under $49 a barrel, really key when it comes to this trade. back to you and "squawk alley". >> jackie, thank you so much. it's 11:00 a.m. at the white house, 11:00 a.m. on wall street and "squawk alley" is live. ♪ good friday morning. welcome to "squawk alley." jon fortt, sarah isen and myself at post nine. what a day. the u.s. economy adding 235,000 jobs in february. that was past estimates called for 197. construction recording its biggest monthly gain in nearly ten years. we've had gains across the

board, pretty much all morning long. we talked to national economic counsel director gary cohn first on msnbc and got his take on the numbers and the president's policies. >> there's clearly a good february's part of the numbers. i'm not going to deny that. but on the other hand, when you look at what we've been doing here at the white house and all the ceos we brought in, whether it be exxon or sprint or intel, they've promised an enormous amount of jobs and job creation in the united states. those hirings have not been done yet. those are future hirings. we're still living on the hire tgs from the normalized economic growth that's built into the system here. >> let's bring in michael forruely. guys, good morning to you both. michael, walk me through. what carl just said and the degree to which expectations of a pro-business environment is feeding the jobs number now. >> so i think the jobs number

now we're seeing is probably just a continuation of the general trends in the business cycle. it was a very good number. it really didn't break out of the trend, though, that we've been seeing over the past year. actually past couple of years. so i think what we're seeing now, we should just look at in terms of the normal rhythm of the business cycle, rather than being directly influenced by policy. but it was a good number. definitely, no doubt about it. >> and you write in your note, fed's last hurdle easily cleared. the fed's moved on. is it too early to make that call? >> i don't think so. so, obviously, they're going to hike next week. and i think in the dots, there's a good case that the median participant on the fmoc will move up their expectation from looking from three hikes this year to four. so i don't think it's too early, at all. there definitely has been a shift in the committee thinkings since last december. and we think that will manifest itself in an expectation among the fmoc, at least, for more hikes this year. for four hikes, actually. >> scott, how concerned should we be that the labor force

participation rate didn't change that much, in this report. the long-term unemployed, still a concern, though. it's down, you know, over where it was a couple years ago. >> these are not new concerns. i think the most important number embedded in today's report was the wage number. i think the fed has looked for that acceleration in wages, as a real proof statement that the labor market is actually healthy. they don't trust the headline numbers, the 4.7% unemployment. but wanl wages are beginning t that signal, as well. i think that's why the fed accelerates their rate hikes this year. >> i'm not trying to be greedy, but it's not that great, the wage number. we were expecting higher. don't we need to see more like 3% number? why isn't that happening with this jobs growth and the unemployment rate down to 4.7%? >> i think it's starting to. not that many years ago, we were stuck in this more abundant environment where wages grew at 2% year after year after year. if you look at the past two years, they've begun to accelerate in sort of a

goldilocks way. they're not accelerating to the point where we're worried about inflation, but they are accelerating to the point where it puts more money in people's pockets and increasing their willingness to spend that money. >> are we not afraid of inflation? >> one thing i would point out about the wage numbers, we like 3% or 4%, but with productivity growing at best maybe 1%, you can't sustain 4% wages without putting upward pressure on inflation. so i do think, even with this relatively modest 3.8% in average hourly earnings, we approachable should worry about inflation, not necessarily for the next few months, but given the trends we're seeing, over the next few quarters, that does become an upside risk. >> are you tinkering with your fed model? if not, the number of hikes this year, the timing of those hikes. >> right now we're expecting three hikes, but i think the case for four hikes is starting to build, just given the surprising resilience of the labor market. it's continuing to grow well above what is sustainable on a long-run basis. and we've talked about the

participation rate being stable. i think given the structural trends in the economy and the demographic trends, you would expect that to be declining between 2 to 3 percentage points per year. and instead, it's been stable over the past three years. so you're seeing, i think, cyclical upward pressure on the participation rate, and that's, i think, showing up in stronger wages. so i do think there is some case for four hikes this year. >> scott, the trump administration seems to be approaching this report with open arms. i don't know if they're entirely embracing it yet or feel they can. at what point do we see that? at what point does president trump completely own these employment reports? >> i think there's got to be some progress on some of the proposals he's put on the table. as it relates to deregulation or corporate tax reform, as soon as there's definitive progress on that, that's when companies respond by accelerating, hiring, or changing hiring practices. then the president owns this labor market. >> that might not be until september. >> that might not be until

september. the fed will remind us this week that they remain data dependent, and although they may not say this, part of the data they're relying on is -- >> why can't they claim confidence levels are rising across businesses. ceos are at the white house, sentiment indicators are up, and therefore the hard data, the hiring is actually happening because of that. >> he can certainly claim that, but cause and effect are really tough to determine in this environment. is confidence up because the market is up, is the market up because confidence is up? yes is the answer to that, of course. >> it's all of the above. >> we covered a bunch of things. obviously, a part of our discussion with cohen this morning was about the packed legislative calendar. infrastructure is a piece of that. take a listen to what he said about that. >> we have underinvested in our infrastructure for the last 50 or 60 years in the united states. we have enormous opportunity right now, and jim, as you point out, we can issue enormous amount of debt in the 50-year, in the 100-year segment to finance debt. i'm not sure how much debt we

need to finance. there's an enormous amount of capital in the system looking for long-duration assets in the united states. >> so, michael, given health care, given tax reform, goldman, i think, this week called infrastructure a relative afterthought. how do we square that with cohn's obvious enthusiasm? >> look, i think more infrastructure spending probably could help the supply side of the economy, it could help productivity. we've been skeptical that it will get a, you know, a friendly response on capitol hill. but if he can sell that on -- in congress, i think that would probably be good for the economy. i think boosting growth in the near-term, but perhaps helping the overall productive capacity of the economy. >> i listened to that sound bite, scott, and i hear the longer-term debt piece of it. this is an administration that's going to need to borrow, clearly. and interest rates are moving higher. and i just wonder when that becomes an actual problem for some of those policies. >> you're not the some one that hears longer-term debt and deficits. there's still deficit hawks on the hill that will be a roadblock to getting this through too quickly.

unless there's a plan to pay for irt. and that's probably what's going to delay this a little bit longer. >> i don't know, michael, we've seen a lot of companies issue a lot of debt. they can see the writing on the wall. you would have to imagine the government would eventually get there, right? >> one would think, but again, i don't think the legislators on capitol hill are considering, necessarily, deficits in terms of trying to time the market the way corporate treasurers are. thing it's a totally different dynamic. >> interesting. michael, scott, good to see you guys. a lot to talk about today. the dow is losing most of its gains right now. let's send it out to seema mody for a quick major flash. >> if you look at the major indices, you'll see the nasdaq is the outperformer. the s&p 500 tech sector this morning hitting its highest level since april of 2000. the big tech gainers include cognizant technology solutions, which has been under pressure as of late because of h-1b restriction concerns. semiconductor stocks also participating in today's tech

rally. lam research, applied materials, and xilinx all up over 1%. >> when we come back, a lot more this morning on the jobs number with the aspen institute's walter isaacson. the president proposing a more than $50 billion increase in defense spending, but what are employers at one of the navy's biggest shipyards saying? we've got a live report. later on, the former council of economic advisers, ed lazear. we'll get his take on the market action and jobs number with rick. the dow's up nine now. back in a moment. >> announcer: post nine is sponsored by fidelity investments. innovative ideas for serious investors. ty trades... ♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪ so let me get this straight. you're a rabbit? im vern, the orange money retirement rabbit, from voya. riiight. and that means...?

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the white house calling today's job number exactly where where we need to be. we go to kayla tausche in washington with the political angle on this jobs report. >> good morning, sarah. it's quite a capture from the way candidate trump describes the job report. we called it phony, but today the white house issued a press release praising tens of thousands of private sector jobs and you can see some of the trump administration's early economic policies gleaned from the february jobs report. nearly half of the private sector jobs gained came from construction, manufacturing, and mining. now, the president has been very vocal about the latter two sectors and his desire to issue policies that target those sectors, specifically. but construction is bucking the

trend, a little bit. thanks to increased activity on the back of the second-warmest february on record. the jump came as a bit of a surprise, since the construction industry relies heavily on immigrant labor, and some economists say there could be a chilling effect based on some of the white house's rhetoric around there. also, health care, bucking trend a bit, even as the longer-term expectation from strategists is is that decreased regulation will mean a decreased need for employees. but the sector and stocks in the sector hit a nearly 18-month high on that report. gary cohn, who helms the national economic council said the administration is just now seeing some harvesting of the seeds that they've been sewing. . >> when you look at what we've been doing here at the white house and all the ceos that we brought in, whether it be exxon or sprint or intel, they've promised enormous amount of jobs and job creation in the united states. those hirings have not been done yet. those are future hirings. we're still living on the hirings from the normalized

economic growth that's built into the system here. >> so cohn says there is more still to come on the job growth front, but there are two sectors that took a direct hit in the month of february 1st. automobiles and auto parts fell by 35,000 jobs. of course, hawkish trade policy and the expectation that nafta could be redone, possibly at work there. and retail, falling by 26,000 jobs. that compares with last february, when the sector added 48,000 jobs. of course, you have some macroeconomic headwinds there with a lot of restructuring going on at these companies. but you also have this specter of a border adjustment tax, that could all but wipe out profits for a lot of these companies. it's special interesting, guys, to dig through this report, because the administration doesn't have a labor secretary in place. they're going to have a hearing on that, on the hill, coming up next week. but notably, one of my favorite statistics, government added 8,000 jobs in february, despite

the fact that the white house put a federal hiring freeze in place at the end of january, as soon as the president took office. of course, that exempted employees related to public safety, but perhaps there are 8,000 of those employees that got added last month. >> all right, kayla, thanks. and it's not just jobs. today also marks day 50 for president trump and there's a lot on his plate, from pushing the health care bill in congress to finalizing tax reform and immigration plans. for more, we're joined by aspen institutes president and ceo, walter isaacson. walter, always good to see you. good friday morning. >> good friday to you. >> so, let's get to jobs first. that's the news of the day. candidate trump talked a lot about micro, about forgotten america, the rust belt, which frankly delivered him the presidency. is it macro that matters now? or should we be focused regionally, as well, on a day like this? >> well, obviously, if you could have job growth and keep unemployment down, we're starting to see a rise in the,

you know, wage numbers. that's going to spread all over and help all over. you need social mobility. you need the type of things that can allow everybody to benefit from a growing economy. but, you know, i think that you're seeing some confidence come back. it would be nice to sort of say, as gary cohn did, this is part of the normalized economic growth that we're seeing. and now we're going to focus on particularly industries, as he said, over the next seven or eight months. >> what should the trump administration be promising, though, in these situations? on the one hand, you've got this rosy job number, where they're saying, hey, they're delivering a lot of what we said. but on the other hand, you've got this health care discussion that is really just starting on the hill, where there's dissent, even within the republican party about what the government's promise to the american worker should be. >> this is the big one. and for the next six months or for the rest of the first hundred days that we're halfway

through, it's going to be a question of what you do on health care. because that's going to affect your budget and everything else. they've actually drafted a bill that, you know, could get through. it's being opposed mainly, at least in terms of the political opposition, by people on the right, you know, some of the strong conservatives. in my wildest fantasies, which will not come to pass, he would let some of the people on the fringe, on the right, go and try to just lure enough democrats to say, okay, i'm a moderate or a conservative democrat. i will meet in the middle. that's not the way it's going to work in this day and age, but that's the way it used to work, right behind me, where that dome is on capitol hill. >> hey, walter, there's a lot of talk today about ceo confidence, corporate confidence, perhaps one of the major reasons why we saw this spurt of hiring, second in a row, from companies during

the month. i wonder, though, is there a gab between the ceo confidence of manufacturers andminers, where we saw the hiring, and some of the tech ceos? they've been a lot quieter. this is your world. how is the tech elite feeling about their confidence in the business environment? >> the tech world, especially out in silicon valley and california, are no supporters of trump. that mixes it emotionally with what they feel, but they're also hurt by certain policies. the visa policy that will prevent skilled workers from coming in. that's going to be bad. if you have a trade war, if you don't allow -- if they get into a trade war particularly with china or in asia, if you don't have something, as we won't have, with the transpacific -- you know, the free trade agreements, that's going to be bad for technology. i also think they feel correctly that donald trump is not exactly, you know, in the -- other than his use of twitter, a great enthusiast for helping the

tech industry. that said, tech, you know, tech is part of the economy. we see the nasdaq catching back up again, hitting new highs. tech will be fine. >> walter w, i wonder your take big picture, on what we see happening in health care right now. there's all this talk about repeal and replace. but the republican's opening bid seems to be a lot more similar to obamacare than a lot of people expected. when we're looking back on this 10, 20 years from now, will obamacare itself have reset the bar on what health care in the united states is, if things continue along this trajectory. >> yes, you're right, john, and i hope the people in the building behind me did not hear you say that. because, you know, instead of having a repeal of health care, it's a modification of it. in some cases, a pretty strong modification, block granting medicaid to the states, whatever it may be. but the bar has been reset and you can't do something that's

going to knock 10 to 20 million people off of having health care insurance. you cannot have a bill that says, if you have a pre-existing condition, you can't buy insurance. those type of things are now engrained in the system, and they're going to have been accommodated. this will be a test for the country and congress, but it's also make or break for the republican party. if they fail to get a modified care act or if they do something that throws enormous number of people off of health care, that will be a problem. >> very high stakes. thank you, walter. walter isaacson head of the aspen institute. >> thank you! >> when we come back, the president meeting with house leadership to discuss health care. we'll bring that to you when it happens. first, we'll go live to the largest manufacturing employer in mississippi. take a look at defense hiring, as we know the country is set to spend a lot more on that. "squawk alley" is back in a minute.

we're exploring all opportunities in taxes. you know, we want to protect american jobs. we really do. as we started out, we're talking about jobs today. it's jobs friday. we want to bring jobs back to america. we want to bring manufacturing jobs back to america. so anything we can do to incentivize manufacturers to come back to america, that's important to us. >> that was national economic council director, gary cohn this morning, talking manufacturing and jobs. what are actual employers saying on the ground? let's get out to our kate rogers in pascagoula, mississippi, at one of the biggest navy shipyards with the answer. kate? >> hey, there, carl. donald trump is calling for the largest naval buildup since the cold war, expanding the nation's fleet from 274 ships today to 350, which likely means even more jobs for military ship builders, like huntington eveni ingles. the navy's largest ship birld,

huntington ingles, is gearing up to expand. >> we're seeing the market is improving. we started sn ed investing in t facilities a couple of years ago to create the space for these folks to work. >> reporter: even based on the navy's current plans that don't include president trump's ambitious proposal, the company is looking to hire 4,000 people in the next three to five years. >> ef-wiwe have dozens of craftt are involved in the building of the ships. it's pipe fitters, welders, painters, insulators, just about anything you could imagine that you might need in building a city, we use, because frankly, that's what we're building. >> reporter: the company relies heavily on the orderly flow of work from one ship to the next. and ceo mike petters hopes that changes in washington will bring an end to the defense sequester that has been a strain on operations in recent years. >> let's get out of this kind of crazy method of government by algorithm and let's get back to the process of creating budgets and establishing priorities and allocating resources to those

priorities. >> reporter: it takes years for these workers to require the skills that they need. and the company is really invested in giving them more than just a job. they want this to be a lifetime career. ceo petters is proud to say they have more than 1,000 master ship builders working throughout the country. that means they have more than 40 years of unbroken service. pretty impressive. back over to you, john. >> all right. be careful up there. thank you, kate. and when we come back, the ceo of jcpenney weighs in on the border tax debate. his takes might surprise you. but first, rick santelli, what are you watching on this jobs friday? >> you know, i'm just watching the markets. the response is fairly interesting. the number actually had some very significant opponents to it. and who better to talk to about those components than ed lazear, right after the break. guys, what's happening here? hey nicole, this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh.

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good morning once again, everyone. i'm sue herrera. here is your cnbc news update at this hour. at least 26 people died, 36 more were injured, when an overcrowded bus veered off a mountain road in nepal. the bus rolled about 650 feet down a slope before crashing into a river. local villagers helped police and soldiers in the rescue attempt. all seven people aboard a turkish helicopter were killed after it crashed on a highway on the outskirts of istanbul. this after apparently hitting a television tower in dense fog there. pieces of the aircraft scattered about on the ground. pope francis says he is open to the possibility of permitting

married men to become priests, this to address the serious shortage of catholic priests in some countries and also in rural areas. he ruled out the prospect, though, of allowing single men who are already priests to marry. and have you filed your taxes yet? well, the irs says you're not alone, because they're seeing fewer returns than at this time last year. about 5.7 million fewer, to be exact. one reason why? delayed refunds. you have five weeks left to file. wish i could leave it on a happier note, but that's the news update this hour. back downtown. carl, i think i'm sending it back to you. >> it's sort of unavoidable, sue. thank you very much. >> i know. >> sue herrera. getting the close here, last one of the week in the uk and across europe, seema's at hq. hi, seema. >> hi, carl. stocks are mixed following the release of that better than expected u.s. jobs report. oil, mining, and financial sectors all on the rise. in fact, let's take a look at financials. banks building on yesterday's gains after ecb president mario draghi indicated the probability of a rate cut has gone down.

you can see that the stocks 600 bank index outperformed the broader european market this week. drag draghi's upbeat tone and his commentary also sending the pound to seven-week lows against the euro, trading at 113. but the euro, itself, rising to session highs on this published report, saying that the european central bank has discussed whether rates could rise before the end of quantitative easing. euro holding on to 106 against the u.s. dollar. let's talk stocks. this morning, volkswagen pleading guilty to three felony counts, as part of a plea agreement with the doj over the automaker's emissions scandal. volkswagen shares have lost more than a third of their value over the past two years and it's also in focus today. switching focus, spin-off news lifting a pair of copies, akzo nobel saying it wants to split off its business, after rejecting a 2d billion takeover offer. and bt group agreeing to separate its open reach

broadband unit under pressure from regulators. but you can see, bt group higher in today's trade. let's talk about politics. the french presidential election, a new poll today from opinion way shows, far-right leader marine le pen and centrist candidate emanuel macron, those two right there, are tied at 26%. on the flip side, you have conservative, francois fillon, candidate, remaining in third place as he faces mounting scrutiny over his allegations of a jobs scandal. but guys, it's really come to macron and le pen. a new poll out on monday. we'll get that to you. carl, back to you. >> seema, thank you very much. the president this hour meeting with house committee chairman over the proposed plan to repeal and replace obamacare. we are expecting pictures from inside the room any moment. but until then, we'll check in with our own eamon javers who's at the white house. good morning, eamon? >> reporter: good morning, carl. the white house tells me that this meeting today is not necessarily about the piece of legislation that's moving the through house committees now, it's actually passed two different house committees. it is on its way to the house

floor. this is really about the second and third phase of the obamacare repeal and replace effort. they've got a second phase, which is going to be focused on regulations with, and a third phase, which is going to be additional legislation that's not necessarily part of this first tranche of legislation that's moving up on capitol hill right now. that's what they're talking about. here's who's in the room. as you said, a couple of key house committee chairpersons here. the vice president, mike pence, is going to be there. congresswoman, diane black, the chair of the house budget committee, kevin brady of house ways and means. greg walden of house energy and commerce, virginia fox of house education and workforce. and congressman bob goodlatte of virginia. he's the chairman of the house judiciary committee. that's who you'll see in this tape that we're expecting to see of the president any moment now. i know the pool has gathered and ready to go in and shoot some pictures of the president meeting with those folks, carl. >> eamon, front page of "the new york times" is the president's charm offensive, pulling out all the stops, inviting folks to lunch and rides on the airplane,

even bowling last night to get -- >> reporter: he's using the bowling alley, yep. and that's interesting. because that's something that president obama was often criticized for not doing in the last administration. he didn't like to schmooze with the members of congress. he didn't like to have them over for dinner and do all the things that you do to twist somebody's arm in a very subtle way. this president is doing that. we'll see if it's effective. he's up against a very difficult political situation. because you've got conservatives up on capitol hill, who don't like this bill. they think that it's obamacare 2.0 or obamacare-lite, however you want to criticize it. and you've also got groups like the american medical association and others that have come out against it, as well. that's a tricky political needle for this white house to thread. it's going to take a lot of schmoozing to get this done and the president has signaled that he's ready to do that. >> eamon, thank you. we'll look for the tape and we'll share it with our viewers as soon as we get it. eamon javers at the white house. meanwhile, let's go to rick santelli.

the dow on the rise, up 28 points. rick? >> thank you very much, sarah. of course, it's jobs friday, here's the man, ed lazear, thanks for taking the time this second friday, dwal, of the month. >> thanks, rick, good to be with you. >> all right, you saw the jobs data, i want you to give me your impression, but pay particularly close attention to the labor force participation rate, which is really starting to wake up a bit. and wages, not month over month, year over year, 2.8. if you take out that 2.9, i believe it was the last month of 2016, boy, these are some of the best levels since 2009. >> well, you nailed it. that's exactly what i was going to talk about. i usually put it in terms of the employment to proposition ratio rather than labor participation rate. they're related, but i like the employment to population ratio. it's really the bottom line. what that tells you is the number of people working relative to the number of people who could be working. that number is at an eight-year high at 60%. it's still a far cry from where

it was, pre-recession. but it's -- this is a good sign. it's on the way back. the other thing that you pointed out, wages. that's really important. 2.8% is, again, it's not gangbusters, but it's certainly a respectable number. it means real wage growth, real increases in the standard of living for the typical worker. and what it signals more than anything else is that we're starting to get to the mature part of a recovery. because what you tend to see first is employment picking up. wages tend to be flat. and when you see wages picking up, that tells you that you're starting to really recovery. the one last point i would make, rick, is that one of the nice things, if you look a little deeper into the numbers, is that part-time work for involuntary reasons fell by 136,000. so that's another good sign that the economy is recovering. all of these, by the way, are consistent. i watched you earlier this morning. you mentioned the market. and i would like to just reiterate that. because all of these are consistent with the fact that the market has been very strong. the market's actually

predicting, based on historical evidence, about 3.5% growth for the next four quarters. so, these numbers are all starting to fall in line. >> all right. you know, perfect. you end it on a perfect note. let's take that detour now. all right, i agree with everything you've said. but, yet, every time i look, atlanta gdp now, for the first quarter, keeps sinking into the sunset. it's currently around 1.3. so as i listen to you, as i look at the data and come to those conclusions, and i look at atlanta gdp now, the only way to reconcile this is that productivity is still lacking. is that where you end up on that intersection and maybe you could speak to that? >> oh, absolutely! if you look at the numbers, so, the first eight years of the 2,000s, we had 2.3% productivity growth. the last eight years of the 2000s, we had 1% productivity growth. the 2.3 is a little better than normal, but it's much closer to normal than the 1%. so the question is, will we get

back to normal productivity growth? productivity growth is the key. it's the thing that affects labor demand. it means more jobs, it means higher wages. so, without productivity growth, we're not going to get there. now, you know, we've talked about this a bit in the past, rick, but, you know, my view is the way to get productivity growth moving again is to make sure that we lower the taxes on capital. that's number one in my view. and, you know, fortunately, both congress and the president are talking about some reforms that will bring that about. so we'll have to see what happens, but those are all good signs, and i think the market's responding to that. >> now, real quickly, ed, we only have about 40 seconds left. on what's going on with infrastructure, i continue to say that in the last administration, infrastructure really was more of a buzz word for stimulus money, much less thought as to what it showed you when they were done spending it. listen, the roof needs to be

rerped. the company has infrastructure that's crumbling. real quickly, there is a difference, isn't there? >> there absolutely is. and the way you want to think about infrastructure that there are plenty of good reasons for why we want to improve our infrastructure, but stimulus is not one of them. the reason is, infrastructure simply takes too long. remember the old shovel-ready stuff? that didn't work out too well. we may want to build new bridges and new roads and improve our airports. all of those things are good investments. but those are longer run kinds of considerations, and we have to trade those off against other longer run considerations. defense, education, entitlements, and, you know, then you start talking about tax increases to pay for it. so we have to think about that in a broader context. but i agree, i think of it as repairing a whohole in the roof rather than giving someone work. >> excellent. ed, it's always a pleasure. you make things seem so easy to understand. we all appreciate it. carl, back to you. >> guys, good stuff. rick santelli, thank you very

much. when we come back, the ceo of jcpenney weighs on the border tax debate. you're not going to believe what he had to say about it. back in a minute.

wapner today on the halftime report. will white house optimism over future job growth lift stocks to the next level and should you buy in today? plus, is the top-rated analyst wavering on his bullish calls now on energy stocks after what's been a brutal week for

oil? he's with us live, as well. and as bond yields rise, prices are falling. what is the best way for you to profit quickly? we'll tell you at noon eastern, halftime report. guys, see you in less than 20. >> energy gen the worst-performing sector on the nasdaq. our own courtney reagan joins us at post nine with more. they've all been warning about this, but you got some good specifics here. >> exactly. he's a very straight shooter. so jcpenney ceo ellison was among those retail ceos that met with president trump and lawmakers last month to discuss tax reform. specifically, the impact of the house-proposed border adjustment tax. i asked him if it would kill jcpenney if enacted, and ellison said, i don't think it would be, quote, a death blow to jcpenney, but it would make profitability virtually impossible. take a listen. >> it takes our tax structure, as an example, from roughly a 34% corporate tax to over 170%. so, that gives you an idea of the financial impact to a

company, like jcpenney. and that's very consistent with other companies, companies like best buy, target, kroger, walmart. i mean, you name it, we're all in the same precarious position, because we don't have a manufacturing capacity that exists in the united states. >> does that mean there's no chance for profit? >> it would be very difficult. very difficult. in the short run, virtually impossible. >> reporter: it's a blow for jcpenney, because the company just posted its first positive net income in six years. ellison says at 55%, jcpenney has a higher percentage of private label brands than competitors do. it is more in control of those costs, but it still forces his hand to raise prices. he can't take 20% cost out of the production without cheapening the quality and he's not willing to do that. ellison reiterated, it would take him a decade to get to the level of manufacturing capacity in the united states, to be able to serve the needs of his shoppers. s and even if that's feasible, it's nearly impossible to know what that would cost.

>> it's interesting to ponder what would happen on the jobs front. retail, biggest employer, right, of the united states, in terms of the sectors. that number was negative this morning. >> i know! >> even with the better jobs report. i just wonder how much -- i mean, if this company isn't profitable, how many jobs they would have to sacrifice. >> i know. and we know that they're closing stores and they have been sort of behind the curve on that. they've waited for a while to do that. they're closing stores and ellison says that he lined up the timing with a retirement program. he's hoping many folks will take this early retirement option and/or place them in other stores. he's hoping not to lose too many. but we sort of know this is inevitable in retail as more shopping goes online. >> i wonder what your take is on -- i mean, the industry has been pretty direct. they're buying ads on "snl". >> yeah. >> they've got executives being very specific. it seems like a united front, more or less. >> it does seem like a united front more or less. clearly, these folks don't buy the economic argument that the dollar will appreciate, or at least quickly or smoothly to the level that they would need for this not to be so hurtful. but, you know, that argument is

being made by a number of economists and certainly, there are folks that are net exporters that are in favor of this. as far as retail, i mean, you know the numbers. 98% of apparel bought in the united states is made abroad and 97% of shoes. what are you going to do if you have to pay a 20% levee y on th. >> did you figure out that math? >> i wish i could work through going from 34%. i don't understand that. brian cornell told us that his rate would go from 35% to 75%. certainly a big jump, but not quite as high as jcpenney. i don't really understand the mechanics -- >> because we're talking about a 20% border adjustment tax. >> 20% border adjustment tax. and this is the plan as written. that changes the way you account for depreciation. it also changes the overall corporate tax rate. so there's a number of levers at play there. he didn't get into the specifics and i don't know enough about tax policy to figure it out. but that's what they say it would cost them. >> court aney reagan, thank you.

>> thanks. rnl and when we come back, it was quite the guest list at a san francisco ping-pong club. the details, next.

the president this morning is meeting with some members of congress, some of tleehe leaderf the committees, republicans there. let's get an update now from eamon javers at the white house.

eamon? >> reporter: hi, sarah. we're told the pool reporters have now gone on in, they're in there with the president and vice president and key committee leaders in the house of representatives. one of the key things i'll be listening for in this tape is what is the plan is the plan fo piece of health care reform the republicans are talk about here at the white house. it's moving now in the house of representative through committee. that part deals with reconciliation and then we'll have a regulatory piece. that's all the regulation that the executive branch can do on it's own and the third piece is going to be additional legislation. we'll wait and see if we can get a sense of what is going to be in that additional legislation. what is this repealing in the obamacare process that he is not doing in this first phase. all of those details being discussed today. we're told. so we'll wait and see where we land here but a lot going on behind the scenes at the white house. >> it will be interesting to see

whether the members of commerce are as optimistic and we get the happy talk out of the ceos. >> it's been a rough few weeks for the uber ceo. nothing a little ping-pong with friends can't fix at least for one night. ping-pong social club spin last friday night in san francisco to celebrate with drop box ceo on his 34th birthday. also mark zuckerberg that is expecting a second child with wife dr. priscilla chan. congratulations to them. a lot we don't know about this gathering but the photos making their way around social media. >> marissa meyer used to draw a group like this together. not for ping-pong but for dinner at her place in san francisco and some places have pool, silicon valley has pingping-pon. it's one of the standard activities. >> but the optics here.

regulation dodging, technology where it had some allegation of sexist work place technology. it doesn't look good to have a boys club outing like this where he's trying to find a new coo at a time when they're struggling under the weight of negative headlines. >> the still photographs maybe look a little bit worse than the video does. yeah but you know, that's the reality. unfortunately, you're walking into one of the break rooms in silicon valley and it looks fraty and there's a ping-pong table soot day at the office. >> people don't realize how cluby and small silicon valley is and as we know, overwhelmingly male. >> all they're missing is even spiegel. he was in new york or beach couldn't make it up perhaps. >> all right. we're watching these levels obviously the dow did briefly go into the red but it's hanging on

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home builders continue to move higher heading for their 5th straight winning week. that would be their longest winning streak since august. take a look at the home builder etf trading at the highest level in 18 months leading the way in the sector. mi homes, also moving higher on the back of better than expected earnings and up about 2%. carl. >> seema, thank you. national economic council director joined us earlier this morning with the administration's view on infrastructure investment. take a listen to that. >> we have underinvested in our infrastructure for the last 50 or 60 years in the united states. we have enormous opportunity now and as you point out we can issue an enormous amount of debt in the 50 year and 100 year segment to finance debt. i'm not sure how much we need to finance. there's an enormous amount of capital in the system looking

for long duration assets in the united states. we have an enormous amount with real revenue attached to them in the infrastructure world. we're going to go rebuild the assets and do it in public private partnerships and do as much of it as we can in a variety of different mechanisms. it's not all going on the government balance sheet. we'll do it as efficiently as we can without using the balance sheet. >> big part of what jim was calling for. that's why they were joking it would be that deal. it's something you would buy for your kids. >> long-term asset? >> yeah. that's why this meeting happening at the white house between the republican committee leaders are so important because republicans are opposed to debt and the long-term debt we will see. we'll see if they can get it where they watch the balance sheet and they can get these things going. corporate tax reform because this is an area.

>> republicans are against it. it's time for america to buy a house. in this case infrastructure. the way this is financed is probably particularly important because of technology and we brought this up a couple of times on squawk alley. it's going to be incredibly important and overtime if you imbed technology to know when the problems are coming up so you can fix them. but you wond for the administration is going to build in the right kinds of incentives so whoever is dealing with this up front maybe also has the maintenance costs to be concerned about and therefore is going to spend extra up front to imbed technology in the infrastructure so if they're not so high. there's ways to do this where you might not want to do that. pinch pen nis up front and not build in the technology and end

one maintenance deals down the line. >> they're a big piece of the longer term puzzle but we also talked about the deficit impact of any tax reform. here's his answer. >> we care about the deficit. we care about revenue. we care about what is going on. and yes be able to use dynamic scoring and we have some opportunities to do that and do it in a very constructive way for u.s. consumers and u.s. industry and everyone as a whole. we are working on a bunch of really interesting ideas to reform the tax system in the united states. >> that answer got a lot of play as people try to read in between the lines and see where he is and where the administration is on border adjustment but some suggest the journal today that if that position holds it is a shift from this white house. >> that they're going to pay

attention and make sure that it pays for themselves. let's see how that happens if they don't do it. we asked secretary ross from the commerce department. he wouldn't bite on. stocks are pretty muted so a lot of it is baked in at this point. we'll see what happens next. >> what a run since the election. we'll see you monday. here's the half. welcome to the halftime report. our top trade this hour, the trump bump, another strong jobs number sending stocks higher. why some say golilocks is now back on wall street. with us for the hour today josh brown, tony is here as well. the chief market strategist also with us on set today paul richards, the president of medially global advisers. let's begin with the employment report. 235,000 jobs created last month. it's only up 28 points now. why. >> we had that n