good morning everybody. welcome to "squawk box" here on c nx. we're live from times square. i'm becky quick with joe kernen. the jobs report is due at 8:30 eastern time. forecasters expect an increase of 197,000 jobs. the up employment rate is expected to tick down to 4.7%. we should point out that a hotter than expected private payroll report led some to raise their forecast. remember, adp was 298,000. that was more than 100,000 more than the market had been anticipating. moody's expect 275,000 from this number today. goldman sachs upgraded theirs. we'll get more predictions in a

second. >> he would come in so high. he believes his number. >> not everyone else -- i'm surprised that the average stayed below 200. >> i am too. given how hot the number was. it's not a one to one correlation. every other signal on jobs indicates that the market has gotten stronger and stronger for jobs. >> this 8:30 number we say how big it is. >> this one actually does -- >> [ overlapping talking ]. >> the futures are looking at 100% odds that the fed raises rates. if you get a weaker than expected number will they still feel like they can go ahead -- >> humor me today and go for 450 or something. we just want to see the tweet from trump. you would want that for the american -- >> humor you for the purposes of

tweeting. >> it would be fun to watch drudge put boom and have a picture of him. that would be fun. would you prefer so that you can say something negative that less americans get put to work -- >> for whatever reno they get put to work. >> for whatever reason, we're hoping for a big number. >> for other reasons -- >> like the last eight years, part-time jobs. >> the economy was building itself up. right? let's be honest. there's a reason why the earnings have been as strong as they have been. >> you started this, joe. >> i was trying to make america great again. >> america has been great for a very long time. >> greater. >> let's look at the futures looking great this morning. >> take a look. the dow futures up by 82 points above fair value. it's unusual to see big movements in the futures before

you get a jobs number. up by ten points. the nasdaq up by 19. overnight in asia, looks like the japanese market was up by 1.5%. the hang seng and the shanghai composite were mixed. hang seng up by -- in europe in the early trading, things are up with the dax and the kack both up by 2/3 of a percentage point. let's get you caught up up -- this happened overnight. south korea president removed from power. upheld her impeachment for corruption and peddling. election must be held in 60 days. two people were killed in the demonstrations. of course, you'll recall over the past couple of weeks, the vice chairman and acting chief of samsung was arrested as part

of this corruption case. it's a huge case over there. it's impacting business. >> not only that, for what it means our relationship with north korea. >> if there's not stability there. >> secretary tillerson is headed over there without the media, though. we'll see whether we'll find out what takes place during those meetings. big energy news. spanish energy company repsol oil reserve oil reserve has been identified in alaska's north slope could be the biggest in united states in 30 years. incredible news. the company says the find could produce 120,000 barrels of light oil per day. in 2021. take a quick look at crude prices at this hour. barrel with wti as we look around. you're looking at -- >> this was the big story

yesterday. >> [ overlapping talking ]. justin trudeau repeating his opposition to the border tax. he warned energy executives in houston, import tax would hurt the u.s. and canadian economies. canada foreign affairs minister said the same thing. wilbur ross, they'll be responsible for renegotiating the free trade agreement and a message that many have been trying to make the last couple of weeks. >> europe is up. there are polls that came out. le pen would lose at this point 60/40 in the second round. >> holes smulz. >> what have we learned from polls? >> he wins by 26%.

le pen and mack ron get to 26% in the first round and 60/40 in the second round. the reason i bring it up. . earlier i saw someone tweet -- this is to what you're saying, one of the rallies in the crowd. it was the enthusiasm gap we used to talk about. >> it was mammoth. there were french flags everywhere. it looked like thousands of people and it looked similar -- >> to the trump rally. >> one of trump rallies. that's going to be interesting to watch. >> polls smoels. >> france won't. that would be they're leaving. france needs. eu, i think, more than the uk does. i think the uk can get by. >> you wanted them to go out. >> i do. i want the whole thing -- >> the netherlands isn't even --

>> i do. >> that stuff peter teal said the other day must have gotten in your craw. >> he made many comments. which comment. >> globalism is on its last lap and the same people that were going to fix the world actually destroyed the world we now know looking back at it. >> davos man destroyed the world. >> you need to know what the opposition is saying, andrew. i need to get in there. keep your friends close. your enemies closer. you and becky got to switch seats. stocks to watch. shares of ulta. ulta beauty are sliding. i want to call it ultra. >> why? >> it's missing a letter. >> your jumble brain. >> where is the r? can i buy an r? >> only a vowel. >> current quarter sales guidance is light. ever go to one of these?

el pollo loco. it's sort of -- >> does it have a smoky flavor? >> yes. >> there's one by knee. >> earnings and comps missing the mark meantime. the ceo of the tex-mex fast food chain informing the board that he's retiring the end of 2017. >> you got to move out to the west coast, joe. >> to get more of it. >> krarcarl's burgers. >> traffic is terrific. >> ver foen on the -- >> you could never leave new york. you're so new york. >> quarter earnings forecast is a little bit light. >> you couldn't, right? >> could never leave the island

of manhattan. could you? >> no. i lived abroad. i lived in london. does that count? >> in college. >> afterwards. >> he was not on the island of manhattan in college. he was not growing up either. >> went to college in ithaca, new york. >> how far is that, man of the people. >> ithaca? >> four hours. >> coal gate. >> hamilton is closer. >> cornell off your list. cornell has never been on the list, believe me. >> wow. >> isn't that the most liberal of all the ivy leagues? >> no. >> you took it off the list. >> it's always been off the list. >> you went to brown. >> you're right. >> who went through the hotel school there.

>> the hotel school is a great school if you're in the hotel business. >> a few hours left until we get the numbers before president trump's first full -- >> michelle gerard at nat west markets. he's a city private bank chief investment strategist. how much of a range for what you think? >> you're only supposed to say 100,000. >> 250 to 350 or 200 to 300. >> you know, let's face it. it feels like it should be a big number. except whenever we start to say the risks are to the upside, then you get a surprise. whatever this number prints, i think we all know the labor market has taken a leg up. we've seen that from the other data. the economy has taken another leg up here. all of the data coming into the year kind of for the most part shows that. whether or not it shows up in

this month's report or next month, the feds and the markets know this, to that extent. well, today can certainly confirm it, each if it comes in on the softer side, it's not going to change anybody's opinion. >> what is the difference in methodology so we understand how adp could come up with such a big number. >> this is really important. adp is really just like a forecast that we would have. it is true they use adp's information on the payroll numbers they get. but they also -- they're running a model like the rest of us, it uses prior payroll numbers. it's a forecast itself with an additional piece of information which clearly, obviously confirms strength. it would have been strong, probably anyway given the fact that the other inputs into their

model, like the inputs into my model are stronger. >> the minute you start -- >> this hour. >> talking about models. it's like great. they're worse than polls. >> which is why we all -- like i said, the standard error is within 100,000. >> the government due date is an estimate. the government data. >> always be estimate. >> you have 100,000 range. >> 200,000 to 300,000. >> you're like a company. that wouldn't cause a stock to go up if all they do is if they keep the low end of the range. >> in a year from now, they'll change the level -- >> low end of your range. >> i think so. >> 150 to 250. >> clearly above 200,000. >> the ism services data has been a good indicator of the. the claims data. 40-year low with the population up tremendously and the labor force up tremendously. all of the other indicators are suggesting a strong report. >> you can confirm this.

even that is significant. because you remember about -- maybe about six months ago, our friend mark zandi, not downgrades, but the new normal for what we expect a -- the labor force had gotten tight. >> right. >> that was still a good number. it was enough to keep the unemployment rate coming down. that was going to be -- previous to that, it was 190 or 2. but he was saying 165 to 170. even saying 100 to 200 would be a surprise to -- >> it would be a surprise, a step up. really at this stage of the cycle to be -- >> he looked pale and sick to his stomach the other day to release his own number. oh, my god -- >> the interesting -- [ overlapping talking ].

>> the economy ends up doing well. there's so many things we blame. the whole thought of secular stagnation. the economy can only grow 2% or less. >> the new normal. >> how about the natural -- the fed fund's neutral rate. in real terms zero. >> we're going to be -- hey, if the economy actually starts to turn in 3 to 4% growth, all of a sudden we're going to say, it wasn't structural, it was really perhaps bad policy. >> last year the labor force grew 2.2 million people already. surprised to me to see two years deep into a recovery, after disappointing labor force growth, something that sees a cyclical rise in labor force. that suggests that we were getting no decline in the unemployment rate, solid group rate for unemployment. if we can get these sorts of numbers and see the labor force grow pretty rapidly.

>> no. no. people weren't retiring because they wanted to. part of what we were saying, the numbers are different this time. >> prime age workers, forget the baby boom for a moment. think 25 to 55. these types of workers. those ages. we've actually seen a really massive decline over the last eight years and if we get some of that back, if we can get that back for a couple of years, then we can have stronger growth. >> you were finishing -- people started thinking about the next question. you just said what we were told about secular stagnation an the new normal might not have been the new normal and might have been policy inflicted. >> bad policy. regulation over-regulation. there are things that could get challenged. things we assumed were structural that, in fact, were due to other factors. this is the test of the -- >> been thinking that --

>> exactly. >> can't get above 2%. >> this will be interesting and exciting to some of us. it will be validated or not. to me -- >> you made a good point, too. when you talk about the labor force growth, that might be something with the unemployment rate. it may be that we start to get the labor force. that's one of the reasons i'm not sure the labor force might decline. consumers, the surveys aren't getting optimistic about the ability to get a job and coming back in. >> back to sort of the average employment the population ratio, the last three cycles, ten million more jobs. you wouldn't have 96 million. but you would have ten. slow productivity growth. we don't even sort of know what an experiment will do with the economy. there's no past sort of reference we have. we can't like a rate cut put deregulation into a model and see how the economy will perform. this is an experiment. we'll see from the results.

>> the regulation thing is important. i've started myself, i'm so excited about the potential for tax cuts and so is the market. the strength of the economy now even before we know what the tax cuts will be and the confidence that business has i've started to question the roll-back in regulation is the bigger story here than the tax cuts. >> here all the time. >> each if the tax plan is pushed off, if that happens i'll take my 17 numbers down. the resilience has me questioning whether that happens. that's the big story. what's got companies optimistic, they're operating in a less hostile environment. they can deploy -- the regulatory and the productivity that will follow. >> what has happened thus far? >> there's been a lot of -- >> no, no. a lot of deregulation thus far. we're talking about the

confidence. i'm saying what is structurally happening. have you seen companies -- >> we have to see in the next few months. >> if the -- >> it's going to be uncomfortable at 8 -- >> when teper goes on. it was stay at home day or whatever it was. that was a bad day. >> what was a stay at home day. >> the woman -- the international women's day. stay at home. that was a bad day to be out and not -- >> i was working that day. >> i know. not listening. i know you were working. that day, again and again, said that small businesses at this point have nothing in the future that's uncertain or to worry about except kept coming back to the french election but saying that all this stuff happened. they're already hiring, already expanding. already spending money. he said that again and again and again. >> he did. >> he's the guy that came the

day before the election. trying to derail the whole election with the hit job on trump. derail the whole election. why come on the day before to say that the guy has never given a dime to charity? >> because he had a particular view. >> i know. >> it's fine. just that he wanted to come on. it's fine. >> thank you. you wanted to come on and express your opinion also. >> and you too, steve. >> going with girard. >> thanks everybody. >> coming up, president trump meeting with business leaders, we have the details next. later, richard le frac is going to join us in a first on cnbc. advising him -- programming note. national economic council director gary cohn going to talk about the jobs numbers this morning. what powers the digital world? communication.

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> good morning. about a dozen folks in the room. cameras were allowed in for the early part of the meeting. that's where the president does this roundtable and gets everyone to introduce themselves. they pull the cameras out after that. i'll tell you in the part where the media couldn't see. at one point ideas were offered up on banking deregulation. things they'd like to see where bankers lend more. at that point, he turned to the treasury secretary and the national economic council director and he'd like to do them in six months.

then trump turned to them and said i want it done in six months. that made a big impression on some of the attendees in the operating room and then he took them on an i am impromptu tour of the oval office. that's his -- he gives them a tour and lets them take selfies and pictures. that he makes a big impression on them when you bringing in a big group. >> elijah and peter welsh to democratic congressman talked about their bill talking about prescription drug costs. the president was enthusiastic about that. i had an opportunity to talk to sean spicer about that. i asked how much pain the drug companies could be in for here as a result of this bill. here's his answer. >> i think that's a bigger conversation we have to have with house leadership in terms

of some -- maybe it is that right vehicle. maybe speaker ryan and leader mccarthy and chairman brady have other ways to achieve the same goal or work with congressman cummings. i don't want to be partnerships tiff to the house. not fully embracing the democrats' bill. but he said he was enthusiastic with them behind the scenes. the president does want to do something about prescription drug costs in the country. that's something to keep an eye on. will the republicans and democrats on the hill work together? is that a possible area of bipartisanship. that's to be determined at this point, guys. >> thank you very much. ipo watch. we're joined first on cnbc. the company begins trading on the nasdaq this morning. later the ceo of adventure racing company, tough mudder

will talk about new tv partnerships. >> that's the one you did? >> i did. >> i think it was the tough mudder. we'll have all of this coming up. >> this fall. crazy. >> they electrocute you as you crawl under these things. >> as we go to a break, winners and losers. i joined the army in july of '98.

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jobs, economy and a possible rate hike. team coverage and analysis. "squawk box" today an cnbc. ♪ welcome back. you're watching "squawk box." live from the nasdaq market site

in times square. good morning welcome back to "squawk box" here on cnbc. a quick look at futures. at 8:30 all of this likely to change depending on what the jobs number turns out to be. the dow would open up 92 points higher. nasdaq higher and the s&p 500 would open up a little over 11 points. it is jobs friday. we'll have two jobs offers to tell you about. this is separate. the duchess of cambridge, kate middleton is looking for a new private secretary. if you're looking for a job, here it is. middleton's current secretary leaving the post after a decade. the world household job. she hasn't listed the open secretary role just yet. try to get in there. if that's not your cup of tea, how about python hunter. the south florida water management district is hiring hunters to control the python

population. they're paying by the hour. plus a bonus for every snake killed. so what do you think? >> because they've had so many release into the everglades. been seeing stories for the last couple of decades. >> alligators. >> it will be fine. joseph wrestles them and kills them by the day. >> you kill the snakes who come on. >> i had a snake. >> i had snakes when i was a kid, yeah. >> smelled a little bit. had a weird smell. >> all reptiles do. >> i think alligators are cool. they're like dinosaurs almost. evolution. go back hundreds of millions of years. they're so effective at what they do. >> would you like that job or the secretary for kate middleton's job. >> the one for kate middleton.

little easier job. folks, i.t. solutions from presidio is listing. 16.7 million shares priced between $14 and $16 a share. joining us now the president and ceo of presidio. bob, thanks for being here today. >> thanks for having us. >> tell people what presidio is. they do i.t. solutions and i.t. con sumting. like an accenture? >> we're helping a mid market client base, helping them create cloud enabled digital infrastructure. cyber security solutions that help them drive data interactio interactions. >> when you say mid level, that's part of the key to this. you're not necessarily dealing to the dow 30 components, not necessarily dealing with small companies. that's where the chunk of the business is in the middle?

>> they're sophisticate north dakota terms of the service they want delivered to their employees and client base. traditionally, they have not had the type of staffing you would see at a larger fortune client. they've been working exclusively providing the types of strategic roadmap development services, implementation services and types of management services that help, enable in an ongoing management solution. >> it has the buzz words. cloud or management security, what's businesslike right now? >> when we look at cyber security and cloud and management services, those are digitally trans -- we're seeing growth in all areas. folks are taking a look at their environment, how to improve the business and how can they be competitive and agile. that's going to require a digital transformation. which requires a different way to --

>> if there's something to be worried about, what are the things laid out, the biggest concern point that investors could be facing these days? >> when i look at the business, it's really around execution. we have to have a solid model in the business. we're -- we have great tail winds in growth and around cyber security and iot and cloud. we've been executing for 15-plus years, i expect us to continue. it's a people business. we're focused on how to enhance the employee experience and the opportunities for our guys to create innovative solutions for our clients. >> if there was one thing you were worried about? >> macroeconomics can provide a dragon the business. in '08 or '09 this business continued to grow throughout that cycle. >> when you looked at the competitors, accenture or computer services, who is your biggest competitor? >> that's the benefit or the beauty for us being positioned within the mid market, it's fragmented.

populated by the number of sub scale buyers or -- it's changed dramatically. you need scale and the ability to deliver the professional and cap ex intensive services. >> this is a broad general question. oftentimes when a company pursues an ipo, it becomes a takeover target. during the ipo process, people start calling up and saying would you be wbetter off -- >> still going to own 73% of it. >> did anybody call you? >> we were focused on running the business and running the ipo. we've got terrific opportunities for growth. we think we're well-established on our own to do that. >> would you plan to use it as a platform to roll up others? >> certainly the first priority is to delever the business, give

us greater agility. but we've been inquisitive through the years and been able to increase value and retain that leadership that helps drive that. we would look down road for the tuck-in geographic platform acquisitions. they're around differentiated services. >> bob, thanks you very much. we'll be watching for the opening bell. >> real estate mogul is advising the president on infrastructure projects. he joins us on an interview at 7:30 a.m. eastern. at 8:30 the jobs report. we'll bring you the numbers and the instant reaction and nebraska governor pete ricketts weighs in on jobs, taxes and keystone, the pipeline. stay tuned. you're watching "squawk box" all on cnbc. opportunities aren't always obvious. sometimes they just drop in.

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welcome back. tough mudder started seven years ago with ten to 12-mile obstacle

course that announced new partnership with espn sports media and entertainment and img. founder and ceo of tough mudder joins us now from london. good morning, will. >> good morning. >> we've seen you here in person. some of our viewers know i've run the race and gotten muddy with you a couple times now. >> yeah. >> tough to understand what it's turning into. it's one thing for us pedestrians to try to try to run in the mud. it's another to turn this into a media event on espn. >> that's right. you know, i think tough mudder is a lifestyle business. 10,000 people have had the logo tattooed on them. it's a tribal movement. >> real tattoos? >> real tattoos. 10,000 now. our partners at espn, cbs and sky sports understand there's a rich tapestry of them doing it.

it's the world's toughest mudder. also the everyday heroes doing the half or the tough mudder 5k getting themselves off the couch, doing something for the first time. 2 1/2 million people have done it. 3 million and we're now in four continents. that's where the story is. >> speak to the media side of this. what are we going to be seeing on the air? >> so we have a couple of shows going on at the moment. the cbs show focuses on the world's toughest mudder. we're rolling out six regional toughest events. four in the u.s., one in canada, one in the uk. those are eight-hour events that qualify for the -- that's the cbs show. the cw show is the lifestyle programming. people overcoming things in life. overcoming multiple sclerosis. the uk show focuses on five british olympians and they're

helping us package the rights locally. the business in australia continues to grow. in china, indonesia, going back into australia and new zealand as well. >> are these going to be -- is this going to become about professional athletes? are you going to turn them into brands and we're showing images of these guys, including guys, the arctic enema, which is one of the great obstacles. this is years ago. maybe two or three years ago. i don't know if we have a picture of us jumping into the arc tech enema. by the way, my heart doctor doesn't think that's a great idea, dean. you're about five miles in and jump into freezing cold water. >> the most interesting about doing a tough mudder is the drive to a tough mudder. seven times more likely to injure yourself getting to the event in your car. almost 3 million people -- >> that does not make the rest of us feel better. >> dean, really, what about the

cold water, come on? >> you're in and out of it pretty quickly. there are safety protocols. our events have been generally on warm, sunny days. many people do the event and they're healthier for it. they get off the couch and lead healthy, active lifestyles. >> what about the electrocution part. my wife doesn't let me do that. >> if you don't want to be electrocuted, you don't have to be. >> that's right. the electroshock therapy is like getting married. you don't have to do it a second time. that's why once you've done a tough mudder, you become part of the mudder legion. then you get an alternative obstacle. we're rolling out kong, the finisher, the repeat mudders. they get to do that instead of the electroshock therapy. the tough mudder half and the 5k, you don't have to do arc tech enema or the shock therapy.

all obstacles are optional. it's about coming out, having fun, challenging yourself, getting outside of your comfort zone. >> just so i understand, if terms of the model for your business revenue, long-term is it going to be more from the licenses and these deals like the ones with espn and others, or is it going to be more from the ticket sales and everything else that goes on for those experiencing the races themselves? >> it's a mix. volume in the u.s. and the uk is up about 25% year on year. we're adding -- launching tougher mudder. s the race format version. we're growing our core markets, international is a big expansion, china, indonesia, new zealand and we have the media part of our business and we keep growing the sponsorship side of our business with the media. it's pretty busy at the moment

at gmhq. >> dean, hope to see you in the mud a little later. >> see you again soon we hope. >> if we could just -- when are you back in new york? in the fall? >> i'm over in new york pretty much every other week. >> when is the next race? we're going to get joe and becky to do this. when is the next race in new york? >> young man's -- >> we have over 30 events across the united states. tough mudder.com. the long island event and the philly event in may. >> what do you think guys. >> no, no. >> you've been working out with a trainer. >> you guys would be fine. >> you guys would just be fine. >> if you're not ready for the full. >> only five miles. >> look at that. shirtless joe. you look great, joe. >> there's days when i'm working out. >> you'd be just fine. >> i've said that. there's times i feel like crying when i'm working out with a trainer. you do a tough mudder every night. >> you know how many times i was up with caylee.

>> by the way, she has teeth. search times between 8:00 and 3:30. >> spy glass, the golf course from the back tees. that was like the worst thing that -- painful as in horrible. i was almost crying there, too. everything is uphill. >> as a team, you race as a team. you don't even -- >> will you carry me like you carried pillar? >> i will. >> this i will come out to see. >> anyway -- >> when we come back, trade and tax reform in focus. joined by robert holleyman. he's served under president obama. stick around. "squawk box" will be right back. and adapting them to work for you. the ultrasound that can see inside patients, can also detect early signs of corrosion at our refineries. high-tech military cameras that see through walls, can inspect our pipelines to prevent leaks.

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time now for the executive edge.

trade representative under president obama ambassador robert holley man. tax is an economic assumption. that's what will happen to currency rates when that tax

proposal would go it does. there are a lot of unanswered questions about that economic impact. and finally, i think something we also have to consider is whether or not such an adjustment attacks would be acceptable under the rules that we helped create in the world trade organization. i know that members of congress are paying a lot of attention to that. i think it is not yet clear whether such a tax proposal would meet our wto obligations. and if they've failed to meet those obligations, then we have a significant problem on our hands if we have a $10 trillion estimate over a ten-year period of revenue that would be achieved through that. but, in fact, if the wto rules that there is an unauthorized export subsidy, we could have a major challenge. so there are a lot of details on that have to be worked out. and we have to treat it very carefully in the process. >> all right. a pretty nuanced answer.

let's talk trade a little. when i think of tpp and read your comments about it, it must have been sitting there, you know, first, you know, the president was going to have to go to the republicans to get it done. and trump came along, so then he lost that side of the aisle. and all along he had democrats, harry reid wouldn't bring it up and you had then bernie sanders and hillary clinton hillary clinton. you must have been like a man without a country. where am i living? what happened to what we thought was such a good deal? was it surreal for you? i mean -- >> well, look, we have a window in time where we had a progressive democratic president and a majority republican congress, who i believe collectively could have come forward in favor of the transpacific partnership. wf what we have to do now is figure out where do we go on this. i look at this like a race, where we're racing against our

competitors, with china as our primary competitor in the global race for both trade and influence. i think we were effectively running a marathon. we were a couple of miles from the finish line. we were in first place. and we, for the moment, have decided to sit down and set on a bench and think about how we want to run this race. in the meantime, i'm confident that our trading partners have moved past us, because they are continuing to negotiate more deals than open their markets. and open markets for their products and services. we have to get off of our bench. we have to get off of our hands. we really have to get back in the game. speed matters in trade. and i hope that we can do that. but quite frankly, i'm very concerned that we are taking a narrow approach to trade, when it's in the u.s. interest to take a more expansive approach going forward. >> all right, you might be able to do well with bilateral trade,

but it takes a long time and you're saying there's a need for, you know, for urgency, because everybody else -- >> well, look, everybody else is moving. and we were, again, putting a lot on moving forward with the prototype of the transpacific partnership. it has the value of being a network effect, just like we see in technology, where the value of the whole is greater than the sum of the parts. i also think we have to look at it, how do we move for the kind of comprehensive trade rules that we need, that deal with things like the digital economy, areas of innovation, where the u.s. leads, and we spend a lot of time talking about how do we bring up our lagging sectors in trade, and that is important. but we cannot forget the areas where we compete and win. and we need to focus on, as well, how do we grow those strengths. and i think those are all ones around innovation. >> you know, we had campaigner,

candidate trump, and we've got president trump. and i'm sure the campaign version, probably in terms of trade, may have been more troubling to you than maybe -- or you tell me. does president trump, at this point, seem like he's more middle of the road on a lot of these issues than maybe the rhetoric in the campaign? he seems like he wants to win. that's what i know. >> well, you know, wanting to win and achieving a win are two different things. so when we move back from the tpp, we tied one hand behind our back. >> all right. all right, ambassador. appreciate it. thank you. >> thank you. okay. coming up when we return, a first on cnbc interview with richard lefrak. a lot to talk to him about. and later, the february jobs report. predictions and analysis is all coming up straight ahead on "squawk box." two big hours start in just a

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jobs in america. president trump gets his first economic report card when the february employment report is released today. we will talk expectations, straight ahead. the gop's health care plan clearing some hurdles on capitol hill. we'll speak to the chairman of the republican policy committee about the bill and other policy priorities, as well. and a first on cnbc interview with richard lefrak. the cochair on an advisory board to the president joins us to talk about rebuilding america and the president's plan to create jobs.

it all coming up as the second hour of "squawk box" starts right now. >> announcer: live from the beating heart of new york city, this is "squawk box." good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. didn't mind doing that? why were you over there? >> i don't know. >> i'm joe kernan along with becky quick. >> tv magic. now i'm back. >> thank you. and andrew ross sorkin. we're counting down to the february jobs report due out in less than 90 minutes. the futures right now are strong this morning. and yesterday, it's all over the map, ended up about two points on the dow. but here we go. again, was that -- we had a little three-day pullback. anybody looking for below 2,300 on the s&p. we'll see whether they ever get

that chance. andrew, you're still hitchhiking. you still haven't gotten on the train. it made it to wilmington, came back to philly, where you were down. you were waiting for it to come all the way back to newark, which it did not. now we're back past philly, you missed it, next thing you know it's going to be down in bwi. >> what happens if it gets all the way back to new haven. >> that's what you're worried about. >> here's what's making headlines at this hour. it is jobs friday. the 8:30 eastern time report expected to show 170,000 new non-farb jobs since the last report. that's the number to beat. however, we should mention that many individual firms have raised their own estimates for nonforeign payrolls since the stronger than expected adp report that came out on wednesday. we'll have more on the jobs report in just a moment and the market likely to move big time one way or the other on that number. also, crude oil is higher today. it follows four consecutive daily declines and a drop to a three-month low. morgan stanley now predicting that crude will be above $62 by

the end of this year. and down about $75 by the end of 2020. also, corporate insiders are no longer enamored of their own stock. this according to insider data provided by the washington service. insider buying now happening at its slowest pace in at least 29 years. and the number of sellers has been rising as well. so what does that say about where the markets are headed? >> don't know. >> maybe. we'll see. all right. breaking news out of asia overnight. the president of south korea was officially removed from power today. the country's constitutional court unanimously upheld her impeachment for corruption and influence peddling. a presidential election must be held in 60 days. the ruling sparked some angry protests from her supporters. police say two people were actually killed in demonstrations. we are counting down to the jobs report this morning. joining us right now to talk about the markets, the economy, and the fed is brian levitt, oppenheimer funds' senior

investment strategist, and steven desanctis. what do you think? we're looking at a situation where the market has figured out, 100% chance of a rate hike coming. if this number is disappointing today, you still think we'll get that rate hike? >> i think we will. i think the number would have to be particularly disappointing. i think it would have to be disastrous which is unlikely to happen after the adp report we saw. the fed is looking at having a little bit of a window. the dollar has been relatively stable, although, going up, credit spreads have behaved. we want to watch the shape of the yield curve. the yield curve did flatten a little bit in the last couple of days. we should watch that, but they've got a window right now to raise rates and they're going to go ahead in march. >> steven, we know that the fed is looking at this very closely, not just at the headline number, but also the wage inflation number that's down as well. you expect the same thing, they'll raise regardless? >> yeah, i think we've been more bullish on fed raising rates.

we've had two hikes, definitely. three hikes with the fiscal stimulus on top of that. makes personal good sense. the economy is kind of chugging along. seeing good numbers. the employment numbers have been good. wages are going up. more importantly, we're starting to see a little bit of inflation. i think we've got a forecast of about 3%, as we start to move towards the end of the year and into 2017. and that's something the fed will have to wrestle with. >> david tepper was here this week and he thinks that the fed will have to raise rates quite a bit more quickly than the market's anticipating because of just that. >> and i think in the last couple of weeks, we've seen the market come to grips with that. i know you're talking about the pullback for three days for a large cap, and small cap, if you think of them as more of the canary in the coal myan, they've been down eight of the last nine days. the only day it was up was after trump's presentation to congress. you're feeling that, okay, if the fed's going to be a little bit more aggressive, the economy

starts to slow, what's going to be most impacted? it will be the smaller companies. and earnings are already not great for small companies relative to large. and you have market valuations that are in small cap pushing 19 times. starting to get to the upper end of the valuation range here. >> is that a broader call on stocks overall? or are you simply sticking with the small caps? >> for me, personally, it's a broader call across. we haven't raised our target. a lot of other firms have. we've kind of kept it pretty conservative. and i actually think we've crossed, actually the jeffries target for the s&p 500. so i think for me -- >> target for the year? >> yeah, for the year. and a lot of people have raised their target. we had a very -- we had a very modest return forecast for 2017. >> but you think the economy is doing well and earnings are going well. >> that's one thing, i think on the smaller side, the earnings numbers ahave not been as good. and that's tricky, you would have gotten that with a better economy. and you've got the fed

potentially raising a little bit more aggressively. and you do have the s&p trading at 17, almost 18 times earnings. smaller companies at 19 times. as you move to a third hike, a fourth hike, a fifth hike in the cycle, you start to see equity performance start to slip on that. >> where would you be telling people to put money instead? not necessarily bonds. keep it in cash? >> no. we're actually, still from a positioning standpoint, you want to play sort of the rate hike areas. so financials actually look pretty good, still. valuations are okay. the revision trends have been really good. i still like tech. it's an earlier that probably doesn't get affected by rising rates. good earnings projegt jectrproj. they were also underperformers last year. >> brian? >> it's unlikely bull markets end with the yield curve relatively steep and a lot of american households not participating. famously last year, more american households played the lottery than invested in the

stock market. which is still staggering some eight years after the bottom. but i think the big risk to the market right now that we all have to watch is we're still at sub-2% real gdp economy. that's what the ten-year rate is telling us. the reason why post-election ten-year rate goes up, comes back down to 230, back to 260, the bond market is not entirely latching on to the reflation trade. we're dealing with the realities of governing right now. we're going to find out what tax reform looks like, what stimulus looks like. watch the shape of the yield curve. if the fed goes too quick, they could potentially slow this down if we don't get fiscal carrythrough. >> brian, steven, thank you, guys. coming up, when we return, republican party policy committee chair, congressman luke messer is going to join us to discuss the gop's health care bill and other policy projects. and then president trump's meeting with "squawk box" regular, richard lefrak earlier this week to talk infrastructure projects. richard is part of the president's informal adviser

group on that topic. he's going to join us at 7:30 in the morning. stay tuned. you're watching "squawk box" on cnbc. hello, my name is watson. i am helping 8 million taxpayers get the largest refund they deserve. one million people c benefit from precision cancer care. 197 million passengers can fly with less turbulence. i am on my way to working with one billion people. i look forward to working with you. i am on my way to working with one billion people. e*trade's powerful trading tools, give you access to in-depth analysis, and a team of experienced traders ready to help if you need it. it's like having the power of a trading floor, wherever you are. it's your trade. e*trade bp developed new, industry-leading software to monitor drilling operations in real-time, so our engineers can solve problems with the most precise data at their fingertips. because safety is never being satisfied.

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worked on the pipeline issue at the state department and would play no role in deliberations or resolution of transcanada's pipeline application. the pipeline proposal was rejected by the obama administration. but president trump has signed an order clearing the way for the project to move forward. we must have -- we probably took our exxonmobil ceo, rex tillerson, shot and just put it on our secretary of state rex tillerson shot, because his hair is grayer than -- we need an updated -- >> you think his hair has become grayer? >> yeah, grayer than on that shot right there. that's the exxonmobil ceo shot that we think must have -- you need to -- >> yeah. >> we've got to get him on the show. we've got to get him to talk to the press. >> we do. do you know -- do you know whether we're using american steel or not? did you see that they had already bought a bunch of steel that they were going to use, so we can't follow through on that?

i just saw that last week? >> the chinese deal? >> that there was some steel that was already contracted -- >> i did see that headline. >> you did? yeah. i don't know. you know, president trump wants to use our steel, but i don't know if it's going to be possible. >> in the meantime, we've got to continue our political conversation, but it does get into business in a very big way which is to talk politics. the gop health care plan clearing a couple of hurdles so far on capitol hill. joining us right now to talk health care and more is congressman luke messer, republican of indiana, who serves as chairman of the house republican policy committee. so this -- some of this has now gotten through parts of the house. sort of walk us through the process and help us -- help handicap what you think is going to happen over the next couple of weeks, congressman. >> next it will be in budget committee next week, and should be to the floor by the week after that. and look, i understand in your business, drama sells, but i think this is unrolling in pretty much precisely the way we thought it would. this is a big deal.

the changing health care is a very big deal. there are understandably concerns there. but we've also promised for five, six years as a republican leadership team, house, senate, or presidential candidates and then president trump that we would repeal obamacare and replace it with something better. and we're going to get that done. there's going to be a lot more drama. there'll probably be some compromises along the way. but i'm confident we get that done. and i believe we'll get it done by the end of this month or very first part of april. >> let me ask you about some of that drama and maybe perhaps some of the compromises, depending on the analyses out there that you read about, it is possible that 15 million people may lose their insurance. do you think that number is accurate? >> yeah, i mean, listen, to get the 20 million people covered under obamacare, you have to count everybody in medicaid, and you have to count all kinds of people, millions of people who lost their private insurance because of obamacare. and then were pushed to the plan. so what we're going to do with

our plan is get rid of the taxes, get rid of the mandates, get rid of bureaucrats deciding how you define your health care and put the individual in charge. and one of the things we believe is that this plan comes forward, the private sector is going to create more affordable plans that actually give people coverage. as you're well aware, one of the problems with that 20 million figure is that you had millions and millions of people whoed that deductibles that were so high, that they had coverage, but really no care. because they couldn't afford to pay the deductible. >> so your expectation is that however the cbo scores this, that that number is is not going to necessarily be accurate? is that -- >> well, listen, the cbo has been inaccurate before. we need some meaningful reform there. my point is that our plan is designed to give access to affordable care for everyday americans. if the measure is somehow how much head count can you have on a government plan that has deductibles so high that they're meaningless, that's not really a

head count we're worried about meeting. >> and epphelp us understand whs not going to happen in the house, but ultimately, how you think the senate will handle this? >> it's going to be a challenge. you guys will stay busy because there'll be a lot of drama in the coming weeks, but at the end of day, we have to keep this promise to repeal obamacare and replace it with something better. i was in the white house this week with the whip team meeting, the president's very confident, and i can't tell you, i see the clear path yet, but i just know that we've all promised that we would deliver on obamacare and there's going to be a point where we all have a choice, and when we have that choice, it will happen. >> the confusing part is that everyone says that they can't see the path. they said, we made this pledge, but ecknwe can't see the path. try to walk us through the path. and most important, the other conversation we have around this table is one of taxes, and this has to get done before that.

whatever plan you think gets ultimately passed, that it saves $1 trillion over ten years, because that's critical getting to the tax piece. >> let me be more precise. i think we have a path. it's this bill with whatever constructive changes can be made to get the bill to the finish line. my point is, i don't know precisely what those compromises will be. there's a lot floating around, but remember, we have a balance here. i mean, millions of americans had their health care destroyed by obamacare. millions more, by the way, can't afford their private health care plans because of the increases in deductibles and premiums that have happened in the private marketplace. and we have to deal with that mess and clean it up. and it isn't a sort of perfect -- there's no perfect way to do that. so this bill is a compromise effort to get that done. i'm confident we'll find another way. you've also, though, highlighted the real chaaeeal challenge her. if we want to get meaning t inix reform done, we can't get that

done before we get this first reconciliation with health care, because of arcane senate rules. we're all excited by what we see in the stock market, some of that is because of regulatory relief by this president, but a lot of it is because of the promise of tax reform. that's important if we want to deliver a better economy and paying jobs for everyday americans. and that can't happen until health care gets done. >> final question, there have been a number of estimates to suggest that even if you do provide these tax credits, based on how it's set up, that health care could ultimately cost more. do you believe that? >> i don't. listen, one of the things about our tax credit plan, it broadens the base. obamacare was a particularly bad deal nor middle clafor middle c. that analysis also just ignores the fact that you have real competition and private insurers aren't loaded up with mandates but able to provide tailored packages that people need, that they won't get cheaper, more affordable, higher quality care. i just believe in competition and i believe in our system, our

economic system pb and i'm confident that more affordable options will come forward if we unleash the private economy? >> congressman, you probably are getting a taste of what you're going to hear after you do this. if one person loses their health insurance, you know, i wouldn't have any town hall meetings or anything. president trump seems to not really care about what the mainstream media says or what twitter or any of that stuff. you think you have the spine to do this? and not care about what your constituents say? >> well, i do care what my constituents say. i will have town hall meetings. just remember this. there's millions of people that were hurt and lost their health care -- >> i know. i'm telling you, it's going to be tough. i hope that the rank and file americans have the same amount of -- you know, can ignore it and do what they think is right instead of worrying about every -- you know, wringing their hands about every move they make, which they have for the last eight years. >> i think we'll do the right thing in the end. >> all right, congressman, thank you. >> thank you.

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good morning, everybody, and with welcome back to "squawk box" here on cnbc. among the stories that are front and center this morning, a deal for akzo nobel may not be dead yet. they rejected an offer earlier this week. but a dutch financial newspaper now quotes a source at ppg saying that a new offer is on the way.

at&t has said to be near a settlement with the justice department involving it direct tv unit. direct tv providers had been charged of colluding to block coverage of the dodgers baseball games. the los angeles times says a settlement could come within the next two weeks. and former mf global chief executive, jon corzine, says the form relied on auditor pricewaterhousecoopers for how it should have accounted for its bets on european debt. testifying at a trial, accusing pwc of malpractice, corzine says that the opinion that those bets should be taken off the balance sheet contributed to mf global's collapse. >> could have been worse. could have had that other accounting firm at the oscars. right? which firm was that? >> that was pwc. >> same one. >> damn! and you're surprised. >> might have been handed the wrong envelope. president trump continues to advance his infrastructure program by taking aim at the major roadblocks hindering the approval process. joining us for more on the

president's infrastructure plan is richard lefrak, president and ceo of lefrak organization, co-chair of the president's infrastructure advisory council. i look at these names. god, so good. private sector guys and builders and people that might know how to do something, might actually be shovel-ready this time around. >> may be! >> with some private sector people. what a concept. to bring some people in. you not only are giving him, i guess, advice on how to fix it, but you're describing the problem, which that needs to be done, first. there was a lot of research on what needs to be done, wasn't there? >> right. well, first of all, as a general matter, if there was ever a president that's interested in improving the infrastructure of the united states, it's president trump. he's a builder. he has concrete in his blood. so, that's a subject that he's very comfortable, that he understands and he understands

the necessity for this work to be done. so it's not something that's in the far corner of his mind. it's on his front lobe. and i think we will get some good activity, in terms of improving the infrastructure in the country. >> how dad do you think it is, compared to other -- >> we just got rated by the society of engineers, i think we got a d plus. isn't that exciting? and i have some reports that show that we've gone from number 5 to number 16 in the world, in terms of the quality of our infrastructure. and a lot of people think it's just traffic that's awful. traffic is awful. i mean, it's an annoyance, it's a quality of life issue, it's an environmental issue. but we have water systems that have to be upgraded and renovated. we have airports that don't have the capacity to handle a number of airplanes and passengers that are going to be making their

dmab demands on the airports. we have the dams and levees that have to be fixed. we have infrastructure that's been built 100 years ago, that's still sitting here. so, in the past, or in the past 30 years, we've developed a regulatory process that just kills the ability to go ahead and do these projects. and not for any particular reason. there's lots of reasons. it's the administration, it's the environmental inputs. but we are just behind the curve on this thing. there are advanced democracies, germany, canada, australia who get done in two years what takes us ten. now, hey, get real! >> okay, so, you've actually identified a couple of places that need to be streamlined, right? and it's not -- it's obviously. obviously, you've got to get things approved, got to get bidding done, you've got to

find -- >> right. >> but is the hardest thing right now getting through the regulations -- >> if you think about the permits process and the delays, part of the reason that the cost of things escalates so much is if you can't tell a contract when they can start, i mean, and natural inflation is making these things cost a lot more than they have to. >> what inflation? >> inflation. i mean, if somebody says, i'm not going to start a project for six years or eight years, you've got to build into that what it's going to cost you in eight years. there are environmental costs that are associated with the eight-year delay. if you run across fox expressway and they have a project to make it go faster and you're spewing fumes into the environment for eight years, what's the voor environmental cost of that? so it's not just one thing. it's a process that got built up with starting in the early 70s, with standards for clean air,

clean water, environmental standards. they're good. they can be respected. they will be respected. but the system of how we go about going through approvals here, it's, i think, to be honest with you, it's insane. >> in terms of prioritizing infrastructure projects, do you see more of the projects being around places like fixing airports in major cities? do you sigh the projects being along the rust bethlt, because talk about trying to create jobs in certain areas in this country that have been hit harder? >> first of all, it's all of the above. there are emergency projects that deal with repair of critical infrastructure, that have to be addressed right away. there are projects that deal with the economy. that will make the economy more productive. that there are good investments, okay? and then there are areas in this country that have just been neglected. for example, getting broadband into rural areas is an important part of our economic mandate. we have to figure out how to do

that. so, there's lots of things that we can do, all of which will be excellent, but we have to kind of get in there, do it, and pay for it. >> richard, there's been, we hear panels that have been exist -- that have been created in washington for years. we hear all kinds of advisory groups that have been created. it seems like nothing ever gets done with them. but this president seems like he is in a very big hurry to see things actually happen. >> hey, this president is a doer. he's achievement oriented. >> so when will we actually -- >> america voted for this type of president. not all of america, but enough of america to say, hey, we want to see some things change. and he wants to get these processes changed. >> so, when can we expect some sort of action? he had bankers in earlier this week, basically said, i want it done more quickly. >> well, one thing he said while we were in the meeting, he said, don't be -- bring me any projects that you want federal

funding for that you can't start and have been completed the state approval processes. because most of these projects come from the states, in 90 to 120 days. if they're not ready in 120 days, tell them to go back, get finished, and bring it back. in other words, he's not going to do, he's not going to devote the resources to things that he can't implement immediately. >> i won't ask any elon musk questions, because those are your questions. >> i was going to ask elon musk. >> i know you so well. i mean, when you're sitting there and talking about all of this -- you know, the tappan zee, finally, they're fixing that. >> right. that's a great case in point. they had -- they fixed it because it was on the verge of -- >> right. but if someone's sitting there and says i want to start digging tunnels under l.a. or make a hyperloop, well, do you really take it seriously? >> i take it totally seriously. >> elon musk, you take seriously? >> he was at the meeting, he's

obviously a force of nature. this guy, he's an imaginative guy. he thinks out of the box. and he said, listen, if we don't have a -- if the roads are overcrowded and we have -- we don't have enough space on the roads, how do you make the roads bigger? you need to widen them -- >> you are never going to get those approvals from california, if the president's first question is, bring me something we can actually get done. >> he's building a test case right now in california. he says that he can build a mile of tunnel that will handle a car for $10 million. so he's taking his own capital and he's trying to make proof of concept. now, if the real problem with doing this is gaining rights of way, using eminent domain or using rights of way to get the real estate to build a tunnel. but he still that has to prove the concept. but at least he is a man who's doing something a little unusual, thinking out of the

box, and willing to invest his own capital to see if it can happen. >> this seems like it would be the type of thing, infrastructure, that is the least controversial of any of the trump administration issues. however, when we've brought this up and talked to other people about it, they have said, look, it all depend on how you deploy these projects. if they are private/public partnerships and we're giving public money to private people so they don't have to use their own money or put their own skin in the game, then we have problems with it. >> there's lots of ways to think about this. first of all, one thing we all have to be cognizant of, is we have to pay for our infrastructure. it doesn't just -- it isn't given to us, god-given infrastructure. we haven't raised the gas tax in the united states since 1993. if you just adjusted it for inflation, you're talking about billions and billions of dollars. in addition, the vehicle that some of you are driving probably gets a little more gas mileage now than it did in 1993.

so you have no inflation adjustment and the car is getting instead of 15 miles per gallon, is now getting 30 miles to the gallon. so you've shrunk the pool of dollars that you've dedicated to one infrastructure. >> to put a fine point on it, is that the conversation that the president is having about raising the gas tax in a meaningful way? >> it was not raised with the president, but raised in a meeting with a bunch of congressional cabinet people and some of the white house staff. >> did the republicans from congress seem to go along with that? >> i don't know what the republicans from congress are doing? >> i'm sorry, the people in the room. >> the people in the room, this was a forum for open ideas. now, public/private partnerships is, again, where does the private sector fit into this? it fits in in a very interesting way. first of all, if the private sector takes responsibility for timely completion, for cost overruns, right?

for the operation and maintenance of these facilities, the private sector has a place in this world, okay? yes, you have to service the cost of capital, that they're going to demand for their equity. but, if they do it faster, cheaper, more timely, take care of it, then that's a benefit. and countries like canada and australia that employ these things figure that into the cost of what the capital is. so, they say, okay, maybe it's a little more experience, you know, the cost of the money, but these guys are going to get stuck if there's an overrun, and they have to -- they have to maintain this thing for the life of their ownership. and so there's that plus. so they use like a value for money concept to determine whether that has a place in this world. >> you have the feeling that, just from the force of trump's

personality, that, number one, this will be more streamlined in terms of coming in under budget or at budget and in the right amount of time, and that it will be paid for in a way that isn't just government largess? >> well, you have to remember, our group is an unofficial group. we're not an official government advisory committee. we're a bunch of interested citizens, some -- >> but can it be done, this government behemoth that bogs down everything? >> one of the suggestions that we made was to try on a prototypical basis a clean sheet approach. instead of using the regulatory system that they have now. now, if you go back and look at certain tragic events like when the bridge failed in minneapolis, they didn't take ten years to re-permit the bridge. they got it done right away. so they do have the ability to streamline their processes, when they have to. so, one of our suggestions was,

why don't we try on a prototypical basis, test-case, pilot program, a few projects where we use the system where we have a national objective, we agree it's a good project. we deal with the environmental mission up-front, whatever that is, the fish, the bird ts, the trees, the noise, whatever it is that people will object to, deal with it up-front, in the form of like an arbitration. so all the stakeholders come in. they make their case that there'll be a government official who in the end is like a bankruptcy judge, who gives a decision and that's it. the litigation is over. all bets are off. and you go forward. and that's the way -- >> like ken feinberg, who defines it all very quickly. it's something of that order. >> is there a project that you have in mind? >> well, we just -- we will suggest the project.

we'll suggest three or four. it's going to require probably some legislation from congress. if they have the courage to do it. but you can only offer these things to the government. you can't make them -- >> can you speak to the theoretical timetable? the reason i ask is just, we keep talking about how there needs to be the repeal of obamacare to get to the tax piece, and maybe you need to get to the tax piece to get to the infrastructure. is that sort of a latering approach, domino approach accurate? >> that's what's -- >> that's what's been enumerated to us, because, you know, the pay-for for infrastructure is going to obviously coalesce a grae great deal with what the tax plan looks like, okay? to do $1 trillion of infrastructure, you need to, in the end, have $50 billion to $60 billion of annual revenue, right? to support that. now, you can't do $1 trillion of

infrastructure. if we had the projects and we had the money, we still couldn't do it. we don't have the human resources, the physical capital to get it implemented. but you're talking about something in the order of $100 billion a year for the next ten years. okay? and so you have to plan, where are you going to find the money to service the capital that is required to make that investment. and you must think of these things as an investment. in other words, the government doesn't have a traditional balance sheet, where it has an asset called, i have a highway, it's going to last 50 years. you build it and it's an expense. it's a little crazy. >> would you consider -- i mean, the idea of hundred-year bonds has been thrown around. would that be something that -- >> i certainly would think it's a good idea. but again, because there's a debt ceiling, the government, the way they do their accounting is a little mad. but, yeah, why wouldn't you borrow the money? it's chief today. and there's plenty of wealth

around the world, sovereign wealth funds, pension plans, who are more than willing to take on that. >> you're a business guy? >> yes, sir. >> covered business issues. >> yes. >> now we've seen lefrak talking about infrastructure. don't you -- >> i do feel good. >> okay. then you've got wilbur. you listen to what he says. it's like, wow! we're in good hands. then you've got gary cohn and jamie dimon. the president saying, this guy would know how -- >> and rex tillerson. >> right. >> and mnuchin. >> seeing all of this. don't you think maybe you can take some solace that this is what happened on november 8th. they have people -- you saw what happened the last eight years and who we had making all these decisions. not private sector people. do you see how this could work? do you feel good? you see what i'm saying? >> i'm a professional skeptic. >> you weren't for the last eight years?!

now you are! now you're a professional skeptic? >> i'm a journalist. i want all of these things to work. i have questions, as everybody does. >> i just thought by now you'd say, wow, he's picked some good people. >> there are some very good people -- >> that was really enlightening, thank you. >> thank you. >> i feel better about the bridges, already. >> that is really enlightening. thank you very much. >> you're always -- coming up, former secretary william cohen on the global economy and national security. we're going to talk defense spending and much more. check out the futures ahead of the jobs report. "squawk box" returns in just a moment.

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welcome back, everybody president trump pledges to boost military spending by 10% to $306 billion. for more on that, let's bring in william cohen, the former defense secretary and chairman and ceo of the cohen group. thank you very much for being here today. >> good to be with you. >> i want to talk about defense spending, but overnight, there

were headlines in south korea that the president was impeached and will be relieved. new elections being held in the next 60 days. that has people worried about what to think about the scenario there with north korea. how do you come down on this and how worried are you? >> well, we can't predict what the north koreans will do. i suspect that kim jong-un will try to exploit the confusion at the moment. there is a sitting president for the next 60 days. our military has certainly been in touch with the republic of korea military. so i think from a security point of view, we're at a high state of readiness. and if the north koreans try to do anything that would be precipitous, i think the south koreans and the u.s. and the japanese will all be ready to confront that. but the domestic situation is troubling. and now that the impeachment has gone forward, we're about to see greater stability, at least, entered into the south korean political market. and then we have the issue of

samsung, which is a major player in not only korea, but the world, which is also in a criminal suit now. there's a lot of confusion in south korea. it's troubling in the sense that usually kim jong-un will try to exploit weaknesses or confusion, going on in any country. >> and there's certainly been additional saber rattling that's been coming from north korea. is there another time you look back to and say this is as concerning or more concerning then? >> it's been concerning all along. the problem is that this leader seems to have some kind of a fixation on showing up and rubbing the warheads of various missiles. that he doesn't have a program to help his people other than saying that we're a military power, a nuclear power, and they've got to deal with us on that basis. but in terms of the economic situation in north korea, it's

pretty decimal. the future is pretty dismal. he's a challenge in the sense he could be very disruptive. he could take action and do something either by miscalculation or intentionally that would cause an overreaction by us and our allies in the region. so i would put that as one of the most treacherous spots on the planet right now. >> wow. obviously, a situation we'll be watching closely. what do you think about the president's plan to increase spending for the defense department? >> well, i think it's important. we've seen the impact of the so-called sequester, across-the-board cuts, which have been pretty devastating in terms of planning for the future of the kind of systems that we're building and how do you plan when you've had $30 billion cut out of your budget in, let's say, one six-month period. and you have it just flat for the next several years, it's very hard to plan on how you're going to bring things into the workforce and into the field.

so, they're -- money will have to be spent. but the question is not how much money you spend, but it's how you spend it. so what are the priorities? this is something that the quadrennial defense review always looks at, the qdr. try to look ahead five to ten years. what are the nature of the threats we are most likely to confront? what kind of resources will we need to meet those threats? and then shape our budget to fund those programs fully, so that we're prepared? you can't prepare for everything, but you have to have, based on your intelligence communities, what are the likely threats we're going to see? now, we used to call it nbc, nuclear, biological, chemical. to that you add cyber. these are the kinds of major existential threats that we can face. how are we prepared for that? the president wants to add anywhere from 70 to 90,000 troops to take the load off of those who are being deployed and redeployed multiple times. it's $1 million a soldier. if you're talking $70,000 to

90,000 more troops, that's a pretty big price tag. then you're going to run into the issue, yes, we have to increase the defense budget, but are we going to pay for it? and then you're getting to the hawks on the budget side versus the hawks on the military side. so a long way to go here before we decide exactly how much is going to be devoted to more military spending, but more has to be made, it has to be made much more judiciously focused upon which what the real threats are. and look to the military to say, what can we get rid of? what can we put into the private sector that we don't have to bear the costs of this type of activity. >> although the problem becomes, when you put things into the private sector, you get issues like this wikileaks dump that everybody was saying, at this point, was being blamed on contractors. if it's not done in house, how much control do you lose over that? >> well, you wouldn't put things of any security into the private sector. you might put, for example,

housing, electrical grids on basis, other types of services that could be delegated to the private sector without letting contractors into your secure systems. >> great. secretary cohen, we want to thank you for your time today. we hope you come back again soon. >> sure. anytime. okay, when we return, the february jobs report. the numbers and reaction from our panel is just minutes away. and later, the governor of nebraska is going to join us to talk jobs. he's been pushing for a more business-friendly environment in his state. we'll talk and ask him much more about that. "squawk box" returns with the jobs number in the 8:00 hour, in just a moment.

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breaking news this hour. jobs in america. the february employment report is just minutes away. our panel of experts is standing by with everything you need to know. i'll bring you the numbers and instant analysis. plus, what it means for the markets, the economy, and the fed's next hike. a special hour of "squawk box" begins right now. >> announcer: live from the most powerful city in the world, new york, this is "squawk box." good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square, i'm joe kernan along with becky

quick and andrew ross sorkin. the futures right now are strong, that i have been strong all morning, up 80 points or so. we had what some people thought might be the beginning of a little short-term or intermediate term pause. and we had one before. the first six weeks after november 8th were good, then we had a little pause and off to the races again, and a three or four-day pause earlier. now we're back up and europe is strong as well. treasury yields. if you were wondering what were they doing down under 2.4, not anymore. there's the 2.61 number now on the ten-year. a lot of people think that's a fairly important level to turn down from there. this time we may be headed for higher yields, which some people would like. some people may not, a lot of people would like it. andrew zblm we'll see what the fed is going to do based in large part on what may happen in half an hour. today's top story, of course, the february jobs report is less than 30 minutes away. forecasters expecting an

increase of 197,000 jobs. that's the number to beat. the unemployment rate expected to tick down to 4.7%. a couple other headlines to bring you this morning. corporate insiders are no longer enamored of their own stock. insider buying now happening at its slowest pace in at least 29 years. the number of sellers has been rising as well. so, what does that say about where we are in the economy. also, former mf global ceo jon corzine saying that the firm relied on auditor pricewaterhousecoopers on how it should have accounted for bets on european debt, testifying at a trial accusing pwc of malpractice. corzine saying the opinion that those debts taken off the balance sheet should be contributed to mf global's collapse. and warren beatty blamed them. corzine blamed them. >> nothing good happening at pwc, lately? >> not in the past week or so. >> it was that matt damon look-alike dude, too, that was tweeting about emma stone or

something. took a selfie with her. >> you're talking about the fellow at the oscars, in the wings -- >> that's exactly what i'm -- >> i wasn't saying jon corzine looked like matt damon, no. that was not -- i don't think there's any resemblance at all. the guy, did, though, if you saw him. >> he looked like an older version. >> older and more full figured. so to speak. stocks to watch this morning, shares of ulta, ulta beauty are sliding. the company's latest earnings and revenues topped consensus, but its current quarter sales guidance is light. el pollo loko missing the park. the ceo informing the board he's retiring by the end of 2017. verifone beating the street. its current quarter earnings forecast is light and shares of zoomies getting crushed. the retailer warning of a larger than expected loss for the current quarter on weaker revenue. shares of finnisar plunging after the company reporting a miss for its third quarter.

the fiber optics equipment company. the outlook also came in below wall street estimates. shares of bp, trading higher in europe right now. an article in the evening standard sites renewed market chatter about a bp takeover by exxonmobil. chevron also mentioned as a possible interested partner. there could only be so many that would have the wherewithal to do that. the "evening standard." >>er with counting down to the february jobs report. let's get right to our panel this morning. joining us right now is neera tanden, the president and ceo of the center for american progress. >> see. see, not that different. similar. >> jeffrey merion, who is the director of economic studies at the kato institute. oxnarra, and our very own senior economic reporter, steve liesman. steve, why don't you set things up for us.

that adp number caught so many people by vise. how did things change, the perception on the street? >> a lot of things changed. what we did is do a canvass out there of different forecasters on the street. and we found the actual forecast on the street is higher than the official forecast. so the consensus forecast is 197, but of the forecasters we canvassed, nine of them, the average is 220. that adp really upped the outlook. the other thing that's happened in the past, not just the week, but the past week, not just the probability that march rate hike has been built in, but one thing we've been following and we have it on this show, we're looking at the january fed funds futures for a sign of whether or not that third rate hike gets built in. it is built in. guys, if you could call up at fff.y, which is our futures there. it was running about 132, 133. 137 is fully priced in.

there it is, 132.5. you can see how that's ratcheted up. there was no play or bet or gamble on the third rate hike. now that's been increasingly baked in. to me, the question is not two or three, but maybe three or four. and somebody in the back with the first name richard asked me, what would make four? i think a big stimulus plan. a lot of infrastructure. a lot of tax cuts and growth could bring the fed to that fourth rate hike. >> this year? >> this year. i don't think the market's prepared for that. but i've gotten sort of hawkish on that -- >> was richard simmons? >> i can't go any further. >> richard simmons hasn't been sneen seen in a thousand days. you're talking about the frak? >> he asked me a question. the idea of real estate is very interesting. some projects are going to get whacked by higher rates. but then again, maybe higher rents in some places. >> oxana, that's something we

think the market has been taking into account, too. how does this change your opinion on the bond market? >> one of the interesting things about the apparel number earlier this week was not only that it came in about some of the highest expectations, but if you look under the hood, the interesting thing about it was that the manufacturing and building parts of that number, the manufacturers and builders had the most significant increase. the biggest one in the last 15 years. so talk about, you know, sentiment, reflecting kind of what this administration has been talking about. that, perhaps, is one place where it showed up. what this means for the bond market, this is not good news for the bond market. good news for analysts is not generally good news for the bond market. i think, however, tryinging to predict whether we're going to have three moves this year or four or two is essentially a failed prophesy. we've seen this not really be a successful proposition time and time again. when we look at history, investors typically overreact when they expect fed hikes. and then when it actually happens or even in the absence of a hike, when rates do

actually move up, they're generally not prepared. so today, i mean, without a doubt, we think interest rate risk is one of the most significant risks for bond investors, but for all the talk and wringing of hands out there about interest rate risk, if you look at how the average bond portfolio is positioned today versus the aggregate being the standard benchmark, maybe 0.8 years shorter. that's not going to do much for you in the event that we get even a couple of rate hikes, forget three or four. so i think the conversation really needs to be about, how do you diversify? what do you need outside of your traditional bond exposure. how do you hedge, potentially. where is the actual value in the market today. let's not focus so much on what we're buying, but on how much we're buying for. >> you have to look at the bond universe. other people say, short bonds, get out of it, go long stocks. >> i think shorting bonds entirely. we absolutely believe that the last 30 plus years have created a tremendous amount of complacency in the bond market. at the same time, we know that the fed has been interpreting

essentially the same stream of constructive economic data differently, and bond yields have moved on that. today we sit here and think that three or four rate hikes are possible. tomorrow, something happens in china or the data in europe goes back to being more bad than less bad, and all of a sudden hikes are potentially off the table. so i think it's a precarious proposition to just run the other way entirely. but without a doubt, let's be realistic about what bonds can and cannot do. >> let's bring our other guest in, as well. neera jeffrey, let's start with you. the idea that the numbers we've seen recently, every indicator on the jobs market looks like this could very potentially be a stronger number. i'm sorry, i said neera first. >> yeah, i mean, we obviously have an economy that's still growing and growing well. i think that the issue that is interesting to me is how much of a disconnect there seems to me to be between washington and wall street these days. we have a health care plan that just came out that hospitals across the country are saying

are going to cost significant job loss, hospital closings throughout the country. and you don't see that discussion, really, reflected in the conversation people are having in wall street about the economy. health care is one fifth of the economy and we've just got to build this week that shows significant, significant disruption. and so, i think as we go forward, we have to see what the kind of discussion or what kind to have impact that proposal will have. obviously, it's just a proposal, but it's one the trump administration has just put the full force of the administration behind. and i'm surprised there hasn't been more discussion of that impact on the economy. >> neara, before we get to jeffrey, it's joe kernan. we've had conversations in the past, it's great to see you. i haven't seen -- >> it's always so much fun to be with you. >> i know. and i haven't seen you since the whole -- i'm looking right here at a "new york" magazine piece. >> oh, my god!

>> a actually prove neera tanden is a truth-telling hero. nobody knows when they're just being themselves how it would look in the light of day. nobody else looked good in that whole saga. >> i'm so looking forward to your e-mails! i am so looking forward to your e-mails, joe! >> you're so phenomenal! you're my hero! you're so phenomenal! i don't care what you say today, i will never look at you in the same way. you are the one person that really looked good in that whole saga, neera. that's called integrity. >> i think -- >> i wanted to say that. >> thank you. i guess, thank you. i think i'm going to go with thank you. >> just stick with that, neera. yeah, it's complicated. >> it is complicated, isn't it? >> it is very complicated. >> do we really have to talk about wikileaks? >> we already did. we already did >> you were the only person that looked good! embrace it! say it loud and say it proud! you were awesome! >> depends to who. >> to me. >> jeffrey, let's talk about that jobs report. let's talk a little bit about what you think we're going to see today?

you think it will be a hot number too, or no? >> i think it's going to be a good number, today, the correlation between adp and the bls number is historically really strong. all the other indicators suggest in the short-term, we should certainly expect that that good number, i would guess 225, but something sort of on the good side of the forecast of the estimates, but i think that there's reason to be a bit cautious after that, if you look at the atlanta fed's gdp now numbers, they almost daily update their forecast of what gdp is in the current quarter. it was up at 3.4, back at the end of january. and it's steadily come down. it is now at 1.2 for the first quarter. if that is right, that suggests that maybe some initial sort of optimism or this euphoria after the election or the inauguration is wearing off and reality will be a little bit more cautious. as someone said earlier, there's a billion things that could

happen. the health care bill won't go through, the tax cut won't go through. there are just so many ways that the current forecast may not be right. >> jeff, a little caution on that. first of all, the far superior to the atlanta fed is the cnbc wrap it update, in case you're interested, which is an aggregate of tracking forecasts, because what we've shown is that the atlanta fed hasn't been a monopoly on the best forecast out there. we've been more accurate over time. so if you would like to see that. i'll send you the link to that. but more importantly, is the first quarter weakness is a potential seasonal aspect of the other thing that people keep tracking here, is the late tax refunds. and so some of the forecasters i've talked to have brought down q1, but they're bringing up q2. because people are going to get their tax refunds late, because of a verification process over at the treasury. i know that's a little twist, just like soybeans in the last -- >> to try to catch identity theft? >> yeah, there's a new verification process that's going to delay tax refunds that has caused people to dial back their expectations for consumer

spending in the first quarter and to shift that into the second quarter. so i've got a couple of people down at this 1 1/2 range for the first quarter, that are ratcheting it up to 3% for the second quarter. >> jeff, what do you think about that? >> i would say that's entirely plausible. that's what i've been reading as well, except that's still a one-off. that's a shift of some consumption, some retail spending from some taxpayers that are waiting on their refunds, from the first quarter getting it early to later to the second quarter, but that doesn't mean that fundamentally productivity or any of the drivers of longer term growth is going to pick up and keep us going at the pace that we were sort of hoping we had picked up to based on recent data. >> all right. folks, stick around. we'll have more from our panel coming up, and that jobs report is just about 16 1/2 minutes away. >> okay. coming up, when we return, where the jobs are. we'll bring you a live report from a big ship-building project in mississippi. and at 8:30 eastern time, you can't aphid to miss the report of the morning, the february

jobs number. and later, nebraska governor pete ricketts will be joining us. he says the key to economic success is thinking like a ceo. stay tuned. you're watching cnbc, right here. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades

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built for speed. built for business. it's jobs friday. that means it's time for the latest installment in our cnbc series where the jobs are. is that really what it means? it's time for that, okay. kate rogers, i'm going to have andrew read where in mississippi you are. pascagoula. is that right? or "gola." >> pascagoula, that is correct. >> nailed it! >> reporter: that's where we are today, joe. and president trump is vowing to rebuild the american military in a big way, which bodes well for companies in defense manufacturing. we're here at huntington evenings, which is the navy's largest ship builder where they're already recruiting workers by the thousand. as the environment for ship build grows. the trump makes good on his promises, they're expecting more jobs and business to follow. >> it will be one of the

greatest military buildups in american history. >> reporter: from land to the sea to the sky. president trump is promising to beef up american military to the tune of $603 billion. that marks a $54 billion budgetary boost in defense spending. talk of a potential budget increase has the industry feeling optimistic. >> if you look at what the president has proposed or at least discussed right now, a pretty significant expansion of military procurement, as well as manpower, is possibly in store. >> reporter: military ship builders like huntington evenings, general dynamics, and their suppliers are among the top potential beneficiaries, as president trump aims to grow the navy fleet to 350 ships from 274. the largest navy buildup since the cold war. >> if that does come to fruition, certainly, those companies, both the ones building the ships and actually the ones supporting the construction of those ships would have to expand significantly. >> reporter: but first, the president needs to get a buy-in from the divided congress. >> i think it's going to be

difficult for him to get what he wa wants. there is a fight coming. >> reporter: now, trump has repeatedly called on congress to eliminate that sequester, which caps defense spending through 2021. here at huntington evenings, they're cautiously optimistic there's good momentum in congress to get that done. coming up later on "squawk alley," we'll hear from mike petters what is growing expectations in the years to come? >> thank you for that report. coming up, when we return this morning, stocks to watch. plus, synchronize your watches, we're getting closer to this morning's main event. the february jobs report is almost here. final predictions from our panel coming up. stay tuned, you're watching "squawk box," right here on cnbc. we are ten minutes away from the big number.

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welcome back to "squawk box" this morning. take a look at futures right now. we're just a little under ten minutes away from the big jobs number. all of these numbers likely to change, depending on the outcome of what we hear when it comes to the jobs report. the dow looks like it would open up about 85 points higher. s&p 500 up about ten points. nasdaq up about 18. stocks to watch this morning. >> because the ten-year is at 262. we're talking about three or four rate hikes. we're going to get a big jobs number, and the market's okay with it. i think that's infant. >> i think the market will continue to be okay with it.

>> the good news is it won't bad news. >> i think that appears to be the way the market is reacting. >> rate hikes is what the market finally wants. it is for the right reasons. it finally is. >> i think growth is seen as being five to one better than the rate cuts. >> did you watch tepper the other day? >> are you kidding me? >> he was out of his mind with fed criticism and they're behind the curve. >> there's a knnuance to what tepper is saying. you guys grilled him on this. the fed is only behind the curve if the fed, if all this stuff happens -- >> i know, i know. i saw -- >> not at the current -- >> and even if le pen were to win it, they're not behind the curve, he was basically saying. >> right. >> all right, we went off-topic. stocks to watch this morning -- >> this is off-topic. >> this might be off-topic. >> we were on-topic, now we're off. >> southwest airlines says revenue passenger miles rose 1.1% in february, that compares

to a year earlier. the company mentioned unexpected softness in the second half of february. southwest is lowering its expectations for unit revenue for the current quarter, blaming heavy rainfall in california with the downbeat results. and vail resorts raised its quarterly dividend by 30% to just above $1.05 per share. higher ticket prices helped offset slowness to the start of the winter season. some of vail's operations and the company said visits had p k picked up significantly. so -- >> higher end of the world. >> it's a weird-looking chart. if there's never going to be snow again. it's a weird-looking chart. >> coming up -- >> all the rain in california. >> do you believe rain in california? i thought the drought was permanent. >> what about the 50 degrees yesterday here? >> announcer: monday on "squawk box," keeping up with kenny. billionaire ken langone is our guest host. from the markets to

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good morning, everybody! welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. it is jobs friday. it's just a couple of minutes away. it's time for final predictions from our panel. neera, let's start with you. what are you expecting on this number that we're going to get in less than two minutes' time? >> i predicted 220,000 jobs, because the economy is still strong. nothing has happened to screw it up, just yet. >> all right. jeff, how about you? >> 225, basically for the same reasons. >> all right. rick, we're going to go to you. and i think you have potentially not only a number, but also what you're expecting on the unemployment number, too? >> unemployment rate, i don't know that there's the point. yes. i'm looking for 316,000. 316,000. >> attaboy.

>> biggest pot of gold so far. steve, how about you? >> 218. >> because? based on your -- >> the model. been running at plus or minus 21,000 error, which means i'm probably due for a big error correction, but that's my number, that's whatoksana, very don't believe in these numbers, so you don't have a number, but? >> we do have a house view number of 230, which is what jpmorgan asset management has put out there. however, as i said earlier, it's not really -- it shouldn't really be the decisive factor in deciding how to build portfolios, right? ultimately, it's not what you buy, it's how much you buy it for. and a variety of these scenarios should be factored into how much risk you're getting or how much compensation you're getting for the risk you're taking. that's what matters. >> all right, we are just a few seconds away, joe. >> yes, we are. we'll take a quick look -- >> what's your number? >> i'm just -- >> do you remember when we used to -- >> for me, it's hope and change. it's hope and change. real hope and change this time. anyway, there is the futures right now.

europe is strong, as well. we're back below, at least for now, 21,000 on the dow. we'll see whether that all changes. the ten-year has gotten very interesting in the last two weeks after a quiescent period -- >> nice word! >> a dormant period. and it's interesting. hampton pearson standing by at tla the laush department. >> 235,000. foreign nonpayrolls increased by 235,000 jobs. the employment rate is 4.7%. revisions for december and january, a net change in increase of 9,000 jobs, from what had previously been reported. the private sector in february added 227,000 jobs. the labor force participation rate, 63.0. the highest since march of last year. job gains by sectors,

construction up 58,000. private education services, plus 39,000. professional and business services, plus 37,000. manufacturing, up 28,000, health care, up 27,000. the biggest loser during the month of february, retail trade losing 26,000 jobs. the so called real unemployment rate, 1.6%. long-term unemployed, 28.8% of the total unemployment. this is the first full month of trump administration and the first job report for the new administration. back to you. >> okay. hampton pearson, thank you for that. in the meantime, i want to get some reaction. before we go to everybody -- >> wow. >> steve's been looking at his computer. what do you see there. >> you know, what's nice, first of all, is the adp number being con confirmed. and something that was mentioned earlier here, construction, plus 58. manufacturing, plus 28. it's the breadth. you have this decline in retail that stands out at minus 26,000.

but transportation warehouse, 8,000. leisure and hospitality up 26. a caution, the jobs market may not be quite this strong, because you're going to get a little bump in construction. maybe leisure/hospital shows more of the mild weather that's been out there. but one thing i do like is the workforce, people coming back into the workforce, 340,000 in february. more than half a million in skbr january and the employed is up. that's a good number. the number of unemployed falling by 107,000. nice number on the top line. when i look into the details, the breadth and the strength of the report seems to really support a decent, a reasonably strong job market right now. >> okay. i'm going to go to neera. if we're playing price is right rules, neera, you were 225 -- >> yeah. no, i was 220. jeff, i think, was the closest. >> you're winning on "the price is right" rules. but neera, make it political for us. because these conversation

always become political. what do you attribute these numbers to. >> i mean, these numbers are the continuation of the economy we've had for a while now. i mean, we haven't seen fundamental changes in policies or anything really past congress yet. so i think that's really the question going forward, whether the trump policies we see on the budget and taxes help or hurt. and i think the issue, as we saw in the election itself, is not the unemployment number, but whether wages are going up across the country. i think that's what he will be judged by. >> so you are not attributing this, then, to the new administration, to some degree? >> i am not attributing this to the new administration, since it's the first month of his presidency. so, these numbers are not radically different than the numbers we've been seeing for the last several months. >> so i don't think that people are making those kinds of

assessments. i will say, health care has been an area of strength for years now. and i worry, especially when you see the plans coming out, that you will see fundamental cuts to the health care sector, which has been an area of growth for a long time. >> i want to jump in and bring jeff into the conversation. >> sure! >> jeff, i don't think it's a crazy thing to is a, is there a trump bump in these numbers? and by that, i mean, if you're a small business, a medium-sized business, and you think change that you like is coming your way, are you more likely to hire workers? so i don't mean in the meat of it, but i mean, in the margin. maybe it's worth 20, maybe it's worth 30,000. is it fair to say that this is a sign of some of the confidence in the economy, translating into jobs? >> i certainly think that's a plausible view. it's not just what policies have been put in place yet, but it's expectations that there won't be as many new regulations, maybe

even some regulations will peel back. the tax cuts are coming. and so on. but i still would be a little skeptical that there's a lot of trump bump. i would agree with you, there's plausibly a little bit in these numbers, but which are basically a continuation of what we've been seeing for a while. so, small trump bump, applaudsably. >> but neera, is it -- >> can i just get in there, though? these numbers are not radically different than what we've seen over the last several months? over the last year, we see little fluctuations here and there. one could argue if there was a trump bump, you would see a number like 316,000, which one person predicted. what we're seeing is in line with what we've seen over the last several months. >> i would just push back a little bit. you did have this easing of the jobs numbers. you were down in the 150 range, and it's come back. now, it came back in january. i think it's hardly possible to attribute what happened in january to the new president. and now you're up again, 235 on the total number, 227.

>> but steve, it's not -- we know it's nothing that he's done. >> no, i know that! >> but i am fascinated by this idea -- >> from january -- this animal spirits in november. >> i don't know if it's smart or not, this idea that i'm waiting to see the confidence numbers translate into real economy numbers. into more sales, into more -- >> delta airlines said that three months ago. >> that's the question, that -- >> rick, you were expecting 316. so what do you say now? >> well, i still think there is a 300 handle number tout there, at some point. i believe that we're talking about the wrong topic, if you're talking about trump. it's not about trump changing the baseline of the economy. that will take some time to occur, although i do think we're going to see some job jumps, and i think it's going to suck people back in from the over 90 million people that could be

working, that aren't working. but i think the real story about trump administration is how the markets are dealing with the data that we've seen. case in point, not a bad number, and i would have probably picked 233, like i did last month. but the reason i didn't, i do think when i look at this number, what happened? okay, stocks rallied, rates hardly dipped at all. they're right back. and the dollar index is lower. i think that type of setup tells me that markets are still a good buy, because of all the good buys. good-bye, regulation. good-bye, crappy tax policy. good-bye, administration, that wasn't really fond of the bank ster steres. and i think this is an important issue. and it will eventually show up in the numbers. last handle we had was october of 2015. >> rick, it looks like there's a little bit of movement on the short end. the two-year at 138. looking at that january fed funds rate, i got it up another

basis point to 133 1/2. it's one thing i'm watching carefully, to the extent on which the market is counting on two hikes this year or three. looks like they took another step towards thinking three hikes is the way to go. the ten-year doesn't look like it's changed a whole lot. a touch cheaper at 260. i think we went into it at 261. >> we actually went into it at 259. it's currently 261. and what i find interesting is, hold your train of thought, okay? >> holding! >> ponder the last time the two-year was at these yields. let's say the spring/summer of 2009. put a spring/summer 2009 chart up for tens with the same increment, and look at how much lower the tens are, which reflects curve movement. to me, that is one of the biggest issues of what's going on with regard to central banks, is how the curve is distorted. i'll take it a step farther. hold on! i don't know that fed funds is telling you the percentage necessarily of what people think

the fed is going to raise rates at. i think it's more of a barometer of whether the fed has the nerve to do what it should. there's actually a big difference there. >> you have a new view on what you think sit's going to do? >> if we continue to see job gains even at this pace, it is very likely that the path of fed funds rate will start getting accelerated. and the bond market is certainly not -- and 2.6 -- >> you're on -- >> i'm saying the debate should be between 3 and 4, not between 2 and 3. >> you were here earlier. we were lovering 165 when we thought that's the best we could do. we were saying, every month, saying, this is really good -- >> it got cut 200 under obama -- >> and recently he had lowered what the average was, because there weren't any workers left. this is 235. >> joe, one of the only things we know that's good in economics is demographics. >> when is the last time -- >> we know that the actual run rate of the economy on a payroll basis should be between 100 and

125, which is just a function of the demographics. >> i get so tired, rick. i was so glad i was able to just sit back and let you -- >> yeah, you know, the demographics argument is crazy. >> it's not crazy! >> first of all, greenspan in the late '80s, early '90s was talking about it -- let me finish! the fact that we've ignored it and now use an excuse, that's the crazy part. but what's even crazier is forgetting demographics. look at working age people from basically 30 to 55 and see how many tens of millions of those are out there. i don't think it holds water. hey, i'll give you all a quiz. how many times and how many days have we spent over 3% in the last six years? anybody know? >> not many. i was looking -- you have to go to 3% -- >> we spent one day, one day! we had one day the last day of 2013. new year's eve, we closed at 303, which, by the way, is a quadruple asterisk number, i've been saying for years. other than that, you have to go

back to 2011. this is a big area. that's the toe keeper to 303. >> rick, i have one thing to say to you. >> yes? >> have a great weekend. >> you too, pal. >> i promised an argument. >> have an awesome weekend, i many friend. i'll see you at 3:00. >> our thanks to everybody. neera, jeffrey, oksana, steve, and rick. thank you for being so friendly. >> i'm always friendly. >> cordial. >> always cordial. >> it's going to be a lot of -- >> joe, you have a good weekend. >> it's going to be a lot of good weekends from here on out. >> make the weekend great again. coming up, nebraska governor pete ricketts. we'll get his reaction to the jobs report and hear why he says the key to economic success is thinking like a ceo. stay tuned. coming up, keeping up with kenny. ken langone is our guest host. from the markets to trump nomics, no topic is off-limits.

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we have a special guest on this jobs friday. a governor who says his recipe for economic success is to run his state like a business. pete ricketts is the republican governor of nebraska. governor, it's funny. a good day to have you, because we had richard lefrak on earlier and i kind of made this point, that, you know, whether you love president trump or you're, you know, still resisting or whatever it is, you look at guys

like icahn or wilbur ross or gary cohn or richard lefrak and you look at what we're trying to do, and i just don't see how you can't come away saying, i feel like we might be in more competent hands than we've been in, than when we had 8% of the private sector represented in the last administration. would you make that same case? >> yeah, i would agree with that 100%. you know, you've got people there who have been successful in business, and the same things that make a successful business run, with regard to having a vision, getting the right people in place, holding accountable, those work for any organizations, whether it's a non-profit or a government. and that's really the philosophy we've been trying to implement here in nebraska. >> yeah, i don't know when government became -- i think maybe they think it's a higher calling, that's not, you know, maybe not corrupted by greed, i guess is what the other side would say about why you want -- you know, the fire department can't be run to make money.

there's things that have to be done that don't have a profit incentive. and sometimes that's where the government is actually good at things and useful at things. but then again, accountability. minding your ps and qs, trying to get things in under budget on and on time. those are all things that the private sector, when there's accountability, might be better. >> that's exactly right. some of the things, for example, we've been putting in place in my administration is simple things like job descriptions for my cabinet heads, doing an annual review process with them. but more importantly, for our agencies, setting goals for how they deliver their services and holding them accountable for reaching those goals. and just setting goals, for example, just measuring what people do, for example, gets better productivity. for example, when we were doing our permits, just by measuring how long it took a permit to get out, we started to see the time of that permit go down. and we started putting processes and improvements in place in order to do a better job of getting those out. that frees up resources to do

other things. we've got a lot of people that are going to retire here in the next few years, we won't have to replace those people. because we're going to be able to find ways to do it through better processes or leveraging technology. those are ways we can help bring costs down. >> switching gears to obamacare, replace and repeal. a lot of governors, even republican governors that represent a state and they want their people to be covered, so they've got this sort of conundrum about, you know, medicaid expansion and, you know, some of them that were probably ideologically opposed to it, they couldn't say no, because they were trying to do the best for the people in the state. how are we going to get governors onboard with this? and from what you've seen of the plan, is it possible to make everyone, you know, to not take things away from people with this plan? >> well, it's certainly going to be a challenge trying to get everybody onboard. you've got states that expanded medicaid. you've got states like nebraska that did not.

certainly, in fnebraska, we dont want to be penalized, because we've been good stuaewards of t taxpayer dollar and spent those dollars frugally. we shouldn't be penalized when other states, not so much. how do you find that compromise where everybody's willing to go along? it is going to be a challenge, because this system is costing the federal government a ton of money. it's not affordable. we'll have to look for solutions. i think the process we've got right now is much more transparent. i think we've got a step in the right direction. you know, part of it is, we've got to see what the scoring on this is. we've got to know how much what this bill is going to cost, because i think while everybody might like a fancy new race car, if you told them the price, they would say, i can't afford that. so we have to figure out what it's going to cost. the key thing here is you've got governors involved where we weren't before. and you also have a much more transparent process. and what's important about those things is, with the governors, you know, we're involved, we're the ones that actually have to implement these programs, so we

should have a large voice in this, because we're going to be the ones that have to actually carry out anything they pass. and because it's going to be transparent, we'll be able to get a lot more feedback and a lot more buy-in along the way for what the ultimate bill is. and i do expect this to be an intertive process. i don't think this is going to be something that we all of a sudden get it solved and move on. it's going to take time to get things put in place. we'll find the things that people like and the things people don't like and there are going to have to be changes. >> as far as paying for infrastructure. you know, i know you've got some private infrastructure that always helps. i wish we could do a lot of that. but we kicked around a gas tax with richard lefrak earlier. what do you, in your view, as a sort of hands-off -- or as a republican, how do you infrastructure that needs to be done in this country, at this point? >> well, it's certainly one of the things that we don't want to be raising taxes on people. i think if you look at our country, we're not being competitive in the global market.

one of the things in our state, we're looking to bring our costs down, so we'll be able to control -- bring our taxes down, as well. we've got some tax reform bills along those lines. but last year, we did pass a transportation innovation act, where we are dedicating some of the money we've got in gas taxes and looking for creative ways that we can use other tools to be able to improve our infrastructure. and that's really what we have to do, is really dig into, how are we delivering these projects? what are the ways we can do a better job of doing that? and how can the federal government help us? and again, i think that working with the states, the federal government will find that we can do a better job of implementing a lot of these things on the ground, and they'll actually be able to save money. so i would encourage the federal government to partner with us, as they look at any of these programs, health care or infrastructure, work with us in the states. because what may work in nebraska may not work in new jersey and vice versa. you have to get that solution tailored to the local environment. >>.

>> let me ask you this, do you have anything out there that you could send me that i like? i have skyline chili i could send you with a bet? i've montgomery ribs. i've got a lot of really great things. do you have anything nebraska has that you could send me if you lose? >> are you kidding me?! we've got the best beef in the world in nebraska! absolutely, we've got -- and just so you know -- well, you've got omaha steaks, but we grow the best beef in the world here. and we also are either the number one or number two producer of popcorn, which you may not have known. so take your pick. we have some great products right there. >> or i could get some deep discounts at td ameritrade or something, too, you could send me, maybe. anyway! so, is it a bet then? >> i'm sure they'll give you a bunch of trfree trades. >> you know, creighton won and lost our best player. if xavier wins, i want you to send me something. but i'm not sure i'm going to send you anything if creighton

wins. >> it's got to be a two-way street. >> all right, skyline or montgomery ribs? which would you rather have? chili or ribs? >> i'll go with the with ribs. come on, nebraska, a meat guy. >> you're right. thanks for being with us this morning. it's on tonight. >> thanks a lot. >> madison square garden. >> great game. when we come back jim cramer will join us live from the new york stock exchange, get his take on this morning's jobs report. in the meantime futures have moved up even more than we saw earlier. dow up 120 points by fair value, nasdaq up by 21. you are watching "squawk box" on cnbc.

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let's get down to the new york stock exchange. jim cramer joins us now. i would have liked 400, but that was just right, wasn't it? not too cold, not too hot. >> well, yeah, because you don't want, earlier you had a guest talking four rate hikes will start hurting earnings and the economy. you want three rate hikes. and this is, i think, fine. i thought it was very interesting some of the stuff rick was saying when we had that one day up to 3%. i would like to actually see that ten-year start going a little bit higher so i could say people believe. maybe it is again if you're in europe you just keep buying our

bonds because their things are just, i mean, insane over there. but yeah, i'm fine with this. i'm fine with this because it gets you three rate hikes, gets bank stocks continuing. i love the breakdown where manufacturing was better, mining was better. i like where the jobs are. obviously retail challenged. if you go over the southwest air comments, they're saying that the rain in l.a., you know, southwest air's an honest company. rain in l.a. really did kind of cut back business. look, one-fifth of our economy is california. so there are a lot of reasons why you could say this was just a good number, not a great number because of dirt and things of that in the country but i like it and i think it's good for stocks. >> so we had lefrak on. you know, just occurred to me, wow, listened to him talk about infrastructure, it's like this guy really knows about infrastructure. then i was thinking about wilbur, which he only has one name now, right? and then i'm thinking you got gary cohn on, i mean, aren't you happy? gratified? >> well, i think what i like is these are guys who if they want to get infrastructure done would actually know how to do it as

opposed to saying, we got to make a phone call here. who knows infrastructure? i mean actually call the guys who are in. >> who's the guy in charge of permitting down there at city hall? >> i think if you had one call you would call wilbur ross how to do it but you don't have to because he's there. also, happy birthday to a guy who is to the left of me, david faber. >> oh, happy birthday, david. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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thanks everybody. big show. big jobs number. make sure you join us on monday. "squawk on the street" begins right now. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. 235,000 is the jobs number for february, solid data across the board for the first full month of the trump white house. dow futures up over 100. we're going to cover this from top to bottom including a live interview with gary cohn. europe is higher, rates here initially slid on the jobs number but now firmly back to 2.6. roadmap begins with the first