live from new york where business never sleeps. this is "squawk box." good morning, everybody. welcome back to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. we start this morning on this friday morning with the markets. the dow, s&p 500 and nasdaq hitting record highs yesterday. if you look, the u.s. equity futures this morning are indicated higher once again. the dow would -- if it were to open at these levels, almost 65 points, it would open at a new intraday high. yesterday was a new closing high. the 64 points would push it to the new intraday high. s&p 500 is up by 6.5 points. nasdaq up by 23 points. overnight in asia, the nikkei jumped to the highest level in two years, rising above that 20,000 mark. you can see 20,177.

the hang seng market was up and so was the shanghai. the dax was up by 1.4%. the cac up by 0.9%. the ftse up by a quarter percentage point. if you check out crude oil prices, you'll see crude oil is under significant pressure once again today. down 1.38. down below $47 a barrel. 46.98 is where the july contract for crude is trading now. >> let's get you through today's agenda about the labor market. may jobs report out at 8:30 a.m. eastern time. non-farm payrolls forecast to ride by 184,000. that's following an increase of 211,000 back in april. the u.s. economy added jobs for 79 straight months. the unemployment rate expected to hold steady at 4.4%. the lowest level in a decade. russian president vladimir putin will be speaking in st. petersburg at a forum alongside several other world leaders including india's modi.

the session will be moderated by nbc's megyn kelly. that begins at 7:00 a.m. eastern time. a programming note, sunday night megyn kelly has an interview with the russian president, that airs at 7:00 p.m. eastern time on nbc. >> narendra, is that it? narendra modi? is that it? >> president modi, yes. >> first name was in there, was in the prompter. president modi to me. >> all right. we're not on a first name basis. >> okay. four syllables. to earnings news, a bright spot in the retail space. shares of -- too many syllable there's for me. lululemon. i will go for it. lululemon jumping after the -- wow, the athleisure company reported better than expected earnings, comps. revenues and gross margins. the company also raising its full-year profit forecast.

other stocks to watch today, restoration's hardware's late effolateest earnings, shares are down 20% because they cut their full-year profit outlook. moving to a membership model, it's building cafes in its stores. trying anything. it will try to liquidate inventory for cash which will boost revenue but hurt profits. zumi is reporting a narrow first quarter loss on stronger than expected revenue and same store shares. the teen retailer is forecasting a wider loss in the second quarter. zumi lost a third of its value this year. president trump pulling the u.s. out of the paris climate accord. he explained his decision in a statement yesterday at the white house. eamon javers has more on this. good morning. >> good morning. the president said this was simply a decision about american sovereignty and putting american workers before foreign leaders. he also said this was about

fundamentally the cost to the u.s. economy. here's what he said. >> the cost to the economy at this time would be close to $3 trillion in lost gdp and 6.5 million industrial jobs. while households would have $7,000 less income and in many cases much worse than that. >> a broad group of ceos opposed the president's decision. a couple announced they're leaving the president's ceo advisory council in protest of the decision, despite what the president said about the economy. those ceos feel this would have ban good deal, would have provided certainty for their businesses and for the global climate. i talked to secretary mnuchin, secretary of the treasury in the rose garden after this event yesterday. i pulled him aside and asked limb what his message was for the ceos who were expressing

their criticism in the moments after the president's speech yesterday. here's what he told me. the president is very focused on the environment. this is not about the environment, this is about creating a fair economic deal and making sure if we are making commitments, that other people are also making commensurate commitments. the treasury secretary there speaking to the american business community saying this is about an economic deal, not about environmental policy. speaking in language that he feels they will understand. couple of key points for you guys. one is that on the books, the united states will not actually be able to get out of the paris accords until 2020. there's a three-year process here whereby you have to be in the deal for three years, then you can petition to withdraw. it takes a full year for that to happen. this will actually be on the books until november of 2020. that's when there will be a presidential election. the white house says the u.s. simply won't enforce any of the

provisions of the deal between now and then. they also say they're confident that foreign countries will sit down across the negotiating table with the united states to renegotiate the u.s.'s potential reentrance to the deal even though a number of those countries came out yesterday and said simply no, they're not going to renegotiate all this. the white house officials were asked several times yesterday by reporters whether or not the president believes that human activity causes climate change. they said they wouldn't answer that question. at one point after getting the question again and again, one of the white house officials said that question is off topic and let's move on. a no answer here from the white house in terms of whether the president himself believes human activity causes climate change. >> mm-hmm. >> thank you very much. this is something that played out through the business world. we've seen strong reaction from the business community. jeff immelt tweeding i'm disappointed by today's decision on the paris agreement.

industry must now lead and not depend on government. the move prompted lloyd blankfein to send his first tweet ever, today's decision is a setback for the environment and for the u.s. leadership position in the world. #parisagreement. tim cook writing a letter to employees saying he's disappointed with the white house's decision. bob iger and elon musk both saying they are leaving the president's advisory council. jpmorgan chase ceo jamie dimon said he is disappointed with the decision, but also said we have a responsibility to engage our elected officials, work for policies that improve peoples lives and protect our environment. i guess making a statement he will not be stepping down from advisory committees or making sure he meets with these officials regularly to tell them what he thinks. i think what you probably see, these are all multinational companies doing business around the world.

there is a blowback from other countries for pulling out of an agreement that we have been in for a year and a half. >> jeff immelt invented something, a marketing tool called ecoimagination. moved into renewable areas. he got all kinds of -- you know, he was -- as a -- i don't know whether you say the poster child for crony capitalism, for a republican, he was close with the obam mra administration, did well for ge that had to do with renewable energy -- >> these are not all renewable energy companies. >> elon musk has a horse in the game, too the irony of it is suddenly we're looking at these guys -- you're not letting me finish, andrew. just let me finish. all i'm saying is usually the

left looks at big business and assumes they'll do the wrong thing for profits, for greed. goldman sachs is the giant squid on the face of capitalism according to matt tiabi. when it suits them and they're talking about i don't think we should pull out of this thing that's very important to the left, suddenly they're held up as guys always doing the right things for the environment. nothing to do with profits. suddenly they do the right thing and they're good corporate citizens, when all along we thought they were terrible corporate citizens. >> but what i think you can say about this administration -- >> you think they're terrible then? you told them out to be amazing when it suits you. >> right. >> and turn it around when it doesn't. you have told me that you -- forget about jeff immelt, you know your views about immelt. lloyd blankfein, i think you have a modicum of respect for.

>> i do. i admit they're trying to achieve shareholder value, that's muff for me, wraenough f than be a howard schultz, where providing jobs is not enough. they have to pretend they're like the red cross. i'm fine with just the profit intent senttii incenti incentive, but when they do this i think it's disingenuous. >> this is all buttering, okay. >> i think this community had an impact on donald trump's decisions to this point. the yes, i diidea that so many opposed to it and he went another direction, shows some waning. >> i don't think the "wall street journal" has interest in wind power. if you read their take on this, it's simple. it was going to do little in terms of handling -- by 2100 you're talking about 0.2 of a

degree celsius. >> the president laid that out. >> china doesn't do anything until 2030. sud lint koelt jodenly the coal exported instead of staying here, because we've done so well we need to start immediately, and redistribute our wealth to the rest of the world because we've done so well? >> it's a great argument. donald trump is right when he says we probably get a raw end of the deal on this. having said that, what we've been doing independently before we were in this, since 2005, we have cut our greenhouse emissions by 12%. >> all right, from market force. >> one thing about this agreement, maybe it was a way of getting other countries to sign on to doing stuff that we were doing independently any way. china is the top polluter, if you can get them to go along by doing things you're doing already, maybe you're pulling

the wool over their eyes. it's nice to see the left embrace the giant squid address a paragon of good behavior. now they like lloyd. i hope they don't say nasty things about him next time. they will remember he was on their side in this. i just can't believe that -- this is only -- we've only been in it a year and a half? the heads exploding, the na gnashing of teeth -- >> it took a long time for the paris accord to become an accord. >> because of bataclan. was that the week before? it's unbelievable so much is being taken away from certain people by this. >> a year and a half ago, president obama did not take this to the senate. >> he should have. it wasn't a treaty, it's an agreement. >> what i do think is that you create ill-will with your potential allies having done this and pulled out of it.

i agree it could have been a better negotiated deal. i agree we set up and agreed to a lot of things. >> it's a definite setback for globalism. but there's a way out of this. that is if the world is still around in 2020 you vote this guy out. if we are not all dead. you vote trump out. >> it's amazing it's set up to november of 2020. >> or if we make it to 2018. if we dodge the bullet until 2018, vote him out. this was a campaign promise, he got voted in. >> that's very true. the justice department is asking the supreme court to let the president's travel ban take effect. this follows a defeat in an appeals court last week. the president is looking to ban citizens from six mostly muslim countries from entering america. we are counting down to the number -- i thought the action in the market yesterday was interesting. 3:00 to 4:00. accelerated up to 140. the may jobs report is due at

8:30 a.m. eastern. for more on what to expect, let's bring in michelle girard from natwest markets, and john stoltzfus, oppenheimer asset management chief investment strategist. i liken it to -- i wasn't going to say any of this stuff. i liken it to the violinist on the titanic, the stock market, as the ship is sinking. >> i did see somebody say that on twitter. >> you did? >> nero fiddling. >> it said and the band plays on. >> it could be the end of the world is a great buying opportunity. think how cheap stocks will be. >> probably will be. >> any way, that was a good number yesterday. >> it was a good number yesterday. our number today, we're looking for 165, that's not quite so good maybe for some technical reasons. i don't want to -- the bottom line is the labor market, whether the number is my 165, or

240,000, the truth is that the le labor market looks strong. that was the message of yesterday's report. it's the message of the initial claims numbers which are low. we had number after number which suggests activity is holding up well. hard and soft data is converging. the economy is, even as we get nervous about when and if we'll get tax cuts, activity is holding up well. sentiment is holding up well. it shows the resilience that exists really right now. >> the most exciting thing to me is that we could really see the tightness allow people to get the raises that they have not -- that we haven't seen in years and years. is that the case if we don't have the people trained for the jobs that are paying the high prices? can we find people for the job? >> what i actually think is

perhaps the bigger issue is that it's the mindset, i think, of companies to be willing to pay more for workers. because you hear quite a bit that the supply of labor is not there. the workers are not there. but companies are not willing to pay more to -- to either entice, you know, employees from other firms to come. there's a -- i think the problem really is is whether it's because of productivity growth is very low. companies are not inspired to pay more for workers. inflation is low, they can't pass it along. to me the mindset, at what point do companies say i need to have these guys, i'm willing to pay more. that's where you actually perhaps finally start to see some wage growth. >> let's get some actual numbers here from john. in november, what was the date

in november when you set your 2450 target on the s&p? >> it was the beginning of december. >> so you had already seen the market did not crash after the trump election. >> we did. >> you felt the animal spirits, you felt 2450. >> we didn't sense animal spirits, we thought it provided wind under the wings of the bull market. it gave it more confidence to recognize where it should be headed, more with greater confidence. >> will you raise your target? it's at 2430 now. will you raise it? >> only 0.8% away. we were the second highest on the street when we initiated the target. now we're no longer the second highest. we'll consider it. we have to wait until it closes above. if it goes through midday and pulls back before the close, we won't call victory. >> why? >> discipline, joe. >> oppenheimer asset management's 2450 target is the resistance point for the entire

stock market? if it gets through the offen himer number him oppenheimer number, it goes -- >> no, no, no i can't tell you whether i raise it. >> okay. >> but what we will do is we'll certainly consider where we're headed. it looks like -- the market just last night, after all the news broke related to the decision to pull out of the paris accord, what we saw right away, we thought let's check out and see what happens in asia. asia took off. really good rallies in tokyo, korea was up about 1%. in addition to that, europe is stronger this morning. the market distinctly says i like it. what it likes is not necessarily pulling out of the paris accord but a u.s. economy that appears sustainable, 2%, 2.5% without

stimulus. whether it comes on or not. in addition to that, you have a global economic rovrry th ecove becomes more undeniable on a quarterly, monthly and weekly basis. as a result of that our expectations are what does the market like? it likes a goodn s s a good eco. you also have monetary policy because rates are kept low, you have a period here where a good runway for the federal vef and centr reserve and federal banks to raise in small increments and spacing the hikes. that should be good for the market, for the economy. this may be a sweet spot, joe. >> does adp know what they're doing? >> they do, but there's methodology differences that may mean that -- >> so i can't count on this? >> you can't count on this. >> no? >> whether it's this month or next month, we're building for a

big number. >> i need to talk to liesman to get a confirmation. >> he'll be here. >> he'll be here? >> can you believe it? >> not on set. >> i think so. >> maybe. can you believe that? >> that's big. that's big. everybody at home -- >> let me tell you something else, you know who else will be here? >> nigel? >> look at us. can everyone see what's behind us today? >> duncan. >> you can't -- >> you know what today is? >> dunkin' doughnut day? >> national doughnut day. >> look at your girlish figure. you can eat as many doughnuts as you want. i can't even look at them. >> i'm so excited. here come the carbs. >> right. i gained a pound hearing about it. >> over or under on four doughnuts? >> four. >> i'm thinking a six. coming up, we have more of the buzz stories, including a new spelling champion. did anyone see this last night? and new numbers on booze

consumption in the u.s. the biggest winners and losers at the bar. we have that plus doughnuts, doughnuts, doughnuts. back in a moment. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

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♪ the u.s. has a new spelling champion. 12-year-old ananya vinay won the scripps national spelling bee last night. she will take home a $40,000 cash prize after nearly 12 hours of spelling correctly. the winning word, marocain. of course we all know that's a dress fabric. >> i had to look this up to find out what it was. she didn't even need the definition. >> i first looked at it, i thought it was moroccan. >> yeah. >> that's how dumb i am. >> there's a strong rib, if you are wondering about the fabric itself, it's not what it's made of. it's the effect. >> i've worn it before.

>> really? >> yes. when i read it, i read the definition, i thought that's what that is. the ribbing stuff on a sweater sometimes. >> i am wearing marocain underwear. i can feel the ribs. it's a thong. four thongs. >> i want to thank the producers for not having me spell some of these names. i think we did that -- we may have made john oliver years ago as a result of this. >> are you in there? >> yeah. he didn't play the turtles mating when i said i'm wearing a thong? thank you. >> i had to give him five seconds. one more time with the turtles mating. in case you have never seen this. >> bleh. >> big turtles. >> the cdc is investigating salmonella outbreaks linked to backyard chickens in 47 states. 400 people have been infected since january. more than a third of those are

children. no deaths have been reported. 71 people were sick enough to be hospitalized. >> that's bad. >> experts recommend washing hands after touching birds. they also warn don't cuddle or kiss chickens or baby chicks. they're cute but dirty. a bad potential thing could happen to you. and a new study from rutgers university found there is no difference in washing your hands with warm water versus cold water. bottoms were effective at washing bacteria off your hands. the important thing is washing bacteria off your hands and down the sink. >> you need soap, right? >> yes. you need to make sure you do it for a long enough period of time. you're supposed to sing the abcs when you do this. sing it for a long enough time. use plenty of soap and water. wash them down the drain. >> abcs -- i'm out of here. >> you get back from the bathroom a little too quickly.

>> we have to. i have an excuse. i'm pretty careful. i'm pretty careful. i don't typically miss. chickens, is that -- that's not a news flash. >> no. >> but chicks are so cute, at easter people give them to their kids. >> chickens themselves, and the -- there was a movie with mickey rourke, "angle heart" see it? scary. coming up, president trump pulling america out of the paris climate agreement. i have no idea what this guy's take will be. we'll talk to koelhl's ceo robe murray on his take. here's a look at yesterday's winners and losers.

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welcome back. you're watching "squawk box" live from the nasdaq market site in times square. good morning. market hat trick. the dow, s&p 500 and nasdaq starting -- or closed yesterday at record highs. and the futures are pointing to more of the same this morning. we have the dow up 65, 65 points. this is pretty amazing. the zch ins&p indicated up 6.

i keep looking at that -- i won't mention whose bottom it was at 2316 that said this is a market you definitely don't want to chase. don't chase this market at 2316. we'll open at almost 2440. what is 2316 to 2440? >> a lot. >> that's where you get to whiedy listwhy e did i listen? why did i say it? let's look at crude prices. crude prices are down. that's interesting to think about. i look at it that energy will stay cheap. energy will stay cheap. the transition from hydrocarbons to renewables is expensive. it would have been expensive. the supply with stay high of natural gas and hydrocarbons. >> on this point, president trump announcing the united states withdrawal from the paris

climate accord despite an outcry from some leaders in the business community. the president says the deal would impact many sectors of the u.s. economy. >> compliance with the commitments put into place by the previous administration would cut production for the following sectors, paper down 12%. cement down 23%. iron and steel down 38%. coal, and i happen to love the coal miners, down 86%. >> joining us now with more on the benefits of the decision for the coal mining industry at least is robert murray, chairman, president and ceo of murray energy corporation. do i need to ask you what you think of this decision?

>> you really don't. president trump, becky, was very courageous, he was very prudent in withdrawing entirely from the fraudulent global climate agreement in paris. this withdrawal had to be an integral part of his energy policy. because he already killed the clean power plant of the most dangerous president we've ever had, barack obama, and his supporters. and in order to do that, and the other items in his energy agenda, he had to kill the fraudulent climate agreement which required china to do nothing, but forced the united states to reduce co2 emissions by 25% to 38% by 2030 while china had to do nothing. >> let's cut through some of the

rhetoric. you're right that china didn't have do anything for all these years going forward. it would have forced us to do a lot of things. what does it mean directly for your business? as a result of this your business will now do what? >> well, under the obama administration, 63,000 coal mining jobs were eliminated. 63,000 families destroyed. his ending of the clean power plant already saved 25,000 jobs. we calculated that. that's happened. >> 25,000 on -- back from the 63,000, or 25,000 additional that would have been taken after the 63,000? >> becky, 25,000 additional that would have been eliminated on top of the 63,000. that's indisputable. that's already occurred. as he brings the economy back in manufacturing, we don't use much electricity in our homes, but we do in our factories. if he brings the energy industry

back, the need for coal-fired or any type of electricity, coal will participate in that because energy -- electricity from coal costs 4 cents a kilowatt hour. from a windmill and solar panel it's 26 cents a kilowatt hour. from natural gas, it's 15 cents a kilowatt hour. how will it affected coal going forward? it's hard to say, but coal will share in any growth in america and the use of electricity and in jobs. because we are 1/6 the cost of a windmiller and solar panel and 1/4 the cost of a solar pan m. panel? >> where are those jobs that you say would have been eliminaelim?

>> the clean power plants -- >> these are based on plants that make decisions over a long period of time. >> the clean power plant would have reduced another 56 coal fired plants, 53,000 megawatts. mr. obama killed 411 coal fired plants. the clean power plant would have eliminated another 56 per our calculations. he's already done away with that. so employment in the coal industry should stay where it is with the opportunity to grow back rather than go from 18% of our electricity from 30% right now. those are the numbers that are calculated. >> the energy companies, do you expect them to put money work building additional coal plants when we know this will be something that we don't have clarity on for four years? we have to wait three years, then petition to get out of it. that brings us to 2020 and another election. do you think this will be a wait and see game where people don't

make massive investments until they see what the end game is. >> certainly the electric utilities have certainty. under the obama administration and the democrat supporters, the electric utility industry were very uncertain in the rules as to how to generate electricity. we now have certainty. it still remains to be seen how much it grows back the cole industry. but it will stabilize at 30%. we must have 30% coal fired electricity to have a reliable power grid. you can't store sunshine at a power plant. you can't store the wind at a power plant. you can't store natural gas at a power plant. the loads on our power plants go up and down every day and through the seasons. so you must have a solid hydrocarbon there to keep the lights on, and that's coal. i wanted to get your reaction. the charleston gazette suggest

that's president is talking out of both sides of his mouth because they have an editorial talking about the budget that the president proposed which would eliminate what they call the appalachian regional commission and withdraw 1$1.1 billion from programs to rescue impoverished coal towns, the center for american progress says this. these cuts, if passed, would cripple the federal government's ability to invest directly in coal communities and workers, they would prevent the government from helping these communities chart a viable future, one that does not rely on unfounded fantasies of the coal industry's resurgence. >> my reaction is that the charleston gazette is a very liberal rag that i don't read and i don't pay much attention to their comments. they have been wrong consistently for decades. it's a family owned, very liberal worthless newspaper.

i won't dignify their comments with mine. i know my subject. i know what this means to america, and i think president trump was very courageous and very prudent in what he's done. the stock market indexes have gone to record highs since he announced that the american people are with him. >> robert, thank you for your time. >> thank you. >> we appreciate it. when we come back, the big business of breakfast. dunkin' brands ceo nigel travis is here to talk about growth and celebrate national doughnut day. then the ceo of johnson controls speaking out about president trump's decision to withdraw from the paris climate condition. he will join us at 7:40 a.m. eastern. there are opinions all over the place about this. at 8:30, the may jobs report. we'll bring you the data and instant analysis at 8:30 a.m. eastern time. stay tuned, you're watching "squawk box" on cnbc.

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executive edge. twitter is facing declining ad revenues and the company is asking for help. it began letting users view and

edit demographic information that the company is storing on you. with so much personal data out there already, you would think that they would know their users pretty well. it turns out that is not necessarily the case. >> they think i'm single and a single parent. >> they think i'm retired. number of children? one. got that wrong. >> single mom, corporate mom. female head of household. >> are you a big city mom? >> no. >> are you a trendy mom? >> i'm not a trendy mom. >> what's interesting here is that they don't know you're a mom. >> they don't. >> i'm a corporate man? >> it's ridiculous. >> baby products, not. >> not birkenstocks. i do buy ben & jerry's. i love me some cherry garcia. >> i'm a bit of a gadget geek. >> they think you're a fluid baby boomer who is a senior who speaks spanish. they think he's a male head of household. they think you're a wife. i don't think you're a senior. >> possibly. >> nascar super fans. that's us. >> really?

>> no. >> are you healthy and fit? >> i don't think so. >> do you own a gmc? >> no. >> do you own a volkswagen? >> no. do you own a toyota? >> no. are you an auto parts buyer? >> no, i don't even own a car. >> retail category. that's true, very boring. >> look how many auto things. >> are you in the market for a car? >> he's always looking at cars. >> they think you're a fall fashionista. >> do they really? they're out of their minds. >> they're wrong. >> i need oral care. that's disturbing. i would consider myself a good brusher and flosser. >> we reached out to twitter, they got back to us saying they're leading the industry in privacy because they're allowing users for the first time to see these settings. and they can edit the ones they don't like or with opt out of it altogether. joe, i know you just pulled up yours now. there's probably a lot of things in here. >> not bad. >> that are okay. like golf lover. baseball fan. >> football lover. >> but some of these other things. i don't know if you're into fine

jewelry. >> could have been for your wife. >> take a guess. that's correct. retail jewelry is correct. i supposedly have three plus kids. that has me worried. i have two, i wonder if there's another one. >> they had becky at one. they didn't have the other kid. >> i was single for a long time. now it says three. >> they think wilf is retired. >> becky thinks because he has all these 4:00 p.m. dinner reservations. steve liesman, they think he's a big city mom, a fit and trendy mom. female head of household. >> i see that. he's maternal. >> you know what's funny about this, it's good for twitter to open this up and let people see the whole thing. i clicked on ads on facebook and bought stuff. >> i'm a big city mom, too. >> where i do go exactly? >> it's in your settings. >> right. go to settings and privatity, yo privacy, your twitter data and interest from partners.

>> partners are advertisers. >> that's based not what you tweet, but what you buy and browse. >> they follow me on google. i have stuff on here i'm sure from my husband browsing. >> i don't know about this. body style, hybrid. >> i don't see joe buying a hybrid car. >> i think this is why twitter can't get out of its own way. >> what they want you to do is uncheck the boxes. >> they do? >> that's how they want you to help them or get out of it altogether. totally optd o out. >> i will do this during the commercial break. when we return, the most exciting day for me. national doughnut day. we're talking big business of breakfast. dunkin' brands chairman and ceo nigel travis is here, and the doughnuts are in the house. a quick check of what's happening in european markets, but who cares, we have doughnuts. >> doughnuts.

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please, do not withdraw from the paris climate accord. this is not in the best interest of americans. >> the united states has spent the money, incurred the debt, put its full faith and credit behind it. >> if the economy continues broadly on the path it's on, i could see a couple more increases this year, which would be a total upgrade. >> as of today, the united states will cease all implementation of the nonbinding paris accord. happy national donut day. this is one of the most exciting days. the u.s. celebrating sweets today with all kinds of donut deals. joining us to celebrate and talk

business, ceo of dunkin' brands. good morning to you and thank you for bringing these glazed donuts. i'll be in a sugar coma very soon. what are you doing -- i want to talk about the business, but what are you doing for donut day here? is this a fake thing, like a hallmark day, is that what's going on here? >> this is the greatest holiday of the year, that's the first thing you've got to know. we've got a couple of new flavors. sprinkle donuts with actually "d.d.s," see those? specially made. go into our stores today, get a beverage, free classic donut. >> free donut? >> free donut if you buy a beverage. >> if you buy a beverage? >> yeah, if you buy a coffee. >> how much does it cost these days? >> say somewhere around $2. >> let's just agree this is a made-up holiday. >> no, no, no, 1938, the salvation army, they were celebrating what women did in

the first world war. >> there you go. >> that's legit. >> so good. >> women, world war i vets. dunkin' donuts made it up to sell. thank you. >> you'll be pleased to know, not only now do we have three women on our board, but a female cfo appointed this week. >> that's great, congratulations. >> charge him for a coffee, because he's having more than one donut. >> he had four last year. >> i had one. now we're on to two. >> i love this. you don't understand. >> the thing that's really excited, we're doing all kinds of social media stuff. if you go in our stores, everyone can vote for their favorite donut and we have the scoreboard going up. >> i want to talk business real quick. during the commercial break, taking a market share from starbucks, you said coffee

companies, smaller coffee stores. >> i think that's always been the case. as we grow, starbucks grow, mcdonald's grow, some of the small independents get challenged. >> i thought there was a resurgence happening. >> in very select areas. i'm talking about your more general breakfast bakery coffee locations. but the great thing is, coffee is growing. >> what about the weather? weather is a problem for you, right? >> okay. >> iced coffee, all of this? >> we're set up right now, we've got frozen dunkin' coffee. we've got all our iced coffee that are market leaders, and at the moment the weather is not particular good, it will turn. weather will always turn. we need hot weather. >> is that going to impact your numbers? >> impacts it on a week, impacts it on a day. i think for the quarter we will always get through it. certainly on a year it washes out. >> is your quarter the calendar year? >> our quarters are the calendar year. >> you're talking about needing

to make up ground in june, just on the hot weather and the cold drink comps versus a year ago? >> yeah, but we study the weather every day, but i would say is really important is the forecast for this summer, even though it doesn't seem like it, is this is going to be a hotter than normal summer. we have a beautiful setup, so we're ready. >> emergence higher on iced drinks than hot drinks? >> yes, and this is the key thing, the attachment on ice is higher than regular hot coffee. >> okay, final question, you're on social media, but i did not see you talking about paris. do you have a view? >> we do have a view. our view is that as a company we believe in the effects of climate change. we're a global company, 61 countries. most people around the world believe this should be tackled. at dunkin', we have our dunkin' green, which means all the restaurants being built have a

new sustainable building fabrics. we recycled water and all that kind of stuff, so we believed climate change should be tackled, but can i just say one thing? >> go for it. >> biggest issue our franchises are facing on jobs day is finding workers. that is an issue i'm sure you're going to talk about. i've talked to steve mnuchin about this. cant find them. >> means wages are going up quickly? >> wages are going up, but we can't find people, which is slowing up growth, not only for our industry, but you read about the construction industry. >> thank you for coming and happy donut day. i have a lot to tackle here, eatingwise. >> your record's four. coming up, the countdown is on to the may jobs report due at 8:30 a.m. if the world's still around. plus, russian president vladimir putin set to speak at a forum moderated by nbc's megyn kelly.

"squawk box" will be right back. ? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms.

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a record run for the markets. stocks trading at all-time highs. will today's employment report fuel that rally? big business sounds off as president trump says good-bye to the paris climate accord. the ceo of johnson controls will join us to talk about the president's decision. and taxes front and center in washington. daif david walker will join us to talk about it. the second hour of "squawk box" starts now. ♪ ♪ new york city, this is "squawk box".

>> good morning, welcome back to "squawk box" here on cnbc live. i am great with the donuts. national donut day. >> you ate another one? we're at three. >> we're at three. this will count as four, and it's so good. >> you're so good at eating on air. >> nobody's better. >> you love eating on air. >> i'm happy to. >> what about the sugar high? >> along with the dow, along with the country. nasdaq up 27 points, s&p 500 up 27 points. as i scarf down the donut, reaction continuing to pour into president trump's move to pull the u.s. out of the paris climate accord, the president retweeting several messages of support this morning from vice president mike pence, ohio congressman jim jordan, among others. a number of high profile ceos on

the other side of the debate, tim cook, elon musk, among those criticizing the move this morning, as well as last night. the may jobs report less than 90 minutes away. economists looking for 190,000 new jobs, unemployment rate expected to remain steady at 4.4%. we'll, of course, watch all of this in the next hour and a half. and a key shareholder vote today ahead of buffalo wild wings. activist investor nick mcguire is putting forth his own slate of directors as he looks to push forward. the company has been saying he has no track record of success. >> few stocks to watch this morning. five below offering a bullish outlook for the year. shares of lulu lemon jumping. also comp store sales, revenue, and gross margins. the company also raised it

full-year profit forecasts. becky? >> joe, thank you. let's get to our guest to talk about jobs in america and the markets at record levels. joining us now, chief economist at rbc capital markets. karen kavanaugh is also here. karen, what do you think happened yesterday? we saw almost a melt-up that happened through the course of the day. dow pushed through the last closing high. what is this? >> i think the investors are realizing the economic data is good, jobs market are good, so there's no reason not to be in the markets, and i think it's finally taking hold. there's still a lot of pessimism out there, but a lot of people think we're in the eighth inning, ninth inning, but they don't realize this is a potential double header, especially if we get any kind of reform, tax reform, regulation reform. this could keep going and investors are realizing that. >> where do you think we are if this is a double header, early

innings of the second game? >> i don't think we're done with the first game. i think we're maybe eighth, ninth inning. we're going to see another resurgence as corporate earnings are doing well, but not just here in the united states, it's also in europe and asia. so there are really good things and if you look for bad, you can find bad, but overall things are generally good and getting better. >> we have a lot of strategists that tell us things look decent in the united states, but better in europe and asia and as a result you should focus your energies there, your money there. would you agree with that assessment? >> i have been agreeing for a year and saying emerging markets, but here even look in the united states, small caps, mid caps. we haven't been seeing too much action there. everybody's been concentrated in the large cap space, so if you're well diversified across, that's your best bet. but definitely things look good in europe and emerging markets. >> there were a number of corporate ceos that came out yesterday and said the

withdrawal from the paris accord was bad, bad for business. will we see that play out in the stocks of multinationals? >> i don't think so. i think businesses are going to continue to do what they do, and if anything, they are going to step it up and say the government's not going to be in charge of this and i'm going to make sure my investors want a corporation that is responsible and good for climate, so maybe they'll even step that up. >> meaning it won't hurt their relationships with overseas governments? i wonder if that's part of the reason. >> i think it's separate. it's a separate issue and they are going to continue to do business the way they always do business. this is a long-term withdrawal. it wasn't being adhered to anyways. i don't think there's a lot of good headlines for it. >> you think there's more noise? >> as always with washington drama, there's always a lot of noise, but at the end of the day you have to see is it changing the way companies are going to do business? >> tom, let's talk about the jobs report that's coming up today. adp report number was much better than expected yesterday. did that change your

expectations for today? >> it did not change our expectations, there's no question the market is braced for a firmer number. you highlighted 185,000, but in the last day or two, last day, they've become much more bullish. they are 205,000. people that literally just change. we're at 200,000, been 200,000 for a while. look, i think, you know, just to pick up on a thread you guys were just talking about, i think at the end of the day in the united states, it's funny, we think about our year aheadpiece, which we published in december and we highlighted focus on fundamentals. anything you get from a washington perspective, if you do get tax cuts or tax reform, that's icing on the cake, but the reality is in the united states with sort of the labor backdrop continuing to chug along, it's easy to build a case to have a constructive view on economic backdrop here. so calling for two to 2.5%,

that's low-lying fruit at this point. >> in terms of gdp? >> in terms of gdp. today's report will be another indication things are moving along at the pace we're comfortable with, which again, 2% to 2.5%. >> we talked to the ceo of dunkin' donuts and one thing they are running into is they can't find enough qualified workers or workers to continue the same pace of growth. >> this is an -- i was listening to him when we were in the green room, and it was great to hear someone else say. it's been an ongoing theme. we've been hearing about this relentlessly. the beige book is a great example that came out highlighting this idea there's a dearth of workers. >> more districts and more occupations. >> yeah, so guess what follows that. >> what? >> wage inflation. >> right. so it's funny, i hear people say wages, they haven't risen as much as i would expect. so that's a philosophical view. i don't know what you expected from a wage perspective.

wages have almost doubled. the run rate, the growth rate. so if you look at the most vanilla form of wages, it went from 1% to 2%. average hourly earnings, i hate that measure, but let's use it, it's risen by a full percentage point. but what people forget is it never rises parabolically. >> so it's creeping? >> it creeps early, and guess what happens towards the end of the cycle? it rises parabolically. it's going to happen. it happens almost every cycle in that same exact way. by the way, like i like to tell people, that's not interpretation, that's jus the reality. >> is that why the fed is often behind with these things, misses the parabolic and by then it's too late? >> the fed is governed -- i don't want to bore everyone with the philip's curve conversation. >> lisa will be here later to do

that. >> let me warm you guys up then. you know, the fed governs itself by the philip's curve, at least in part, and the reality behind the philip's curve is people are beating up on that notion now, saying a couple of soft inflation prints, will this derail the hiking cycle? no, not in a philip's curve concept. in a philip's curve concept you're acutely aware you're getting toward full employment, tight side of full employment, and as a result that important point, the fed being governed by that means the fed will continue this process despite the fact you have a couple of soft -- >> two hikes this year? >> two this year and four for next year. tapering also. >> tapering the balance sheet at the same time, which is another form of tightening. karen, what's that mean? two hikes this year, four more next year, tightening the balance sheet at the same time, what's that do to the economy and in turn to the stock market? >> the economy is moving

forward, then the economy should be able to handle this. and that will be absorbed. and -- but it's also predicated on we are moving our economy forward and right now we're stuck in the 2% growth. we need pro growth policies to really move things forward. >> the only thing i would caution against is we have to be careful what we wish for. the thing that i love most about this backdrop is the lack of imbalances, right? in the classic imbalance in the united states is credit users, by individuals in particular, and it's almost always that imbalance that takes you down from an economic perspective. the great thing of growing at a 2% run rate is we haven't seen it built on a lot of credit usage. what that means to us, to put some analytical views around that, what i would say is i love this backdrop because it can't go on much longer. the average tenor of economic expansion is eight years and we're in year eight now.

this could easily be a ten or 12-year economic expansion, mostly because of the lack of imbalances. i think we have to be careful for what we wish for, because the only way to get to a higher run rate is build in imbalances. >> tom, karen, thank you both for your time. it's great to see you. >> thanks. >> thank you. >> i think i'll take the imbalances. give me 3%. i'll deal with the imbalance. you want to stay at -- maybe you could stay at half a percent for 50 years. that would be awesome. except i'll be dead. coming up, former u.s. comptroller david walker joins us. later, the ceo of johnson controls tells us why his company supports the paris climate accord. too bad. the futures at this hour, 85, based on fair value, almost 82. there's the nehro fiddling while the planet burns. we'll be right back. top companies. 100 of's the power of a proven 15-year track record.

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the government could hit a borrowing limit this summer, not the fall. joining us, david walker, former u.s. comptroller general. they looked at the numbers, how does that happen? you're right, not going to happen then. it's going to happen six months sooner. what goes wrong? >> joe, what happens, you're talking about the difference between the revenues and the expenses. >> how did they mess it up? >> one of the things that's happening is revenues are not coming in at an expected rate and one could debate why that's the case, but one of the things that many people believe it's because you have certain taxpayers, in particular high net worth taxpayers, that are delaying recognizing income in the hope that there will end up being tax reform that ends up resulting in lower marginal tax rates. this is not just affecting the federal government. it's also affecting state governments. as you know, i live in connecticut and they had a huge

surprise in that with six weeks left in the year, they had a $450 million deficit show up and it was directly attributed to less revenue expected as compared to what the models. >> maybe etna will pay more taxes. wait, they are moving. >> they are moving. >> the connecticut model, beautiful. >> connecticut is a basket case. >> killed the golden goose. kill the golden goose, right? >> weird thing is, they moved to boston and they are talking about new york, which don't seem like tax meccas. >> here's what they are. here's what they are. they are vibrant cities with innovation, with a lot to do, and a lot of great academic institutions, all right? you can't have a great state and have deteriorating cities. i live in the largest city in connecticut. populationwise. 147,000.

bridgeport, connecticut. we've got three cities in connecticut that are headed for bankruptcy absent restructuring. hartford, waterbury, and bridgeport. what's happened over the last 30-plus years is bridgeport has overtaxed -- not bridgeport. connecticut has overtaxed, overregulated, expanded its welfare system dramatically, promised way too much to employees and retirees with regard to pensions and health care, not invested in infrastructure, and that's where we are today. >> you see it in illinois, too, which was down graded yesterday. >> connecticut has been downgraded several times. >> illinois is lower. >> in illinois, in california, and in new york, the benefits for state employees and retirees are guaranteed by the constitution. they are not in connecticut. and so one of the things that's going to have to happen is you're going to have to restructure those in an

equitable and sustainable fashion. connecticut and a lot of states have a lot of high debt, too. one of the things we need to recognize, joe and becky and andrew, we need to move away from this debt ceiling limit. it hasn't worked. we've gone from $5.7 trillion in debt in 2000 to almost $20 trillion. they passed budgets and appropriations bills that are guaranteed to run deficits and they have this big hoopla about the debt ceiling limit. we need to get rid of that. we need to go to a debt to gdp mechanism, which would be a pro growth mechanism, both on the tax and intelligent infrastructure, so you have to constrain the growth of debt. you grow the denominator faster than the numerator. we need to get down from about 78% of gdp to public debt to about 60 over 20 years or so and make sure we can keep it there, but to do that, you've got to force everything on the table,

including the 69% of spending that's mandatory. >> we know that, but they are not even trying to do that now with social security and medicare. look at the blowback just trying to do anything about the growth of medicaid, the growth of disability, the growth of food stamps. look at the blowback you get trying to do anything to any entitlement that's already out there. how do you do it? >> here's the problem -- >> are you still with the peterson thing? >> no, no, no, i left the peterson foundation a number of years ago. >> getting nowhere with it. i love you're trying. >> after i was ceo, and they do good work, after that i ran something called the comeback america initiative. let me tell you what i did that shows you the way forward. i did a national fiscal responsibility tour in 2012. 27 states. we had two town hall meetings, alice rivlin partnered with me where we had a demographically represented voters in ohio, we

spent half a day, facts, truth, tough choices, and here's the bottom line. we got 77 to 97% agreement on specific reforms to budget process and controls, social security, medicare, medicaid, health care, taxes, defense spending, government organization operations, political reforms. >> all you have to do is spend a half a day with 250 million voters. it's the education of telling people what our choices are and getting into this. >> here's what you have to do, and by the way, bill clinton tried this in 1998 for social security, and i was part of that, all right? you have to go directly to the american people with the facts, the truth, the tough choices. they are a lot smarter than a lot of these politicians realize. they are looking for -- we need principles and values and goals that will bring people together rather than divide people apart. >> good luck finding that these days. >> if you get the right -- look,

it takes the ceo, if you don't have the right ceo, whether it be president, governor, mayor, if you don't have the right ceo, kiss it good-bye, you're going nowhere. that's not enough, but frankly we haven't had that yet. and that's a nonpartisan statement. >> you still didn't really answer me how we take back anything. once people have it, how do you take it back? how do you do the p.r. to tell people the money's not going to be there, we're not going to have it anyway. if we don't do something now -- >> only two things guaranteed by the constitution of the united states, debt and union civil war pensions. i think we've taken care of the union civil war pensions, that's why we're never going to default on the debt. the treasury has to do whatever it takes to make interest payments on time. hopefully we'll never get there, but that's their constitutional responsibility. what you have to do is what you said, joe, you have to help people understand. look, the money's not there.

all right? we've overpromised, we've underdelivered, you know, known demographic trends, rising health care, it's just not there. >> you think it's cruel to try to get people that have a better deal not working, do you think it's cruel to induce them to try to get back in the workforce? >> absolutely not. >> can't do it right now. >> our welfare system is out of control. it discourages work. it discourages marriage. it doesn't even require you to look for work. let me give you an example. i was speaking with a recent new citizen, a chinese immigrant, and here was a comment she made to me. i came from china. we used to have a one child policy. they are loosening up on that, but if you wanted to have more than one child you had to pay to demonstrate you want it and can afford it. she's coming here, working with section 8 housing, low income housing, she said i don't get the u.s. welfare system. you can stay on welfare forever,

you don't have to be looking for work, it's very generous benefits, all things considered, and you get paid to have more kids when you can't afford the kids you have. i'm not advocating for one child policy. we have to have a reasonable safety net. but take connecticut. >> thanks. >> we have the most generous welfare system in the country. one person i talked to last week was in puerto rico, which is having a problem right now. they saw an ad on a bus in puerto rico encouraging puerto ricans to migrate to connecticut because it's got the best welfare system in the country. my question is, who the heck paid for that ad? you know, and by the way, there's only two jurisdictions that are losing population. i'm talking about decline in population. puerto rico and connecticut. it's time to recognize reality. and i think connecticut's -- could be a model. >> we got to go, but how much is an issue of -- come on back. i want to talk about how much a percentage of the problem is the

welfare issue versus health care and everything else. >> absolutely, and i'm happy to come back. federal, state, local, whatever. >> okay. coming up when we return, a preview of today's big jobs data. plus, walmart annual shareholders meeting kicking off. back in a moment. most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

still to come, president trump's decision to withdraw from the paris climate agreement not sitting well with ceos. we will hear from johnson controls ceo alex molinaroli. he'll be joining us in a bit. "squawk box" will be right back. 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. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio

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combined with the most wifi hotspots. it's a new kind of network. xfinity mobile. good morning and welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. among the stories front and center on this friday morning, challenger gray and christmas is issuing a revised report this morning on job cuts for the month of may. yesterday right here on the show it said the planned job cuts were up 71% from a year ago, mostly because of expected cuts at ford motor. however, challenger has now cut the estimates jump to just 9%. this comes after ford told cnbc it expected 1,400 job cuts

rather than the 20,000 challenger had estimated based on media reports. yeah, revision. american express has won a contract to be the exclusive issuer of hilton branded credit cards. previously they shared with citigroup. it's seen as a key victory for am ex, who took hits over the years after losing partnerships with costco and jetblue. the white house has taken over its battle over the proposed travel ban to the supreme court. it is asking the high court to overturn lower court rulings from preventing that ban from going into effect, potentially banned travelers from six muslim majority nations for 90 days. we're about an hour away from may jobs report. a look at what investors can expect. my sugar high is coming down. >> there's an answer for that, eat more donuts. >> that's what i told him. he's had five, plus a munchkin.

>> it's like a sugar crash. >> it's an issue i don't have a problem with. if i'm in the left lane of a four-lane highway, i make a direct turn to get to the dunkin'. can we talk about jobs? >> by all means. >> economists looking for 184,000 jobs in may, unchanged 4.4% unemployment rate. adp said the private sector grew by a wlopihopping 24,000. how much slack is in the labor market? how far can we go? here are the numbers for our viewers and investors to ponder. unemployed, 7 million. not in the labor force, but they want a job. last two months, 5.5 million. part-time for economic reasons, they want full-time work 5.2 million. add it up, total of 17.7 million. sounds like a lot, but not necessarily when you look at it as a percentage of the workforce. unemployed, for example, that's 4.4%.

that's that 7 million number. that's near a 17-year low. there's going to be some unemployment in the market. how far can we go? then take the broader measure, the u-6, all of that stuff, that's near a ten-year low at 8.6%, just 0.2 percentage points above a long run average. morgan stanley writing, "rising anecdotal reports of labor shortages potentially holding back new hiring." you heard that from nigel, the head of dunkin' donuts. steve stanley writes, "all but the most die hard of doves are willing to concede the economy is essentially at full employment." all of this is pushing the fed to get in front of wage-driven inflation before it shows up. it's a question for investors as they try and forecast labor costs, which are a lot for a lot of companies, and then ensuing profits. so we're keeping an eye on this number and will be looking carefully at what it means for wages today. >> nigel travis said he's having

trouble finding people to work in dunkin' donuts. put that up against the minimum wage increases we've already said, he said the answer is higher wages and that's how they are finding the bodies to put in the job. >> probably why we don't have a perfect experiment on the minimum wage effect. this causes jobs to go down, but you can't in an environment where the employers need to pay more anyway to get workers. i talked to nigel in the back, he said he's already paying more. it's not necessarily helping. he's worried, as officials are, on the immigrant situation. these are 11 million people who are filling jobs all throughout the economy. there was a story, a line in the fed's base book this week that some harvest on the west coast are going uncollected or unharvested because of a lack of workers out there. and everybody, the math is such that if you want to grow the economy at a higher rate, you need the workers to do it. there is some slack out there. if you calculate out that 17.7

million at $200,000 a month, that's seven years of employment. >> plus you need the workers in the right place for where the work needs to be done, too. >> excellent point. mobility of workers is key and is one thing that makes america great and distinguishes us from europe, is this broad country and market that people can move in. >> mobility has slowed. >> mobility has slowed. questions that has to do with the market or finance. brings up a question about insurance or health insurance. insurance you could bring anywhere you go could increase mobility. something dallas fed captain said he thought was a negative of doing away with the health insurance. >> national plan. >> exactly. >> thank you, steve. >> pleasure. we will continue this conversation in a bit. but walmart shareholders kick off their meeting today. joining us with some of the expectations, courtney? >> good morning, andrew. if it's the first friday in

june, you know it's walmart shareholders. right behind me, 15,000 or so of walmart's global employees will stream into the arena behind me. the event starts in about 90 minutes or so and the focus is expected to be on e-commerce and innovation in that area, even though it's estimated 95% of walmart's business is still done in stores. it's also mark lori's first walmart shareholders as head of walmart's e-commerce. his team has had a busy year already unveiling three strategies that really do use walmart's 4,700 stores to lower its cost for e-commerce, while also making it cheaper and faster for shoppers. now, the big news from this week's event so far is that three store tests that walmart is doing where employees can sign up to deliver online orders for walmart.com and jet.com for a little extra cash. last month you'll remember walmart announced they'll give you a discount if you choose to

pick up your online-only orders instore instead of having them delivered and walmart lowered its free shipping threshold two days, no membership. those are all direct shots at amazon, as they hope to grab a little bit of that business. of course, the main order of business for today's events is the election of the walmart board, and that does include marissa myer, as well as instagram's founder. there will be ten members that will be expected to be re-elected and one new member, karla harris, of morgan stanley. anybody have the guest who the celebrity emcee or music guest will be? that's always a surprise. >> do you know? the rock? >> okay, that's a -- the rock, that's a good one, i haven't thought about that. i'm guessing jennifer garner, out of thin air. >> relevant, yeah. >> totally. yeah. exactly. she's on the cover of a magazine this week, so that's why i'm like maybe it's her. i don't know, total guess.

>> all right, we'll find out. courtney, thank you. >> thanks. all right, coming up, the ceo of johnson controls on the president's decision to pull out of the paris accord. and we're getting ready for our jobs panel and the may jobs report. check out this lineup, please. austan goolsbee, ryan streeter, and many, many more. cast of thousands. complete coverage of the number of the month begins at the top of the hour. "squawk box" will be right back.

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joining us now, ceo of johnson controls, one of the executives who signed a letter urging president trump to -- >> actually alex molinaroli on. >> what did i say? >> anyway, there he is. >> hi, alex, nice to see you, sir. >> good to see you, how are you doing? >> why don't you talk to alex?

>> take a shot at that. all spelled out. there it is. >> you want to do this? >> nope, go ahead. >> alex -- >> didn't want you to alienate him in a second, depending what you think on the paris accord. >> alex, help us understand why you are so against what president trump just did. >> you know, it's not going to affect johnson controls. johnson controls is, you know, a believer in not only climate change, but just the technologies that are going to come out of clean energy and being more efficient. i'm just more concerned about the united states, you know, the leadership position that it has around technologies, these technologies, is just seeding that leadership position. that's more of my concern. >> this has no impact on your -- joseph over here thinks that every ceo who's come out thus far this morning saying it's a terrible idea to get out of the paris accord are all doing this because it's in their own

corporate self interests for profits. >> p.r. >> p.r. and profits. >> disney has no renewable -- >> p.r. and profits. you're just p.r. spinning, is that what this is? >> no, i don't think so. if you think about investing for the future, you're going to invest in what technology is going to invest in. you're going to invest in clean technologies, where the world's going, and do you want to be a part of that, a leader in that? our history says we're going to be on the forefront of new technologies and i don't think anyone -- joe, yourself, i can't believe you would think that coal is the future. >> i don't believe coal is the future, but i don't think the future is going to move from hydrocarbons any time soon and i think the technology that's revolutionized the energy industry in the past four or five years is horizontal drilling and fracking, which is not what you're talking about.

i don't think the way that you transition away from hydrocarbons into renewable energy is by taxing the hydrocarbons or making that less efficient. i think as it happens, i don't think you tax horses and buggies to make sure that cars succeeded. i think it happened on its own. you know, subsidizing economically inefficient models of energy production doesn't help anyone and is a waste of money, as we've seen. you know, when the hundred smartest people get around -- hundred smartest elitists get around and decide this is how we're going to mold the future, i'd rather have market forces mold the future, alex. this accord did very little. two-tenths of 1% of celsius by 2,100 and we let china do everything they want to do, india do everything they want to do because we're already so rich and that supposedly makes sense to you. other than p.r., why are you for

this? >> yeah, so i'm certainly not here for p.r., but i can tell you this, the greenest building we're building in our own portfolios, our headquarters in shanghai and not because the government is asking us to. >> what does green mean, in terms of carbon dioxide? >> sure, what footprint will that building have. but think about this, joe, we don't live in the world of 100 years ago where the united states was the only economy in a closed economy. the market forces include what other people are doing around the world. doesn't just include what's happening in the united states. i don't disagree with everything that you just said, except i believe we live in a global economy and if we're going to treat the -- if we're going to treat our incentives one way and the rest of the world is going another direction -- >> that's how we were already being treated that way in this deal. we were being treated differently than everyone else. >> i'm not going to defend whether we could cut a better deal or not. the question is, should we have

gotten out of the climate agreement. >> and you can believe both of those things. you can believe this was not necessarily a fair deal, but you can also believe you are poking other countries in the eye by pulling out a year and a half later and creating ill will. is this going to hurt sales potentially around the globe for multinational companies, alex? >> i don't think so. i think the american multinationals are going to pivot. i worry that it's going to create disincentives to invest in the united states for these technologies, that you're going to invest and the technology is going to come from other places. that's it. if there's a p.r. spin, that would be the only p.r. spin i have. i do not believe this is going to affect johnson controls in a negative way. i think what it will do is probably steer investments and technology investments, you know, in other places. >> do you think that -- >> i bet you that's similar. >> do you think the obama administration made it easy to invest in horizontal drilling,

oil and gas production, fracking? do you think they made it easy to do that for the past eight years, and did what happened in that market, just because of market forces and transformed -- transformed the global energy picture in our favor, by the way, happened in spite of government control. >> you know what, joe, i 100% agree with that, but i don't look at the last eight years to decide what i'm going to do for the next eight years. i do not disagree with anything you said, joe, but i look at the situation we have in front of us. i think we have to deal with reality. >> do you think subsidies for tesla cars, subsidies for solar power, subsidies for renewable energy and wind power that at this point cost much, much more than natural gas, much, much more than what we already know how to do, do you think that makes sense, that we should just continue to open the spigots for that development, even if it doesn't make sense? >> so, i do think in the long

run that the cost today is going to be different than the cost in the future. you got to remember the united states isn't in isolation here. what we do is not the center of the world. and these technologies or incentives, whether you agree or not, are going to be provided in different parts of the world. i don't have a pony in that race. >> one of the things i've been wrestling with, a lot of people have been wrestling with, is how investors have reacted to this. something that's surprising, given the number of ceos that have come out against this and suggested like you have that this is going to be bad for the economy, why the u.s. stock market, not just in the past 24 hours, but even if you want to do it on the past 24 hours has gone up, not down, what do you think that's about? >> i think that has more to do with we live in a transactional world. if you look at long term, it's a different perspective than if

you look at in the near term. you know, i was watching the show earlier today and i'd be surprised we have a lot of new coal plants. uncertainty is still going to be out there. it's going to be a head wind to put that -- >> you can do clean coal and there's going to be coal plants in india and china and coal mines in india and china. >> i don't think we have clarity here in this country. >> right, right. but there are -- i know there's certain high profile ceos -- really, what do you think jeff immelt to say with enough eco imagine nation and the skin he has, but the heritage foundation, maybe the heritage foundation, wall street journal, papers written by the federalist, look at conservative think tanks and what they said. it's not like -- not monolithic in terms of ceos that suddenly these high profile -- bob eiger at disney decides he didn't like

it. there are conservative thinkers that didn't like that idea and thought it was a better idea for the future of the united states to get out of it. it's not just trump's a moron. there are people that think, you know, as the left would say, there are people that think this was the economically sensible path to take. >> i'm going to read you something -- >> that's not the editorial. >> your vaunted front page -- vaunted page of "the wall street journal." >> there's a china wall, just like at "new york times," right? >> this is the heart on the street column. okay? which is a capitalistic free market oriented thing. hold on, let me just read it. u.s. regulations aimed at meeting paris goals weren't burdensome at all. >> hang on, alex, what are you trying to say? >> joe, i just think there's two different deals here. did we cut the best deal that we could? no. did we cut a deal? yes. is it better to be in it or out of it? because what i didn't hear is

that we're going to modify the deal, going to change -- what i heard is we're getting out and we don't believe this is a good idea. >> immediately said we're going to try to get a better deal and negotiate if we can get people to come to the table. >> that's a big if, other european nations have said no. >> i know that and i don't think he meant it anyway. >> that's the point, he didn't mean it anyway. >> growth and innovation are better forms of climate insurance than -- it will find a way through markets and growth in innovation to deal with this rather than some globalist -- i don't even know what that was they decided on. i can't believe that a year and a half ago we didn't have this. i thought things were -- i didn't know what dire straits we were in a year and a half ago until this happened. >> yeah, well, i don't think the rhetoric on either side is exactly correct, but i think you're rational and you think about the future, we need to

invest in technologies that are going to keep the united states in the front. i'm concerned about that. >> that's why the discussion would be whether this somehow harms that or actually harms that. the journal's take is it helps the innovation if we have the money we would have otherwise spent i don't know where it was going or what it was going to help with, going out of the country if we keep it here and develop our own technologies, maybe that's a way to do it, alex. >> i just would be concerned that those technologies are going to be developed in other parts of the world. that is as simple as it gets for me, because everyone else in the world may not have your free market view. >> alex molinaroli, thank you for joining us this morning and suffering through this. i apologize. >> thanks for having me. >> what are you apologizing for? >> the whole back and forth. >> calling him molinari instead of molinaroli.

>> that and the debate itself. >> i'm sorry for andrew, too, alex. coming up when we return, a record day for the markets. we're going to take a look at some of the stocks on the move ahead of today's opening bell. programming note, check out what's coming up on "squawk box," walter isaacson, plus the ceo of lowe's and co-owner of the new york giants and arne sorenson will be our special guest. "squawk" returns in just a moment. i need someone that understands my unique needs. my dell small business advisor has gotten to know our business so well, that it feels like he's a part of our team. with one phone call, he sets me up with tailored products and services. and when my advisor is focused on my tech, i can focus on my small business. ♪

stocks to watch this morning, vm ware reported four cents above estimates. however, the maker of virtualization software is seeing stock fall this morning as investors focus on smaller profit margins. five below beat estimates by a penny, also raised full-year guidance. when we return this morning, we have much more to talk about. it is the big jobs report coming up at 8:30 eastern time. we're going to line you up with what to expect ahead of that in just a few moments. countdown right now, 33 minutes, 38 seconds to that report. in the meantime, futures are closing at record levels yesterday. s&p 500 up by 6, dow up by 67, nasdaq up by 23. "squawk box" will be right back.

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breaking news this hour, jobs in america. the may employment report is just minutes away. a lineup of experts standing by with everything you need to know about the big payrolls released. plus, the numbers. lightning fast analysis and the

instant market reaction. a special hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box". >> good morning, welcome to "squawk box" right here on cnbc on national donut day. we're live at the national -- the nasdaq markets in times square. we are now just about 30 minutes away from the big jobs report. payrolls forecast to rise by 184,000, following an increase of 211,000 back in april. the unemployment rate expected to hold steady at 4.4%, that would be the lowest level in a decade. meantime, quick check on the markets. futures look like they are higher right now, dow looks like it would open up 70 points higher, nasdaq looking to open

higher, as well. and s&p 500 looks like it would open higher, about 7 points higher. >> we'll get to our jobs panel in a moment, but first world leaders taking the stage at the st. petersburg international forum. megyn kelly is moderating a forum with vladimir putin, narendra m narend narendra modi, and others. don't miss kelly's interview with putin on cnbc on sunday. among today's other top stories, a number of ceos responding to president trump's decision to pull the united states out of the paris climate agreement. tim cook, mark zuckerberg all expressing disappointment after that announcement. disney's ceo and elon musk tweeting they'll leave the president's advisory council. jamie dimon disagreed but will not leave the council.

we should tell you what he said, we have a responsibility to engage with our elected leaders and officials and that's why he thinks it's very important to stay and continue giving his guidance. canada goose, by the way, is out with its first quarterly report as a public company. they posted a smaller than expected loss. it did beat estimates by a wide margin, and as you can see, the stock is up 12%. check out shares of lululemon, reporting better than expected earnings, sales, revenues, and gross margins. the company also raising its four-year profit forecast and that is good for a gain of almost 16%. >> we're less than 30 minutes away from the may jobs report. right to our panel joining us now, former chairman and university of chicago's blue school of business professor, austan goolsbee. looks like he's in a good mood, is here. and aei's director of domestic policy studies, ryan streeter, is here. are we still expecting -- i

guess so. adp was big, austan. is that real? is it real? are we -- you've been sort of right about not getting too excited many times in the past. are you excited today, austan? >> you know, i don't think it's totally real. i hope i'm wrong on that, but i kind of think we're running out of bodies, you know? if this is a big positive number, that will be the 88th month in a row of positive job creation and eventually you get to something like full employment, where the numbers have to go down. now, i hope the adp number is right, but i'm afraid it might be a little on the positive side. >> we talked about this earlier, austin, and knowing you as i do, we need the labor market to get tight enough to where valued employees can say i want more and we need that because you

want a narrow income disparity. but are you worried that we don't have the trained people to take the high paying jobs? is that your concern? >> i'm somewhat worried about that. look, i want to see -- i'm -- you've baffled me, joe. i think about it a lot. >> i worry about that. >> i agree. i think we agree. >> i listen to you. i listen to you. >> and i listen to you, joe. it's national donut day. we can all come together, yes. >> i won't eat that. i won't eat one. it's like i have to go run, like, six miles if i eat one just to break even. maybe more at this age. ryan, where are you on the number today? >> pretty close to where austan is. the adp number feels a little high. i like it, i hope it's true, but i think we're running out of bodies, too, to use austan's language. i think the real problem right now, there is a skills mismatch out there. we have people not in the labor

force who could be and should be if they were properly trained. i think the wage gains that we hope to see in this jobs report will be in the kind of jobs that require certain levels of education and skill. and so i think the big challenge for us right now is it plays out across the states and regional labor markets is to really start matching people that are underprepared for where the job growth is going to be happening in the future. i hope for a good number today, but i'm worried about some of the effects of the tightening on the labor market and what it will mean for the workforce going forward. >> austan, i was also thinking about we talked about the stock market action and you've come on a couple times when there have been kind of a pause since november and you said, well, you know, it's not moving up, but now it seems like it's in another gear again here. and the fed, i mean maybe it's still the fed, maybe it's still the liquidity, awash around the world, or not. what is it, austan? >> look, i don't know. i got to ask you, because the

thing is, we had this debate, trump was elected, stock market went up. you said they thought that the regulation was going to. >> right. deregulation, animal spirits. >> i said it was just tax reform. but we kind of both have been proven wrong, you know? >> right. >> tax reform has been stalled. regulatory stuff has largely been stalled, but the market still keeps going up, so maybe it's the fed, maybe it's international, maybe it's just the continuing of the expansion. i don't really know what it is. i'm also a little nervous on that, you know, that maybe -- >> i have an explanation. i think that on the margin you go from just sort of antibusiness sentiment to totally pro business sentiment, and i think maybe, you know, you see some of the -- not just the stock market, but just in, you know, you poll the sentiment of

business owners and small business and others, and it's definitely improved. just based on maybe a friendly environment. am i wrong on that, ryan? it's partly animal spirit. it's sentiment. >> i think a lot of this has to do with predictability and so far it seems like at the local level, small businesses, medium-sized businesses feel they are operating in a more predictable environment these days, so things are going along quite nicely, but that can all change. if a tax deal is not reached, if some of these promises on infrastructure don't happen, if it looks like washington's stalling on some of the things people have come to count on, that can all change, but it is hard to know where it's coming from right now, as austan said, but i think the predictability is a part of it. their sentiments are up when they feel they know what's going to be happening in a few months with regulatory predictability and other things, but that's a tenuous hope right now. >> austan, i'm glad you sort of copped to being sort of, you know, being a little bit flu

flummoxed of what's going on. i was wondering what is the statute of limitations on sugar? >> that's a lot of sugar. >> but doesn't -- i thought the sugar high was followed when it goes away by -- it doesn't last six months, does it? sugar highs are not supposed to last six months. >> i think realistically we've got to look at other explanations because eventually the sugar high explanation runs out. that said, i don't think it can be predictability. donald trump is the most unpredictable man we've ever had in the white house. you saw the ceos from this paris climate announcement, you've seen a string of ceos come out and say they want to have nothing to do with the administration. >> we've talked about that, though. >> haven't seen business investment coming back. >> austan, you've got heritage, you've got, you know --

>> there are some -- >> i thought you were going to say hair. i was going to come after you. >> you have conservative think tanks and thinkers that may not be in line. i hate to keep saying jeff immelt, but if anybody is in line with needing the government to continue with renewable energy policy, you know who the people are. i don't understand, bob eiger, he lives in hollywood, that might have something to do with it. i can explain immelt easily. brian, where was that -- >> you don't need to have a nasty day. it's national donut day. you're going to go after the tech ceos, elon musk and g.e., next thing you know every public company is in question. >> no. national donut day was not dunkin' donuts. it was salvation army, right, sisters of the poor? >> i believe salvation army for women in world war i. >> back in the '20s, okay? so don't denigrate -- where's aei on paris, do you have a policy paper out on that? >> no, we don't have a policy

paper out on it and aei don't have house views. our scholars have different views. right now, we'll see what happens, but i really don't think withdrawing from it is going to create the cataclysmic effects people think it's going to have. i think across america, i think that business owners right now are actually feeling pretty good about things. i would differ with austan on this notion of predictability. it is a volatile white house and trump has proven to be unpredictable, but when you talk to business owners in the heartland, people feel differently. they feel they are operating in an environment that cares about them and what they are investing in and makes that possible, so i think for ordinary business owners across the country, this withdrawal isn't going to have much of an effect on what they decide to do. i think these longer term problems about the qualification of workers, do we have enough people to help this growth continue, i think that's where the real problem is. i would like to see this administration really focus on

workers, you know, even if they have a big infrastructure program, the question is where are these workers going to come from? we have the skills mismatch problem across the country that i think should be the top priority and i think it's going to catch up with us if we don't do something about it. >> that is a long-term solution, though. there's no quick fix for that. that is not something going to be solved tonight, tomorrow, this year, next year. >> that's right. the longer we wait, the bigger the problem. >> austin, i missed scott mcneely, he's a classic. he says what's on his mind. when he was on, i forgot he said he described the current environment with a lot of ceos and he said i've been talking to a lot of ceos who said at this point the waterboarding has stopped. therefore, we're much more optimistic. i guess he was eluding to the last eight years and actually used the term the ceos were getting waterboarded, but that was his comment, not mine. i remember when he said it, i thought it was kind of funny. the torture of the corporate class, the banksters, you know,

all the -- we heard that stops and that's good so far for 3,000 points, austan. >> okay. so, you're going to quote to me ceos that agree with you, but when i quote back to you ceos that don't agree with you, you attack those ceos, oh, that guy's company is not big enough, he lives in california, so he's biased. >> so does mcneely, but not hollywood. >> okay, how do you explain it? >> that's the first time anyone's chosen a certain ceo to make a point. we all do the same thing, right? be honest. anyway, are you guys coming back, are they coming back? >> yes. >> okay, good. siaviita coming, too? >> yep. >> all right, see you in a couple minutes. coming up when we return, if it is jobs friday, we are finding out where the jobs are this month. "squawk" is heading back to class. details after the break.

plus, a panel on world leaders. highlights from that conversation in just a moment. you're watching "squawk box" on cnbc. so you miss the big city? i don't miss much... definitely not the traffic. excuse me, doctor... the genomic data came in. thank you. you can do that kind of analysis? yeah, watson. i can quickly analyze millions of clinical and scientific reports to help you tailor treatment options for the patient's genomic profile. you can do that? even way out here? yes. even way out here.

time now to find out where

the jobs are. we are heading to the classrooms of america. kay rogers joins us this morning from detroit. kay? >> hey, andrew, good morning to you. a growing public school teacher shortage is increasing schools like behind me in detroit where classrooms are overcrowded and some teachers say they are struggling, but unfortunately the issue extends far beyond motor city. each year some 300,000 public school teachers are needed around the country, but a shortage is intensifying nationwide. >> if these trends continue, we'll basically be 100,000 teachers short for every year after 2025. >> the aft said the shortage is amplified in rural areas and inner cities. the teachers needed run the gamut from special education, english, science, and math. one reason behind the lack of educators is compensation. >> with pay levels the way they are for school teachers, given the kind of requirements teachers have in terms of the knowledge of content area, the

pay is not commensurate with the knowledge and skills. >> many teachers receive bachelor's degrees and go on to earn their master's before entering the classroom. the a.f.t. said for the 2015-2016 school year the average public school teacher made just $60,000, but a chance to foster the next generation makes it worth it. >> there is nothing better in terms of job satisfaction than seeing the impact that one can do in the life of children. >> pay and benefits for teachers really do vary, depending on their location, their role, what their education does look like. the a.f.t. did express concerns about the trump administration's proposed cuts to the department of education's budget, fearing this is only going to add more stress to a cohort of teachers already grappling with low pay and overcrowded classrooms. back over to you. >> okay, kate, thank you for that. it is always good to hopefully

get a position -- get us into a position where we can have more jobs. appreciate it. good to see you. when we come back, the final countdown to the may jobs report is on, and monday on "squawk box," don't miss a lineup of news makers, including lowe's hotel chair jonathan tisch. arne sorenson and many, many more. it's all starting monday at 6:00 a.m. eastern time. stay tuned. "squawk box" will be right back. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov bp engineered a fleet of 32 brand new ships with advanced technology, so we can make sure oil and gas get where they need to go safely. because safety is never being satisfied.

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welcome back to "squawk box" futures right now. been positive all session long. up 63 points on the dow, 23 on the nasdaq, s&p up five. all three would be at all-time highs if that were the close that we saw at 4:00. >> meal ingredient delivery service blue apron is filing for an ipo. blue apron aiming to raise $100 million, although that number of could go higher as the company sees rapidly expanding revenue. revenue grew between the years of 2014 and 2016 and blue apron had more than a million customers at the end of march, up from last year. lead underwriters for the filing including goldman sachs, citigroup, and barclays. spotify has no immediate

plans to go public, despite reports it would carry out a direct listing on the new york stock exchange later this year. sources telling reuters today an ipo could come within a year. spotify was most recently valued at $13 billion. a little squawk booze news on national donut day. u.s. alcoholic beverage consumption fell last year for the first time since 2011, much due to weak demand for bear. domestic beer brands fell. if you include craft brews, domestic volume fell 3%. tequila, this may be the answer, tequila outpacing other categories, according to new data from alcohol research group iwsr. the study found tequila buying grew at 7.4% last year. >> that's me. >> to 7.5% market share of overall spirits. bourbon also faired well. scotch posted the lowest growth rate among whiskey categories.

one causality of changing tastes is rum. i like to go to jamaica and drink rum. >> rum is a hangover thing. >> wine volume grew 1.1%. all that rose, joseph. >> for the summer, yeah. >> premium wine price above $10 per bottle grew more than 7%. >> i'm not kidding, i think i'm good for two or three of those tequila points. i love tequila. you know, i tried to get jean-paul, jean-paul, to call me. i wanted to write a book with him about margaritas, but i can't get through to him. his assistants will not -- he comes on the show. i bet he doesn't know i'm trying to get to him. they are screening. don't you think a book on margarita -- i get notes from him, sends me stuff for my dogs, but wouldn't a book on margaritas, because i'm searching for the perfect margarita. i have been. >> do you salt the rim?

>> yeah, oh, yeah. yeah, yeah, yeah. i don't know whether to use simple syrup or agave syrup, whether to use quantro, fresh lime. >> i like margaritas, yes. we got to run, though. job numbers are going to come. going to be a big deal. we have to play a round of "predict the payroll" and the number of the morning. instant market reaction in a moment when "squawk" returns. and packages. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪ there's nothing traditional about my small business. i count on my dell small business advisor

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welcome back to bo"squawk box," everybody, it is jobs friday and we are ready for final predictions from our panel. the countdown is on. savita is here. let's start with her. what do you think, what's your number? >> sure, economists are forecasting 170,000. and then a 4.5% unemployment rate. so a little bit of a tick-up in the unemployment rate. nothing that we think is market moving, but those are the

numbers. >> economists. are they any good? >> they are great. >> you're endorsing -- >> i'm not an economist, i'm a market strategist. >> are you endorsing this number? >> these guys are the experts. they know what they are doing. >> it's his number that -- what was yours today, 187,000? >> 187,000, yeah. >> 187,000, wow. >> austan, your turn. what is your number? >> i'll say 169,000, but i think -- and i think the unemployment rate drops a tick. >> drops a tick. >> most of the positive numbers, they feel too good to me. >> ryan, how about you? >> so i'm the optimistic one here. it might be a sugar high, it's national donut day, i'm at 229,000, expect a down tick in unemployment a little bit. offer that with a little bit of hesitation just because of what's going on in our service sector and retail, but i'm sticking by it for now.

>> all right, rick, how about you? good morning, by the way. >> good morning. 233,000. i had no idea the last guess was optimistic, but, of course, when it comes to jobs, it's hard not to be optimistic on some capacity. it's just what extent, i guess. yeah, 233,000. listen, if this is a weak number, be very, very careful here. we're sitting at very key levels in ten-year note yields and the market certainly seems to want to challenge the low yield close of the year, 217,000, so that's the level to watch. >> 217,000, we'll keep an eye on it. how about you? >> i'm at 187,000. i agree with rick. you know what, i think there's a lot of potential upside here, because i don't think that the market is spooked by more fed with more jobs anymore. i think the market is kind of discounting -- discounting is the wrong word. it's ignoring what's going on. we had powell on yesterday,

kaplan the day before that. everybody is talking about two rate hikes and cutting the balance sheet and the market doesn't appear to move. >> narrow wages may matter. >> a bit more, but i don't think we're talking about a much more aggressive federal reserve. >> seconds away from the jobs report. hampton is standing by. the numbers, please? >> 138,000. may nonforeign payrolls increase by 138,000 jobs. the unemployment rate is 4.3%. average hourly earnings increased .2 a percent. that's the lowest unemployment rate since may of 2001. obviously, the headline overall number below consensus. there were significant downward revisions for both march and april, combined job revisions downward by 66,000 from previously reported for those past two months. how did we get to 4.3% unemployment rate? 233,000 fewer employed, 195,000

fewer unemployed. 62.7% is the labor force participation rate, falling from 62.9% in april. job gains, business services up 38,000, health care plus 24,000, food services and restaurants plus 30,000. job losses. retail, down 6,000. government employment down by 9,000. the so-called real unemployment rate at 8.4%, the lowest since november of 2007. with revisions, job gains for the past three months now stand at 121,000, 181,000 over the last 12 months. back to you. >> all right. hampton, thank you very much. let's get reaction from our panel. savita, austan, ryan, rick, and steven. rick, i want to go to you. you said look out if it's the weak number. what's the reaction we're seeing in the bond market? >> well, we did see yields move lower. i picked off 218, we're

currently at 219, we settled yesterday at 2.20, last year 2.88 and the low yield was 2.17. we're pretty much right there. when it comes to lower yields, i think on the big picture they are not going to go nearly as low as they have in the past. i still think higher is the direction, but it's all about time. i think we could have some drifts down in the yields closer to 2%, but i don't think we're going to spend a lot of time there. i guess that's really the big trade. >> steve, let's go through the numbers. not only lower than expected, but also revisions to the previous months. >> if i were wearing a hat, i would take it off now to jim o'sullivan who had 140,000 and said, you know what, there's a may seasonal thing going on here and if it comes out as he expected, he nailed wages, which were just 01 and the number at 140 and said i'm still not going to think of this as the job sector being weak because of what happened last may, as well.

but let's go through these numbers and take them at face value. what you see is a lot of mixed cross currents here in terms of -- where did it go. hold on a second. here's where we are. negative on wholesale trade, negative on retail. government employment down by 9,000. i expected it to rise. one reason i was off by that amount or so. but you had construction up 11 and goods producing overall up 16,000. then you had this tremendous changes inside the household report. down 429 on the workforce, so half a million or so left the workforce. employed down 233, unemployed down 195, so that's why you get to the really low u-6. i'm not going to say right now that the jobs sector is weak in any shape or form. what i'm going to say is we're heading back down towards what everybody believes to be the sustainable level of employment in this economy. it really should be 75 or 100. now, i came on earlier at 7:30

and said, you know what, there's not as much slack there as we have had previously. you don't have the workers. you have to start believing some of these anecdotal reports from businesses who say it's hard to find people. i think that's something worth -- >> what's going on with adp? isn't this two or three in a row of so far off? >> it is off. >> i wouldn't mind the 130 so much if i hadn't just heard adp say 250. wouldn't be so much disappointment. in the methodology, what's happened? it's hard. >> here's what i know, their model, like my model, like everybody else's model, over time is plus or minus 50. and that's as good as you can get. the idea you're expecting it to be closer and you take one month -- for example, the revision downward made my model last month. you made fun of. can we roll the tape on you making fun of me? i'm a whole lot closer now than i was last month. >> who was closest was mr. party

pooper himself, austan goolsbee was closer. you made up all the time and you always win. >> i'm not that negative, but yes. unfortunately, our issue has been we're growing, but we're growing modestly. and that didn't change when trump got elected and a bunch of people again for the seventh year in a row got out ahead of themselves saying, ah, we've turned the corner, now there are animal spirits. we're going to grow at an unbelievable rate. and it's just not true. the economy has to shift what it's doing from after the financial crisis and bubble and that's a slow process. >> austan, i want to jump in on that. >> that's just where we are. >> i think it's important to point this out. there should be no expectation. however good businesses think it's going to be, but they would bring on workers in anticipation of things getting better. right? >> that's what i think. that's what i think. >> a year from now we're going to have 3% growth, so i'm going to bring on ten people.

i don't think it works that way. >> look, just look at this. the house survey, it's awful. 233,000 people. >> i'm not going to go into the household survey, because that's a real volatile -- >> i'm just looking at it. if you look at it over the past month, down 233,000 people. >> savita, what do you think? >> i think that -- >> if that continues multiple months, we will be even more nervous than we are, but the revisions, you don't want to take any one month as doctrine. with the revisions, we're not growing that fast. and i fully expect that president trump is now going to get out and say it's a conspiracy and call joe and joe's going to say the b.o.s. is doing this, they need to replace the commissioner. >> savita, does this raise any concerns about the market rally we have seen at this point? >> i think it raises concerns about the internals of the market. if you look at -- i'm not as worried about this trump trade, because it's fully reversed this

year. look at market leadership this year. we're seeing, like, a realign of 2015. it's growth and yield. the market is basically anticipating nothing good at this point. >> coming out of washington in terms of policy? >> stimulus policy, even the economy, the most gdp sensitive stocks have underperformed. look at the financial sector, industrials. the key point in what everybody is saying is the economy is actually growing. and that growth, i think, warrants rethinking some of these cyclical sectors of everybody over the last six months because we haven't gotten as much policy. >> real quick in response to your question, plus 4.47, plus 4.72, plus 1.56, so we're not going to make anything. it's why we focus on the payroll survey. i want to just ask ryan a question. ryan, would you join me in penning a memo to president trump, don't take credit for any

of the previous numbers, any of the current numbers, these are not your numbers. anything that has to do with your policies, these are not reflective right now. maybe a year from now is the time to start thinking about taking credit or blame for whatever the jobs numbers are? >> well, i'm out of the memo penning business these days. but i think i'm with you in that these numbers are hard to interpret right now for a lot of reasons that others have mentioned. right now what i'm thinking about is people in the retail and services sectors, which have taken a hit and are squeezed. the good news, when people leave retail, general sales or administrative work and other parts of professional business services, health care, they generally land on their feet okay and looks like there are opportunities for workers in those sectors right now and some of those jobs are less prone to automation, as well. hopefully in the internals of the market, workers will be okay, but it looks like we're growing at a different rate than i thought coming on the show.

>> rick, what are you seeing in terms of the june fed funds? i still see 86%, but not sure i've updated here. >> well, let's see. they are up one-fifth of a point, okay? so that's going to make a huge difference in what the fed's going to do. listen, steve. the fed doesn't know what they are going to do. fed fund traders are trading and there is an arbatross there, but we have peter sellers in an old movie with regard to central banks. they think they are all the mice that can roar, but in terms of the economy, listen, everybody's missing the big picture here. whether you believe you can get 3% or 4% growth or not, we can debate that. but in the end, there are many things going on that don't get a lot of scrutiny that are taking the bags, the saddle bags off of this economic mule. we're getting rid of the

nonreformers of europe, no matter what you think of climate change, to think that the paris accord is going to do anything. look at germany's electricity cost. just energy on its own, nothing else, no more dumb regulations, no more making people go to school for $20,000 to be able to braid your hair, all of that stuff, plus this energy dynamic where the u.s. is going to have the cheapest energy, kilowatt hour over time is going to definitely help the economy. stocks have it right, and in the end they are going to get the final laugh. >> i'm looking at a 2.18 on the ten year here, which is lowest since april. before that you have to go back a long way, i need a minute to do it. >> no, bonds aren't wrong, but bonds are telling us is that mario draghi and kuroda and the stimulative trillion-dollar plus that's put into stimulus since

the beginning of the year by the central bank, still active. that is what's disaffecting my opinion. foreign exchange and the interest rate differentials. >> but rick, the whole spread, the whole steepener from the election is out of the bond market right now. i want to turn to savita. when you're investing in stocks, are you looking over your shoulder at your buddies over in the bond pits and saying, wait a second, do they know something about what's going to happen with the economy or inflation i don't know? >> there's this thesis that bond investors are smarter than equities and bonds always lead equities. that's not always true. here's what i think is going on, bonds and stocks have been basically moving based on positioning. so if you notice, every quarter either investors get really bulled up on the economy and bond yields drop and cyclicals rally, and then the next quarter, disappointing numbers, second derivatives rolling over, then you see the reversal. what i'm worried about most is not what bonds are doing, but

positioning of investors. that's driven more of market returns over the last let's call it three years or so than anything else. think about last year. we saw this sort of intoxicated frenzy over fiscal stimulus and tax cuts and trump's, you know, republican sweeps. the market rallied. cyclicals led, bond yields dropped, banks did great. and you have -- sorry, bond yields rose, banks did great. then you have a complete reversal. where are we now? we have a positioning trade where everyone is out of cyclicals. that's what i worry about from a market perspective. >> rick, just getting back real quickly, are you there still? >> i'm here, of course. >> we're having this discussion all day, we're now told it's monolithic with ceos, they all love the paris agreement. i brought up the journal's take, the federalist's take, heritage take, then we had a guy on who told me he had no vested

interest in this going on at johnson controls, alex molinaroli, and i looked. everything you're involved in involves energy efficiency for the automotive industry. isn't it possible that some of these ceos were benefiting by the gravy train from this paris agreement and we can't just look at what they are saying and think they are trying to save the world? >> you know, back in the '50s, cobblers used to have a sign in their stores saying you're much healthier if you walk an extra two miles a day. yes, wear those soles down so you have to have them resoled. a lot of ceos have a lot of marketing and dogs in this fight. listen, it isn't about governments or governments in europe that couldn't reform, can't even spell reform. we don't want to hitch our cart with them. put our horse on their cart. we want to let our entrepreneurs and our leaders do what they do best. it isn't about government. government doesn't tell elon musk, steven jobs of the world

which direction to go, although i am a little disappointed in elon musk. so, what, he doesn't want the u.s. to pull out of this agreement, he's going to take his baseball and bat and go home? that speaks volume about his generation. >> said we are now -- we have abdicated our leadership in the world. that didn't happen in the middle east or didn't happen in any of the foreign policy moves of the last eight years. that happened now from exiting paris. >> yeah, i'll tell you what, it's amazing to me. listen, taking care of the planet. you know, one of these generals wrote a book. if you want to do good in life, you have to start somewhere, just make your bet. it was a big success. listen, if all you people out there are so worried what happened yesterday with the paris climate accord, do a couple of things. don't order things that are coming every day in a box in a box in a box. take your water bottles, why don't you -- don't throw them

away. we can circle the globe with water bottles. let's start with an easy step. easy stuff. >> rick, are you aware of any -- can you name some ceos of operational companies not investors that are not in the coal business that you think are supportive of what's taken place yesterday? anyone within the sort of fortune 500, fortune 1,000, you think, that are publicly supporting this? because i have yet to see them. >> listen, publicly supporting breaking away, you mean? >> breaking away. coal company ceos, but sort of outside of coal company ceos, i'm unclear. these are the people who are ostensibly going to be employing people in the united states. who are those ceos? >> i'm not going to speak on behalf of them. i tell you what, when i was raised, i was raised not to look and follow people. i was taught to be a self thinker, okay?

i'm not going to speak for ceos and even when they speak, they are most likely buttering their bread a bit. they have a responsibility to shareholders. common sense doesn't mean that you need to put your head around other people's opinion. the paris accord, if nothing else, creates a dynamic where we shift money overseas or we shift economic strength overseas, where we ship electricity pricing up. i don't care what a ceo says. it doesn't make sense. and it isn't synonymous with taking care of the planet. just look at the name in front of accord. >> austan, i want to read you the last five, four months of the three-month average of job growth. 201,000, 166,000, 152,000, 121,000. that's five months of declining, three-month averages here. what would you say right now is going on in terms of the job market overall?

would you say that is a good sign that is actually decelerating? >> well, i don't think it's a good sign. i think it endangers the fed's aggressiveness, you know, they've talked a big game of how many times they want to raise rates. and i think they've gotten out ahead of themselves. don't you? i think -- i don't think -- >> i wouldn't be saying anything -- >> i think it's cooling off. >> i do want to bring up one more thing, which is we've been talking about your buddy over there at the university of chicago, steven davis' economic policy on uncertainty, which has spiked. i want to know, because, look, i'm with rick and joe on this idea, you reduce regulation, reduce business, unshackle things and get to a place where business should go ahead. we haven't necessarily seen it in the business investment numbers. i'm wondering if we're seeing an increase of business uncertainty and economic uncertainty and maybe that's hurting the hiring numbers? >> you know, we have had ceos that have told us just that. >> emmerson the other day. >> who said they are waiting to see, they are expecting changes.

they are not going to make decisions until they actually see clarity with what's happened. austan? >> the epu is going crazy right now. >> folks i think -- >> is rick still there? rick? >> yeah, i'm here. >> hold on. rick, you see yesterday they tried to find out what trump's views on whether humans caused climate change or not. they kept badgering him, trying to get him to say that he may question that. that's what a ceo would go through if they don't get onboard with this group thing. they lose anybody on that -- their customers on that side of the aisle. they can't possibly speak out against it. >> joe, joe, joe, let's make everybody's heads explode here. gmos, gmos, how many fast food places, places that sell you food in jars, no gmos, you can eat here. no gmos. how many people have you overheard of who died or been sick from gmo? a lot of this is about

marketing, okay, and i get it. ceos need to survive, as well. >> right, i get it, too. poor scott pruitt after he said he didn't think co2 caused climate change. the guy almost got -- he's going to get tarred and feathered. i would never say that. >> i want to know what kind of cadillacs the dinosaurs drove to create their ice age. mother nature has a mind of its own. >> thanks to our panel today. have a good weekend, everybody. how about we pump more into promotions? ♪ nah. what else? what if we hire more sales reps? ♪ nah. what else? what if we digitize the whole supply chain? so people can customize their bike before they buy it. that worked better than expected. i'll dial it back. yeah, dial it back. just a little. live business, powered by sap. when you run live, you run simple. ...better than a manual, and my hygienist says it does. but...

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driven up, driven up, welcome back to "squawk box." don't try and do the jumble today. let's recap the may jobs report. thanks, andy. adp. the economy only added 138,000 nonfarm jobs after we thought it would be well above 200. >> we never got to the low participation rate in the entire conversation which dropped one again. what that is indicative of. >> it's now up -- see if it -- if it shakes this off or whether it says, wow. we heard that the job market is still strong. there are issues -- seasonal issues according to jim o'sullivan i think liesman said. but it was well below the consensus and disappointing. the consensus was 184,000. the two prior months were revised lower as well. however, the unemployment rate

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vladimir putin speaking at the st. petersberg national economic forum. >> i wouldn't judge president trump because with respect to the decision the acting president didn't believe they were well thought out. maybe he thinks there's no sufficient source available. so this requires very thorough consideration. but to my mind, one could as well stay inside the paris accord because they are a framework nature. but effectively what one could do is to alter the united states' obligations within the paris accord. but you cannot wind back whatever was said was said. so you have to think about what to do next and to do in the future. you certainly should not bend the problem to the extent -- i'm not familiar with president trump's statement, but he stated that he wanted to reconsider this treaty or sign a new one

instead. because he's not giving up on working on this problem and so it seems to me that one shouldn't be creating noise about it but rather create terms and conditions for a joint effort to be undertaken. because such big countries who are being emitters, no workable treaty will be reached or signed so you have to act on what there is and do something positive in order to make this whole work constructive. >> you said that to not take action on climate change would be criminal. is that your message for president trump? >>

. >> translator: i think, you know, many people know how to make hot nice out of everything. that's what people want to do is sensationalize everything. i'm -- i would put it very simply, i'm simply talking about the aspirations or the dream that one has for oneself. that is one thing. the second thing i would like to mention is that i have mentioned about the knowledge bank in india. 5,000 years ago i wasn't born by the way and it was mentioned that human beings or man should -- it's okay to milk nature. we have the right to milk nature. however, we do not have the right to exploit nature. this is what our -- it was

mentioned 5,000 years. i only mentioned what was said 5,000 years ago. five years ago in germany somebody asked me the same question and of course we did not -- we did not have any statement from anyone at that time and in germany i mentioned that whether there is paris accord or no paris accord, we are convinced that -- and that is part of our cultural tradition that we must not steal something that rightfully belongs to the next generation. we have to make sure that we must leave behind a beautiful bountiful nature for our future generations so that they can live peacefully. they can breathe fresh air and live a good life. this is a fundamental concern of

india from ancient times and i have used that example in germany. i used the same example today. >> but if i may, president trump might agree with that. but the question is whether it's going to cost so many jobs and hurt america so much economically and that it's caused outrage by other leaders. where do you fall on it? which side do you fall on? >> translator: i do not think that this subject -- in fact, it's not a question of taking sides. this is not the subject. what i'm talking about is thinking for the future generation. the generation that does not -- that is not born today. that the generation or the people who are to be born in the next year's -- that's the side i'm on.