kbl. good morning. the final test. could it also be the catalyst for the fed to hikes rates. hurricane hermine slams fth l florida. just been downgraded to a tropical storm. live report and updates from the ground. >> clinton's stash. raked in more money than ever before in august, despite for e-mail drama. it's friday, september 2, 2016, and "world wide exchange" begin

>> will happy friday indeed from me as well. i'm wilfred frost. let's check in on the global markets. we saw a selloff yesterday. tough week for oil. futures under some pressure. it's been muted ahead of the big jobs report coming later this morning. dow futures down 6. s&p down 2. nasdaq down a little more than 1 point. as for the ten-year treasury note yield ahead of big economic data point and after manufacturing came out in the u.s. much weaker than expected. showed contraction. weakest number since back in january and the odds of september in terms of the fed hike went down. so did u.s. ten-year treasury yield. we are sitting below 1.60 level. >> that ever so slightly building we had just eased yesterday on the eve of the big

jobs number we get in a few hours. european equities. let's have a look at them. broader stock 600 is flat for the week at a whole. likely to end the round there. bit after weakness in the weak for the ftse 100. it's down half a percent for the week as a whole. ending broadly positive in what has been similar to the u.s. a flat-ish week. asian trade today has been again slightly positive as you can see. the nikkei just below flat, but it's been a strong week. shanghai comp and hong kong ending the week in positive territory. >> as for the broader market. cross asset oil is a story for sure. rebounding a bit. we're back down to 43. 43.43 currently and the plies of oil has shed about 9%. brent international benchmark, 45.81. higher by about .80%.

let's quickly show you the action ahead of jobs this morning. the dollar continues to strengthen against the euro. dollar stronger again against the japanese yen. we've been hovering above that level. at the highest level there since early summer. has really recouped some of the recent losses on the better data. 1.32. >> some further better data today. not moving. much like yesterday had 1 percent move. construction data improving and showing the same trend we saw in the pmis yesterday. july was bad, august is bouncing back. >> shaking off the immediate impact of brexit potentially. as for gold, quickly show you what the stronger dollar comes the weaker gold price. seeing over the last week or to. gold shedding about 2.50 this morning. today's top story is the august job's report. now 3.5 hours away from the count down.

landon dowdy joins us this morning with three things to watch. >> good morning to you. it's one of the most crucial reports of the year. jobs friday with the august numbers out at 8:30 a.m. eastern time. first the numbers the unemployment rate forecast to tick down slightly. the u.s. economy is expected to have added 180,000 jobs last month versus the whopping 255,000 add instead july. the second item to watch, the sectors. the u.s. has become a service based economy. lack of demand abroad continues to hold back manufacturing employment. the third thing to watch. wage growth. they're currently closing in on 3% year over year. fully healthy economy, wage growth should be closer to 3.5%. something the data dependent fed would be watching closely. telling me he doesn't think there will be enough to cause the fed to raise rates at the september meeting, but it will be close, adding a move would

require a stellar jobs report. that said, take a look at this, august has a history of ugly job reports. showing august was the worst performing month of 2015. >> thank you so much for that. it's going to be the big jobs number. august has the most revisions ever. which is understandable one over the summer months, but quite significant revision. so to take confidence off the back of a number that's often revise thad will see big moves as early as september, perhaps people are underestimating that a bit. >> already mark as slow down in job creation. 180,000 from the 255,000 we saw in july. there is a high bar. see how high it is to get the fed funds moving. >> if we do see a strong number and a september hike, a further hike in december is still on the able to. if we did see two this year, that would be a big surprise for markets. besides the august job report, there are other

noteworthy items on the agenda. july trade deficit. followed by auto at 10:00 a.m. corporate headlines for you this morning and potential $10 billion deal in the making. hewlett-packard seeking a buyer for software unit. company in talks with buyout firm bravo. meg whitman looks to focus on tech services. reuters, hp has received offers for as much as $7.5 billion. check out shares on all of this deal talk. got a bit of a boost here in the premarket. not much. >> samsung is halting sales of new galaxy smartphone. batteries exploded or caught fire while charging. found 35 cases of problems with the battery cells. the company says it will offer a global exchange program for phones already sold. it will take two weeks to repair

replacement devices, but unclear when the new sales of the galaxy note seven will resume. share prices have been hit quite badly. they are up 1% today. declining over the last week. that is a six month chart so that little tick down in the last week or so perhaps not showing as significantly as it has been. >> some other stocks to watch today, verphone cutting outlook. after third quarter revenue missed estimates. check out shares of lululemon. meeting analysts, but same store sales fell short of expectation. store traffic, but customers are making larger purchases. spending on supply chain rose sharply. ceo addressed on the conference call. >> our focus on operation is the main driver of gross margin and earnings improvement. benefits from sourcing,

logistics and supply draw this result. >> he had overseen a big stock rise in the chart of lululemon in the past years or so. before this report, the stock was up more than 45%. it was vulnerable to a milsz high expectations, priced to perfection sort of thing. why you're seeing a 9% slide. also a lot of short interest around this name. 18% of overall flow. makes it vulnerable when it does miss expectations like this. it is hard to find 14% revenue growth in retail and lululemon is still putting that up. >> is there a lot more competition in this area now. >> absolutely. >> traditional names fighting back. >> under armour, nike, lee surely category was growing so fast has slowed down a bit. so the competition always gets a little bit harder. lululemon still comping 4-5%

without currency. we'll see if they can keep it up and the profitability the ceo was talking about there. check out shares of lululemon heading south in the early action. >> some other companies. the million device maker says cfo gregory matt will retire end of october. >> gap sales dropped. gap says a fire this week in distribution center in new york is struggling fulfilling online orders. smith and wesson lichlts guidance. up 2% in the premarket. >> broad kom swung to a loss. adjusted results beat forecast as did the chip makers fourth quarter revenue outlook.

>> when we come back, the trump effect. the republican presidential candidate hasn't built his wall just yet, but already having an impact on the mexican economy. we'll explain straight ahead. plus julia chattily is on the shore in lake como. >> tough assignment. >> indeed. we'll have a prove of whose there, what to expect on an important period in politics and economics. back in a few minutes. t,ars. gett. ...coach gman used his rewards cdit card from bof ari to e1% ch ba everywhere, ery me. pces e baincages. ♪ 2% back at grory stores and now at wlesasa clubs. an3% back . whh help him give his playermethina. the shewar crecard fr bk america. more cask for in y buy most.

welcome back to "world wide exchange." is donald trump crushing the mexican peso. down 9% against the dollar and has been unusually volatile. check out this chart. what it shows is trump versus clinton in the polls. that is one line. and when he spikes, as you can see, when he won the primary a few months ago, so does the u.s. dollars versus the mexican peso. that means the mexican peso gets hit hard. he's back on the rise towards the end of the chart and from the blue line, the peso is heading lower again. coincidence? maybe. i talked to a dozen strategists about this. some said not much here it's about the price of oil. you can see going back a few years that correlation is very

real. mexico is an exporter. gets hurt when it falls and lately the sell off has wayed on the mexican peso. also had credit rating down. the trump threat is real for mexico. if he does rip up nafta and try to renegotiate it as promised if elected. that is an if. that could be a huge blow to mexico's economy. most go to the u.s. more than half of imports come from the u.s. and america has poured hundreds of billions in foreign direct investment into mexicos economy, especially since nasdaq has taken affect. that number has shot up more than 600 percent. the bottom line, watch the peso. buzzing about this idea that it shorting the peso is a trump presidential hedge. you don't see that much election impact in the markets right now. if he actually does assume the presidency, mexico could be the most -- have if most to lose in

terms of economic vulnerability because it's ironic. when he in fact is part of the reason it's falling. >> really interesting correlation. clearly there is a relationship. what extent do you think it's going to be a fundamental move or trade as you say trying to haej things out. >> could be a little bit of both. hard to get a straight answer when it comes to this. though it is unusual and mentioning this yesterday to see a currency move so closely with polls like that. we'll continue to watch it. he seems to be getting steam here. fundamentally the relationship is clear. mexico depends on the u.s. economy and any questions marks about nafta could have serious impact. from mexico to italy, the annual forum getting underway. here from renzi.

julia joins frus the shores of lake como with what to expect. julia. >> reporter: thank you so much. beautiful backdrop here belying the huge challenges that triand prime minster renzi faces. recent earthquake, weak growth we've seen for many years ask or it being so pivotal and that's the italian banking sector. he's going to come here today and try to underscore greater confidence. i did takele one of these issues with the countries finance minister earlier today. that was the banking sector. i asked him if we need to get real and accept ultimately a bigger bailout program needed. he was firm in his response. listen. >> this is total imaginatioimag we're not talking about that kind of money and we're not talking about bailout. bailout is ruled out in european

context. we're working with the rules of the bail in system which strong participation by the shape shareholders and stake holders recapitalizing the banks. >> the banking sector has become a critical issue here for another source of which is this vote of political reform that's set to take place in the fourth quarter. probably in november. renzi has said he'll resign if he loses that vote. the last thing that country needs is political instability on top of everything else. so i think renzi is going to come to the business community and say, look, i'm still the man for the job and we need to get voters on board. right now the polls are pretty 50/50. guys, back to you. >> julia, i know this is a long tradition in italy and we cover it because of the economic talk that goes on there. if that happened in this country with some of the struggles you outlined in the country, a bunch of politicians schmoozing on a

report on a beach. that would get a lot of questioning and pushback. does the italian press jump on that. >> we just had jackson hole. >> it's not very fancy either. i've stayed there. it's rustic. >> this is pretty fancy. welcome to italy. in fact, welcome to dwruyou wer that point, but to wilfred, jackson hole is kind of similar. it's important for thought generation. the oblem is we always ask and ask about things like the g20. what's actionable. ? what comes out of these talks. that's a very valid question. >> as the leaders meet at the g20 in china. good point. it's mostly we're jealous of her assignment. >> i agree. i think with all of these things, g20 is the best of example of lack of action. >> what comes out of it. >> no different than the likes of jackson hole. they all kind of expensive

trips. are they ever justifiable? a lot of taxpayer money goes into them. >> hermine taking a significant amount of attention overnight. the hurricane has just got downgraded to a tropical storm. we'll have a liveup date updat up. >> plus hillary clinton smashing records. we've got the latest august numbers to share with you. you're watching cnbc, first in business, worldwide. a hotel he, bucan't imine dog ytng else. now that the t makes itasier to getere, the e orhoodis really angg i haveo go whever t wk is. businessesan prosper. d i 3 or 4 gigs aoowed. wh it o ben goodhand likfig newo tnguity tomaket in the by.

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welcome back to "world wide exchange." hurricane hermine has been downgraded to a tropical storm, but not before making land fall or florida this morning. this is the first direct hit hurricane in the state in the past 11 years. it's being called life threatening. the next state in its past is georgia. nbc jay gray joins us with the latest. >> reporter: good morning. we're seeing the outer bands moving into savannah. you can see the rain picked up dramatically. getting a bit of a wind swirling as well. we know much more is on the way. driving rains, severe winds and a violent surf, the storm continued to build as it rushed toward the coast. thousands in its path rushed to get ready. >> get rid of debris. strap things down.

move inside. >> reporter: while outside conditions intensifies and so did the warning from governor rick scott. >> put this in perspective. this is life threatening. we have a hurricane. >> reporter: made land fall overnight in the big bend region of florida's gulf coast. the first hurricane to hit the state in more than a decade. >> technically this is the first one we've had as far as hurricane and we have people that's never been in this and stuff so it's now people. >> reporter: for those in and around the straight point t storm surge pushed water into places it's not supposed to go. on shore, it continues to churn. this morning flooding is already an issue inland and growing concern for potential of tornados and widespread power outage. expected to continue path of destruction through the holiday

weekend. >> and right now we know there are 56 counties here in georgia under an emergency warning at this point. an emergency order. schools closed and we expect to see this rain and wind pick up through midday. gusts could be as high as 45-50 miles an hour. sara, going to be a rough go for several hours out here. >> jay, thank you for the update. stay safe. live from savannah, georgia this morning. the hurricane isn't the only problem in the state right now. officials announce they found the first mosquito carrying the zika virus in the miami area. the hurricane is expected to make things worse. delaying insecticide spraying. >> now to politics, donald trump has named david bossie new

campaign manager. he is advised trump for years. gop telling "washington post" that he is smart, loves politics and knows how to win. recent reshuffling of campaign leadership when he promoted kelly an con way to campaign manager. august was a big fund raising month for hillary clinton and the campaign. raking in $43 million last month. that is a 58% jump from july figure. donations to her campaign remaining flat. in july and august, the campaign raised about 62 million indicating the increase in funds was driven by large contributions to the democratic party itself. donald trump's campaign is not yet released august fund raising numbers. we will watch that as the polls have swung pretty sharply for trump in the past two weeks. me lamelania trump files a

lawsuit against the uk daily mail. accomplished a story claiming mrs. trump worked as an escort while at a modeling agency in the 1990s. trump's lawyers saying the defendants made several statements about mrs. trump that are 100% false and tremendously damaging to her personal and professional reputation. late on thursday t daily mail retracted the article and clarified the piece saying there was no support for the allegations. >> the g20 kicks off on sunday in china. getting into the topics to be discussed. president obama controlling the corporate tax rate and creating fair global tax systems. the topic is more relevant this week in light of the eu must pay 14.5 billion in back taxes. a decision that the obama administration and the u.s. treasury has criticized. >> two sports in the u.s. open

top ranked serena williams continued her quest. faced king in the second round. one in straight sets and picked up 300th career victory in a grand slam tournament. stars with out to watch her win. >> when we come back, this morning's top stories including the markets in a wait and see mode ahead of today's big job report. talk expectations straight ahead. stay tuned. you're watching "world wide exchange" on cnbc. and grease in just a minut

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good morning. jobs in america t. count down to the biggest month. we'll talk expectations straight ahead. crude reality. wti set to post biggest weekly decline since back in january. dress like steve jobs. you too can rack the turtle neck and jeans if you shell out cash. it's friday, september 2, 2016 and you're watching "world wide exchange," cnbc. ♪ ♪ ♪ good morning and welcome back to "world wide exchange." on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. let's get straight to the action.

a late in the day rally took the dow and s&p to above flat. the nasdaq up a quarter of a percent yesterday in the premarket we are now once get pretty flat. the s&p low and the nasdaq called slightly higher. the stock 600 broadly flat as we came into today's trade. ending the week just positive for the week as a whole. the ftse 100 has lagged. it was down 1% for week. it's still flat. in asia we a seeing activity. the nikkei just below flat having a strong week in the face of some weakness in the yen. shanghai and hong kong closing out a little bit positive. >> almost 2% decline for the yen this week. huge sigh of relief for the japanese policymakers and stock market market as well. >> as for the broader market. oil is back on the radar front and center these days after a

pretty steep selloff. we'll talk about it in a few minutes. over the course of the week rebounding this morning. wti back down to 43.59. brent is up 1% as well. ten-year treasury yield. hovers below 1.60. it has been a slightly higher yield story. see if jobs are good enough to lift that over the 1.60 market. as for the u.s. dollar. a tail of the stronger dollar. expectations for fed raising interest rates. that's mainly caused the dollar to rally against the japanese yen. 103.59. a lot stronger than where we were back around the 100 level a week or so ago. as for gold prices, we'll see if all these correlations hold up post job. gold sl hovering around the flat line. >> investors will of course be focused on the latest employment report out in just under three hours from now. few other noteworthy items on

the agenda. followed bid july factory orders at 10:00 a.m. richmond fed president speaking to a group of economists this afternoon. that's another thing to be watching. >> now, it's been a down week for oil with wti off by more than 9% putting it on pace for its worst week since january. joining us now, head of strat y strategy. >> and a taylor swift fan apparently. saw you dancing to our open. >> i am a fan. >> aren't we all? >> who isn't? >> exactly. should i be dancing to the opening a little bit more. >> maybe a little bit. people would enjoy that. >> probably help the ratings if i stay clear of that. oil prices, is it something more meaningful. it's a big slide in a short space of time. >> it's been a tail of basically two august. we had the opec rally. opec saying we're willing to come in and freeze production. we had some short covering. and now we have new concerns

about the oversupply, the inventory situation. we've had two weeks of record imports to the u.s. so people are saying we're just a wash in this crude. some people are concerned about. >> every day the narrative changes around this month's meeting. will they freeze production or won't that? it's a different answer every day. >> it's the drama of opec. we had vladimir putin saying i would like a freeze. i would like something to happen. >> even without iraq. >> iranians saying we want to get to levels. they presanctions level was 3.8. they're very close to that now.

they could take the win if they froze in september. >> the 4 million target gives them a free out to not take part in any other freeze. >> if the supreme leader and those around them say we don't want to cooperate. we want to look strong. we don't want to do this. they can say we go to 4 million. they're not going to get to 4 million. they're pretty close to maxing out. >> a saudi russian freeze, would be massive news if it did happen. we talked about this for so many years. >> i think it's important for sentiment. so many market analysts have said opec basically has no calls. they won't get this done. i think if they come out and freeze production, even at these high levels. get the act together to do something. that will stabilize sentiment and move us a bit higher. >> does it really alter supply. >> no, this is all sentiment gain at this point. sentiment has been driving the market. if you have the sense that opec could do something.

>> what's the range for the rest of the year? between 40 and 50 we're going to have big moves on a daily level. we shouldn't expect to end on those two boundaries. >> we see us going to 50s by year end. you have the macro headwinds as well. i think it's going to be sloppy until year end. we look to next year and say we can clean up overhang and invento inventory. unless we have a country like venezuela blow up. those are the wild cards to be watching. you have stress producers. and venezuela we have seen the big protest there. the situation is getting dire. the oil production is trending down there. >> we have. hundreds of thousands on the street yesterday. >> and arresting key political leaders in advance of the protest. shortages are only getting worse. venezuelan production is down. it could get worse in that country. >> what about the dollar? making a move higher. if we get a better jobs report, if we get a fed rate hike this year. >> that is a significant

headwind for oil. one of the things we are concerned about and watch oil trade is part of a macro story. that is something we think will be important. we think the daily supply and demand balances basically. we don't have a huge overhang. we have these inventories and other broader macro issues. >> election a factor you're watching or not really. >> not really. i don't think it's meaningful really. >> great stuff. love to see you. have a lovely long weekend as well. >> thank you so much. >> time for top trending stories of the morning. more than 200 musicians are rallying behind robin thick. for rel and ti. this comes after a ruling that marvin gay's children sued for infringement. copied 1977 hit got to give it

up. the children won the case ordering to pay $7.4 million. now the likes of lincoln park, fallout boy, r. kelly, are backing an appeal. the appeal arguing that the jury's ruling is very dangerous to the music community and with stifle future krcreativity. how can a jury be competent enough to rule on this. >> going nuts over there. >> i disagree. if ever there's a song that's an example of being overplayed and illing it. this is it. >> this was the song of the summer. it was the song of every seconds of every single day. it's like stop playing it. takes me back to that. >> wilfred prefers show tunes. >> classics to be precise. next trending story, you might not be able to be like steve jobs, but you can dress

like him. live dubbed the auction house to the stars selling the late apple founders wardrobe. shirts, watches, chris devenski play the most expensive item. the leather jacket. the jacket is currently priced at $4,000. it will go higher. steve jobs. unbelievable legend. his clothes? i'm not sure i would bother. >> you only see him in turtle neck and jeans. >> his clothes of all things, i wouldn't personally go for it. >> me neither. >> hope it raises a lot of money. >> disney land iconic tower of terror ride set to close. theme park is ending the ride january 2 to start a new construction. disney lands celebrating the tower of terror final days with a series of promotion, special

merchandise, and musical performance. have you made it down there yet? >> no. >> tower of terror is a scratap end of an era. check how europe is trading this hour. ending the week on a positive tone. not the ftse 100. just below flat for the week as a hole. back in a couple of minutes. ok team,

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welcome back to "world wide exchange." it is time for must read stories catching our attention today. my pick in the wall street journal. can anxiety beat depression in november. she goes to the psychological factors between hillary clinton and donald trump. good take on clinton actually. writing now know exactly who she is. what trouble she brings. she brings the sack full of scandal and won't make anything better. mr. trump says anxiety. if you back him you know you're throwing the long ball a real hail marry pass to the casino developer and reality tv star who may or may not catch the ball. he has fun with audience. kood character generalizations.

dprez t depressing in total on both of themt. why are these candidates the least popular in the race. why out of all america are these the two choices we have. still worth a read. >> completely agree. it's a good perspective in terms of a slightly depressing, but amusing take on it all. my pick is in the "washington post." only immigration solution. you can promise to round them, talking about illegal immigrants, and deport them. that may win you plurality of primary votes, but eventually you have to let it go. everyone knows they will be allowed to stay. slightly criticizing donald trump's position, but goes on to speak a bit about the wall and the way that everyone has been criticizing the wall, addressing those criticisms. the author writes if main objection is symbolic. walls denote prisons, only if they are built to keep people

in. not for keeping outsiders out. city walls are for protection and lists various cities around the world with successful walls around them. it's an interesting take on the issue. criticizing the rhetoric and backtracking from donald trump in general. the wall isn't a crazy idea. it's been an imagine in the race and actually some aspects that could be positive. >> far right. and it is interesting because you don't have that many. we look through dozens of things every single morning. rarely do you find one, especially in the "washington post" coming out explaining the trump policy and being okay with it and backing it. >> some perspectives on the wall worth taking note of. not everyone's point of view, but worth having note of. still to come, dissecting

what to expect from the job's report and what it may mean for the fed. gilmgo it, marcus. go get it. .coach gilman used s shards cret card om bank america to earn 1% cash back everywre, every time at plali the batting cacas. ♪ [ owd cheers ] 2% back at grory sres d at whosabs and 3% bac gas. ich helped him give his players somethinextr the caewar credit card om bank ofmerica. moash ba for ththin you buy mos

welcome back to wienl. there's your count down clock to the top story. august employment report. likely to add 180,000 jobs last month. unemployment rate seen dropping to 4.8%. joining us for a little jobs debate, former adviser to the dallas fed and we've also got david rosenberg from toronto. good morning to you both. >> good morning. >> so david, tell us how we are set up for this august report. we know august can be funky with revisions and seasonality. what are you expecting. >> the consensus as you said is 180,000. i think august for whatever reason tends to come in slightly

below expectations. so i think we'll see a number closer to 150, 160, but keep in mind what the adp number flashed yesterday was that or two days ago that we had an upward revision to july. the mix could be we end up averaging a pretty good number for the past two or three months. the question will be how the fed is going to respond. >> what's your estimate consensus. >> before yesterday, i would say the data was pretty evenly mixed, but i was really surprised to see ism employment sub component so we've had seven out of nine on the last month ism employment index come in below 50, come in at a contraction. i saw an interesting statistic out of citigroup yesterday. 72% of the last instances of ism headline misses that the subsequent payroll report has also come in as a miss. >> and that would pretty much jive, david, with your 150,000

forecast. the question you brought up is the fed. how they interpret this data. clearly behind the headlines wages will be key. what are you looking for to see whether the fed does make a move in september or december? >> i'm not even sure that we're going to get total clarity out of today's report. i think ultimately what the fed is going to do as now it's test it can the market to see what gets priced in. not a snowball chance in held they're going to raise rates this month if the futures is priced for 40% or sub 40% odds of an increase. >> why not? they'll be too afraid of what the market reaction will be? >> pretty sure about that. this is a symbiotic relationship. the market leads the fed. take a look at the beginning of the year. the fed was flpledging they wer

going to raise rates four times this year. that's going to be impossible now. only three meetings left. sharp tightening of financial conditions coming off the rate hike of last year. the economy slowed. the markets seized up. the fed moved to the sidelines. so the fed right now is just throwing it out there as a possibility. data dependency, who knows what that means. if you take the holistic view of the u.s. economy, gross income is brarly running at 1% rate. inflation is below 1%. when you strip out housing it's running negative. data dependency would say they shouldn't do anything. unless it all comes down to one or two employment numbers, which so me is ridiculous. not taking a big picture view. if the market starts to price it in, the fed may make sunshine. >> are you as skept skal in the

short-term? i would say the majority of views we heard over the last week is if this number today is close or something to 200, not only is december on the table, but september very much so as well. >> i think that's what the market would like to believe, but, again, i think if there's nots a 50% of higher probability of a september rate hike, they won't pull the trigger. so i'll be focused really a lot of on the income numbers in today's data and whether or not in the subsequent press conference they elude as they've done in the recent past a september hint leads to a december hike. we'll have to see. >> beyond the fed, you did raise some questions, david, about the broader u.s. economy and the trajectory we're on for the rest of year. why are you not feeling as optimistic as you were couple of months ago. >> actually, i was optimistic on the economy or more constructive from 2012 to the beginning of this year so i would say

actually for the past eight months, i've actually turned the corner and become a little more concerned about the economic outlook. my views have changed quite a while ago and a lot of it started when i started detecting the declines we were seeing in capital goods orders and what that meant for capex. which is still very weak. the fed says they're data dependent, but what data are we talking about? when you think about it, real gross domestic income. what is bigger than that. that is ha $17 trillion animal. that came in what in the second quarter plus.2% annual rate. this is real gdi which i one of my economic heros would tell you the best measure of the economy. i'm telling you times when real gross domestic income, this doesn't make the hooins, running at 1% rate, we would be heading to recession. >> in you look at consumer

spending and the gdp 3% level. services data, you could also piece together a recovering economy that has improved. >> it's not cherry picking. you know, actually the atlanta gdp model which was running 3.8 is down to 3.2. let's say we get 3% third quarter growth. can you tell me you look at that out on context and terms of the fact we couple out of three quarters of ruchly 3% growth. what if it's just a spasm and we roll over in the fourth quarter. one quarter of growth when you're talking about data dependency to a central banker, is it one quarter or couple of months on payrolls. employment is picking up. we know productivity is going down. employment going up at the expense of productivity. still yielding an economic growth profile of barely more than 1%. your data dependent, what does

it mean exactly. it's going to come down to a n nonform payroll number. housing is running negative so when we talk about data dependency, are we talking about employment that's the only thing that goes into the mix. >> danielle, jump in. are you as pessimistic. >> i'm chomping at the bit here. there was interesting data that came out of the chicago pmi a few days ago and reiterated in the ism number and that's the backlogs data. those have been coming down and that shows what the economy is banking in in terms of demand going into the fourth quarter has been declining. that really does coincide with his thesis here. >> so you're similarly pessimistic in terms of where we're heading for the economy as a whole. >> i don't see this massive second half pickup that is so priced into a lot of the consensus estimates. i don't see it panning out the way we're headed.

>> in agreement, you two. >> my favorite sort of debates. >> good to see you both. thank you. >> i feel like -- >> we are worldwide. >> i feel like you and i need to have a disagreement to offset that. >> to offset the agreement they just had. let's check in on the markets for you. we have about 30, 40 seconds to go. we are looking a g aing at -- >> you do use boerses when i'm talking about european. >> on u.s. tv. >> they've improved in the last 20 minutes or so pointing positive. at least for the dow and the nasdaq. it all comes down to jobs at 8:30. >> very exciting. what that means.

"squawk box" will break that live with all the reaction throughout the day you need. don't go anywhere. cnbc is the place to be. >> have a good weekend. that's it. we nd ally tht temperaturrols. uld mean scrapping engil anartingamic we nd ally tht propumaple urbon ramelnalysi om design througproduc, emens technologyow. s nuurers meet critical deadlines i think is'lle r biggest flor yet. ou ove onehot,ouet need ahole lot of ingenuity.

it good morning. it's jobs friday. we'll tell you what to expect. hermine, downgraded to a tropical storm, but not before becoming the first hurricane to make land fall in florida 11 years. can you say climate change? >> an update from the pan handle straight ahead. a record haul frll from the clinton campaign despite for drama from the personal e-mail server. it's friday, september 2, 2016 and "squawk box" beginning right

now. ♪ ♪ ♪ >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen. steve leaseman. andrew is off today. we are counting down to the august jobs report. comes out 8:30 a.m. eastern time. payrolls increased by 188,000 in august. the unemployment rate is expected to tick down a tenth of 1% to 4.8 %. we keep saying this is an important number. this time around it might actually be important. odds are the feds watching this very closely and could ride on this number today, whether or not they decide to raise rates later this month. more on this in just a moment. in the meantime check out u.s. equity futures.