good morning everybody. happy friday and welcome to "squawk box" here on cnbc. i'm becky quick. today's top market story the april employment report. forecasts say the economy probably added about 205,000 jobs last month. ton employment rate they think will hold steady at 5%. risk is that the adp number is weaker than anticipated. the futures this morning are a little weaker. right now the dow futures are down by about 32 points. s&p futures off by.

the nasdaq off by 11. take a look at at asia. nikkei was down by a quarter percent. and the shanghai composite down by 2.8%. in europe. same trend we've seen. the dax is down about half a percent. the cac close to 1%. ftsi down .7%. and crude oil, wti is down slightly, at 44.12. >> i don't think the market is ever going to go up until it stops raining. >> and it is 50 and raining for like the -- day in a row here. >> only been five? >> yeah and --. >> probably use some rain. >> these guys could use some.

this is a worse story. developing wild fire out of canada this morning. officials warning the fires could spread even more because conditions are still tinder dry. at least 88,000 people have already been evacuated and more than 1600s and buildings destroyed. the fires could lead to $9 billion in insurance cost. in an area with the third largest oil reserves in the world and estimates suggest production cuts could wipe out canada's growth in the second quarter entirely. that is a big story. also, stocks to watch this morning. gopro, delaying the loss of its first drone device. until the winter holidays

instead of the end of june as targeted previously. we're going talk to an analyst about gopro in about ten minutes. herbalife is in talks to saelt probe by the federal trade commission into business practices. herbalife also reported first quarter results that beat forecasts, posting first sales increase in six quarters. >> some people struggling with an explanation of why it was updated -- it was total clear to me why it was -- this is not a existential threat. >> not going to zero. >> this is not fraudulent, pyramid scheme shut down by regulators. this is pay 200 million. do a couple of things. >> and by the way -- >> and when i was here yesterday watching that show i was just thinking about ackman. if you can't understand why the stock is up $8 look at what

ackman's -- >> he was testifying a couple of weeks's for valiant pharmaceuticals. used that to tell congress he was testifying before you should be looking into the herbalife. he was using that time as the way of saying look at what's happening there. >> this is like -- >> slap on the wrist. >> he's probably right -- >> i think the problem becomes -- from perspective if they settle on something like this it means there is not going to be additional. >> existential threat to herb herbali herbalife. >> if that is the case, does it change the dynamic? there were questions about what bill was saying. first amendment or liable or slander or?

-- >> [ inaudible ]. >> worse than that there were questions early on about whether it could be determined if market manipulation if you are not telling the truth. it's a very complicated situation. i believe that -- i believe that he believed everything he said. >> and he actually -- remember he had some lawyers he had hired from was it a former sec commissioner who he had run through a lot of this or the former enforcement guy. kuzami? >> right. >> so he was pretty careful how he was going about this. he vetted it with someone who was in the know. >> but i wouldn't be surprised if they somehow get in the clear but then there are all sort of other new lawsuits that turn around on it. >> just not going to walk away? >> i don't think so. couple more headlines. activision reporting first quarter earnings and the raising

full year outlook. benefitting from growing digital games sales in the acquisition of digital king, maker of "candy crush." and in today's jobs report let's get a check on the 10 year note. yields have been under pressure for quite some time. you can see the 10 year note is still yielding 1.747%. even though expectations are built into the market and fed itself that we'll see additional rate hike this is year. it's been really hard to move these yields higher. currency market and today it looks like the dollars down across the board. gold prices this morning. are you have just over 10 dollars. and take a look at the futures. it's been a little weaker. right now the dow future down about 30. s&p off 4 and the nasdaq down about 11.

>> german bund is 16 basis points. >> how can you possibly build on yields here? >> right. just a couple of hours from the april jobs report. that is correct, it's may right? joining us now is michael -- i heard someone earlier he was supposed to go -- sullivan was supposed to go over there. but we came here so we set him up to be able to talk to wilfred. and i heard -- he because the claims number continued to be pretty good, i guess he wasn't talking about yesterdays though. because these figures are before the most recent. you can't use that. >> right. >> but claims are at 40 year lows or something. >> the way they do it is they say survey during the week. the numbers are for the 12th to

the month. the numbers we saw will be inputs into the may data. >> anything to indicate. i look at jobs as coincident at best is lagging. will they start to be more synchronized though? >> i think it is mainly contemporaneous. there is some lag. we find a little of both. but historically when the labor market and activity data diverge better off listening to the labor market. it sends a better signal. as long as the jobs holds up it is evidence -- >> is it going to hold up -- >> we do? >> you think it is most likely -- outlier at -- >> absolutely. we take a very strong signal from the payroll data. yes, if the payroll data is slow and gdp doesn't. i'll say something more negative. but if it's just gdp has an off quarter but the payroll data holds up, that is a positive

sign. >> do you ascribe anything to an election year? >> usually you don't see. i want that .5 gdp out of the at way before the election. you can't really jigger the numbers i guess. but it always seem to coincide with that. >> right now to your points earlier, i don't think the election is affecting activity or investment or sentiment at this point. we have to get a little further but yeah it will be a factor. we have a strong forecast. we're looking for 250 on the headline today. we're looking for better wage growth. and unemployment to fall. a bit of a trifecta report. >> i don't make any sort of forecast until i hear leisman. >> he does put some work into it. he has a model. >> -- contrary.

>> you're not going to come one an easy guess? >> no. no no. leisman. it's like everybody else. like 150,000 one way or the other. >> statistically speaking, 150 and 250 are the same. doesn't make for good tv though. >> so you expect the gdp to start reflecting a strong jobs number. does that mean a 2% 2016 gdp? >> q4 and q4, yeah. that is about where we come outen the numbers. >> we're thinking consumption will look a little better in the second quarter. auto data reflects that. the retail sales next week should show that. if the dollar does stay more or less stable, oil is stable, then manufacturing and energy should be less of weight in the second half of the year so you could

have something closer to two and a half going into the election. >> all right. just like clock work. michael thank you. >> thank you. >> bring an umbrella? we can lend you one. >> i didn't bring an umbrella. i was in the other part of the mid west this week but it was actually quite sunny. rock island, illinois. i was back there doing some things with them for a few days. >> come a long way. something of yourself. what was your major? >> economics, surprisingly. finance and then i did grad school a at indiana. so it was good to go back and reconnect with some people who launched me on my way. it was a good time. >> thanks mike. >> politics. house speaker paul ryan t highest ranking elected republican says he's not ready to get on board the trump train. more on the implications of all this. john. >> good morning. this is a big development that

says something about the struggle to unify the republican party nationally. something about the challenge of holding on to republican control of congress in this year. and something about the nature of paul ryan individually as a political leader. but yesterday the chairman of the convention, the highest ranking republican elected official in the country said he was not ready to get behind donald trump and his fall campaign. >> to be candid i'm not ready right now. i hope to. and i want to. but i think what is required is that we unify this party. >> now that provides cover for every republican member of congress who doesn't want to endorse donald trump, who feels pressure from independent, from democrat, from moderate republicans in their district. and donald trump didn't take kindly to it. he raised the stakes when he put out a statement a few hours later saying that he's not

prepared to support paul ryan's agenda. maybe we can work together in the future. now, here is why that is a problem. paul ryan believes in his agenda more fervently than most political leaders so the disagreements he has with donald trump on trade, sbiemtment, who knows on taxes as donald trump said on our program the other day that he may alter his tax cut, raise that top rate. paul ryan could not have liked those comments either. this indicates a challenge for donald trump that is going to exist throughout the year. in the most recent wall street journal poll he was only getting 72% of republicans supporting him. you cannot win in you are a polarized system with numbers that low. >> there is a way that republicans -- or conservatives are still trying to push trump into more palatable positions on a lot of things that they want. in fact i think you could sort of read between the lines with paul ryan. it was like i'm going to support

someone who believes in the principles of the conservatives and the republican party. and until i can see that mr. trump believes in these principles, i'm not going -- hold back. i saw reince priebus on too. look. it is going to happen eventually. i don't know if he will. yesterday he said he might support a minimum wage increase. might bic a democrat more vice -- >> the -- [inaudible]. >> challenge is every impulse that donald trump has displayed since rwrapping up the nominatin is to try to make himself more presentable to democrats. and there are so many layers to this. paul ryan is someone who might ran for president himself in the future. there are a lot of cross

pressures here. >> it is like stop the presses. 43 is not backing trump. he just humiliated his brother and said 9/11 was his fault. >> and two former presidents, both bushes won't be there. -- >> -- romney -- [inaudible]. they ran together. but in romney, i thought that was thrlow in warning -- i wish somebody had been there to warn us about romney to close the deal. and there was one other point i was going to make. i can't remember what it was john. oh what you said about 2020. to have three straight administrations of democrat, usually the next administration is going to be republican. if he's thinking 2020 and i'm not going to tell you that in the back of his mind he's got a horse in the race.

but if he's maintaining any notion for 2020 it would be much better for hillary to get elected than trump to get elected. >> and there is a huge impulse within an important swath of the party, especially a lot of republican donors and the so called republican establishment to say let's focus on making sure we a, hold the senate and b, at all costs hold the house of representatives, which the you get wiped out has the potential for flipping. it is not likely but it is not impossible either when you have the kind of margins that we've seen in some polls now. so paul ryan is protecting his members. he's throwing out the sort of conscientious objector status as a safe harbor for people who don't want to come out and say quick that they are for trump. you know you say what kelly ayotte did the other day. put out a statement saying she

endorsed trump and clarified and said well i'm supporting trump but i'm not endorsing trump. indicates the discomfort of a lot of these people in blue states and blue leaning districts. >> what is your best guest on supreme court appointments in this next term? 3, 4? as many as five? so they -- you know, the whole thing, i don't know. it is an important election. and i don't know. ryan will come around. but it is not helpful. >> in our polarized system, you have got to unify our party. trump's got to figure out a way to get there. >> the rnc looked like it got caught totally off guard by this. he said reince didn't know it was coming ahead of time.

>> i wish paul had been this tough on biden. in that debate. really take a stand. romney and him against president obama. but they are taking their stand now. way to go. anyway. >> coming up when we return. more bad news for battered camera maker gopro. that stock falling. down 75% since their 2014 ipo analysis. and later it's time to pick your pony. we're going to tell you about -- >> nyquist? >> nyquist. >> there's two syllables. >> i know but it could be. >> new york kwis? >> the kentucky derby. show me movies with explosions.

show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. shares of gopro trading lower aft the company reported quarterly results. camera maker delaying the launch of its first drone device until winter instead of june as previously targeted. joining us is aaron murphy. a lot of disappointment around this stock. there has been for some time. what do you think caused the

selloff last night? the delay in new products that we were expecting in the first half or the steeper than expected loss? >> i think it was actually more tied to the delay of the products. the fact they are delaying the drone having been in the pipeline well over a year now is concerned for us. and they did not change the full year guidance. so we're still sitting on pins and needles waiting to see if they can even make this year come out in and of itself. >> product delay is an issue but gopro also got beat up because maybe they put out that weren't quite ready in the past so maybe it is better in the long-term for coming to market? >> fair point if they are adding extra bells and whistles to the product. the broader concern is it seems from our perspective a little too late. the category has opinion on fire for a few years. but now what you are seeing you really started seeing in ernest since the winning of this year

is price competition which is something gopro felt even starting last year. we are concerned about the timing when they are launching regardless just given the category's competitive pressures. >> is this a company you think can turn things around? it came out with great fanfare. certainly disappointed since then. what is the end game? >> we are still fairly bearish. we still see downside here. there is value in the brand but in terms of where they are at right now we do think they have hit a wall in terms of the addressable market. there are a couple of new product this is holiday but our concern is they continue to lose market share and have really already hit that tipping point in terms of addressable market. >> the point at least a couple of years ago the company was talking about how it was going to be much more than just a gadget company. it was going to be a media company. all these channels on youtube

and xbox. is that still something you think is possible and something achievable? >> we haven't seen them kind of proactively monetize that yet. there is great content that gopro users create. but the pathway to monetization is really we feel a little more bleak, particularly with the proliferation of what you are seeing on the smart phone side and just kind of how consumers are engaging in other aspects of sharing their lives whether snapchat or instagram. it seems a little harder to monetize the content they have helped create. >> at this point is market cap is about a billion dollars. this a statakeover target? >> the concern with that is it is a category we still feel is very much this decline. it is a product that there are

other competitors in the space. and we still think there is value and that's where we kind of set our price from the brand itself. but from a category perspective i find it really challenging. >> why do you think the category is challenged? is it the millennial aren't buying this? the teens aren't buying it? the smart phones have better and better cameras? >> i think it is more the latter point. on the smart phone side you have clearly another pathway to the consumer to capture and edit content. and if you look at the traditional camcorder market it's been in perpetual decline for several years now. i just don't know if there is much more to go beyond that as consumers go more towards just one device which is their smart phone. >> aaron i don't want to miss this. remember netflix used to send you dvds in the mail. >> no it is not that.

>> what about vr? is there anything they can ever do to somehow get into -- as the billion company. if it's going to 40 billion you need to tell us now. is there anything they can do in vr that? >> they made some ak sixes in the vr side. we don't have the visibility in what they are doing in vr yet but it is -- taubl inaudible. i think time will tell. the concern between now and then is they are starting to burn up a little cash and they continue to see declining market share in those categories. they have made some acquisitions. i think it is just too soon to tell. >> thanks. we really appreciate it. >> thanks for having me on.

>> there is your money shot owe. >> go porn. it's two letters. i don't know. coming up -- embarrassed again. you know -- i don't get. >> i know you do. >> you will get embarrassed for both of us. >> i'm not really embarrassed for you. i'm embarrassed for me. >> because you're sitting there. >> facebook losing round one. details straight ahead. and later, the americas cup is coming to new york for the first time in 96 years. that is kind of exciting and i did not know that. we'll give you a look at what is being described as the lamborghini of the votes and a look at the s&p winners and losers for yesterday. going on ?

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welcome back to "squawk box" everyone. right now it is time for the executive edge. fab has lost the first round in its court fight. some users sued over a facial recognition feature that suggests tags on photos. they say the feature used data that was unlawfully collected and stored. a california judge turned down facebook's motion to dismiss the suit. >> and the food and drug administration's announced a plan to regulate ecigarettes and

tobacco products. while smoking is down, the percentage of high school students using ecigarettes has skyrocketed in recent years. hook and water pipes and cigars are also popular. the plan does not address flavors in ecigarettes, which many critics say is what's enticing the kids. the call just came in. she's about to arrive. and with her, a flood of potential patients.

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x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. welcome back to "squawk box." jim chanos is weighing in on china's growth story this week. >> the china story is the gift that keeps giving on the shortside.

it keeps morphing as the credit bubble gets bigger and bigger and finds different outlets. they have opened the credit spigots up again. so i suspect going forward some of the things that worked back in 2010, '11 and '12 are going to work again. >> our next guess brings news of another --. peter alexander. supposed to be with us yesterday. actually sat down here at the table. and donald trump called in. so he got bumped. >> hillary not going to cool in any time in the next 15 minutes is she? >> no. >> we haven't had her on. >> let's not do that today. >> you think china is absolutely wrong. >> start the initial premise in

2010 was property market was oversupply and there was that demand. property prices on aggregate are up 70 percent since he made that statement. has he made money? i have no idea. i find it interesting that there is this confirmation bias. i want to find out what i can out there to support and i have this position that it is bad and i'm going to short everything. so i'll go out and -- his premise was completely wrong in 2010. >> jim is always a couple of steps deep. -- going out through the mining and the minerals and commodities. he was totally right on that. in fact just this week, david einhorn shorted caterpillar. so he's been right in a lot of the derivative plays of his notion that china was definitely slowing down. >> he gets credit for being able to look at old economy and not the new economy and china was

moving from 13% down to 6%. and forget it. it was what everybody wanted to do. to be able to say it is overleveraged it is possible. but there is a lot that's happening in the capital market that's -- >> and you don't worry about the shadow banks and companies that are offering crazy interest rates that make no sense? >> well it is based on where they are making the investments. the shadow banking element is basically being curtailed right now. the where the government is moving towards the market. they want corporate finance to be away from the banks and more towards the fixed income market. >> there is a report tim cook going to take another visit to china. >> right. >> doing what chanos did with caterpillar, how do you think about apple with some of the

worst carl icahn and others expressed about what could happen in china. >> i don't follow apple as a stock. but i've lived in china for 20 years. and everybody has the iphone. and icahn has made a lot of money and he's decided to exit at this point in time. >> we want your take on a comment that donald trump made about china yesterday on the show. listen to this. >> you look at what's happening with our trade. look at what china's doing to their currency with devaluations, they are killing us on trade. and trade is the single -- and devaluation. if you want to really take a hard look at what's going on. the devaluation is the single

greatest tool that these other countries are using to absolutely kill us. assuming they have capability, manufacturing capability etc. and china is like a grand master. >> the grand master. >> he's talking about about the valuation. and currency and what have you. china had a move on currency last summer to a more market-oriented basket. to have a currency that is reflective of its trade. and since then it's basically been stable, if not appreciated a bit. so you look at kyle bass has not done very well this his bets and we think the longer term trend is for an appreciating currency. >> what do the chinese officials by the way think of donald trump? >> i don't necessarily think they think much of anybody in the political system here.

i think they look at the united states as a political environment that has a number of different players. look, bill clinton famously called china when he was running for election in '92. by the time he ended his term he had laid all the groundwork. politicians, saying a lot of different things. let's see where they are in november. >> the word frenemy was created for what we are with china. and same as what they are with us. and they don't look at us in -- probably. i imagine. -- in any other way than how they can benefit their own interests in terms. and i understand that. and, you know, it is business. it is not anything else. >> right. >> i don't think that they have always our best interests in mind like they have their own best interests and same with us. >> correct.

>> so it's geopolitical. but what really needs to be addressed here is ripping out or stripping out all of the emotion around china. china is an enormous market with huge opportunity. and you have chanos and ray dalio now on the other side. he's been approved with no fanfare to set up a the investment platform in the mainland. >> collecting r and b. >> we don't know what he's doing to be doing yet. we know he's going to be building a business on shore. and -- our drive right now. and it's getting to the point where i'm thinking we should be running money. you are talking unhedged returns of 3%, 3.5%.

maybe even a bit more on very high quality debt. the opportunity exists. >> does he have to have a partner for that? >> no he does not. it's a wholly owned enterprise. it is a big deal. >> thank you so much. >> thank you. coming up. it is the most exciting -- [ laughter ] two minutes -- >> two minutes in sports. >> i was thinking about something else. i've said that so many times. i've tried to convince someone that and had very little luck doing it. we're going to tell you more about the favorite for tomorrow's kentucky derby. that's next.

iran is a crucial story right now because they are reemerging into the international markets with a lot of oil. you walk into the stock exchange and you meet all of these people who just love investing. here it is not bulls and bears. it is lions and foxes. >> we could be at the key moment of change for the country. are they going to change their economy enough so that it can grow? there is so much state intervention here still. it is the law here to wear this scarf. >> the america's cup is sailing into the new york city for the first so i'm in 96 years. cruising the hudson river, six catamarans. and we got a behind the scenes look. good morning. >> good morning andrew. six teams will be competing this weekend in the america's cup world series event here in new york city. oracle team usa is the current

defender. team emirates new zealand is leading the current series however. the ac45-f is a twin hulled carbon fiber catamaran. the lamborghini of catamarans. and these buioats are actually built to fly. it literally flies about six feet above the water. >> he's been fantastic. raced with each other a lot. he's a really good sailor himself.

>> i got to ride along for a practice run with the team oracle yesterday. it was incredible. it was high winds. it was cold. water was spliashing in any fac. but something hard to describe. flying above the water. the ride was just incredibly smooth. really the experience of a lifetime. and i have to say sailing has officially won a new fan. the oldest trophy in sports right here. more than 165 years old. this is the americas cup. it gets to travel in its very own first class smeet as a matter of fact. t and it will go again hopefully to oracle. >> well done. >> there's sailing and there's sailing. that was sailing.

wow. >> that was the hudson river courtney? >> that was the hudson river. i got to tell you. when that water splashes in your face, it's a little shocking. it was really cold. but it was so ride was incredib. i mean, you are flying. the speed boats that actually took us out there for the transfer on was pretty bumpy because it was very wavy and windy yesterday, but the boat ride itself on the oracle boat, wonderful. >> good for you. that is terrifying. i hope you got your shots too. >> yes. i did. >> courtney, when they tack or whatever, they all go into motion at the same time and they're all coordinated and synchronized and stuff, that must be cool. >> yes. it is very cool. >> were you strapped on? >> i wasn't strapped on. i sat on netting. basically it's netting that holds together the two holes of the catamaran. there was a little red rope. they said you can hang onto that if you want.

but it's the pulley system for the sails also and they said, don't touch that part. >> were you terrified? >> i was at first. when i went on the speed boat going out there to transfer onto the boat -- because we actually made the transfer in the middle of the hudson river. i didn't get onto the oracle boat at the dock. i was a little nervous because of how bumpy the ride was out there. once i was on, for some reason it wasn't scary. i don't know what changed but it was just so cool. >> was that a gopro? we were talking about them today too. >> yeah. we had several gopros. we had a gopro at my feet, one on my helmet and one on the boat as well and the crew members and myself, and that was it. >> pretty good assignment. although -- >> it was a pretty great assignment. >> may be more fun with the sun out. thanks, courtney. we have to get this right, dom. if you haven't heard the name everyone wants to call it new

york quist. >> it's nyquist because it's named after a specific person. >> chances are you're going to know new york quist is the colt to beat in tomorrow's kentucky derby. dom chu is here to introduce us to the derby favorite. they know this is a great horse? >> he's come in with a very impressive record so far. he is the prohibitive favorite to win this year's derby. he is on a hot streak, comes in with a 7-0 record. undefeated. attempting to be the eighth undefeated winner. the first since 2008. second, nyquist has a winning team including trainer doug o'neill, jockey mario gutierrez and owner paul reddam. they had success in 2012 with i'll have another. he dropped out of the belmont stakes because of an injury.

third, for those with the fear of 13, he's going to be racing from the number 13 spot. it means he will be further away from the inside rail, which is the number one position. that inside rail can become a congested, high-traffic contact area in the early part of the race, bangs a lot of horses around. he also won from the number 13 spot at last year's breeders' cup juvenile, a top-tier race there. fourth, he was most recently purchased for over $400,000 and has pocketed $3 million in earnings also. so it's nyquist at 3 to 1 odds. number one exaggerator. 8 to 1. number 3, creator. number 5, gun runner and number 14 mohaymen are 10 to 1. the reason why the kentucky derby is so fun, it's the -- it's probably the most exciting,

you know, couple minutes in sports, right? i mean -- and this is all about pedigrees as well. >> it's all about money. >> this is all about money. sot winner, because they're -- if we get the full field of around 20 horses to participate this time around, it means the purse will be between $2.3 million and $2.4 million and the winner will take home at this point about over $1.6 million at this point. so it is a very rich race. >> how much will they have spent just to get there, though? >> it's crazy. they will have spent hundreds of thousands of dollars. just to keep a horse, the stabling and feeding and everything else, let alone the training at that level of competition. it's huge. it's a huge investment. it's one where they talk about this idea -- the ones who buy these horses for like a million dollars, two million dollars. they're the ones who rarely pan out. you sit there and say this is a guy that is supposed to have the lineage and bloodlines. then you have some of the horses who maybe don't look as good

coming out, don't have the great bloodline but do well. it's such an american story. >> i read about american pharoah yesterday that he's taken very well to being a stud. that he's doing very well. >> having that first triple crown winner in nearly four decades and you retire to a stud farm, right now he's already gained, guys, 170 pounds. 170 pounds in retirement and he's mated or bred with over a hundred mares so far. >> that's taken to retirement. so how many times has he sowed -- >> a hundred? >> that might get tiring. >> two or three times a day. >> if any horse can do it, it will be one that's won the triple crown. >> i wonder, dom -- we got used to it being so rare, the triple crown. i wonder if all of a sudden we have two in three years or something. it's really hard now because they do it differently and they're so specialized with the

different tracks, maybe it won't happen again. >> what's interesting too, we had seattle slew in '77 and affirm in '78. people were thinking about american pharoah last year. is there another one here. the knock on nyquist. there is not a lot because he is undefeated. the knock is he hasn't had as commanding of wins through the year. >> you know the fear of friday the 13th has a different name. it's paraskevatria phobia. >> look at that. that is -- that's like the 26 letters or something. anyway, thank you, dom. derby coverage. i'll be darned. it's on nbc and it starts at noon on nbc sports. the sports network. and then it's on big nbc at 4:00 p.m. when we come back, the jobs report is just over 90 minutes away. strategists from jpmorgan and ubs join us next with their predictio predictions.

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working for a living. the markets on high alert ahead of today's jobs report. could it be a game changer for the fed? what you need to know ahead of the employment numbers straight ahead. a major wildfire burning out of control in alberta leaving in its path nothing but ashes. the fire spreading south and forcing more evacuations this morning. a live report is minutes away. the takata air bag recall getting bigger and bigger with fear mounting that it will dent used car sales big-time. autonation ceo mike jackson is here to sound the alarm that the problem will get much worse before it gets better. the second hour of "squawk box" begins right now.

♪ it's friday, i'm in love >> live from the beating heart of business, new york city, this is "squawk box." ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. the futures at this hour have worsened a little. down about 41 points. see what happens when the employment figures come out. nasdaq down 13. s&p down just under 6. oil, continuing to check that when we check the futures. still correlated i would say to some extent and the selloff yesterday in oil was -- it was note worthy, i guess. down 30 cents this morning at $44 for wti. to some of the stories making headlines this morning. apple ceo tim cook visits beijing this month according to reuters. he is said to be planning meetings with high-level government officials as he tries

to deal with setbacks in a key overseas market. market company reported a wider than expected loss for the first quarter and though it raised its full year forecast investors seem to be focused on a surge in operating expenses. the stock is down 17%. two companies for jack dorsey that have had a rough earnings season. french drug maker may raise its fee for buying medivation. if not it will consider going directly to shareholders with the $9.3 billion bid. stock up 28 cents this morning. less than 90 minutes away from the april employment report. steve liesman is coming to us from the west coast, san francisco. good morning. >> the street today looking for 205,000 jobs in april. for the unemployment rate to remain unchanged at 5%. i had a chance yesterday to talk

to atlanta fed president dennis lockhart about what he is looking for in the jobs number. >> 200,000 is a good, round number. i'm not going to panic if we're below that. i would be pleased if we are above that tomorrow. and any number that comes in has to be taken apart and decomposed and looked at very carefully to see what the underlying story is. >> now lockhart said he was on the fence about raising rates in june. he wants to see the weak growth data come in line with the stronger jobs reports before hiking rates. on growth, i also spoke yesterday with san francisco fed president john williams, who says he is just not a believer in these weak gdp numbers. >> my colleagues at the san francisco fed think that the underlying growth is really around 2% in the first quarter. so we'll have to watch the data as we get the data for march, april and may going forward to see whether my forecasts for

better growth in the second quarter comes true. i am not taking too much of a signal from the first quarter gdp. >> three things to look for. earnings up 0.3% last month. do they remain above trend. work week has been stuck at 34.4. some economists would like the week to tick up. participation. americans have been returning to work in droves, up more than 2 million in the year. does that continue. other job indicators ahead of the report have been mixed manufacturing was weak. services looked a little stronger, the claims numbers have been low, and that, guys, has boded well in the past for job growth today. joe. >> thank you. thank you, steve. we alluded to you earlier. i thought you would be here. what is your -- >> how so? >> what is your work showing for this -- >> i haven't actually -- i haven't done that -- >> you stopped do it. >> i haven't stopped. i -- i haven't stopped doing it,

joe. i just haven't had a chance. >> we use it. it is useful in coming up with an overall idea. >> doing the opposite. >> not the opposite but putting it in our -- you know, just one of the things we consider. one of the things we consider. let me know. message me. >> i'll crunch the numbers now and i'll email it to you separately. >> thank you. how will this jobs report impact the feds' decision making process in the markets. joining us jpmorgan funds market strategist. and manager and professor at nyu. you've got the sort of academic and in the private sector. i'm not sure how to think about that. >> i try to explain to my students that things that are written on the black board don't always come true in real life. >> that's good. pure academics never come to that conclusion. >> well, that's why the balance is important, because you have to deal with the reality, but you also have to deal with the

principles. >> getting uncomfortable with the consensus that you can just ignore gdp and it's all about the labor market. do both of you think that that -- is that okay to think that way? >> i don't think it's all about the labor market. if the number that we get is a solid one or it's a weak one, i don't think it really sways the fed one way or another because the underlying issue that we have is what i would call the failure to launch when it comes to economic data. i mean, you look around. we're chatting in the break room before. nothing is particularly strong, right? all the data that came out this week or this year has been tepid. if that's the case as one of my clients put it, what's the rush. what's the rush for the fed to actually raise rates? >> let's not look at it in the context of what the fed does. let's look at what kind of economy we have. do we have a sub 5% unemployment rate economy, or do we have a .5% gdp economy? is it terrible? did you just say we're having trouble getting it -- launching interest rates or launching economic expansion? >> well, both, because you can't

have a launch in interest rates without a launch in economic expansion. if you look at everything from vehicle sales to retail sales, pmis, manufacturing surveys, it's not that we're doing terribly. we're not. we're doing fine. the point is we're just muddling through. if you're the fed and you say we have a sub 5% unemployment -- >> back to the stupid fed again. >> i'm back to the stupid fed. excuse me. but if we do have a sub 5% economy but wages are not rising and inflation, the fed expects to stay very low, why would they raise rates? >> i guess -- instead of looking at it in the light of the fed, i am looking at it in terms of the political year too. i wondering, if you were trying to -- depending on who you are it's half empty or half full. i know a lot of people in this country seem to feel like it's not a great economy. >> people aren't happy. >> right. >> it's amazing. because you look at the

unemployment numbers. we should be happy. >> why aren't they, though? they're not wrong, they're not stupid. they're not somehow not looking at their feelings accurately. these are true, real feelings. >> right. i think there is some -- did you want to say something, becky? >> good. >> i was going to say i think there is a little bit of post-traumatic stress syndrome from the crisis and from january and february. it's like we've forgotten about january and february. i think the fed is well aware of what happened to the markets in january and february and they're looking at global concerns and looking at sentiment. people are not sentiment bullish. they're sentiment sort of getting by. that's not what the numbers show if -- you can make a positive case, but people are not feeling positive. people have to be grateful and start to feel that way. >> a lot of the numbers have been muddling at best. >> i can make both sides. the fed recognizes that. i think the fed's biggest motivation -- >> you're on the fed too. i want to know whether we are in a good economy or not. >> i think the fed would like

to -- >> oh! the fed, the fed. >> hear me out. the fed would like to raise rates because they want to show that things are good. >> it's all about the fed. do they raise a quarter of a point. >> interesting story on the front page of the "wall street journal" today pointing out that all these people who have been in their jobs a number of years are now upset that minimum wage will be raised to $15 an hour for people who just walked in the door when you had to work years to get to that level. now companies have to consider additional perks and raises so they keep the people who have trained into these jobs. it opened my eyes a little to -- >> a lot of people feeling flush right now. when you start thinking about mandating higher wages it shouldn't have to happen in a real growing economy. >> can i put one idea out there as to why people feel as lousy as they do? >> because it's been raining for three weeks? >> people compare our life today

not to what it was three or four years ago or even seven years ago at the financial crisis. they compare it to 2005, 2006, and 2007. the problem is it was like alice in wonderland. >> the '80s and '90s were great too, andrew. life is better now than it was in 2004 and -- in terms of the electronics and leisure time. >> think about this. there is one simple reason, i think, why the politicians that are getting support right now are getting support right now. that is wage growth in inflation adjusted terms has actually not been above the levels that you mentioned in 2005 and 2006. so no wonder you go around the country and ask how are you feeling, well, not so great because the median american wage has not been rising. >> were all the good times illusions? so '99 was the tech bubble. the '80s was reagan spending -- >> there were periods of illusion. '5, '6, '7 -- >> i think the status quo is

where we grow at 3%. >> over 50 years it was. >> it has but not since after the financial crisis. the growth rate has dropped to 2.2%. >> joe, maybe it comes from what's within ourselves? i think that every -- >> that's profound. >> it's the way you live your life. either looking at the positive or the negative. the glass half full and glass half empty has real repercussions on the economy. i think the fed is trying to emphasize the positive. the politicians are offering hope for people. that's why they get support. >> none of us who appear on this show need to look inside themselves. we've all got it made. >> how are you feeling? >> i am feeling great. but that's not the -- i'm not representative of the rest of the -- >> if you look at the polls, some of the people who are the most well off in this country are also convinced that the country is going to hell quicker than actually people on the

lower levels. >> right. that's because we understand economics and we have seen what we've been through the last seven years. for people that don't understand that they're not better off. i told you, i am going to become a limousine liberal and not care if anyone ever gets elected up again. go ahead and elect bernie if you want. i don't care. i got mine. i'm going in tax-frees. you're on your own. wildfires in canada. alberta problems still raging out of control and affecting oil prices. a live report from the region next. then we'll head south to the bayou of louisiana. brian sullivan looking at stacked riggs and falling rates. for once we're not talking about the stupid fed. find out what businesses hold for one of the most oil producing states. "squawk box" will be right back. blink of an eye,

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e.t. phone home. when you find something you love, you can never get enough of it. change the way you experience tv with xfinity x1. . welcome back, everyone. a massive wildfire continues to burn out of control in alberta, canada. we're joined from edmonton. deirdre, this is something we've been watching closely. it doesn't seem like things are getting much better. >> reporter: the weather has not been cooperating. we're outside right now of one of the evacuation centers in edmonton as you said. let me give you the latest. the fire has exploded in size since sunday. it has moved further south. emergency officials have been telling us that the fire is now

threatening two oil sands site. to put this in perspective for you guys, the fire has grown to an area roughly ten times the size of manhattan. so it is huge. 80,000 residents have been displaced. thousands more are coming south today. they were trapped north of fort mcmurray ain some of the oil sands camps. more buses loaded with more evacuees are coming in. this is the most distressing fire alberta has seen in over a century. it continues to blaze. the weather is not cooperating. no rain is expected over the weekend, which many officials say is needed to help to battle and contain the fire. where we are right now there are about 450 evacuees in the center behind us. more may be coming in. the question on all of their minds is when can they return home and what's going to be there.

officials, they just don't know at this point. alberta's premier saying that it will not be a matter of days before they're able to return. we continue to monitor the situation. back to you guys. >> dierdre, thank you very much. louisiana is one of the most important oil-producing states in the country. but since 2014 the state has lost nearly 12,000 jobs in the oil and goes industry. local economies are feeling the pinch. brian sullivan joins us from louisiana this morning. >> reporter: good morning. the sun is coming up here in the bayou. unfortunately that is not a metaphor for the oil and gas industry here in louisiana. much of it offshore in the inland waterways. times are very, very difficult. part of that is just lack of new investment in offshore, in oil wells and even in fixing oil wells. in fact, what we're standing on right now is called a workover rig. this would go out to a well, get it flowing a little faster, fix the rig, et cetera. if you are not investing in the

oil wells, you don't need this rig, which is why we're sitting on it. it is out of a job. the company that owns this rig is the biggest owner of these riggs in the world. they own 12 of them. two of the 12 are currently on a job. one is coming off at the end of the month, which means they'll have one rig working, and that rig is going at day rates of $12,000 to $13,000 a day. normally they get $18,000 to $20,000. they carry 20 guys. they go out for up to a month and live on this thing. so since we've seen the well count come down from 218 to 45 to 43 this year, jobs are being lost all around. yesterday we were here and spoke with one of the co-owners of the company. listen to what he had to say about the state of louisiana's oil and gas business. >> it's a total disaster. there is no other way to say it. we're in deep trouble, all of us. something is going to have to

happen. our whole industry is in dire straits. the town i live in is -- talking about massive foreclosures heading our way. >> reporter: normally you hear company owners being more optimistic. he laid it out as plainly as can be. unfortunately they had about 650 workers a couple years ago. they're down to the 200s. he's laid off about 400 folks. the unemployment rate here is 6.1%. making it 44th out of 50. we'll get the numbers. i expect the louisiana unemployment rate to tick up. and it could tick up a couple of tenths making louisiana the state with the highest unemployment rate in the united states. >> crazy, brian. feast or famine. they were doing so well a couple years ago. that's -- i guess that's a reflection of supply and demand and economics 101. hopefully it comes back. even -- brian, i think about that with -- we've been doing a

lot on coal too in west virginia. seeing the people who have actually been displaced. they said, you're going to get $30 million for retraining. they say i don't want to be retrained. i don't want to move. my house is here. it's sad to see what happens sometimes. >> reporter: and joe, you're exactly right. the other story, too, is -- and we'll be here all day -- it's not just the guys working on this barge. the barge is towed by tug boats. we'll show it later. 20 giant boats are in dry-dock behind us. every one of those employees, the truck drivers are out of work. the realtors can't sell a house. it's boom, boom, boom. >> the diner. i am sure. waffle house. it ripples through all that stuff, brian. you look like kind of like a rough-neck, though. that's why we send you on these things. he fits right in. people see him and say, oh, just another guy. they don't think it's some wimpy

journalist. >> he knows how to show up. he's not out there in a suit. which we appreciate. >> reporter: i'm kind of an engineering geek. i love big things. big engines and drilling riggs, tug boats. so i really appreciate them having us. we'll be here all day. we have some interesting stories coming up. >> you could maybe be a train engineer, i think. >> that's pretty hard. >> that's hard too? never mind, brian. >> i got in the cab one time. they had to kick you out. >> definitely not a chemical engineer -- electrical engineer. >> reporter: the only thing i can do is talk. that's my commodity. >> all of us. i know. coming up -- thanks, brian. takata air bag's problems won't go away. why this could hurt car sales this summer. check out the futures at this hour. still down around 40 on the dow. 13 on the nasdaq. s&p down about 6. i take prilosec otc each morning for my frequent heartburn

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stocks to watch today. gopro's first quarter revenue fell by nearly 50%. the street was looking for an even bigger decline. the company reported a wider than expected net loss. gopro is also delaying the launch of its first drone device called karma until the winter holidays instead of the end of june as it had previously been targeting. we'll talk to an analyst about gopro in ten minutes. herbal life in advanced talks to settle a probe by the federal trade commission into its business practices. the company says a range of outcomes could include litigation or a settlement. herbal life reporting first quarter results that beat forecasts posting the first quarter sales increase. that's weird. the one thing i hadn't talked about is announcing that you're

in settlement talks before coming up with a settlement and saying there could be litigation as a as a result. gain of 13% on the stock. blizzard reporting strong first quarter earnings. the video game maker raising first quarter outlook. the acquisition of king digital, the maker of candy crush. king accounting for about 25% of revenue during the quarter. that stock up by better than 61/4%. autonation's ceo mike jackson when we return. later, the only woman to race in this year's indy 500. pippa mann makes a pit stop to talk about her charity work and the world of indy car racing. look at u.s. equity futures as we take a break. ♪ the first stock index was created

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among the stories front and center at this hour, we are now

an hour away from the april jobs reports. here is what economists are looking for. 200,000 new non-pharm jobs. alp alphabet google unit in honeywell solved a patent lawsuit. they struck a long-term licensing agreement. house speaker paul ryan saying he is not ready to endorse donald trump for president. he added he hopes to be able to do so. trump added by saying he wasn't ready to support ryan's yaegain takata preparing to recall additional inflaters. this comes presenting a new challenge for car dealers who are sitting on a growen inventory of vehicles in need of this repair. joining us is autonation's ceo mike jackson. great to see you. this is pretty concerning news. >> good morning, becky.

>> this is pretty concerning news when you realize this is now about one in four cars that are out there that this affects. >> well, becky, as -- when i was on your show a couple of weeks ago i said there would be more and here we are, an additional 35 million. the other big piece of news with this announcement is that nhtsa has now determined exactly what the defect is. we have been replacing these air bags with -- just knowing there was a problem but without a definitive answer as to what's wrong. and the decision of takata and takata is the only device maker that made this decision, to use ammonium nitrate as the propellant which has proven to be unstable in humidity. a fatly-flawed decision. that means that most likely we're not even done now that the recall is up to 65 million devices because there is something like over 100 million of these devices out there with

ammonium nitrate in it. perhaps some of the later ones had another manufacturing process. another issue is availability of replacement parts. consumers urgently want their cars repaired. we have to order them by serial number and wait for the arrival. for retail dealers and many other dealers who have made the decision not to retail vehicles with unrepaired takata air bags it's disruptive to the business. no question. >> so far we've only replaced 8 million of these. it tells you a little bit in the huge amount of time -- over a year that we've known about this. only 8 million have been replaced so far. how should consumers feel about this just from a safety perspective, mike? >> well, so the first failure, becky, was in 2004. the first recall was, i think,

somewhere around 2008, 2010. >> wow. >> so this is a long story. and for the industry now to be sitting here having finally determined what's wrong and not have sufficient devices or a plan to get sufficient devices into the repair is not good. now, if you are a consumer and your car is newer than five to six years, you have nothing to be concerned about. if you are in a humid or hot climate and the car is over six years old, you need to google "recall" and go to nhtsa's website and see if your serial number is involved. in which case you need to contact your nearest authorized dealer and get that part ordered for your car. there has been a debate whether to disconnect the devices in the meantime, but quite frankly, air bags, even takata air bags, are saving more lives than injuries

that they're causing or deaths. that's a -- it's a pretty cold-blooded calculation but it's just the truth. so the decision is to leave the devices connected while you're awaiting repair. but i -- if i had a daughter in a car with a seven-year-old takata air bag i would definitely be concerned and have the part on order and be anxiously awaiting its repair. >> as you mentioned last time you were here. i think you are the only dealer doing this on a national basis, not selling used cars that have this recall and it hasn't been replaced yet. with this additional number, millions and millions of cars that this impacts, how is that going to impact your business? >> so, autonation is the only retailer that has -- auto retailer that's made the commitment not to retail any vehicle with an open recall,

whether it's takata or something else. we check every vehicle for open recalls, and order the parts and make the repairs before we will sell it to a consumer. it's difficult. it's disruptive. there is a lot of operational issues raised by it, but we are working through all that, and i think the industry needs to get to a better place on the whole challenges brought about by recalls in principle with this takata being the most complex and largest ever. and autonation would like to be part of the solution, not part of the problem. >> how many of the cars that are on hold that you won't sell are takata air bags, and how many are other recalls? >> we have about five or six thousand units at the moment that are either in the process of being repaired or awaiting parts. that's about, oh, let's say a

m hundred million of inventory and fully 60% of those are takata air bags. this takata air bag challenge is going to be almost overwhelming for dealers over the next several years, becky. we're going to be talking about this. years. but it's a serious -- you know, the ultimate irony here is that we have a device that's only in the car for one reason, to -- for safety, to save lives, that is now either causing serious injury, if not death, and we have had over 12 fatalities around the world, ten of which are in the united states. and in the united states over a hundred serious injuries because when the air bag explodes, it unleashes shrapnel towards the driver. it's really a horrifying

circumstance. and we just need to get devices much faster. and every manufacturer and every supplier should really look at how they can ramp up production. not just takata, but let's turn to the other propellant manufacturers and say, device manufacturers and say, hey, you know, manufacture devices that we can get these ammonium nitrate takata air bags out of customers' cars. >> i can't believe this has been going on since 2008, mike. and the idea that it has taken us this long to even figure out what's happening. what does that mean just in terms of our system, tracking this and monitoring this, and what are the implications eventually for takata? >> so, i think it's -- the recall situation is a black eye for the auto industry, whether it's the gm ignition switch, which was a decade-old story

before everyone faced up to the reality of what was happening here, is simply not acceptable. we need to identify quicker and more decisively when something has gone seriously wrong and address it more comprehensively. that's on every level. supplier, manufacturer, and retailer. the industry really needs to come together. so i fully agree with you, becky. what is going on is not acceptable and is of serious concern. it's a black eye for the industry. and the industry needs to do better. >> mike, before you go, i wanted to get your thoughts on tesla. the new numbers in the plan to make 500,000 vehicles not by 2020 but apparently by 2018. is it doable? >> well, andrew, when i saw that, i was somewhere between the word audacious and preposterous, not knowing

exactly which one to settle on. here we have a company that has missed every launch date by years, and every production commitment significantly has -- i don't even want to use the word doubled down. i don't even know the word for it. so let's do the math. for them to get there, they would have to launch the car in 2017, the model 3, significantly. it would have to be in the market in volume by july in order to hit one or two hundred thousand units next year. in order to ramp up to a half a million units in 2018. and i find it very interesting in the same announcement of this new preposterous target, the vp of mossack fonsecaing aanufactu production both leave the company. meaning they looked at it and said, you know, connect the dots, you know. it's -- mission impossible.

>> you think that's why -- mike, i did see some reports that suggested those two left actually because they were responsible for some of the glitches and delays with some of the other models. >> yeah. all right. fine. i'm sitting down here in florida. >> right. >> i don't know the true answer. i am just an observer and have been in the rooms when these kinds of decisions get made. that's my point of view. we'll see what happens. so the profit target has been punted out of 2016 and he has to raise capital. you go out with an ambitious plan to make the case to raise another billion five, two billion of capital. i will say the model 3 will be easier to produce than the model x. the model x is unbelievably complex to produce. when i saw those falcon doors the first time, i said that's going to be a nightmare to make because other manufacturers have

looked at it before and just said they're impossible to make. but the model 3 will be easier. but i think it's audacious. >> mike, thanks for joining us. >> i'm thinking of putting a sleeping bag in my conference room. maybe that's the secret to getting to your goals faster. >> good to see you. >> good to see you. >> thank you. still to come on "squawk box," the april jobs report. our panel is getting ready to count you down to the numbers. up next, fast and furious. indy car racer pippa mann.

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see car insurance in a whole new light. liberty mutual insurance. the 100th running of the indianapolis 500, the largest single-day sporting event in the world, is later this month. the only woman entered to compete is pippa mann. she joins us now. great to see you. >> hi. good morning! >> this is exciting! we always introduce -- we just introduced you as the only woman to be in the race. does that matter to you? >> it actually feels a little strange because in the u.s., ever since i moved to the u.s. to pursue indy car in 2009, there have always been females

at the indianapolis 500. so to potentially be the only one for the second time this year feels a little odd. >> what's that a function of? >> i think it's a function of sponsorship. it's so tough out there. and to put the economics and business together to raise the money. with my program we actually do something very different. we run a female driver. a pink car. >> susan komen foundation. >> it's a pink car for a good cause. supporting the susan g. komen breast cancer foundation. one of my partners actually work in that space as well. so we're trying to put together these partnerships of companies who are interested in the women's health space. >> how much does it cost to do this? >> a lot of money. >> can you -- can you give us -- we're a business show. can you give us just a sense of what -- there might be a company ceo watching right now who wants to sponsor you. what does it cost to get something like this off the ground? >> honestly, to run the indianapolis 500 properly it

costs close to a million dollars. however, there are all sorts of ways to go about doing things to help you reduce those costs. we try to run with a budget of around half a million dollars. so we look for companies who want to get involved at sort of $50,000, $100,000, $200,000 to piece together the little pieces of the puzzle to create an entire race car to run on the track. >> that's interesting, what you just said about how it costs about a million dollars but through cost-saving measures you can get it down to half a million dollars. makes me think like you're almost a small business owner yourself. you have to run things efficiently. >> we do have to run things pretty efficiently. sadly in racing terms money is often speed and not having the extra money means our cars can't go through the wind tunnel as much and. >> you can't test to see if the car goes fast. >> yes. >> are there cars that you think will be much faster. the fastest car on the track -- they're spending how much. >> they will be right up in the

million dollar or more range to go and run. >> so it's not -- there is nobody out there spending $2 million or 3 million or doing something we don't know about. >> not for that one race. but it's motor racing. the more money you have, the more money you will spend. >> i'm always curious about this as athletes who deal with sponsors. how much time do you spend on the sponsorship side of it running the small business, if you will, versus training for the actual events? >> for me personally, i actually really am a small business. i only race a few times a year. the indianapolis 500 being one of those events. and i spend the entire rest of the year working on the sponsorship, working on marketing. later today i am actually ringing the closing bell at the nasdaq for genetic technologies, one of my partners on the car this year with. >> you have some good athletes in the pit crew. >> that's true. it's not only drivers. these guys have to go over the

wall. >> the stuff they do is -- >> yes. >> don't they have to train with weights and everything? >> they do because they have to get over the pit wall and change these heavy indy car tires at incredible speeds. >> they put them on, and they're on immediately. i saw undercover boss go into a pit crew. he is like trying to put this tire on, and it's not going on. he takes it off and looks at the screws and tries again. you couldn't do that. you have to be great. that can make all the difference in the race, right? >> it makes a huge difference. one of the very interesting things with being a driver such as myself who doesn't race full-time is that i am also paired with a crew who doesn't crew an indy car full-time because they're crewing another series and doing other things. so we're effectively -- we're the part-time team that gets invited to the super bowl. >> what kind of gauges are on the cars? i have always wanted to know. obviously, you see how fast you're going. does it tell you how close you are to the next car. >> you asked me that about a normal car. because you don't drive.

you don't own a car. there is a tach and -- >> so, in the actual racing car there are no real gauges in the way you would think. and speed actually isn't something that interests us except for the speed at the end of the lap for our average speed. the big things we're actually interested in are the fuel numbers, how much fuel am i using, how much fuel do i have left. we actually have things we can adjust inside of the race car to try to help the handling. >> that was actually a good question, andrew. >> yes. >> it's not the gauges for rpms or speed. you are talking about how much gas you have. tire wear as well. >> tire wear is not a gauge. but you change things inside the car -- >> how many times per race? >> do you change the tires. >> at the indianapolis 500. probably seven or eight times. >> that's unbelievable. >> what do you mean when you adjust things inside the car? >> you have front and rear anti-roll bars inside the car. the adjusters are in the

cockpit. as a driver, as the handling changes i am sitting there driving with the steering wheel and i reach down and make the changes. >> because the tires are getting thinner? >> as the rubber wears down, the handling of the car changes. so you keep adjusting. the readouts pop up right in front of you because you don't want to be trying to look to your right-hand side or left-hand side at 220 miles per hour to see what position you have a bar in. >> you don't have a side mirror that tells you by beeping that somebody is about to hit you like we do in our cars, right? >> no. the mirrors on the car are very small. we do have spotters. they stand up high above the racetrack and talk to us when we're on the racetrack. that are our eyes in terms of other cars coming up around us. >> do you feel safe? what do you think about the safety issues? you've been in a couple different accidents here and there, including one where there was a death -- not -- you're here so we're happy about that. >> it's open-wheel racing.

and motorsport is always going to be deiangerous. we're working hard to make racing as safe as we can, and the advances in safety have been phenomenal. but when you take race cars and you drive them at 230 miles an hour between a couple concrete walls, occasionally stuff is going to go wrong. >> no music, right? "danger zone." >> no music in the race car. >> no system blaring. >> just the sound of my own voice. >> screaming yaaaa! >> pippa, thank you. you'll be ringing the nasdaq closing bell later today. i'm sure we'll be broadcasting that. >> that will be easy compared to -- >> you just push a button. when we come back, destiny for act vision. a number of gamers playing its games it haddihitting new highs. our jobs panel is ready to go heading towards the april jobs number. will the latest numbers force

the fed's hand or not? we'll get analysis and reaction straight ahead.

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. take a look at a few stocks to watch. signa reported quarterly profit of $2.32 a share beating estimates of $2.15. it also raised the full-year forecast on strong growth in the global health care business. activision business gaining with estimates of 23 cents a share. the video game maker gave upbeat guidance for the current quarter

as the latest game in its "call of duty" line continues to sell well. and herbal life says talks -- >> herbal life! >> isn't the ceo's name herb? >> in advanced stages, the commission investigating charges that herbal life is operating a pyramid scheme. herbal life doesn't yet know whether a lawsuit or settlement will result, but if a settlement is struck, it puts the amount of the fine -- likely fine at $200 million. to anyone else that would seem like a lot, but -- like we made the point earlier. it is not an extension threat. they get the fine and the company keeps doing what it's doing. >> it totally occurred to me in the last hour. it says it could be near an sec settlement. let's see the settlement deal. >> that would be interesting if they weren't. >> because they also say we could wind up in court.

wynn resorts earnied $1.07 share and reported a slow in decline. the slump in the region may be bottoming out. fire eye says the ceo steps down next month to be replaced by president kevin mandia. dewalt stays on as chairman. the cyber security firm reporting a smaller first quarter loss than expected and is cutting the revenue forecast. thank you. when we come back the jobs report. you are looking at the clock. or you will be in a second. yeah. that's the clock outside the labor department. forecasters say the economy probably added 205,000 non-pharm jobs last month. the unemployment rate is seen holding steady at 5. the futures have been a little weaker ahead of that. "squawk box" will be right back. you both have a

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breaking economic news, the april employment report now just 30 minutes away. could a strong jobs number be a game-changer for the fed? the government data and instant market reaction straight ahead.

a house divided. paul ryan says he is not ready to endorse donald trump. can the gop's presumptive presidential nominee unite the party? power ball fever. sure, you can work for a living. or you can hit this weekend's $415 million jack pot. take a chance. joe is. the final hour of "squawk box" begins right now. ♪ if i had a million dollars ♪ if i had a million dollars >> live from the most powerful city in the world, new york, this is "squawk box." ♪ i would buy you a house happy friday, everybody. welcome back to "squawk box" here on cnbc. first in business worldwide. i am rebecca quick along with joe kernen and andrew ross sorkin. this hour is all about jobs. polled forecasters say the economy probably added 205,000 non-pharm payrolls last month. unemployment rate holding steady at 5%. average hourly earnings expected to raise by .3%. check out the futures. after probably a difficult week for the stock market, the dow

futures are down 42 points this morning. s&p down 5. nasdaq down 11. treasuries. ten-year note yielding 1.744%. we'll see if the jobs report has an impact on that. andrew. developing story out of canada this morning. wildfires growing to more than 300 square miles increasing by tenfold from just yesterday. officials are warning the fires could spread more because conditions are still tinder dry. at least 88,000 people have already been evacuated and more than 1600 homes and buildings destroyed. analysts say the fires could lead to $9 billion in insurance costs. the fires are in an area near the third largest oil reserves in the world. estimates project production cuts could wipe out canada's growth in the sect quart-second square posting a wider than

expected loss. raised its full-year outlook but investors appear to be concentrating on a surge in operating expenses. gopro missed the mark on the bottom line. the camera maker say it will delay the launch of its planned drone product. sanofi threatening to go hostile in the bid for medivation. it could raise the $9.3 billion offer if medivation engages in talks. if not, sanofi warning it will go to shareholders to oust the board. less than 30 minutes away from the april jobs report. first, we talk about the election and the economy. we have a panel of experts. head of u.s. equity and quantitative strategy. kevin hassett, senior fellow and director of economic policy studies at the american enterprise institute and former policy advisor to mitt romney. i saw an ad with mitt romney in

it. austin is with us, hanging out in chicago this morning. laney chen -- lanny chen director of domestic policy studies at stanford, also former economic policy advisor. we have a couple mitt romney guys here. >> not me. >> i'm not looking at you as a mitt romney guy. >> i think it's fine. >> you're feeling the bern, aren't you? >> no, no. >> i think -- >> for me you are, symbolically. that's what i figured. okay. >> you want to ask him about the bern? >> i am sitting here feeling him feel the bern. >> i want to start this conversation -- >> i am enjoying him feeling so uncomfortable with how things are going. >> we'll talk about your predictions and the economy. i am curious about how you think this number, if it does, changes the dynamic of the election. >> we done know the number yet. >> i know. >> well, regardless of what it is, the economy is fine. it's producing 200 -- whether

it's 200. >> i told you. >> whether it's 250,000 or 50. >> if it's 32,000 it's going to be great. >> joe, joe. >> this is a good number. >> wages went down. hours went down. this is a good number. >> joe, here is the point. no. here is the point. >> it's getting fun already. >> the economy has created 207,000 jobs on average each and every month for five solid years. up some months, down some months. 207,000 jobs. i don't think that's changed. today's number could be 350,000 or 50. nothing has changed. we're still producing 200,000 jobs. by the way, 200,000 jobs, that's twice the rate of of the working population. >> joe was asking last hour, why is everybody so angry? >> not everyone is. the key ingredient is wage growth, right. so we had this big hole in the economy. a 10% unemployment rate, all this slack. now we're getting back to full

employment and wage growth has been slow to pick up because of that. now wage growth picks up. people think about the economy, their own economy, through the prism of their pay. their pay increases have not been large but it will be as the labor market tightens. >> it's just now we're only seeing the labor participation rate increase. so i think there were a lot of disgruntled folks that were just out of the game. maybe that's why everybody is so angry, is that they were just sitting out in terms of looking for a job. maybe the numbers don't necessarily highlight the underlying -- >> let mark answer for that. if you say it's a 40-year low in par participation rate, he'll -- i know you're not the one we -- in our dreams. can you handle any of this, hassett. or can i pass it off to you. >> the economy has been -- we used to have the jobless recovery. now we have a recoveriless jobs,

that we're seeing jobs but not the growth. it's easy for the first quarter to revise negative. we could be looking at another president who inherits a recession. it's not crazy. everything is slowing right now and i expect the numbers to be lower and that to impact the economy and the election. the party of the incumbent is always the one that suffers politically if the economy is weak. i think the economy is turning south. i think it's turning south enough that i am starting to be anxious about us seeing a recession in the summer. >> what are the odds of a recession before the election coming? >> maybe 30%, 40%. something like that. >> really. >> part of it is something mark and i have been talking about. everybody who has a big factory to build or maybe a big purchase to make gets anxious about what the future looks like. so here it is june, say, and you're going to build a factory or are you going to wait till november. people wait till november.

capital spending in the second quarter is tanking right now. >> companies are talking about this in their guidance. they're saying we're worried about politics. we're not going to plan until we have a little more visibility on the future. >> so we could be having a wait-and-see recession. could be that we had those the last two times a new guy went in. >> austin, what do you think? >> from the university of chicago -- oh, no. >> milton friedman. inheriter of the legacy. >> what do you say, austin? >> i was just saying, wait for donald trump to say a few more sentences like, let's hair cut the owners of u.s. treasury bonds or some of the other more extreme and whacky economic ideas that he's put forward, and i actually think that kevin's downside risk of political uncertainty i think will start ramping up. i think you'll see markets start to freak out a little bit if they think that donald trump might actually win.

>> plus, there is a socialist who is doing pretty well on the other side. it's not exactly like you look at what's going on in the democratic party if you are on investor and think, oh, if they win it will be great. >> socialism is in the eye of the beholder. >> if bernie sanders were the nominee, i agree there would be a lot of nervousness. >> does i.a. take a position? >> they never take a position. >> what about kevin? >> i have not taken a position this time around. it's looking like a pretty good call for me. >> what are you going to do? >> i guess i'll watch paul ryan and think the same way that he does, i want to see what people do and judge based on that. >> did we say he were a romney adviser or you? >> i was. >> stick with paul ryan. good. >> yesterday he said he's not ready to support trump. >> are you ready to support trump? >> i am a journalist. actually i'm not. but -- i'm not a journalist, but

i'm not ready. no. i made the point i wish ryan and romney had been as vociferous about barack obama when they ran as they are about trump. it would have then -- maybe we wouldn't be talking about this now, but they weren't. so -- right? >> they did lose. it's true. >> what's the position out at the hoover institution this morning? where is he? >> well, the position is it's early. beyond that, what i would say is anxiety is the watch word here. there are a couple people mentioning anxiety. i think there is a lot of economic anxiety out there. this is so interesting. this cob the first election where both the democratic and republican nominees are in favor of bigger government. i think it has to do with the fact that people are looking for some activism out of government. they' they're sick of the gridlock and nothing happening. that explains donald trump to a certain degree. you have trump and clinton, who i just find it staggering that you have both of them who probably won't do a thing about medicare or social security,

both are looking for more spending and both looking for direct negotiation of drug prices through medicare. it's fascinating. >> it's almost like we need a third-party candidate to run. >> it could be. it could be. >> couldn't it be the case that actually there is less uncertainty? i mean, if trump stays low in the polls, say he stays -- he's 40% right now. >> i don't think he's going to stay down there. >> if he stays down there -- i mean the markets now are basically not pricing in a donald trump. if they were pricing that in, we would see a lot of turmoil in the markets. right now the markets are saying -- >> everybody has been wrong about donald trump the whole time. >> to this point. >> you can just coast. seriously. you got no worries. >> definitely have a worry. if he goes from 40 to 45 to 50, we all have to worry. >> we do. yeah. it's not going to happen. no. he's going to stay at 40. he coasts. no problem. no problemo. >> is he being sarcastic?

i can't tell. >> i know. >> this is happening in a situation in which you've still got stagnation coming out of europe, emerging markets totally in the floor, and china -- it's getting worse by the day. now they're going after the economists. anybody who comes up with a forecast less than what the government says it's going to be, they're process cuting thsed trying to crack down on them. in a situation like that, i don't disagree with kevin. there is a not zero and maybe even a low chance we go in a worldwide recession. not like 2008 but maybe like 1991. >> really, austan? >> guys, we'll press the pause button and continue this conversation. but thank you. coming up, the clock is ticking outside the labor department in washington. it's iclicker everywhere.

right? >> we're getting older everywhere. >> it is everywhere. mary thompson joins us from rhode island with a look at one industry that's hiring right now. mary. >> reporter: joe, we're going to show you or tell you about an environmentally friendly sector that is cleaning up when it comes to job growth. that's coming up after the break.

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stock on the move this morning. stocks, fire eye shares getting slammed. cyber security firm reporting a smaller first quarter loss than expected. it's cutting the full-year revenue forecast. yelp posting better than expected first quarter results. even as higher spending led to the company's fifth straight quarterly loss. consumer review site is raising its 2016 outlook. today's top story is the jobs report. ahead of the government's numbers we're looking at one sector cleaning up when it comes to creating new jobs. mary thomas joins us from new providence, rhode island with the latest installment of where the jobs are. >> reporter: behind me what you see is a firm called arcadis

doing what is known as soil remediation. cleaning up this formal industrial site so that it's fit to build on in the future. work like this is plentiful these days and so too is demand for the engineers who can do it. over 150 years old the global engineering is consulting firm is finding lots of new business in making what's old new or at least clean again. >> our environmental business is the biggest. >> reporter: years after love canal. cleaning up toxic sites. frank runs the staffing environmental recruiting firm. along with regulations he says generational turnover means these workers are in high demand. >> if i could get genetic material and shoot it into individuals and create myself a five to seven-year professional environmental engineer i would be a wealthy man.

>> reporter: the median wage, over $88,000. a price tag that gets bigger with experience and added degrees and licenses. the number of job openings getting bigger too. the government forecasting a 12.5% increase in environmental engineering jobs by 2024. at a minimum you need a four-year engineering degree but an engineer can increase their value and salary by adding professional licenses along with advanced degrees. back to you. >> thank you very much. mary thompson. synchronize your watches. the jobs report minutes away. numbers and market reaction. first, powerball fever. nearly half a billion dollars up for grabs this weekend. we have the details when we come back. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be.

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welcome back, everybody. powerball mania strikes again. saturday's jack pot prize hitting nearly half a billion dollars. that makes this the ninth largest jack pot in u.s. history. it could grow even larger depending on how ticket sales go between now and saturday's drawings. the odds of hitting all six numbers, more than 1 in 292 million. so you're saying there is a chance. >> just like earnings season for us for the general news media. never gets old, does it? here are the lines. what are you going to do if you -- it never gets old.

never gets old! right? they're going to do it again. and then that causes more people -- it won't be ninth anymore. it will be like second or third. >> i am buying! >> don't tell him that. >> i'm buyin'. why not. political news this morning -- >> i'm buyin' and i'm not sharing if i win. >> have you thought about what you'll spend it on? >> you know what, enjoyment of thinking of that is worth the dollar. >> couldn't you not spend it and think about it -- not use the dollar and think about what you would spend it on? >> it heightens and elevates the way i -- >> really? >> it does. >> it's a left brain, right brain thing between us. are you from mars? >> i am. political news. donald trump taking to twitter to respond to paul ryan's endorsement comments. the presumptive gop presidential nominee tweeting, so many great endorsements yesterday, except for paul ryan.

we must put america first and make america great again! then paul ryan said, that i inherited something very special, the republican party. wrong, i didn't inherit it -- what? oh, okay. okay. that was wrong. no. it's not paul ryan saying -- paul ryan said that i inherited something very special the republican party, wrong. i didn't inherit it. i won it with millions of voters. we all have a lot going on in our lives. who knows. 2020 might be looking good. i don't know. the "new york times" launching a meal service this summer in a partnership with a food start-up cheffed. the service provides subscribers with ingredients from the times cooking site. ingredients delivered within 48 hours with the two companies planning to split the profits. >> it's like you see the recipes in the recipe section.

>> you take the recipe and say "buy" and they bring it to you. >> i bet you couldn't get gluten if you wanted it. >> sure you can. >> red meat? >> yes. >> no! >> yes. >> not sugary soda. >> it's for foodies. absolutely. butter. >> butter? >> butter. lots of it. sugar. >> your mouth is watering now, isn't it? >> i can't believe it. it's heresy. the waiting is almost over. final predictions and the number of the morning, april jobs report. "squawk box" returns in a moment. try the superior hold...

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♪ it's the final countdown ♪ ♪ the final countdown the final countdown, everybody. let's go around the horn and get last-minute predictions from the jobs panel. rick starting with you. what's your number for today? >> 224,000. i think the jobs creation is going to stick roughly to the norms we have had. they've taken much of the variance out of the numbers,

whether it's adp or this number. adp being on the light side. places like goldman raising their calls. it will be a fascinating number. the quality of jobs, the income it pays and the lack of horse power in growth that makes the difference. that's my number. >> following average hourly earnings closely too? >> you know, i am. i think that today's number expecting up .3, 2.4-year over year. i don't think that will be surprises there given the recent spat of data. i think we actually may be disappointed in that category. >> steve, how about you? >> you know, i have been following my model, becky. my model has not been working so well. so i'll keep following it. i'm going 155. it's been underperforming the actual numbers. >> whoa! >> look, if i use adp as an input or use the isms as input,

they've been pointing to weaker growth as those numbers have come down. so i can't help but go with it until i change the model. i haven't had time to do that so i'm sticking with it and going down with my ship. >> how about you? >> i'm sticking with the house view. we're looking for 200,000. right in line. i think we could see a little bit of softness in wage pressure just because of -- i mentioned earlier labor participation rate. more folks coming back to the market, so that could put a little bit of pressure, you know, bigger supply of workers puts a little pressure on labor. so we are looking for 20 bips instead of 30 bips there. >> okay. >> 5% unemployment. >> mark, how about you? >> 190 k. consistent with the soft adp. i couldn't have been on tv to wednesday to explain it. >> what happened? >> you want to go to the weeds? sorry about that, steve? >> you didn't tell us that, man. >> i was supposed to be on tv. we had a technical problem.

it overstates the softness. >> you're in trouble, liesman. >> guys, we have to go fast. >> open job positions record highs. layoffs are record lows. underlying job growth rock solid around 200 k. >> austan? quick number. >> 189. i think the unemployment rate comes down a tenth. eventually productivity will come back to something like zero instead of a negative. when it does, the jobs numbers will slow down. >> lanhee. >> i am going 225. i am usually the pessimist. but april jobless claims, ism. the adp came in weak but i'm going 225. >> kevin? >> i am with steve a little bit below at 150 because i think the election uncertainty is starting to slow everything. >> does it change your mind, hearing what mark said about the

weakness? >> it's not just based on the adp. it's based on the bigger cosmic situation. the futures ahead of the number. weaker all morning. dow futures down 40. s&p off by 5. nasdaq down by ten. let's get to hampton pearson, standing by at the labor department with the numbers. >> reporter: 160,000. april non-pharm payrolls increased by 160,000. the unemployment rate remains at 5%. average hourly earnings up .3% for the month of april. 2.5% over the last 12 months. below the consensus forecast, that 160 figure is also the lowest since september of last year when we only had 149,000 jobs. revisions for february and march, a collective lower by 19,000 for the -- those two months versus what had previously been reported. april private sector job growth up 171,000.

sectors of strength, professional and business services, up by 65,000. health care, plus 44,000. financial activity, up 20,000. on the downside, mining losing another 7,000 jobs. government employment down by 11,000. labor force participation rate, 62.8%. the u-6. the so-called real unemployment rate 9.7%. long-term unemployment six months or longer declined by 150,000 last month, 2.1 million people, 25.7% of the total unemployed. back to you. >> hampton, thank you. >> come on. everybody. leishman, leishman. >> keeping the model. >> the broken model is working, steve. you are the closest at 150. >> this is like when i go fishing. this is like when i go fishing. >> let's eat taco bowls to

celebrate. >> i am not making any jokes. here is the thing. it's like when i go fishing and i'm ready to leave and i've been there for two hours without a bite. then i get a bite so i stay. the model goes up, it goes. goes crazy. who knows. i just want to make a couple of quick points. >> you're hooked. >> there is stuff to like about this and stuff not to like. the 160, a little bit shy coming down a little bit. we like the work week, looks like it ticked up. 34.5. we like the wages also doing pretty good. at least maintaining what we had before. the revisions, really modest. not sure why we're getting the government decline by 11,000. retail took a break. and also a break in the influx into the work force which i have been watching carefully. you were minus 362. so the work force declined by 360. but also, the unemployed declined by 46,000. so this is going to be seen as a

lukewarm report. i don't think it's anything that gets the fed off its bittard. >> you are obsessioned. y -- obsessed. you came up with the taco bowl. how about an email salad. you are obsessed. everything trump with you? >> if trump becomes the president we're in for doom. >> you're allowed to write bernie off? >> yeah. >> oh, okay. then we can focus on hillary. we can go there too if you want. >> okay. i'm waiting for you to get a gary johnson sign. >> what? >> he is the libertarian candidate, joe, you should look into him. >> you're suggesting a third-party candidate. i wonder who would win. the market reaction to this. we were looking at the dow down 40 points below fair value right before. you can see they're now down by

about 73. s&p down close to ten. nasdaq off by 20. rick santelli has been watching the cme. >> big drops. we dropped into the 60s on a two-year. mid teens on a five-year. maybe the most important aspect. at a 170 yield in tens. within four basis points of the lowest yield close of the year, which aren't only in the 160s, but there are two of them. anybody who has been following fixed income markets, double bottoms and double tops in treasuries are huge. whether it holds or not could have fairly large ramifications. so the move was very swift. and i think it's a big technical day, especially for weekly closes. japan's open. we want to pay close attention to 166 in tens. >> does this actually pull them back from potential rate hike say even in july? >> we have the fed tightening

two times this year. i don't know if this report will change that materially. i do think, though, that, you know, even if the fed doesn't tighten, other parts of the economy are tightening for the fed. if you look at, you know, capital markets activity, ipos are basically a shadow of their formerselv selves. it's hard for companies to raise capital. it's more expensive and that's playing through to the whole market. the fed, i don't think it matters. we're still seeing liquidity contract on the margins. that is worth focusing on a little bit more than the fed. >> mark, you wanted to jump in? >> in my view this means the labor market is still tightening. suppose job growth is actually 160 k per month. i don't think that but say it is. that's still well above the 80, 90 k you need each month to absorb the growth.

you can see it in the increase in labor force participation. wage growth has improved enough to bring people in. so the labor market is tightening. i feel confident, joe, that we'll be at full employment with all the part-timers by election day. you can feel the growth accelerating. >> the trajectory you're seeing will take us to 120 next time. then it will start -- >> you're taking one data point and extrapolating down. >> but we thought, based on the uncertainty models, that we would get a bad number today. we got a bad number. the point is they say it will be worse next time. the market is starting to be nervous about that. i agree if we stuck here there would still be job growth but i don't think we're going to stick here. i think it's going to go down. >> if mark was on yesterday and hadn't overslept his appearance for adp on wednesday because he was out the night before, i

would have queried him about what happened to the large adp. in the economic data, not just jobs but other data, what we're seeing is a residual hangover, good word, from what happened in january. you had a big swoon, huge recession worries. picking up on what kevin is talking about, financial conditions tightened. this is the result of that and it's something that the economy might work through in the next couple of months. >> yeah, okay. certainly you can't dismiss that because the bottom in the markets was late february, so, you know, the ceo might call the human resource person and say stop hiring. that won't show up in the data until this month. so you can't dismiss that. i will point to the fact that initial claims for unemployment insurance, even with last week, are running at 258,000, 260,000 per week. that's about as good as it gets. it doesn't get lower than that. that's very consistent with job growth.

>> a lot of republican states, mark, cut back on insurance claims. seems to maybe perhaps have had an effect of putting people back to work. have you seen that effect? >> maybe. but on the other hand we also have record high open job positions. we have the number of people quitting their jobs surging, and that doesn't happen unless people feel i can find another job. >> one thing to remember on this is that growth hasn't been that good. jobs have been going a lot better than growth has been going. and that's only possible because we have had these weird productivity numbers. >> that's true. >> when it starts going back to something like normal, the jobs number will get worse. >> it's weak gdp growth. >> correct. >> we can count jobs. we know now to do that. >> you're questioning the numbers too. >> absolutely. we cannot count gdp. >> we can't count the productivity either. gdp and jobs normally have a

relationship and that relationship has looked strange lately. it can be explained by the low productivity. >> productivity -- we don't have mountains of regulation. vapor cigarettes. the government can't do anything right, and they go after vapor cigarettes. i know more people who have quit. your government in action. putting water everywhere. if everybody else does that you end up in the hooscow. it's a lack of productivity and you dismiss it because the only answer is less government and that's off the table. >> lanhee, you were the high expectation. do you change your mind based on this number or do you think it's a one off? >> no. it would seem to be the start of something troubling. i think kevin was on to something when he talked about this general aura of anxiety or the general aura of uncertainty around the election. i do think some of that is

there. but i don't think it alters the fundamentals of where we are headed in this election. i think fundamentally this looks to me at least like hillary clinton's election to lose. i know i shouldn't say that probably, but that's just the reality of it. and as the economy continues i think people feel the labor market is strong, this anxiety is lingering. but it just -- that's the way it looks to me. >> hmm. >> folks, we're out of time -- >> steve? >> are we out of time? i want to ask rick. looks like one development in the bond market today is that they're pricing out the fed for the year. given dovish comments yesterday from lockhart and williams, i'm not sure that's the wrong call when i look at the one-year dropping down. two years down, up 68 basis points. looks like they're saying the fed can go home for the rest of the year. >> i would think that's a pretty safe bet. i think also also a school of camp thinking if you had 400,000 jobs every month you probably still wouldn't get a tightening

until after the election. >> thanks, guys. thanks to the panel. coming up, jobs in america. can the country bring manufacturing jobs back to our shores? we'll ask our business roundtable president john engler. he is next. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ this cit added this other level of clean to it. it just kinda like wiped everything clean. my teeth are glowing. they are so white. can the country brin

. flp.

welcome back to "squawk box." back to the jobs report in just a minute. first, shares of retailer jcpenney. the new york post it cut payroll. froze over time and took other

cost-cutting matters due to an expense challenge due to an internal memo. is that stock opening off 7%. >> this food thing with the "new york times." is that a fall-back for when the paper folds? will they get -- >> the paper won't be folding. >> do they deliver the food? >> yes. >> so you could be -- you got to learn -- you have to get your driver's license if you -- >> i see. i see what you mean. >> there will be jobs in the delivery -- >> they're partnering with a company that does that. >> they are. >> they won't bring that in house. i would love that, krugman behind -- working for a living. can you imagine? >> on a bike. >> ding, ding, ding, ding. out of the way! [ laughing ] i didn't come up with that. people share with me. it's unbelievable. i won't tell you who did, but someone that you trust and thinks that -- i'm not going -- >> someone that i trust?

>> yeah. someone that works on the show. >> that i don't trust anymore. >> now i'm sure who did it. >> i'm not outing him or her. now back to the jobs. joining us business round table president john engler. we had interesting comments just recently. we're all dealing with a .5% gdp. trying to figure out how we can be close to sub 5% on the unemployment rate. you know. is it a good economy? is it a place where you can find jobs? why are people so dissatisfied? >> i think it's a pretty lousy economy. i get, you know, some of the numbers. but labor participation still below 63%. wage gains have happened a little bit more lately but are still pretty sad. we have seen, if we go back over a period of time, we're having the first presidency concluding where the gdp during the entire presidency never hit 3%. the last time that happened was the hoover administration. i think all of this -- it's like

ground hog day, the numbers over and over again. we're stuck. stuck in a mediocre place and we're certainly underperforming against the potential of the economy. we're underperforming against what the trends should have been coming out of the depths of the '08/'09 recession. i think it's a lot of things. failure to deal with big questions. every time i have been on we talk about tax reform, trade, and that's been brought into an unbelievable debate now with the presidential candidates all opposed to trade. i still believe that's an absolute necessity for growth. and then the inability to resolve things like the immigration debate and the regulatory side. it all adds up and it depresses -- the animal spirits are locked up in cages. they need to be let out. we're hoping 2017 does that. it doesn't look like much change is coming the rest of this year. >> this is not a good time monetary policy-wise to be slowing down. even stock market-wise. you can see today -- you know,

it used to be if -- maybe it's off the table this year for more hikes. possibly -- that used to be good for a couple hundred points on the industrial. it's not anymore. now the .5%, that took the market down. for gdp. now this number, the market -- we don't need the fed anymore. we need something to work in the economy for the stock market to go up. >> i looked at a study where actually on gdp too, the one country in the sample of large industrial companies that consistently overestimated gdp and later revised downward. ga guess what, united states of america. i would argue that one thing that's a ray of hope here, it's interesting that both the clinton campaign and the trump campaign have talked about the need to get busy on the american infrastructure investment. it's been our belief for a long time, especially the ultra-low interest rate environment. that's a tremendous opportunity

to rebuild things that need to be rebuilt in this country. everywhere we look there is an opportunity to do that. and many of those don't need any public funds. they just need a permit or permission from a governmental agency to get going. and so that could be a big story next year. it's not going to happen this year with this administration. >> the business roundtable, are they going to endorse donald trump? >> we don't endorse anybody. i get to remain happily in switzerland throughout the fall. our ceo group is scrupulously non-partisan. bipartisan. we work with who the people send us. we privately have views that they could do a better job sometimes. but we stay out of this. we're awaiting regime change and we'll see who we get. we hope the first hundred days will be focused on the domestic economy. i think whoever gets elected will look around and say fires are going on all over the world. we better fix the u.s. economy

so we can deal with the global issues. >> governor, i think whoever is elected will focus on the u.s. economy but their take on how to fix it may differ radically. you have ideas about what needs to be done. >> i think there is an opportunity in infrastructure. i see that as something that could be bipartisan. >> both candidates who are in the lead at this point have mentioned things like this. >> they have talked about it. there is a hidden issue in there. because if you're going to build something, you have to have, in almost every case, the permission to do so. we've been ham strung by environmental -- so you know, don't put a shovel in the ground, don't build this, don't fix that. you have to get by that. i think there is a great labor, you know, coalition that exists where republicans and democrats can get together. that's a significant potential. i do think the tax code has to be addressed. we have a treasury department that just has not been able to do that. in fact, they went the other way again just recently when there

was a debt-equity rule that came out with a potential for a significant tax increase, all done administratively. and sort of a -- a neutron bomb dropped without any warning. nothing in advance. and neutron bomb dropped without warning. nothing in advance. it's got companies, all kinds of companies, all sizes of companies scrambling to figure out how much might it cost? it just does not end. apparently won't end until january, i don't know, 19th or 20th. >> you talked about a lot of the headwinds. and, you know, a lot of people make the point that slow, steady, 2% growth, best house in the neighborhood. you know, a lot of people have done well over the past six, seven, eight years. could it -- whether it's hillary clinton or donald trump, or -- you know, suddenly start feeling the bern. could it really be any worse than it is right now? if, you know, what happens, you

know, in november? i can't imagine that the private sector could be compromised more than it has been. >> let me give you an example how it could happen. i thought that since you had both leading candidates, mrs. clinton and mr. trump in west virginia this week. trump talked about the role that coal might play as part of an all of the above energy strategy. mrs. clinton is saying, coal miners are basically history. but we'll have spending to help retrain you, some what like the oil story this morning. the workers don't want to be trained. they would like to go back to work. are there strategies to put people back to work? or raise money and pay them in lieu of working. that strategy has significant flaws to it. where does the money come from? what enterprise is working to support that spending?

it's all being borrowed today. nobody is talking about fixing the overall fiscal mess we have for the united states budget and long-term deficits. that needs to be brought into play. and the low interest rates. one thing that would be great for a slightly higher interest rate is for the seniors and everybody depending on some return on their savings to be able to sport themselves. when that interest rate goes higher, the implications for the national debt are stunning. >> we have a grid to feed, with all those teslas we're going to be buying pip can't see the coal miners fitting the solar panel. >> mike jackson -- >> providing the energy at ten times the price. ten times the kilowatt hour. >> i thought mike explained tesla well earlier today. >> all right, fompber. just gets more surreal. we're in unchartered territory. >> thank you.

>> i hope -- i hope that the people that think he's coming back are not right. this is how it would start. right? twitter. twitter. bernie sanders. almost president. this is the way it would happen. these are the things you would see. >> science. when we return, jim cramer will join us. this car?

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welcome back. let's get to the new york stock exchange where jim cramer joins us now. good morning. what do you think of the numbers? >> look, there's a worldwide in the last few weeks, we started thinking the commodities got ahead of themselves. maybe oil. the u.s. is going to be strong. china is going to be okay. suddenly, it's unraveling. i don't want to put too much emphasis on any one given number, but the notion of acceleration of worldwide growth, which drove the industrial stocks up in the last few weeks is kind of vanishing. we need to see something to keep those balls in the air. these numbers are not strong enough to justify the moves we have had. >> we'll see you in just a bit. labor secretary thomas perez will join the folks at "squawk on the street' at 9: 35. operag system for industry.

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we're about out of time. quickly. mark, a quick parting shot. >> don't despair. i think the underlying job growth and economy is doing okay. >> the economy is okay. the market looks fragile at these levels. it's pricing in a lot for growth

than we're seeing. >> kevin? >> weav're stuck in a bad place. it's getting worse. >> fantastic. great to see all of you. look at what's happening with the futures since we got the jobs report. it was, again, 160,000. about 40,000 me low hat the street had been anticipating. the market not liking it. join us on monday. right now, it's time for "squawk on the street." good friday morning. welcome to "squawk on the street." we're at the new york stock exchange. april jobs, 160,000. below estimates. the weakest number in seven months. wages up 2.5. the odds of a june hike are lower today and so are the futures. some of the margarets returned from holidays. yields are lower. crude low e as well. that 160,000 payroll in april came in below forecast of