government is operating under a continuing resolution. with that, i'll send it back downtown for the start of "squawk alley." guys? >> morgan, thank you very much. breaking news this morning. a busy morning on wall street and around the world. at this hour, the president leading an expanded bilateral meeting with president xi at mar-a-lago as the u.s. launches an air strike in syria. the u.s. added 98,000 jobs in march. well short of estimates. dow is down about 12 points. i'm carl quintanilla at post nine. we have team coverage this morning of all of the top headlines. kayla tausche is in palm beach just north of the president's mar-a-lago result. michelle caruso-cabrera is back at hq. kaleyl kayla, the president now meeting with china's xi jinping. >> they're holding a bilateral meeting that include top milita military, diplomatic and economic officials. we expect to get some commentary or at least an image from that meeting momentarily.

president trump yesterday aboard air force one told reporters that the top two items would be north korea and trade. he says somehow those two topics will mix. clearly last night added an additional layer of complication to that and the air strikes may change the agenda here. china's foreign minister, the spokesperson for the foreign ministry said it condemned the chemical attack that led to the strikes but said they still reiterated their preference for multilateral approaches through the united nations. in a briefing last night that was off camera for reporters but recorded by president trump's social media adviser, secretary of state rex tillerson said that the u.s. isn't changing its policies in the middle east. >> i would not in any way attempt to extrapolate to a change in our policy or posture related to our military activities in syria today. there's been no change in that status. i think it does demonstrate that

president trump is willing to act when governments and actors cross the line. >> the air strikes did see bipartisan support across congress. the senate will be briefed this afternoon. representative nancy pelosi has requested that the house reconvene to debate funding for this. unclear how much political capital the president will earn by this event that happened last night and whether he will have an easier budget fight ahead. a budget that cuts about a third of the budget for secretary of state tillerson's state department. so whether that goes easier, unclear at this point. we'll have to get through this meeting with the chinese first. carl? >> i had a quick question about how the events unfolded last night at mar-a-lago. any word that the chinese leader got a heads-up on this? any warning on this? how did it all go down last night? >> there is no word from the

administration as for who was notified about these strikes and it's been pointed out that the fact that the president of china was photographed smiling and laughing at jokes president trump was making on stage almost concurrently with this going on is not going to play well in china. these two countries are very focused on bringing home a win for each of their respective home audiences and appearing tough and it appears that last night president trump with this air strike that happened very late at night, he has the appearance of military strength while the chinese president is seen dining on new york strip. >> sean spicer tweeting out a picture of the briefing on that strike with the national security team so the photos will be somewhat important as we get reaction not just from washington but from syria and around the world. for that we get to michelle caruso-cabrera. michelle? >> we are about a half hour away from the u.n. security council meeting called as a result of

the u.s. air strikes in syria last night. ahead of that, responses to last night's missile attack are coming in from all over the world. canada, turkey, jaerordan, germ, france, saudi arabia and others issuing statements of support of the move by president trump. the european union says it understands the aim of u.s. missile strikes in syria to deter anymore chemical attacks there but believe political solutions are the only way to end the ongoing six-year now civil war. in syria, rebels fight for the country. bashar al assad applauded the missile attack on the air base near homes but said it's not enough. can't be one off. they want more. it's not enough to stop government warplanes from hitting the rebel held areas. the attack struck an airfield that the u.s. believes was used to launch a chemical weapons attack by siryrian government attack of assad.

back to you. >> thank you very much. we'll talk more about the latest out of syria and that international reaction. let's bring in former assistant secretary of state ambassador lincoln bloomfield and also joining the conversation is retired four-star general barry mccaffrey who served as gulf war division commander and former national security council member. good morning to you both. general mccaffrey, i'll start with you. the global support that has been pouring in as michelle just outlined not to mention domestic support, congressmen and senators from both sides of the aisle, how important is this for the new president, president trump, as he figures out what to do next? >> it was widely seen as a rapid decision response to the threat of chemical weapons used against civilians. it will probably be well received by most of our international partners as well as domestic political audience. at the end of the day a half million people have been

murdered in syria. most of them by assad's forces. millions of refugees living a life of misery on the border areas. this won't change the reality of the situation on the ground at all. it's still a desperate civil war between the sunni muslims with various factions fighting against assad supported by a lot of external actors. not just the russians. the iranian revolutionary guards are in there. hezbollah militias. it's a very complex terrible situation that will notten dramatically changed by u.s. military action. >> ambassador bloomfield, when the president made this announcement last night, he ended with god bless america and the entire world. do you think that this act and the statement it makes indicates that he's going to pivot from his america first policies? >> i don't know if the america first sort of mantra will be

redefined. i agree with general mccaffrey, this won't change the military situation. it does change the political situation. what president trump has said, which his predecessor president obama never said, he talked about syrians wanting to go back to syria one day. he made it clear it wasn't just about the chemical attack victims but that it's time for the international community to stop the carnage in syria. that's a broader political objective. i think that what president trump and what secretary tillerson are trying to do is to say you don't know what we're going to do next. this is what we stand for. that gives you momentum and deterrence and i think all eyes are on the trump administration to say where do we go from here? there are places they with go with this that could be very productive. >> general mccaffrey, what do you see as the likelihood that this changes the calculus whether they step up the regime

there. if you weaken one, you need to do more. >> well, i think that there is a certain optics to this initial strike that's probably favorable to give our diplomats more levera leverage. we have to remind ourselves we do not have vital national security interests at stake in syria. we do in north korea. we do in iran with our nuclear development program and with the russians threatening the baltic states and poland. so to some extent we have to be careful. mr. trump at one point talked about creating safe havens inside syria using u.s. armed forces to do it. that would be a massive operation by the u.s. military and would divert resources into an active combat zone that would be unwise. that would be a concern i would have going forward.

if the next step happens, i think what we'll do is go after the syrian air force. if you told the u.s. navy and air force to destroy the syrian air force, they probably would pull it off in a couple of weeks. that's the next escalation step. i don't think we want to see significant combat forces on the ground in syria. >> ambassador, general mentions optics and sean spicer tweeted out a photo of the president with the briefing in mar-a-lago. i would caution viewers from reading too much into things like this. you do have bannon not at the table. you have economic advisers like mnuchin to the right. how much of this is interesting to you or relevant? >> i think it's quite interesting. obviously president trump is very good at attracting attention. he's proven that over the last year as a candidate as well. so people are watching the play by play. i think to the extend that the

professionals in this administration, general mcca mcmaster, general mathis, general kelly, the intelligent community stepped forward and presented a strategic path forward, it's a political path ford. there are things you could do. russia is involved in this. if i were advising ambassador nikki haley today, i would say, look, if american helicopters drop nerve agent on anyone, we would suspend those arms deliveries so fast it would make your head spin before congress could do it. why not call out russians and say take responsibility for what you've been doing for six years now dropping barrel bombs and nerve agents and chlorine through your helicopters and your bullets. russians are involved in this. the message at mar-a-lago, we don't want to everybody president xi. there's no doubt that if trump can take decisive action in

syria like he did, he can take decisive action in north korea as well. >> what message do you think was sent by president trump last night to china on north korea? >> i would be a little cautious about thinking that the lessons out of almost no risk strike on a syrian airfield relates to north korea. north korea has not only nuclear weapons and a delivery system currently that will allow them to strike japan and south korea and u.s. forces in the region, but they also have the better part of 20,000 artillery pieces that could bombard seoul. 23 million people in a short order and a bizarre internal decision making process that we don't understand. so i don't think the chinese are going to read president trump's action in syria as imminent strike on north korea. i hope we don't do that.

north korea, the only short-term action we can take is enhance ballistic missile defense. we've got some excellent technology. thaad. we have to build capability to protect america from what absolutely will be north korean ability to strike the united states in short order in the next five years. >> really quick, general, mcconnell on the tape now saying he would be "interested" in looking at form aal authorizati for use of force in syria. >> i can't imagine democrats giving this president a broad local authority to conduct future combat operations. i don't think congress wants to be on the record and in the short-term, obviously historically, politically, legally, the president can take unilateral military action. so i don't think much will come

of that. >> it's all very complicated from here. gentlemen, thank you for joining us. ambassador bloomfield and general mccaffrey. >> thwe want to track market action. bob pisani is on the floor with the latest. >> great discussion. very interesting to listen to. i want to remind everyone we've had 24 hours of very high drama with three big events. we had president xi meeting with president trump. a big meeting. we had syria missile strike and disappointing jobs report. normally a lot for markets to digest. what's really going on, look at the s&p futures. we're flat. we did move about ten points late at night when the syrian missile crisis was announced. we started coming back in the morning. moved down a little bit when the jobs report came back but again we kept coming back. market keeps coming back. very resilient. even volatility is subdued. i have said many times i don't consider this relevant until it gets toward 20. not a big move to the upside.

10-year had move but that's coming back. there's two day of the 10-year and moved down again to 2.27 early in the morning. coming back with 2.32 here. if you take a look at the sectors that are moving, one thing that we've seen movement on is gold. highest levels since november up another 1% there. defense stocks, telecom and real estate, consumer staples dominating. banks having trouble. overall talk of the guys down here, some people feel less chance of fed getting more aggressive on rate hikes. maybe a factor in holding up the markets today. you have to admit regardless of the explanation, the markets are handling all of this big news in relative stride. back to you. >> indeed. thanks very much. bob pisani. when we come back, a lot more on the market reaction from last night's strikes and the jobs number this morning. dow down 19. we'll talk to the former council of economic advisers ed lazear

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march payrolls falling. joining us this morning, oppenheimer cio and wells fargo head market strategist to break this story down. good morning to you both. >> good morning. >> march weak but q1 best in

five years. should we write march off? >> i think focusing on month by month basis doesn't make much sense. we're talking about a really decent growth environment and while things may be peaking, they're not decelerating to a level where it causes any bit of panic. >> that's right. you still have the fed online for two, maybe three rate hikes this year. you still have wage growth sufficient to demonstrate that the economy has growth ahead of it. >> we're seeing commentary this morning suggesting that there might not be a big enough supply of workers out there right now. shouldn't we be seeing more wage growth overall if that's the case? >> you would expect that, yes, but we still have a pretty low labor participation rate and there's still some problems matching up workers with jobs so the wage growth is still a little bit subdued. it's still steady enough to generate some economic growth

and maybe 6% to 7% earnings growth this year. >> bond market doesn't seem impressed with 4.5% unemployment rate lowest since may 2007. why not? >> bond market is impressed there's no wage growth. at 4.5%, rates would have been significantly higher. the key point here is the fact that since the financial crisis we have had a decent recovery without significant uptick in inflation. and that's a pretty decent environment for financial assets and that's what we see in the markets today. >> the low yields, paul, certainly they are weighing down financials again. i think earlier we reached 2.269 on the ten-year. new low for 2017 and a year where everyone thought finally the bull market in bonds is over. >> we heard that refrain several times in the last ten years definitely. but, look, inflation expectations have even knocked

off a little bit 2.3 earlier this year. maybe now 2.12, 2.2. the bond market is not impressed. >> barely comes alive even after a night like last night. tom lee out with a note this morning spending two weeks on the road with clients saying conviction of either bullish or bearish signs is hard to come by. people don't know which way they want to trade. do you feel that way? >> the economic environment is actually quite good. we have had a decent run. so for things to change dramatically, we need a catalyst. we expect it to be trump policies. they're not forthcoming. on the other hand, we don't want to go down -- there cannot be a significant drawdown because growth is good. i don't think it's an anomaly. i don't think it is a disaster in the market by any measure. >> we've been talking about labor force participation for a

long time. now we're talking about wage growth or lack thereof. what's the most important number in these reports now. >> i can't remember an unemployment rate that mattered less than this one. wage growth is not great. it looks to be sustainable and as it recovers more, we think that will be the one to watch going forward. we think even by the end of this year investors may think a little bit more carefully about inflation than they are right now. >> i was going to bring up oil prices. that's where we saw volatility and some of the sharpest moves off their highs as a lot of these assets have been. do investors need to rethink the oil picture after what happened last night? clearly more military escalation in the region. iran has already condemned it. talked about isis controlling oil fields and this is going to be a key foreign policy challenge. what does it mean for oil? >> i think this is a very controlled escalation. i think that's really the key

point. so if the expectation was things will go crazy, then oil would be at a very, very different level. markets would be at a different level. missile firing is more symbolic than foretelling if there's going to be a disaster in the marketplace or some invasion or something. >> so many of our guests and so many experts told us that you can't just leave this. it's not necessarily isolated. there has to be some sort of followthrough. there has to be a strategy at least from here and it's going to be bumpy. >> the containment strategy is really not going to involve things that are going to be extraordinarily detrimental to supply of oil in the marketplace. i think that's really what the oil market is latching onto. >> equities out of practice in terms of discounting geopolitics. haven't had to do it for a while. thank you so much. have a great weekend. >> thank you. >> still to come, international reaction to the president's

meeting with china's of xi jinping and latest on last night's strike on syria. a live report from the pentagon when "squawk alley" comes right back.

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markets frozen eastither in uncertainty or fear. dow unchanged. defense was a leader at the open. in fact maker of the tomahawk missile was the big gainer. when we come back, the former council of economic advisers chairman ed lazear talking about jobs number and china and fallout from syria when "squawk alley" comes back. n, i just neef the customer app will be live monday. can we at least analyze customer traffic? can we push the offer online?

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breaking news out of mar-a-lago where president trump has been meeting with president xi jinping of china. president trump says his relationship with china's xi is "outstanding" and says progress was made in the u.s. relationship with china during these talks. the press pool is inside, which means we should get a tape in just a few moments. as we get it, we'll continue to share it. those are initial headlines looking very positive in a meeting of the two biggest economic superpowers in the world. one that investors were on edge about given president trump's

early campaign talk, harsh rhetoric around trade. one point saying china is raping us and cheating us out of jobs. what looks to be the first face to face meeting looks pretty positive and a different tone from president trump and president xi which investors will be relieved to hear. >> seems likely investors will take that as a good sign. you can't help but notice the many reversals that we've seen over the past few days. you noted rhetoric from the campaign to the statement today or on syria just a few days ago the administration was talking about removing assad not being a priority. that quickly changed after these attacks attributed to assad though to many onlookers, this is not a surprise that assad would do this. we've been watching the news over the last couple years. >> some of his supporters and administration would say it's very different to be a candidate and to be campaigning across the country and to be sitting in the chair as the commander in chief.

that is what he's doing now. >> as jack jacobs said, meaningless to take tweets from 2013 and apply them to today saying leaders involved in all of this are essentially of the understanding that you have to be looking at it from a day forward. >> think about how many meetings he's had with global leaders. that perspective. just this week meeting with king abdullah who has been the recipient of so many syrian refugees and what influence that had and kind of intelligence he's privy to now as president. >> question for investors, at what point do we expect to stop seeing reversals? globalism? is that back on the table? what about tax reform? at what point do these things stick? >> the dow is down eight points. and courtney reagan joins us now with a cnbc news update for other headlines we're following at this hour. >> good morning to you. a truck crashed into an upscale department store in central stockholm killing at least three people and injuring many more.

the prime minister said everything indicates it was a terror attack. arizona senator john mccain says he supports president trump's move to bomb syria but this is just the beginning. he made the comments during an interview on the "today" show this morning. >> i think the signal that was sent last night was not just for bashar al assad. it was also for putin. as i say, now a lot of work needs to be done that probably couldn't have been accomplished without this beginning. >> hyundai and kia are recalling near 1.2 million cars and suvs because engines can fail and stall. the recall covers 2013 and 2014 hyundai santa fe sport usas and mid sized cars. also cared are kia mid sized cars and suvs from 2011 to 2015. back over to you. >> courtney, thank you. markets are closing over in europe and the u.k. stocks mostly near the flat line digesting that u.s. jobs report

and of course the u.s. air strikes in syria. on the currency front, the dollar is rising against the russian ruble. 1.4%. concerns there about increasing tensions between the u.s. and russia in the wake of the air strikes. russian stock market under pressure. moscow index down 3% on the day. here's a look at how the european stocks finished the week at large. barely positive. sort of unchanged week after what has been strong outperformance in the last few weeks out of europe. carl with the dow also really unchanged up one point. >> the world is reacting to last night's missile strike on syria. conflicting reports out of the kremlin. let's get live to hans nichols at the pentagon with the latest. >> the latest is that the u.s. navy is tracking a russian ship that is leaving the black sea and sailing into the mediterranean. now, the eastern mediterranean

of course where the "uss porter" and "uss ross" launched 60 cruise missiles into syria. the russian ship is believed to be armed with its own missiles so that's something they're monitoring here. "porter" and "ross" still in the mediterranean. there are a lot of assets in there. i was just a couple weeks ago on the "uss george w. bush" in the mediterranean the entire time a russian destroyer was shadowing. excuse me. hopefully that's not an important source or someone giving me new information. what we have here is an update on the number of aircraft that have actually been down on the field in that airfield in syria. it looks like it's around 20 to 26. we're safe to say a couple dozen. what they're doing is battle damage assessment trying to figure out how successful they are. i think what everyone is watching here at the pentagon is, a, what's the russians response. we're seeing that in the navy

and, b, how does this affect other decision makings? how does this affect decision making on potential action against north korea? what everyone here is talking about is the speed, the velocity with which this decision was presented to president trump and then approved. it happened all in the same day just 72 hours those strikes came after the initial attack of chemical weapons. carl? >> hans, before we let you take that call, what can you tell us about staffing at the pentagon? we keep hearing the trump administration does not have their full team. they don't have a deputy secretary of state for instance to make all of these very complicated in the moment decisions. >> so bob is the holdover deputy secretary of state. beneath him there are very few assistant secretaries, deputy assistant secretaries. that part of the pentagon on the political side isn't staffed up there. there is clearly some friction between secretary mathis and the white house on this. i will say though that the functions of the pentagon, the

infrastructure here continues to grind. you have so many professional military types here. the decision this centcom plan to launch a bunch of cruise missiles from destroyers in the navy happened quickly because you do have centcom up and running and same joint chiefs of staff and everyone here has a lot of military experience. on the policy side and on the political side, you're right. we're starting to see more new faces here. that has been a concern to some extent but because you have the professionalism of the military, you don't hear the complaints here as loudly as you might at the state department where they are really looking for policy guidance. guys? >> hans nichols, get back to your reporting. thanks for joining us from the pentagon this morning. another of many stories we're tracking this morning. it's day two of president trump's meeting with china's president xi jinping. for more, we're joined by the

former deputy security adviser james jeffrey on the phone. thanks for being with us. >> thank you for having me. >> i wonder your take on the president's most recent statements about the meeting so far with president xi calling the relationship "outstanding" and saying progress was made. is that significant? >> it sure is because people were expecting, of course, negative vibes out of this given the president's statements about the trade relationship and given the reality of the trade relationship the huge imbalance in trade statistics and the north korea issue. the president increased his chances significantly by the syrian strike. that's the kind of thing that will get the chinese attention be it on their own actions in the south china sea or north korea's actions. they'll see him as a guy who will act on his own and act

cooperatively with the chinese. he offered that to the russians. they turned them down at the u.n. if they turned him down, well, they can expect what's going to happen. >> ambassador, do you think that improves the environment for the conversation because it is in a sense unilateral action and china has favored that? some ways or because the united states is going to need allies and backers for this type of action and china might very well do that? >> yeah. china's position has always been a little bit softer on syria than russia and china is very concerned about chemical ke weapons. the second thing is the president chose an issue where there is universal condemnation, almost universal come den natio

condemnation. there was u.n. resolutions that give an authorization for countries to act unilaterally and immediately throughout the world from the pacific allies of ours to all of the european states to arab israeli and turkish friends in the region, people supported us. and that's something that will get attention. unlike 2003 when we went into iraq, the whole world is rooting for us on this one. that's a real piece of diplomatic capital that they will know how to deploy with. >> the common threat here that we sort have been following this hour, president/xi meeting and reaction to syrian air strikes, is the uncertainty going forward and policy reversals from president trump, how unpredictable does it make foreign policy whether it's north korea, the middle east, the relationship with china which is now "outstanding" going

forward. >> it's unpredictable only if you took for absolute truth the kind of things that president trump was tweeting and saying in the campaign. we have absolutely critical interests worldwide since 1940. trump filled his entire cabinet with some of the most extraordinarily outstanding people who have lived in that world. secretary tillerson, secretary mathis, secretary kelly. mcmasters and that's their world. so he's being unpredictable by being predictable and doing what jfk or what lbj or what george bush 41 and bush 43 or clinton would have done and did do under similar circumstances. what he has done is deviate from obama's foreign policy, which was not a real hit abroad. >> does it surprise you,

ambassador, that he's taken a stance that a lot of presidents come to the realization of and that is that the u.s. has to lead conversations with violations of international law? >> i knew we would get to this point. this guy is unorthodox president. he's a guy that lived all around the world and worked all around the world. he's a businessman. he's not going to tear down the american global structure. and he hired people totally committed to it and fought for it. i thought that the first big crisis would get him to this point. i'm surprised at how quickly he moved and despite all of this talk about chairs not filled in the bureaucracy, i am impressed. his people, tillerson, mattis, others, they called our allies and alerted everybody. they even alerted the russians. they were doing all of the right diplomatic things as if they had been in the job for six years.

impressive from a diplomatic standpoint and one reason why everyone around the world is applauding this rather than criticizing it. and again, that puts pressure on russia and it will be noticed by china. that's helping the atmosphere of the meeting. >> so let's talk about tillerson's upcoming meeting to russia. what message is he mandated to give? do we come out of that meeting next week with a different sense of u.s./russia relations? >> only thing you need to know is that it hasn't been canceled. donald trump, one, putin, zero. if russians don't cancel that meeting they will say you can smash the hell out of my ally, assad, because he was even though he won't admit it, bad boy on chemical weapons and we still want to talk to you because we have important issues. and so that's the real takeaway

of that meeting. rex tillerson, i have worked with him. i know his skills with the russians. he knows them all. he's negotiated really tough with them when he was with exxon. >> ambassador, thank you for your time. ambassador james jeffrey on syria. as we're talking, the senate has voted to confirm judge neil gorsuch to the united states supreme court. senate republicans invoking that so-called nuclear option confirming him with just majority vote. the justice is 49 years old. native of denver. lives in boulder. was a u.s. appellate judge nominated by george w. bush. trained and educated at columbia, harvard, oxford and known for an interpretation of the law that fits with the man whose seat he is replacing, that

is of course antonin scalia after his death. >> that's an important point now that he's officially confirmed. it doesn't really shift the ideological balance before scalia's death for conservatives or liberals. justice kennedy is the swing vote. that was hard fought and hard won here by the republicans in the senate. our jon harwood joining us watching this live on the senate floor as we continue to see the senate voting to confirm neil gorsuch to the supreme court. >> the biggest surprise here is that this is not the biggest story in the country today. of course the strikes that you were just discussing with ambassador jeffrey are. this is an important victory for conservatives, for republicans, for president trump. they succeeded in preventing president obama from filling that seat after the passing of justice scalia. and now they have succeeded in putting neil gorsuch on who is a highly qualified, very capable

judge. and this is something that donald trump can say is a victory even if it's overshadowed by other news in the country. >> once we get out of the beat of news of the day and we look at this from an historical perspective, this is huge significant. this is a supreme court justice confirmed with a simple majority vote in the senate. this is fundamental shift in the way the legislative branch works in this country. how is this likely to affect so many other items on congress' agenda over the next year? >> well, john, i'm less of the view that this is a huge shift for the senate. i think the country, the political parties, the united states senate along with them has become much more sharply polarized over the years. we took an interim step toward this conclusion with the harry reid move in 2013 and now mitch

mcconnell has taken another step. we had justices confirmed with fewer than 60 votes in the past because they weren't filibustered. clarence thomas got 52 votes. the question for me and what would fundamentally change the senate is if we then move to a situation where legislation is approved without having to clear 60-vote threshold. mitch mcconnell says that's not going to happen. i'm skeptical but we're not all of the way there yet. >> that's the question, john. they confirmed judge neil gorsuch to the supreme court but to what cost? the cost of bipartisan corporate tax reform? those are questions investors are wondering. >> no. it's not at the cost of those things. this is not going to have an appreciable effect on either of those agenda items. they are going to rise and fall on their own merits and of course with the question of tax reform, republicans are going to

do that or attempt to do that through the reconciliation process, which like with neil gorsuch is not subject to a filibuster. so some things, infrastructure, which will move separately, will have to get 60 votes. because there is significant democratic support unless the plan is all tax credits, for example, that is expected to clear that threshold. i don't see much of a relation between those two events. >> john, does the gorsuch related ranker in the senate endanger other elements of policy? at least this year? >> i don't think so. look, ranker is at epic levels before or after gorsuch. some of that is the natural flow of how parties have developed. bill clinton polarizing. george w. bush very polarizing. barack obama and now donald trump in his own way is just as

polarizing as those predecessors if not more so. i don't think this is a landmark event in that process, which has been ongoing and at a very high level for a while. >> is there anything to suggest to you that this is reversible in the short to medium term? that the senate goes back to having its structure be a check on partisanship as it was in the past? >> it is a slight check on partisanship. it is not entirely like the house, which is the hot house. it's a majoritarian institution so majorities can do whatever they want. the way the senate functioned as a check on partisanship in the past was at a time when the political parties themselves were not as partisan because they were more ideologically diverse. you had conservative democrats and liberal republicans. we don't have that anymore.

we have distinct parties and that raises the stakes of every fight and you have ideology and partisanship reinforcing one another. we have an additional element now since the obama presidency of race being an even more robust element of that polarization than it has been in the past. we have partisanship, ideology and race all moving and pushing in the same direction which is intense partisan warfare. >> appreciate the color and insight as we watch that historic vote. it does take a bit of a back seat today. it will not for years and years to come most likely. dow is down four points. let's get to rick santelli with his special guest. rick? >> thanks, carl. of course i would like to welcome ed lazear. thanks for taking the time today. >> pleasure. you have a lot going on today. >> we do. we do. >> this is important news but

you have many others. >> we do. big number today in my opinion is 153 million. if you look at the household survey going fast through these numbers, up 472,000 94 million. look at that and define what you see, ed. >> the way i would put it is the employment to population ratio, which is a number that i love. is at 60.1%. the heist in a year. so that's good news. the best thing that came out of this jobs report and it's consistent with what you're talking about in the household survey. the other good news, wage growth is still not spectacular, it's strong, positive. 2.8% is a real wage increase for

american workers, so again, that tells us we're well recovery. things are still strong in. the one thing i point out that hasn't been noticed is the bls snuck something by us. it was negative. they said weekly hours were unchanged. that's true because they revised down the previous month. >> yes, yes, february's a big revision month, yes. >> so we're down a tenth of an hour and you know that's the equivalent of 400,000 jobs, so that's something we need to watch. t not positive news, but let's not get too excited. there's a lot of rounding error. on the whole, i would say this is not a negative jobs report. it's kind of just an average. 178,000 over the last three month, still above what we need to do to keep up with the growing poppopulation, so still okay. zwl let's go generic headlines.

wages, i know what you saying, they're not bad. in my opinion, they're not impressive. productivity is well below the grade of not impressive. this morning, we had a discussion. the last administration had a nice string of jobs, but jobs, jobs, jobs is important for two reasons. growth and productivity and that transmission seems to be b broken to some extent. do see this administration or any of the policies in the future changing that baseline? >> i do. of course, it depends on what they're able to accomplish. but there's no question at least they're annoyanunced tax reform. lower rates on capital and expensing will have positive iskts on growth. so if they get that through, that's a big deal and it can have not only effects on wage,

but on jobs. so that's a positive one. i hope they get wak to obama care. not just for the health consequences. >> jobs right? >> sorry? >> i said job consequences. >> well, consequences through the deficit, the obamacare legislation, the new legislation, would have cut spending significantly and taxes significantly and that's a job dproeer, so again, i think that's an important one to revisit. i hope they don't give up on it. we had failures. the t.a.r.p. failed the first time and passed the second time. so they can have a mulligan on this one and they ought to be thinking about that. >> all right. quickly. one minute left. let's cover the big elephant in the room. the fed. so 4.5 cements the notion that we have a fed rate increase. not sure i see it that way. but i do see good news. u 6 fell .3 what do you see with

regard to the fed and give me the compromised versions tightening arguments you see regarding balance sheet issues they stretch the talk iing gamet the expense of rate hike game. what do you see? >> i think they're going to continue to move along a slow, but steady trajectory. i do think that at this point, to be honest with you, rick, at this point, i think it's secondary b kindses of fiscal policies. what you mentioned in terms of tax policy are more important what the fed is doing, but i think they are moving back to a path that implies more regulari regularity in term of what they're doing. i think they'll wind down the balance sheet. i don't give it a lot of consequence in terms of effect on the economy. given everything else that's going on, that's more substantive in terms of its effect on both productivity, job b growth and wage growth.

>> you know, now, you've piqued by curiosity. so i'm going to get this trouble. we're going to go longer. when i look at the fed, i am very impressed, actually. i think they're embarking on what they need to embark op. is there a kind of a fit for the marketplace like the taper tantrum that gave us a big move in ten years because balance sheet issue is to many is a tougher one to try to quantity and when markets are truly bit puzzled, they don't seem to mind much about. >> i think you know, the eviden evidence, when the notes came out the day before, the market didn't react a strongly. i think that was appropriate. the reason is because i think these have limited em pact on the economy. think about what we've been talk ing about, is this policy that the fed has been engaged in,

really effective in doing anything. if that's the case, moving to a normal path is not going to have significant consequences. i know janet well. i think she's a thoughtful, conservative and careful person and i think she sees pretty much what you an i are seeing. what i would expect. >> and you also get an a plus in my grade book. thanks if for taking the time. carl, back to you. >> always good to have ed. especially on jobs day, rick. thank you so much. dow remains almost exactly flat. we are awaiting tape playback of the president and chinese president xi at their bilateral at mar-a-lago. the president headlines have been b made, b saying the relationship when xi and himself is outstanding and that they made tremendous progress during these bilaterals.

kayla is in palm beach watching this and we'll tap dance a bit until we get that tape. headlines out of this meeting overall. >> of course we have the head la lines from the american side, with the president saying he believes progress has been made. not only in his meetings with the president of xi, but his lieutenants and their count counterparts on the diplomatic side, military side, on economic side, but it's unclear exactly what the substance was and what the results if any of those conversations was. interestingly in the remarks to press pool, president xi spoke in his native tongue. not surprisingly, but there wasn't any translation for the press pool there, so we don't really know what he said about the meeting. we're waiting for the white house to provide that translation so we can see how the chinese feel about this meeting. >> thank you.

we also don't get hear from president xi often. doesn't speak in public that much and we will have a translator to help through as soon as we get the sound, which is right now. let's listen. >> i just want to say that president xi and all of his representatives have been really interesting to be with. i think we have made tremendous progress. in our relationship with china. my representatives have been meeting one-on-one with counterparts from china and it's i think truly proper assessment has been made. we'll be make iing a lot of additional progress. the relationship quoped by president xi and myself is outstanding. we look forward to meeting together many times in the future.

and lots of very potentially bad problems will be going away. so, i just want to thank president xi for being with us in the united states. it's a tremendous honor the for me and all of my representatives to host the president and his representatives. and again, progress has been made. thank you very much. thank you. thank you very much. >> thank you all.