demand factors that could drive the market. >> rebecca, thank you. when we come back, burt reynolds.

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[ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ will today's early employment picture overshadow gdp doldrums and ignite investors? or rock market confidence? the jobs report on "squawk box." today, 8:30 a.m. eastern on cnbc.

we are just one hour away from the release of the jobs report. when we come back, we will have both sides of the employment picture, some fresh data on layoffs and the industry that is having trouble filling jobs. keep it right here. "squawk box" will be right back. get a leg up on the trading day with the morning "squawk" newsletter. go to our show page, squawk.cnbc.com and sign up now. morning squawk is a snapshot of the day's top stories, guests, and some fun water cooler stories that we'll be squawking about all morning long. sign up and get morning squawk delivered in your inbox every weekday. "squawk box" on cnbc. profit from it. ♪ [ male announcer ] andrew. rita. sandy. ♪ meet chris jackie joe. minor damage,

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welcome back to "squawk box" this morning. making head lines. it is official the season's first hurricane has now arrived. arthur threatening to disrupt fourth of july celebrations. it's now moving towards the north carolina coast where evacuations have begun. 9 u.s. is increasing, also we should tell you, this is a

fascinating scary story. increasing security at overseas airports with nonstop flights to the country. officials citing worries that al qaeda operatives in syria and yemen are developing bombs that could be smuggled onto planes. this is a story that emerged a week or so ago. there was some chatter it might happen and now it has. the challenger jobs report just out shows roughly 31,000 planned job cuts in june which is the lowest monthly level of 2014 year to deet. that's the good news. job cuts are down 5% from 2013. joining us now with all of the news, john challenger ceo of challenger, gray and christmas. we want to contextualize this for what we will see later at 8:30. walk us through the top line head lines here. >> well you hit some of the core ones. layoffs are very light. lowest we've seen this year. companies that are laying off people are often doing it because of mergers and

acquisitions, not because their revenues are down. so these are positive reasons, really, for why we see big layoffs in times like this. the economy from a labor standpoint is in very good shape. >> i was struck by this, the heaviest downsizing occurred in the computer industry. 30,000 some-odd jobs across the country. what happened. >> well computer industry moves very fast. so you'll see some of the companies especially larger companies having to go through layoffs one of the core areas of technology has been superseded by something new. we saw some heavier cuts earlier in the year from hp for example. so so far this year, just over 30,000 job cuts in technology. >> and we're looking on the screen if you can see it at the top five job cutting industries for the month of may. entertainment/leisure with a little over 6,000 job cuts. can you explain?

>> those cuts were driven largely by some casino cuts. in new jersey. which then led the way for the month. with over 7,000 cuts. so, not heavy cuts driven by some particularly large closings, you know, that accounts for entertainment leisure. health care, is another one that we see for example like technology that really goes through periods of up and down, we're seeing a lot of pressure with the new health care laws. with medicare payments so we continue to see cuts there as well. >> we also just showed a screen in terms of states with the biggest job cuts for the year. of course, california, being the biggest state so i imagine they -- do they always have the biggest number of job cuts? when you look down that list is it strictly based on populous? >> it certainly, the core driver of that largest employers states. rut also interestingly we see

states like california, new jersey, illinois, continuing to lead that list. their tax situations, their big debt loads, are causing businesses to move jobs elsewhere and you see more layoffs there. >> john, how long have you been putting this together? these numbers together? >> since early '90s. >> early '90s. how would you characterize the current environment in the context of that entire period that you've been conducting the survey? >> it does feel to me like we're in a period where the economy has long ago achieved that liftoff speed we were looking for some years ago. probably three or four years ago. it's rolling towards full employment. that's a couple of years away. we're starting to see some shortages, in particularly tough areas like say programmers and technology begin to crop up. so, it does seem to me from an economy standpoint we ought to be looking for ways now to be slowing the economy down, taking

that move forward gradually so, you know, letting interest rates rise, cutting down on government spending. this is the time when you should be doing that unless there's some kind of big event we're moving in a positive direction. >> has the survey ever been better in the period since the early '90s? >> we've seen very low layoffs here. think about the dotcom period when unemployment was dawn below 4% late '90s, there was so little pressure on companies to lay off. in fact, it was only coming from mergers and acquisitions for the most part but that was when we were really in the bubble period. i don't think we're there yet by any means. but again it's a very -- companies are under -- not just aren't facing much pressure in terms of having to cut jobs. they're looking for people now more than they are trying to lay them off. i think the skills gap as cups get into this period they start to bring on people that don't

quite have the skills that they'd like, they can't find as many people as they want so they start to train them on the job. that's often how you get some of this change from within the system rather than trying to do it externally. >> john we're going to leave the conversation there. we appreciate your numbers. we will see where the other number turns out at 8:30 this morning. >> thank you. >> thank you. >> the biotech industry is booming and hiring thousands of johns. that's forecast to be added by the industry over the next eight years. but for some biotech firms finding skilled workers needed to make innovative therapies can be proving difficult. mary thompson joins us from quincy college in massachusetts. that's a community college that's training students for those hard-to-fill jobs in biotech. mary? >> becky, this lab was created with the express purpose of producing biomanufacturing technicians. so not only do students receive hands-on training in the lab, they also receive classroom training in compliance which are the rules and regulations that govern the industry. we all know biotech is big.

it's especially big here in massachusetts. the state is number one in biotech r&dwchlt but number eight in biotech manufacturing where they actually make the drugs. now, for companies like shire pharmaceuticals which makes three biologics at its rare drug facility up the road in lexington, massachusetts, finding workers to man the front lines can often prove difficult. here's shire's head of technical operations. >> the ideal candidate for us is someone who has been exposed to some of the hands-on laboratory work. the manipulation of equipment, use of diagnostic tools. those are the type of people most in demand. >> now that's where quincy college comes in. in their two-year program students will be growing their own cell lines using machines like this wave rocker which is used in the intermediate step. they monitor ph levels, as well as temperatures. they then move the cells to this bioreactor from which the cells are harvested along with the proteins that are needed to make the biologics.

so essentially the students leave this lab ready to work on the machines and knowing the rules under which they have to work. here's the company's -- or the program's chair bruce van dyke. >> we have all state-of-the-art equipment. that the students are working with. they're just like the industry uses, some of the software's identical to the industry, and along with that, they get to actually learn the process from "a" to "z." >> now the bls estimates between 2012 and 2022, 8,000 new biomanufacturing technicians will be hired at starting salaries close to $40,000 a year. the quincy graduates have done well so far. the first class all placed landing jobs at the likes of shire. the second class, 80% of them have found jobs. now coming up on "squawk on the street" we're going to tell you how quincy college works with the industry to make sure their students not only leave this program with a diploma in their hand but a job offer as well.

that's coming up on "squawk on the street." >> someone told you it was quincy, didn't they? >> what do you mean? >> like a "z." people that live there say quincy. >> quincy. well i'm from massachusetts, joe, so that would be -- >> oh, i forgot that. so you would know. that is such a hub, mary. with the whitehead institute, and harvard, harvard med, m.i.t. >> mass general. all those hospitals, brigham and women's. >> route 128. all of them -- many, many of the premiere biotech companies started out there like route 128, and thereabouts. wall thumb. so once again -- >> does this look familiar to you joe? i kind of felt like you would enjoy this. >> it does. i used to work -- >> i'm sure you did something similar to this. >> i used to work in a hood -- not a hood but it's a hood is a

place where you reach under and there's a uv light, because there can't be any living -- >> yes there's one in the next room. i've seen it. >> and you -- you learn how to use a pipette but when you're holding all the stuff you got to learn how to take the lid off, unscrew it. all this weird stuff, technical or just like dexterity to be able to not mess things up. >> yes. >> and then you wear a -- mary, you always wear a radiation badge on your lab coat, and if you forget, you could have p-32 or something, and you wouldn't -- but if you don't have it on you don't know what you're exposed to. and they're huge numbers, io dine, isotopes and stuff. i remember it, i remember it well. i also remember things that had to be messed with every three hours. do you know what that means if it's a 48-hour experiment? >> it means you don't sleep for 48 hours? >> it means every three hours you're driving back from newtonville on the turnpike.

>> these biomanufacturing plants are open -- they run 24/7 because the cells never sleep. so if you have to produce the cells, i mean 365 days a year they are open, and producing the cells that they'll eventually need to harvest and get the proteins that they need to use these drugs. so it is. it's a hands-on, and a very delicate operation. >> amazing. >> a lot of monitoring. >> so easy to mess it up, too. and it's smelly. the only times the cells sleep is when i start talking about this. >> that's the audience, joe. that's the audience that's gone to sleep. >> which are composed of cells. thank you. coming up once again she's using the company to go home, go back to where she is okay. >> it's smart. >> coming up the employment report is on the way. first, as europe's economy showing more signs of life? we'll get the ecb's decision on interest rates in just a couple of minutes. [ male announcer ] meet jill.

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♪ ♪ we are waiting the rate decision -- >> sorry. >> that's how i put people to sleep. we're waiting the decision from the european central bank any minute now. joining us from london is head of european economics and rate strategy at rbs capital markets. we already love you people over there. because you're at this point

doing what we've already done and i think you're helping our stock market and our bond market at this point. what are we going to hear today? >> well, frankly, i think today, we're probably going to be -- is going to be very unexpected, because at the end of the day we had a very exciting one last month, and the best we can hope for is probably some explanation of what these are going to be like. but that's probably all we can get. i think at the moment the ecb is just in a wait and see stance. >> should we -- we should hope that nothing more is probably required, right? i mean we shouldn't hope that you have to go to full-fledged -- what happened? >> ecb is unchanged. >> unchanged. now we'll see the comment. we should hope that these half measures are enough, we shouldn't hope that you have to go to full qe because that would mean these aren't working, right? >> well, i mean, first of all, yes i think you're absolutely right we have to hope that there's going to be enough. frankly before we get any further insights in whether that's going to be true or not, there's quite a lot of time

needs to pass, because i mean the first of these new ntros are going to be rolled out only towards the end of the year and then probably need to see how they're going to work. so that's -- that means we're probably going to be well into 2015 before we can see that. that's the first thing. the second thing on the qe, i mean, we have been saying for white awhile that with the system in europe, particularly the banking system being propped up buying bonds is probably not going to solve the ecb's dilemma and hence they're going to resort to something else. what that something else is is unclear at this stage. >> are you surprised that the euro is where it is given what the ecbs did last month and what would get that euro down? >> well, i mean first of all, i'm not that surprised because one of the things we still see is inflows into the euro area, probably still an overhang from or response to the crisis before, where a lot of people sold the euro, and now are coming back and the ecb has been pointing that out. secondly, after all before we

see the fed moving into the other directions interest rate gap is only going to widen very marginally. on that front it's going to be very difficult, i think, to move the euro really. >> what's going to get it down then? presumably they want a lower value -- i'll ask you, do you think there should be a lower value of the euro and how would they achieve that? >> well, first of all, let me just caveat that a little bit. the main task of this stage is to prevent the euro from rising further. i'm not quite sure whether they really want to actively push it down quite significantly. some political quarters want that. but if you look where the current account balance is, you can even make the argument that you know, where the euro currently is, it certainly doesn't need to. europe doesn't need the euro to go down. but that's a different matter. so i think let's settle on the ecb doesn't want the euro rising further. what does it need? what does it take to get the euro down? first and foremost we think it probably requires the dollar getting stronger rather than the euro weaker for that exchange rate to move. >> okay, all right peter, thank

you. appreciate it. and want to wish you, and all the people in the uk happy fourth of july. i hope you have a great -- hope you have a great fourth, great barbecue, great -- what's wrong? >> they're going to have fireworks? >> celebrate -- >> oh, that's right. they're not real happy. they're not real happy about this to this day, are they? i'm sorry, peter. just like -- >> we did like a tax inversion in the opposite way. >> that's right. >> all right. when we come back -- >> involves some tea. >> when we come back we'll be getting you ready for hurricane arthur. the weather channel's jim can'try is going to be coming to us from north carolina. he's got a live report in the next half hour of "squawk box." but first one of the biggest stars of the '70s and '80s is about to write a tell-all book. "squawk box" will be right back. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading.

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welcome back to "squawk box." burt reynolds is writing a memoir titled "but enough about me." publisher gp putnam's sons announcing it set to release in the fall of 2015. 78-year-old reynolds promises to, in his words, set the record straight on everything from his love affair with sally field and lonny anderson, did you know that's where the original centerfold was? >> i did not -- >> you didn't know it was in cosmo. it's a really scary centerfold,

because he was so hairy, and i was full-on -- >> is that the one when he was -- >> 1972. he was full arm frontal and we had his arm draped in front of the full monty. but he was so hairy except on his head. i wonder if he will come clean about the various rugs and weaves he's had over the years. we would hope he would come clean -- people who do have fake hair. i've had to suffer for their sins. the book is expected to cover reynolds' friendship with clint eastwood, frank sinatra, also johnny carson and in his day he was, bar none, the biggest star in the world in his day. >> you have such a full head of hair, why would you want to -- >> because people think -- >> for everybody who doesn't have a full head. >> they're the ones that write in and say why should we listen to anything you say when you're not even man enough -- >> at least you should take it off. >> that's what they tell me to do or stop dyeing it. it's been 20 years of this.

i'm sensitive at this point. >> maybe we should get you a haircut. >> i'm getting a haircut today. >> maybe a little shorter on the sides -- >> another, it's not gray there. >> anyway, more rumors about the iwatch, ubsian list says that a voice messaging could actually be the key feature of the device. he recently talked to apple ceo tim cooke who is said to have mentioned a trip to china where he witnessed people walking down the street and dictating voice messages to their iphones instead of texting just like joe kernen does. he lives to use siree. >> i use siri and change all the crazy stuff that she writes that i say. >> now you're going to talk into your watch. >> right. but it's comical if you look at some of the stuff that i say so clearly and i look at what she thinks i'm saying. we've got to work a little still. >> you work on her. in the meantime we're going to have the final countdown to the thursday jobs report. our jobs panel standing by with predictions, and reaction to the

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welcome to this special edition of "squawk box." jobs in america.

as the country gears up for july fourth fireworks, the labor department is lighting the fuse a day early. the countdown to the jobs report is on. and "squawk" has a preview and predictions. plus, the american revolution started in massachusetts, with the shot heard round the world. now the state is home to a industry on a hiring spree. get out your stars and stripes, salute the flag, and get ready for fireworks. "squawk box" begins right now. >> welcome back to "squawk box." i'm joe kernen. along with becky quick and andrew ross sorkin. jobs report now less -- well it's tilely not less than 30 minutes away. i don't know why we'd say it if it wasn't.

it's 32.5 minutes away. the nonfarm payroll's consensus. 215,000. more from our special pre-july fourth jobs panel in just a minute. but first the futures ahead of the employment report are now up about 18 points. that's where they were and the ten-year is about 262. >> also in corporate news today. lulu lemon's founder is reportedly talking to private equity firms about a buyout of the yoga wear maker. "the wall street journal" is reporting that there is no deal in the works. and a buyout would face issues because of the premium that would be needed for the company's $6 billion market capitalization. but still that stock is up by over 3% today. also abbvie's ceo is in london today. he's trying to convince shire's shareholders that his takeover is in their best interest. >> boo. another inversion. boo. >> don't boo. just -- >> andrew wants to block it. need more shareholders. >> i want corporate tax reform.

i think we have to boo -- >> that's the answer. then they'll keep their money here and invest in america. >> do you expect that to happen this year sfr >> actually not this year but after the election. there is surprisingly some bipartisan support -- >> i have heard in the senate of some bipartisan support. >> and the question is will it be the right kind, do we want to be competitive, need a 20% corporate tax rate -- >> 20%? you think you're really going to get 20? >> actually i want to go to zero joe is absolutely correct as usual. and i want to repatriate the $2 trillion with a minimal penalty rate of 5%. that's it. >> i've heard 25% to 28% could get some bipartisan support. >> i want to push, you know me. >> larry's here. we've got a lot more to talk about with him. we should also tell you about global economic news. the ecb leaving itd key interest rate unchanged as expected. policymakers are waiting to see if stimulus measures announced last month are working. ecb president mario draghi will begin a news conference in just about 30 minutes.

>> let's get to our panel of experts for a preview of today's jobs report. lindsay. mark zandi, our own larry kudlow and kevin haslett senior fellow and director of economic policy studies at the american enterprise institute. what was served at the lunch with president obama yesterday? did you order -- did anyone order crow? >> i guess it could have been like one of those game of thrones wedding feasts. >> you're from the aei, aren't you? did you have your food tested first? >> no, no, it was delicious sea bass i think was what it was. >> would be easy just to get rid of all you types. what did you hear yesterday? anything? do you have a glimmer of hope for was it just mostly, you know, i don't know, what's the most famous socialist tomb in the world? did you hear more big government

solutions for everything, kevin? >> well, i thought first he wasn't the satanic kenyan that you describe him to be all the time. >> i never had lunch there. it's only what i read. >> no, i thought it was a very collegial thing. one of the things i think i learned most is that president obama really is a college professor very much at heart. so being around all these nerdy economists he was having fun. the lunch ran pretty late. almost a half hour longer than i was told it was going to be. and i think it was because it was kind of like a seminar and he was having fun. but it also helps me think about what i don't like about the president. think about everything you think that's wrong with campuses. i think that's kind of wrong with the president, too. he really is like a typical ivy league college professor. >> the seminar, he was giving the seminar to you guys, that was the probably wasn't it? >> no. that's wrong. that's a misconception. that was the thing that kind of surprised me. he was gracious and collegial and inquisitive and saying without, obviously all off the

record but as an example he might say this guy zandi says this, how do you respond to that? >> i'm not surprised he'd quote zandi. >> thanks, kevin. >> yearses ago a bunch of us had dinner with him at george will's house just before the inauguration, and he was charming, he was witty, he was congenial. i know it's off the record but did you make any progress on dropping the corporate tax rate you and feldstein? you can tell us this is off the record. >> you just can't talk about what the other guys talk about. and i think larry intuited what i'd be talking about because the only thing i'd ever talk about, maybe 17 years which is cutting the corporate rate. i think that if you look at the things the president's proposed in the past, that there's a lot of hope. he's not really that far from the dave camp bill and he wants

to lower corporate tax. it's something that he mentioned in the campaign. exactly what you pair it with in order to base broaden and get the revenue back is the thing that's been the hang-up and frankly what i think we should do is give up worrying about near term static scorers because the corporate tax is so high that's it's on the wrong side of the laffer curve. >> you've got a high tax rate and you've got a million deductions so you get low revenues. and you don't get any growth. if you have a low tax rate, and you promote growth, and you get rid of the deductions, then you'll have high revenues. they don't seem to get that. >> i guess that might be correct still, yeah. >> i don't think it's something they don't get that right? everyone would agree with that. that's why there's bipartisan support for it. >> maybe there is some debate about the degree to which -- >> he wants to jack up a lot -- if you look at the bill mark and i admit it may not be all the details but we heard it in the inauguration and the budget, they want to still penalize a lot of companies going in, and

also i don't like their rerate ration they haven't specified a number. mine is five. i hear they're talking 10 to 15. >> broadly speaking everyone agrees let's broaden the base, bring the revenue, and bring down the tax rate we can debate about base broadening. how come we can't get a deal? >> because it's in the specifics. if you were just talking about a flatter tax code to make it fair to all companies, because i think the biggest problem with this is small companies get extra penalized. they don't have armies of accountants. >> you're dead right. >> one thought, both you guys experts on this. when we did this in 1986 when i was still down there we lowered the individual tax rate, right? so it was lower than the corporate tax rate. >> right. >> individual was 28. and corporate was 35. they connected the two because people could switch. so in other words -- >> not corporations.

>> s-corps, the small businesses could now go to the individual rate, which was 28%. and by the way, guys like picetti and other left wing redistributionists inequality guys don't understand that tax policy change appeared to give more income to wealthy people it didn't. we could do the same thing now in reverse. they could go back from the individual rate, into the c-corporate which will be 10, 15 points lower than the individual rate. so it would be great for small businesses. >> right. yeah but larry i think that you're kind of missing the way that we ought to talk about this. the fact is, right, that the reason why we're not getting a corporate reform is that we have the highest rate in the developed world but nobody's paying it except for the people not attracted to the u.s. the multinationals avoid it. they don't want a corporate reform because we have the best possible code for them now. they're not paying the tax but they got a high rate. >> i understand that. and i hate this game playing, i hate the inversions andrew was talking about.

i can't stand that stuff. the way to do it is properly reform the code alone the lines we are -- >> and i don't want crony capitalism for big business. ge should not have a -- ge should not have 100 people in their tax department. >> there's a lot -- >> -- linked them. >> you did it innance 86. >> there's a logical error in what you're saying. you're conceding that we're not getting the revenue from these guys and when you cut the rate you're saying we've got to cut all these loopholes until we get the revenue back. if you're not getting the revenue in the first place we should just cut the rate. >> i'm all for that. if you can score it dynamically, which the cbo has made some progress on. if you could score it dynamically i would go there. kevin i'll tell you, i'm sick of the deductions. i really am. i'm sick of all this crop coney capitalism. i'm sick of the xm bank. all it is is corporate welfare and crony capitalism, and

corruption and we're helping a whole bunch of countries that are enemies in the war against terror. in other words get rid of all that stuff. where the hell is the republican party? get rid of crony capitalism. get rid of corporate welfare. lower the rates, broaden the base. get rid of all that -- >> lindsay, do you -- you're getting drowned out here. what's your take on -- >> i love it. >> see i'm a supply side liberal. >> i was letting him run with it. i would certainly agree that we need a simpler tax code both on the corporate level and on the individual level. and really, it comes down to small businesses. and when you talk to small businesses, they continue to say, we're ready to hire. we want to hire. we want to invest and grow our business. but the reason that we're sitting on the sidelines is tax uncertainty. tax policy. regulation. obamacare. all of this -- this undue cost and burden to small businesses is stopping that robust job creation that we need to see and this morning's number is going to continue to highlight the fact that we're in this very

stagnant pattern. i know that we've lowered the bar of expectations now 200,000 is a fantastic jobs number but it really isn't. we need to see much more robust job creation, especially out of the small businesses if we want to talk about the 3%, 4% that joe wants -- >> right on. right on. let's see who was it leo from ucla showed the other day in the "journal" how business start-ups have completely dried up in the last 10, 15 years. that's a typical example. people don't want to commit capital. you know, for longer range projects because they don't have any certainty about taxes, regulations, obamacare, who the heck knows. kevin, was the president anti-business or pro-business yesterday? because the guy's been anti-business for so long. what was your take on that? >> it wasn't anti-business at all. i would say the conversation we just had was pretty similar to the kind of conversation you saw yesterday, with the president playing the role of mark zandi.

>> this assumes a question that may be off limits, can you give us a sense of priorities. what's on the agenda? >> that i -- you know, i couldn't even say. >> you couldn't. >> it was a very broad ranging conversation, and exactly -- i don't think it was meant to, you know, for him to say, here, i'm about to do this, what do you guys think? it was more what do you guys think i ought to be doing? >> did he come out and say he wants to link the dollar to gold? >> no, i don't think so. >> no, no, not bitcoin, just link the dollar to gold like my pal steve forbes and i and art laffer and a few others have said just for the last 40 years. >> did you hear the president's comments yesterday on marketplace? he was on the radio yesterday bashing wall street? did you hear that? >> i didn't. >> did he do any of that? >> i didn't. >> what did -- i didn't hear the comments. >> bashing wall street. >> he was brashing wall street. saying how the -- it was sort of an odd comment only because he'd been so supportive of dodd-frank and suggested that was going to

work and then was sort of saying there's still so much more to be done. >> kevin, where was the -- i don't know, maybe it's just for his base when he gets on tv or something. where was the you don't like it sue me, i'm doing whatever i want, this is the worst congress we've ever had, i don't care what you think of me, i'm just going to -- where was that? >> that was a surprise for me. i kind of expected that he was going to be lecturing me and proving to me that i've been wrong my whole life which maybe i have been. but there was none of that. it was really just a collegial give and take. >> it scares me even more. i don't know what -- >> kevin how do you think about this? the guy, he's a smart guy. i disagree with his bosses but we know he's a smart guy. if you want to make a deal with the republican party, on immigration, on tax reform, let's take two head line issues, don't you think it would be good if he didn't have a press conference that pounded the bejesus out of the republicans first? and then goes back to them and said make a deal.

wouldn't it be nice if he had something nice to say, conciliatory, a little more compromising, you know, like reagan and tip o'neill, go up and have a drink, you know that kind of thing. why doesn't he get that? >> well, the thing is that at the lunch it seems like he does get that. and indeed, even can sort of see the merit of arguments on all sides which is something in his public life you almost never see. it's always his way is the exact right way, and anybody who thinks otherwise is evil and wrong. that's what i thought he would be like. that's not what he's really like. i think he's probably bad political tactics, bad political advice. >> i think he -- >> remember i think this is -- i think that the conversation though is a little bit disingenuous. the president continues to have these panels, bring economists out to the white house to have these conversations, but they don't appear to be honest conversations. we really see knew fruition come out of this, no policy changes. so i continue to think we're giving the president a little more credit than he deserves when we don't see any policy initiatives. >> a lot of business leaders say a bunch of stuff, and there's,

you know, polite listening, but -- >> exactly. >> nothing comes of it. >> i heard of that dinner many years ago. >> we will have much more from our panel in just a bit, but first we got this big jobs report. >> coming up, we're tracking the jobs and the economy. we're also tracking arthur, the uninvited guest that could be showing up and ruining the fourth of july plans for many on the east coast. our good friend the weather channel's jim cantore is going to join us next from north carolina as we head closer to the release of the jobs report. take a look at the "squawk box" market indicator. [ both ] we checked into our hotel in paris,

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benefit protected by the illinois constitution. of course that has huge implications not just in illinois but frankly for municipalities all over. let's talk about hurricane arthur, which is heading towards north carolina. we're going to get over to jim cantore. he's standing by to help us through what the next three days are going to look like, jim. >> well, it's kind of amazing. you see it out here it looks fantastic. behind me all these cars are not heading out to breakfast this morning on hatteras island they're evacuating. because last night they gave the evacuation order to begin at 5:00. people are using highway 12. this is the only way in and out of the outer banks. as you would imagine on a holiday weekend it is absolutely packed. the problem is, the atlantic ocean is only a couple hundred yards that way and over this way, is pimlico sound. what happens the hurricane approaches from the south we'll have an easterly wind. the flooding from the atlantic is very, very high. when the hurricane passes from

the northeast about this time the winds will shift from the sound side and push the water from the sound over highway 12. back in 2011 when hurricane irene moved through here it caused massive damage on the roads. and you just can't have an island full of people and have potential road damage, structural road damage like we had there and get people out of harm's way. they said let's do that first and then we'll clean up whatever we have to clean up tomorrow morning here and we should be able to bring people back on the island from the weekend. quite frankly it is going to be a beautiful weekend with the hurricane pulling away. i don't think there will be any major impacts for cape cod and martha's vineyard. but our friends in nova scotia, that's a different story. it will be a tropical storm but the wind field will be twice as big as it is right now as this thing transitions into what we call in the biz an extra tropical cyclone. >> are people taking the evacuation seriously? we see the cars going but there's a guy standing behind you who doesn't look like he's in much of a hurry at all. >> he's just hanging out having

some morning coffee. i'm not exactly sure why. you guys see things i don't because i'm looking at the camera. they are. i mean, people have been heading out in droves, really since about 9:00 last night. we've had a lot of families come by with the kids. you know, it's hard obviously to kind of pack up the kids and say hey guys our vacation that we had on the beach, unfortunately is going to get cut short. that's the bummer. this is going to be a huge economic deal to this area. >> right. >> let's face it. this is one of the big weekends for business owners where they're expecting a packed beach. but people leaving now, you know, i would say more than likely probably about -- maybe a quarter of them or less would come back. maybe even less than that. >> normally you do know what's going on around you. i've seen you knee a guy that approached you once that you saw and then but you should because the greatest we've ever seen where someone didn't know what was around him was the person in the canoe supposedly in a flooded area and then the people walked by looking over at her because the water was only

about -- you remember that one. that's something to keep an eye on. just keep -- keep looking around, jim. >> i do. but the fact that that's our network we'll just kind of keep that between us, joe. >> yeah, yeah. i didn't -- see i wasn't going to say that. it was such a timeless -- >> that's all right. >> never mind. ixnay on the shot -- >> i got up. >> all right, buddy. >> it's great to see you. thank you very much, jim, and be careful out there. >> go pump some iron. it looks like, you know, you only got 18 inch biceps right now. you're shrinking. look at that guy. >> yeah, they're shrinking. i'm sweating it out. >> unbelievable. >> you look great, jim. thank you. >> when we come back, the fuse is lit for the jobs fireworks. will the report light up the markets, or will it be a dud? final predictions from our economic patriots right after this. turbocharged reward$1,000 card with a new volkswagen turbo. so why are we so obsessed with turbo? because there's nothing more exhilarating than a powerful ride.

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all right, everybody, it is time for final predictions for the jobs report. we're going to go around the horn. lindsay, why don't we start with you. what do you expect for that number? >> i'm looking for a little bit below consensus, around 190,000. but i think the market is going to be pretty satisfied with anything between 200,000 to

240,000. not much movement if we stay within that range. >> larry? >> with an error factor of plus or minus 80,000 i'm staying with the consensus. but i will say this i was kind of impressed with the adp private jobs plus 281. i just -- >> there we go. >> you would take the high side. >> if i knew what i was talking about on this subject, which i really don't, i probably would take the over. >> we play with the price is right rules so you got to stay under. >> all right. >> to win. >> kevin how about you. what's the number you're looking for? >> actually i think the economy model i use is above 260 but i'm still a little wary of the bad weather not being the whole story of the first quarter so i shaved my number low to 260. >> where would you be if you were just following your model alone? >> to 280-ish. >> wow. >> okay. rick, i think you've got a number a little bit below although it is above consensus. >> 233,000. if it was good enough for

fibonacci it's good enough for me. >> and mark? >> well i'm unbiased and i'm sticking with the adp number so i'd say 275. >> for people who weren't here earlier, you didn't have such a high number before you ran the numbers for adp. >> no, i was near consensus, 225. but the adp, you know, i put a lot of -- of course i put it together. so i guess that is i am biased. i put a lot of faith into it. >> where do you think the strength and the surprise and the strength, is there an area you can look or is this broad based? >> it's broad based. but construction came in stronger than i would have thought given what's going on in housing. that's a big swing factor. one technical point, government employment could go up much larger than most people think because the winter was so bad schools, couldn't stay in session so they stayed longer into june. seasonal adjustment will make it a pop. >> we have heard of a lot of job cuts that came in new jersey and illinois and other places. >> i'm glad if those government jobs are cut that will improve

the private sector. we've got to remember wages really matter a lot. hours worked really matters a lot. the participation rate really matters a lot. the u-6 impaired marginal -- all these things matter a lot. you got to look at it because ms. yellen has a dashboard of labor indicators. but they just matter a lot because, you know, the last few months we've had good numbers. and if we go to 200,000 plus that will be the fifth straight in a row which is the best since the late '90s. but it doesn't seem to be impacting the rest of the economy. it's weird. >> let's -- >> you know what they call those dash board indicators on cars, don't you? >> what do they call them? idiot lights? >> i didn't say it but yeah, that's what they call them. >> idiot lights. >> if this number is over 200k this will be five months running over 200k this is the first time since the late '90s when people say this isn't a strong job growth market. these are strong numbers. >> the trouble is, i'm glad

people are working. these numbers ought to be 350,000 -- >> why? it would be nice. >> because we're 8 million jobs below the long-term baseline. >> no we're a million, 2 million away from full employment. >> we're 6 million to 8 million jobs below the post-world war ii baseline. but the point i'm making is, it does look like it's mostly low wage jobs. businesses are not investing. outside of the energy sector, which is creating fabulous jobs and high salaries -- >> and they're trying to stomp that out. >> yeah, they are. >> it's just -- this is a weird -- looking thing and i don't think america's got its best foot forward yet on the economy. >> larry you're wrong on that. >> we've just bourt 17 million cars. >> we're going to have to hold this. the predictions are done. the stage is set. the grand finale just a few moments away. the june employment report is right after this. take a look at the futures. even after closing at highs yesterday, the s&p and the dow and the nasdaq futures are all looking like they're indicated

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will today's early employment picture overshadow gdp doldrums and ignite investors? or rock market confidence? the jobs report, on

welcome back, everybody. we are just a few seconds away from the employment report. we've been watching all of the equity futures ahead of that. and things have been very

positive. in fact all week long you've seen higher numbers. the dow futures are up by about 13 points. s&p futures up just over 1.5 points after closing at record levels yesterday. you have to wonder what the market will expect. where this number comes in. our hampton pearson joins us right now from the labor department with the numbers. >> 2 8,000. june nonfarm payrolls increased by 288,000 jobs. the unemployment rate is 6.1%. average hourly earnings increased 0.2%. that 6.1% unemployment rate is the lowest since september of 2008. private sector job growth in june, up 262,000. we had significant revisions, plus 7,000 for may from 217 to 224. plus 22,000 the april revisions 282 up to 304,000 making the april number the best since january of 2012 as revised. job gains in june, widespread.

professional and business services, plus 67,000. retail trade, plus 40,000. bars and restaurants, up 33,000. health care up 21,000. local government at the state levels, primarily for education, gaining 22,000 jobs. how did we get to 6.1%? the lower unemployment rate, the employment in june increased by 407,000. unemployment decreased by 325,000. in that vein, the long-term unemployment total dropped by 293,000 to 3.1 million or 32.8%. that's the lowest since february of 2009. however, the labor force participation rate remains at 62.8% for the third straight month and that's been the lowest overall since way back in the late '70s. happy jobs thursday. happy fourth. >> hampton could i ask another detail? what was the u-6 impaired unemployment rate?

>> it is 12.1 larry down from 12.2 the previous month. so it's been preparing downward, as well if you look at the last three or four months. >> last one i promise. what's your year-to-year change in average hourly earnings? >> 2%. >> thank you, buddy. don't have that in front of me. i can grab it. >> sorry. >> okay. >> great. >> all right let's get back to our panel of experts for more reaction, lindsay, mark zandi, larry kudlow, kevin haslett, all join us. >> stable labor force participation rate low but stable so that's a good sign. that was a pretty strong report. >> and your number was, if it was private you had 2 what? >> 281 on private. >> i'm looking at your numbers. >> 267. >> you're trying to get it to 20,000. >> mark brought up a very good point. >> right. >> that this is part of this is because of the weather issues where you had schools in later. >> right.

>> so you have more jobs than pulled into the month of june. >> as i heard hampton say we've got 25, 25k on local government employment so that will bulk of that will come out next month so you know, got juiced this month it will come out next month so the next month will be -- >> and in answer to your question 35.4 hours. >> that's constant. >> yeah. so that's -- >> that's a very solid you know, number. >> it's okay. i mean >> it's okay. it's okay. >> 280 -- >> 288 is good. i'm glad i took the over. i'll grant you that. on the other hand, participation rate flat. all right, nothing going on there. u-6 still 12.1, slietdly lower. year-on-year wages, 2.0. you know, that's pretty soft. i'd like to get the breakdown of where these jobs were. are we still at retail? we still the low pay jobs? i can't tell from -- >> the last year, year and a half, the quality of the job creation has improved.

if you go back in the beginning of the economic recovery, it was all low-paying jobs. now we've seen more high paying jobs and middle income jobs which are construction related jobs. >> lower the number -- >> did -- >> mention manufacturing construction, goods producing, those are all -- >> in the government jobs are middle income jobs and they are stabilizing and starting to rise after falling by -- >> i don't want government jobs to rise. >> these are good paying teachers, emergency responders, these are your policemen, your firemen. >> just what we need is more teachers to produce worse sco s scores. come on, buddy. >> we need good teachers. >> mark, you gave the teachers union the teachers union stimulus package back in 2009. you just gave it to them. and what you didn't give to the teachers union you gave to the other public sector workers which by the way got their tuckous handed to them in the latest supreme court decision which is good. i don't want government workers. i want private workers. >> i want both. i want all of the above.

>> we need flee private workers to pay the salary of one government worker. why do you -- >> we need -- >> we need teachers. >> we need teachers. you don't want more teachers? >> we need good teachers. >> get rid of the bad teachers. >> i want school teach and i want teacher performance. which is -- >> which the teachers union opposes. >> even if we're talking about charter schools which i'm a supporter of. >> good, this is good. >> you would still argue that you want teachers that would be good public employees. >> no, if it's a charter school -- >> don't need a net increase they need good teachers. >> i think let's put a few numbers to the argument. we're looking at this top line number and it certainly is impressive. but i think we can all agree that the composition of the jobs being created is still very much in question. now we talk about what type of jobs are being created. part-time jobs are still up near 19% of employment gain. temporary jobs which are typically 2% of the labor force are 16% of employment gain. low wage job creation, 45% since the end of the recession.

so this is the reason, despite the fact that we're seeing over 200,000 jobs being created for five consecutive months, we're not seeing any wage pressure. and from the fed's standpoint, that is the only inflationary measure they care about, that wage price fireup. and because employers are still having 13 million americans actively seeking employment, we're sitting at this stagnant 2% wage growth which we've seen since the end of the recession. that does not spell 3% or 4% gdp. >> kevin, to that point, kevin, what do you think about the disconnect between gdp and jobs? i mean what's your sense of that. what's -- how would you explain that? >> in fact just to put a fine point on it, mr. kudlow, i'll bet you dinner at the union lee club in new york this revises up above 300,000. so what's going on right now is we're starting to see a kind of '90s style booming economy at least for one quarter. i think that gdp growth is, you know, well nourished, 3.5 probably in the current quarter. the job market is consistent with the gdp that strong. the question is what happens in

the second half of the year. and there's been a lot of false starting in this recovery. >> 17 million cars -- >> the union club of new york, are you? >> i still pay my dues at the union league. >> oh, union league. >> i'll -- look i'm -- i'm for jobs don't get me wrong. here's what i'm saying there's a difference between jobs and gdp. to fill in at least one major blank, business investments has lagged very badly in this recovery cycle. for all the reasons we talked about earlier regarding the need for tax reform and being competitive and the cash going overseas and also you've got a lot of regulatory burdens out there. not least of which is obamacare which i think throws a wet blanket over long-term investment. they don't know their costs. it also hurts jobs. what i'm saying is where's the business investment? where's the new business start-ups, which really create the jobs of the future.

and as o'hannian has said from ucla and john cochran had in the paper today we're not getting the technology advances, we're not getting the productivity advances, so i'm all in on the jobs. i want more people to work. but this is a very unbalanced recovery. >> so my interpretation of what you said, and i think i agree with it is that the disconnect is productivity. >> i think so. >> and productivity is weak because we haven't had the business investment. >> i think. so. i think these business firms, two things. number one they're afraid to take lnger-term risks because of the policy uncertainty and whatever else. and number two, they're running fast for tax reasons to go overseas. and i think that's most regrettable. i'm not going to praise them but i say i get it because you don't want to be double taxed at our rate. you want to go overseas. the trouble is that doesn't create american opportunities. >> but larry, the issue with it is that if you look at surveys of businesses, then one of the top reasons why they haven't been investing is weak sales. and alls i'm saying is we're

about to have a quarter and i would expect the treasury markets today, especially like around the ten-year, are going to be pretty anxious about this number because we're starting to have a quarter that looks really solid. >> you know what -- >> solid sales and solid jobs. >> are you going to change your name to tanya? the stockholm syndrome you spent one lunch at the white house and you're going to be knocking off a bank with a submachine gun. you turned into a -- god almighty. was there a little -- did the president have a little stopwatch like this for you? >> it's like bird dog. >> was the lunch in stockholm where you got the syndrome? >> kevin, i got to say i love this stockholm syndrome. kevin, even if you get 3.5% you're headed for a crummy year. because look at the first quarter. >> yeah the first quarter tells you the annual average. >> i want to see what happens. you know, i'm sorry, personal spending, the pce spending indicator, has been down the

last two months. so i just taking this one day at a time. you got pluses here. but this is not 1980s numbers -- >> rick were you at that lunch yesterday? i remember robert gibbs wanted to know where you lived. did you ever give him your address, robert gibbs? >> oh, no, no. but i don't think they really need my address. i'm sure that they have one of those nsa little eavesdroppers -- >> you're -- i'm surprised you haven't been yet you probably don't want to talk about it. but you weren't at the lunch yesterday? >> no, no, i wasn't at the lunch. i was contemplating some of the issues that janet yellen pointed out. i want to understand how map road prudential can possibly hold up and how zero interest rate policy could possibly hold up given the euphoria around this jobs number around that desk. i mean you guys could talk about all the issues about taxation. nobody's going to do anything. okay? to look at the world the way it is, between now and november,

what i see is economy, certainly that isn't in crisis mode. i see economists that always have 3.5% to 4% in the quarter ahead of us, even though for the second quarter they've already completely abandoned that logic. but in the end, how can we have zero interest rate policy, how can we have the conditions that we have and the comments that we have coming out of janet yellen given the stability within the economy we could argue whether it's going fast enough, slow enough, but it certainly isn't in crisis mode in a ditch. >> what are the futures right now, rick, my friend? are the futures markets discounting an earlier short-term rate hike as a consequence of today's numbers? >> i know you want me to look at fed fund futures to tell that larry but my own opinion is if you look to fed fund futures to come to that conclusion you're looking in the wrong place. >> how about the two-year -- >> or the ten-year. >> the two-year is hovering over

50. the ten-year is at 267, and 266 on a closing basis, would be key. 350 is a psychological level. but do keep in mind that in the greater context of things, you know, we said last year at 303 and 10s to put that in perspective. i do like to see rates go up when we get better than anticipated data. it shows that even a very handicapped securities market in the u.s., and basically globally still has a sign of real life embedded in its dna. >> speaking of globally, what do you got, becky? >> i've been looking at mario draghi. he's been making comments while we've been going through some of these jobs numbers and some of the things he's been saying including that the ecb is unanimous in its commitment to using unconventional measures. they would take those measures as needed to combat what they would be looking at as a prolonged low inflation, trying to read my scribbles.

the risk on the downside geopolitical risks and developments in emerging markets could have negative impacts. you can see the euro trading at 136.15. >> it sounds very bullish for the dollar. and very bearish for bulls. >> it's actually going ahead with these measures. >> they're easing, easing, easing. we're less -- >> tightened. >> but less accommodative. >> yeah. >> okay. >> thank you guys. >> policies. >> when we come back the numbers are in, but what are the real hiring trends across the country? the front lines of the help wanteds. that's coming up right now in a moment. way to get your fiber. try phillips fiber good gummies. they're delicious, and an excellent source of fiber to help support regularity. wife: mmmm husband: these are good! marge: the tasty side of fiber. from phillips.

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welcome back to "squawk box." the labor department releasing the june employment report just moments ago. nonfarm payroll coming in at 288,000. the unemployment rate now standing at 6.1%. take a look at the futures. see what's happened. we were talking about it during the commercial break. you know, we were saying why are the futures not higher? dow looks like it will open up about 18 points higher. nasdaq up close to 7 points higher. the s&p 5002 points higher. >> that was before the report. >> the question becomes is the good news really bad news. because had this been so baked into the cake had it come in lower would people have felt the fed would give them a little more room? >> this market reaction is my sense of what the market's going to look like over the next two, three years. i don't think p/es are going to rise in the context of rising interest rates. >> they have in the past. >> they have. >> it depends on the level of interest rates when you start.

i mean if they're rising from 6%, we get -- because we've never been -- this is unlike chartered territory. we've been at zero how long pushing on a string. we could go up four points. >> but historically -- >> we could go up four points on fed funds -- >> historically rise -- rising rate environment. >> it's the absolute level that matters as well. >> it's different because it's zero -- >> i can just remember having just pished for a 6% or 7% bond at it would be jimmy rogers said we will never get to 6%. >> what happened to the ten-year in the past ten minutes? >> yield's gone up. >> gone from 262 to 268. >> that will explain. >> starts with a 2. ten years. >> let's get more now on the pulse of hiring in the united states, joining us from los angeles is bob damon, korn/ferry international executive chairman. good morning to you, bob. you're in the executive suite. i don't know how much we can take away from the hiring that's

going on there relative to the rest of the country, but i noticed in some of the notes that you're hiring a lot more cfos. what does that mean? >> well, i think we're hiring two functional areas. we're hiring cfos to continue to look for efficiencies in companies. but actually the highest functional area is that of the cmo. chief marketing officer. and i think what that indicates is that companies are turning externally and looking for greth and innovation. >> in terms of industries where you're seeing hiring and perhaps just as importantly where you're not. >> yeah, i think what we've seen is very strong demand in the areas of consumer parts of technology. health care, biotech. where we still haven't seen a lot of activity, although we are seeing signs of life, is in the financial services industry. >> i notice the automotive sector has been a big uptick for you recently. >> yeah, automotive has been growing consistently. and again, if you look at what they've done -- >> they're hiring all sorts of

new people at gm? what is that? >> i think automotive and general motors hiring because of the product cycle, innovation that's going on in the automotive industry. >> recall -- >> did you see, by the way, that one of the reasons that gm is doing better in this last cycle is because people are coming in with their recalled vehicles, and they're trading up and buying new cars that that could explain the new buying cycle. >> because the older models are getting recalled. maybe you feel better about the new ones. >> do they get a break on the recalled car? >> i do not know. but apparently this part of the year is not a great touch point for customers. so many people are coming in. bob, before we let you go i have sort of a privacy question for you because you do deal with executive recruitment and board room issues and it relates to jamie dimen. there's piece in the paper that talks about s.e.c. rules abouts closing a health issue. apparently there are none. some people say it's material. some people say it isn't.

what is your take on when and if you think you have to tell the public something like this? >> well, i'm not sure that there's a consistent answer to that. i think what we have to think about when you talk about succession in any company any c issues that could come up like health or like an accident is that companies today do an excellent job of planning. in this event, they thought through all the scenarios. i think when you look at that issue, you have this think about succession has been thought of, and there's a plan in place for any of the activities. >> right. bob, we appreciate you helping us out this morning. >> thank you, and enjoy the fourth. >> you too, thank you. did you see the piece? fascinating how there's no requirement because of the privacy concerns on the other end. you can't actually force an executive to go public potentially with a health issue. >> see the bitcoin piece? billionaire buys dr. >> i did, draper:r buying

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welcome back to "squawk

box," everybody, and shares soaring, saying the firm intends to have discussions with management regarding alternatives including a possible sale. you can see that stock's up 15 %. >> down to the new york stock exchange, and jim cramer joins us now, 288,000 jobs, arguing whether they are temporary, part-time, good jobs, bad jobs, government jobs, but 6.1% are jobs anyway, jim. >> great for the economy, great for the stock market. i never out think these things, i think those who out think them are fine. you can do what you want. i'm here trying to make money for people. this is the number you need to make money, ship the money to where the industrials are, to where the minerals are, to the heavy metal that's all that's supposed to happen at this point in the cycle. it's all good. utilities you saw yesterday, a great prelude. time to make changes to people's portfoli

portfolios, more aggressive. that's what you do with this many jobs. >> we had a conversation yesterday, one is that it's hard to expand as rates go up, but my point was -- have we seen rates this low where on an absolute basis, rates are going up, but they are only getting back to what we would consider very low, like, if it was 4%, that historically would be low. >> right. >> do multiples have to stay stat static? >> i don't care about multiples, just the revenues growing, top line blowing out, bottom line real good because we have not paid more wages. that's how it goes up. if there's multiple expansion game, you have 1987. i have to make that point right now. >> are multiples expensive right now? >> not if we have top line growth, no. >> okay. all right. we're just trying to decide. >> top line growth solves

problems that people don't realize. >> what's the s&p earnings this year? what is it supposed to be? 115 or something? >> i know we're at 17.5. does not interest me. i have top line growth. ship your portfolio, get out of the stuff that grows at 1% or a 2.88 yield and get into stuff blowing up the numbers. >> i wish our u.k. colleagues happy fourth of july, they look at me crazy, i don't know, i don't get the joke. thank you, jim. celebrated around the world, independence? >> shot heard around the world, i don't know about independence. this morning's job number and later, labor secretary, thomas perez. more squawk after this. a powerful ride. and you can get that in places you might not expect. like the passat. and also in the fun-to-drive jetta. in fact, volkswagen has sold more turbos than any other brand over the last ten years.

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let's get back to the guest host of moody's analytics. mark one thing to take away from the jobs report? >> great news. what's happening is we're seeing full blown hiring. up until a year ago, it was a story of lower layoff, and now it's a story of low layoffs and some hiring. the next step in the progression to a better economy is business investment, see that pick up because that's key to productivity growth. >> do you think that's happening this year? suppose to be the year of capital expenditures?

>> yeah, i think so. kudlow made a great point, reasons to be concerned about that, but i think sentiments improved and more investment. >> all right. thank you. >> yeah, thank you. a lot of fun. >> enjoy the week, a long one, join us monday, and "squawk on the street" begins right now. breaking news this morning, of course, the june jobs report blowing past expectations, the unemployment rate falling. good norng, welcome to "squawk on the street," i'm david faber with jim cramer, and carl quintanilla has the day off. futures, of course, after, what are we, a half hour after the jobs number? we are looking for an up open, at least thus far. not too much, although won't take much on the dow jones industrial average to take us to that psychological important 17,000 milestone. ten-year note, where the new seems to be flowing right now, jim. we're almost at