"squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off today. check out u.s. equity futures on this 1st day of september. the calendar actually says september. >> ugh >> dow futures up by 40 points s&p futures up by a point. the nasdaq up by 3 1/2 it comes after a strong month for the month of august. let's check out the august score card the dow and s&p 500 finishing fractionally higher. big gains yesterday. they extended the winning streaks to five straight months of green arrows.

nasdaq had its ninth positive month out of the last ten. the worst performing sector, energy not a surprise given wti's performance, down about 6% that's the worst month for wti since march. as for the year so far, the nasdaq is leading the way. it's up more than 19%. the dow is higher by 11% the s&p 500 is up by 10.4% >> check the global markets. things were kind of friendly in europe not much happening in the asian markets. japan and the hang seng and shanghai european equities were more positive a half percentage point gain in average in most of the bourses look at the dollar got over 1.20, back down to 1.19 the ten-year, 2.13

do you go straight -- do you have a gauntlet from your house to your car? do you get in a garage do you know, it felt like fall >> was 55 degrees. 56r7b8g >> 55. real-feel 50 >> i walked out in my sleeveless dress, grabbed a sweater came back out. >> there's some leaves around. >> rustling a bit. >> that went fast, didn't it. >> way too fast. we still have this weekend >> school starting >> we do. >> you can't stop it >> no. >> you can, that's not a great alternative. >> i'll take the change of seasons. >> let's look at energy prices crude oil prices under pressure. we've been watching this play out in the last week or so with the backup of crude supplies, as those refineries have been shut down wti down by 1% for the month of august down 6%. gasoline prices have taken off because of the refinery

shutdown, 23% to 25% of the refineries shut down that has led us to that spike that you've seen in rbob for the month, it was up by more than 14% there was a contract that rolled if you're looking at the contract, you can see numbers up higher this is all playing out to increase prices at the pump. by some estimates gasoline polices may climb by 5 cents a day over the next several days let's get to the day ahead on wall street. the labor market will be front and center the august jobs report is out at 8: 8:30 a.m. eastern time non-farm payrolls are expected to be 179,000. the unemployment rate will hold steady adp came in this week a little unexpected we'll see what happens also plenty of other economic data out there

the august ism manufacturing index hits at 10:00 a.m. that comes with consumer sentiment and july construction spending also don't miss the first on cnbc interview with president trump's top economic adviser, gary cohn. that's at 9:35 a.m. eastern time on "squawk on the street." kayla is here. she came up on the train >> i flew here >> on a plane. >> back from vacation. >> boy, are your arms tired if you didn't use a plane >> yes, you can see the muscles. >> round two of nafta negotiations kicking off >> it seemgs li s >> it seemgs lieems like you wa talk about something else. >> off-camera i was needaling y needling you about comey according to grassley and the -- >> the chair of the judiciary. >> did you see this "washington post" piece?

>> yes >> they're citing confidence privately fretting about supposedly president trump's moves, but it's not as free-wheeling as it used to be kelly has things running people can't come in and out and talk about things. supposedly he had to deal with north korea, deal with this, deal with that, deal with nafta. >> a lot of work >> they want to establish hierarchy. >> 15 sources -- >> is what they site in that piece. >> 15 people still there walling the "washington post" at this point. >> depends on how you define confidant, someone inside the white house, outside of the white house that he picks up the phone and talks about these issues >> that's probably it. >> unclear >> well, okay. let's get to policy. this is a business network

nafta matters. >> it does >> dreamer stuff, do you have any inside information >> we are still waiting. the white house wouldn't comment on when they hope to conclude a review of that or what the policy will look like. fox news yesterday reported that the president was seeking an ent to t end to the program the president has been talking so much in recent weeks about his desire to just withdraw or scrap it altogether if the talks don't go the way he prefers. mexico has been calling the president's bluff to a certain extent on that the foreign secretary of mexico was in washington on wednesday he said if the president stays tough, we'll stay in it but they will refuse to negotiate with the united states. they have been getting partners from asia, trying to find other ways that if this falls apard,

they have a backup plan. >> there is pre-existing trade text that canada and mexico can rely on and existing relationships that they have not broken down. they can lean on them to def at leverage against the united states i want to play you what president said this week about tax reform which has leaders of business feeling concerned about the future of nafta. >> working right now on nafta. the horrible, terrible nafta deal mexico is not happy. as i told them, you made a lot of mron fooney for a lot of yea, everybody left you alone we have to change this deal. we have to renegotiate this deal if we can't we'll start over with a new deal. >> randall stevenson of at&t, you can see him there with kevin brady. he questioned what a withdrawal for nafta might mean for his $7

billion investment in mexico so many companies have cross-border investments, and they don't know how that will play out floor par for that part, canada and mexico are the top trading partners with the u.s when asked by cnbc yesterday about the impact on the u.s. economy if the deal were ditched, treasury secretary mnuchin said renegotiations is the preferred route. to that end rex tillerson continues to meet with his counter part the president is on the phone with prime minister trudeau. it's unclear how much this public bluster translates to the career officials who are negotiating the details behind the scenes >> it's interesting you bring up at&t because of that major invest they made in mexico, that was because they felt they couldn't get a fair shake in the united states with the obama administration

>> i was going to say, if you were randall watts, you would be like wow i got the net neutrality stuff that's great for me. the reason i went down there in the first place is because i didn't want to invest here the trump administration reverses that, that's like a ben franklin close that's a positive. geez, i have not heard trump say i hate big mergers between big media companies. >> recently. >> recently, not since the campaign trail everybody at this point thinks at&t and time warner will happen >> he said he would take a closer look, but that was a few months back. >> 7 billion is a big deal, but i think about the other two things -- >> this gets to the point of business leaders wanting continuity in terms of what they can prepare for and plan for >> you can't hand trump a wish list if you're randall stevens saying i want every one of these things >> every sector has a different

wish list. there's a cog nnizant dissidenc. oil and gas companies are shaking in their boots about a potential rewrite of nafta because it's been advantageous for them farmers don't want nafta to be scrapped, just made more beneficial another piece says fruit and vegetable farmers in florida have been outpriced by the cheap mexican fruits and vegetables flooding the market here you have all of these stakeholder horse have different views. >> every little lever -- >> each calling their contacts in the administration. >> i'll trade you a net neutrality and a time warner merger for a nafta any day, i think. i don't know i don't know the details >> the problem is it's so complex. >> and a tax reform. and other deregulation >> pmi your battles. >> we always hear from ceos.

we just want to know what the rules of the road are. when you have such different administrations, you will see huge things. we'll see what happens >> can't win them all. all those ceos really wanted is an invite to pebble beach, to the at&t except they don't want anyone to see them, because they might be good at golf >> or they may be bad at golf. >> i would think you guys would want them to be at pebble beach, too. >> we would. they're afraid to come on, because someone may see them but it's 3:00 a.m. when they're on >> kayla, thank you. >> great to see you guys >> are you going back? do you feel -- are you drawn back down there? does it feel good to get away. >> i'm from the south. >> no the beltway, i mean. within that how frrific area, w the fake news swirling around.

>> he gets a rash when he goes there. >> i do get a lot of mosquito bites. >> right it's a swamp, right? >> you're in those -- it's like monkeys throwing stuff at people you're in some of those press conferences. >> all the time. >> jim acosta, all that stuff, aren't you there watching firsthand? >> i have been there >> a circus. >> a lot happening a lot of news. >> there's a level of political theater on both sides. >> does he have his own show yet, acosta? >> i don't know. let's get down to texas for an update on the hurricane recovery efforts scott cohen has an update on the refineries, first to contessa brewer in houston. good morning >> reporter: good morning. harris county in houston estimates 136,000 structures, 10% of those overall have been

damaged in some way by harvey flooding along the buffalo bayou, you can see mountains of housewares piling up. friends and family are pitching in to rip out drywall, rip up flooring and get it clean up rebecca rivera, a woman i met in the anybodihood, just bought her house last month like 80% of the harvey victims, she doesn't have flood insurance. core logic analysis is estimating that there could be un up to $36 billion in residential losses because of harvey flooding what we're hearing from insurance adjusters that perhaps

before going in and throwing everything out that people need to be sure they can document as proof for their insurance claims and for fema relief what they actually owned inside. they're warning people not to be too aihasty in an attempt to get their houses cleaned up. apparently the damage is so severe that houston postponed the start of school until september 11th that's two weeks after its original start date. a lot of businesses are getting back, opening up doors certainly for the broader houston area it is not business as usual >> fema saying you have to document these things, take your time getting everything out, at the same time just the reality of living through something like this, having lived through sandy here, you have to get that stuff out as quick as you can, otherwise you risk the mold factor making everything like a complete teardown on those issues the complications, how long this

will take, how painstaking it is, you're highlighting it in an excellent way. this will not get fixed any time soon there are no good answers no matter which way you look at it. >> it's true i survived sandy i remember the rush to get in there and rip it out what i did, we took a video camera and recorded everything with you in it, that way there is no doubt it's your stuff n your apartment just bit from my own personal experience as you can see, there's a lot to deal with here >> you know one really grade thing happening tomorrow night is the astros are going to play in houston returning to minute maid stadium to play the mets they should win probably they were leading the american league also. we have jim crane, the owner of the astros on the show later today. they also just acquired justin

j verlander, mr. kate upton. i met him on a driving range moments like that, those are great to watch it's like the storm -- it's not lifting, there's a long way to go but you get a sporting event like the astros coming home -- >> and the businesses need it. >> yes that would be a great moment >> all these restaurants there's a church across the street from minute maid stadium that says go to mass and a ball game it's been a ghost town around here, so they need something like that. the streets are largely impossible just a block from where i'm standing, the buffalo bayou is still flooded. little pockets are still struggling then the larger houston business

community is like bring it on. let's get the money back flowing. let's get people out to eat. they're asking -- yesterday i talked to a guy up the street here who works in the oil and gas industry i said what's your message for the larger business community? he said we need your investment, we need your money support houston business right now. >> contessa, thank you very much. let's get to scott cohen standing by in baytown, texas. scott? >> this is the giant company mobile baytown refinery. over my shoulder here is another good sign. you can see the flame burning. when you drive here before sunrise, you drive past a lot of refineries, a lot of that flaring. that's a sign generally that they're trying to get the refineries started again for now this is out. here's what they're dealing with look at the pictures from during the storm and in this general area

torrential rain there's a we saw. almost biblical rains that flooded a lot of these refineries out here's the result. about 20% or more of the nation's refining capacity as of yesterday was offline, including the baytown refinery also the one people are concerned about, the largest refinery in the country, the motiva refinery in port arthur, that area still largely under water. they don't know when they'll get that started again even as other refineries do try to get going here is energy sector and former texas governor rick perry. >> this is about the refining end of it. can't get product in the refinery, the refineries are not online either because of flooding, because of leng cal

p power. i don't know how long it will take to get those back on. >> here's the problem,not just in houston, there's concern, rumors floating around about shortages because of this talk there's lots of gas lines, but officials say there's ample supply but what we're seeing, prices are going up that may continue as they try and get out of this. now, there are other stories we're looking at as well when you think about infrastructure in crosby, texas the arkema plant where the first of the fires from the chemical that needs to be kept cold that's not anymore, the first of the fires burned itself out yesterday. there are more fires to come and more fires for the company to fight they have a news conference, a teleconference scheduled for later today. they'll be asked a lot of questions, we would think, about what their plans were, response plans were, and why this company was lobbying for easing of

regulations or delaying of regulations about what chemical plants should report, they were successful in that effort. don't know if it would have made a difference up in crosby. a lot of questions for arkema and 200 people are still out of their homes. they don't know when they'll get back >> scott, as you were talking about that, eight more of these chemicals, odds are they'll all go up in smoke they'll have these mini explosions because they can't get in and stop anything a lot of questions about how dangerous those smoke plumes are and where they travel to >> the epa has been doing air testing. they say it's not dangerous anymore than basic smoke one of the other issues is it's not just these peroxides stored there, there are other chemicals there. the company says the ter rox

sides were stored far from other chemicals that might be toxic or dangerous if they caught fire and released supposedly none of that has happened haif been doing f they've been doing flyovers, and nobody has been able to get into the plant and there's the hazard of fires. so a lot of questions for this company to answer. >> scott, thank you very much. a programmi inming note for, at 8:50 a.m. eastern time, we will talk to houston astros owner, jim crane the team is coming home to play a series at the request of the governor >> jim crane, 4 million of his own money for relief. coming up, job prediction. we'll tell you what to expect. and later hiring trends with

tom gimbel from lasalle network. ♪ ♪ ♪ ♪

we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

anso shouldn't we get ourde inphones and internete. from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. and ask how to get $200 off the latest devices. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com.

♪ welcome back the countdown to the august jobs report is on joining us now to talk about jobs in america is michelle girard, chief u.s. economist and managing director for natwest markets and anthony chan from chase. good morning are we thinking this will be a strong number again? it's been the trend. adp better than expected august can sometimes be shaky. how do we add that up? >> we've come off of two very good months. i think some of the reason we saw the strong numbers in june and july above trend was the fact that we had an influx of additional labor supplies as people were coming out of school, graduates looking for work, companies are so hungry for workers, they keep telling us we would be hiring more if we could find the workers the last couple moptds th monthe had the workers, and that's been absorbed >> not because companies don't

want them. >> they can't find them. they had that inflow in the summer i think we'll settle back in august that's typically what seems to happen >> and think whthony what do yo? >> that adp number was strong, but in march and may, that adp number missed the estimation by over 100,000 in one case 174,000. i'm fler vonervous when i see tp report amazon told us they would be hiring 50,000 workers in august. >> that's a good point >> that's a po tents inititenti. can't you sort of after two great months, isn't it always sort of -- i nthink the same thing about gdp, because i've been used to it for eight years. we regress to 2% we did 3 did you see the atlanta fed?

3.3? that's 0.3 ahead of 3. is that a trend or are we going back to 1? >> we're at 3 ourselves. >> for the third quarter >> for the third quarter there's inventory help there as well we may settle down >> how much? >> i think you're right. >> 2 1/2 now >> i think that's where we're trending the year over year changes are cleese cloe close to that. >> buffett said key do two >> he said that feels good french did 2 1/2 -- >> yes again, think about where we are in the cycle very late in the cycle to be growing at an above-friend rate of 2 1/2 percent that is good. to be growing 150,000 to 200,000 jobs a month at this point in the cycle is solid >> agree with everything you said but that gets us to the point if we're so excited about that type

of growth in this point in the cycle, how concerned should we be with rates now? they keep saying inflation is not here the fed doesn't need to raise rates quite so soon. if we're at this point in the cycle and worried about it, we're at emergency levels for funding. >> at some point the federal reserve has to normalize we think december is a good time to continue that process >> december, not september >> december. >> the good news is that wages are still low. 2.5% year over year. this month is no different >> good news unless you're an employee >> that means that the federal vef doesn't ha reserve doesn't have to worry about inflation getting completely out of control. you go back to the '60s, you will find a strong relationship between productivity growth and wages. productivity growth is nowhere to be seen even in the latest numbers we're inching in >> so employers won't pay more

unless they get more productivity and they get to the point i can't hire anybody then how quickly do wages rise. >> that's the question i have run some models that would take into account not only low productivity but the low inflation environment. even with those numbers expect wage growth closer to 3. it's not a big overshoot echoing what anthony said. when you say it's good wages are low, meaning that if we were seeing the kind of wage growth you would expect to be seeing -- >> the fed would have to raise much more quickly. >> exactly we would be talking about the fed having to catch up, go -- >> if corporations get tax reform and repatriation, maybe productivity goes up >> absolutely. >> the age, you say where we are in the cycle i immediately thought if i gauge the cycle from where interest rates are, i don't know whether we're at the end of the cycle.

do you use it for chronological? do you do it for where the employment rate is or do you do it for wage gain >> joe, you make a great point in the sense that we are--the cycle has been different >> but this is a big game of pickle if you use it that way. at some point the fed raises rates, does that bring everything down? >> you can raise it to 3%, 4% -- >> 4%, will you talk about some serious challenges >> 8% didn't cut things off in the '80s and '90s. 8% was fine. i remember on the way down to 7% i was like my god, 7%, businesses will go crazy with interest rates this low. >> you make a good point when we talk about this stage of the cycle, a lot of us are meeting that on the demand side. you expect to get pend t up

demand companies have done a lot of hiring to date you're just talking about the fact that growing at this pace, at a level that you would see usually earlier in the cycle, to that sense it's a solid performance. >> what cracked me up yesterday, you remember the old days where eight, seven, five, six, ten >> on interest rates >> i left, and it went from 2.20 to 2.10. i left and the world was totally different because it was 2.10 from 2.20. in the old days, wouldn't even -- that's a rounding error. >> people look at me and say you think the fed will take interest rates to 2%? are you crazy? that will throw us -- >> but it is doubling it or tripling it. >> anthony, michelle, thank you guys for coming in a programming note for you the director of the national

economic docouncil, gary cohn wl be on "squawk box" at 9:30 a.m. eastern time >> why isn't he on our show? it's cramer, isn't it? i know cohn. >> it's one network. we'll promote them it's one network >> on this show. it has squawk in the name. coming up, rampant drug use in part of the country has some companies rethinking drug poll social security. we'll get a special report on drugs and the work force next. as we head to break, here's yesterday's sp sp w&p 500 winned losers ronoh really?g's going on at schwab. thank you clients? well jd power did just rank them highest in investor satisfaction

with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

theextreme risk of burstd a pipes and water damage...y... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages

from happening in the first place. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it- and see it through-with digital.

♪ >> welcome back. you're watching "squawk box" live from the nasdaq market site in times square. ♪ >> good morning. it is the first day of september. my gosh. august is gone september is here. first trading day of the month we've been watching the u.s. equity futures you will see once again things are starting on a positive note. dow futures indicated up by 54 points nasdaq up by 9 the s&p futures indicated up by 3 points the merger of dow chemical and did you upon the has been completed. the new company, dow dupont, issued that announcement moments ago. the stock will trade today on

the new york exchange under the symbol dwdp. dupont share holders got 1.3 shares for every share they held >> dominion resources is still around dominion t would be good -- >> why not dd instead of the complicated dwdp >> time for the executive edge counties and states struggling to contain the hideous opioid crisis, the rampant abuse of prescription drugs is taking a toll on the labor force. ylan mui got a firsthand look at impact and the stories of redemption ylan, growing up, opioids involved needles it was a totally different thing. if you could pop a pill, that's part of the problem, isn't it?

>> right some of that prescription drug use is moving over to street drugs like heroin and fentanyl we went to columbus, ohio, there businesses say they are having a hard time finding workers who can pass a drug test that's forcing companies to rethink zero tolerance policies and focusing on second chainses. james rupe part owns a business installing counter tops, and some of his employees are recovering addicts >> i flew theknew there was drui knew there were problems with employees. to now these guys are accountable while out there. >> half of all prime age men who are not in the labor force take pain medication, most of that prescription drugs that's what happened to ron eagle. he hurt his back when he was 19. he spent the next 20 years in

and out of jobs fighting drug addiction. >> honestly, nobody wanted anything do with me anymore. everybody, my mom, my family, i had no one in my life. i was at my bottom i couldn't take it anymore >> the cycle didn't stop until ron got help at a recovery center called house of hope and got a job working at rupert's business >> i used to hate waking up and going to work and now i actually look forward to it it keeps me sober. i work with a lot of sober people i've surrounded myself with sober people saved my life. >> not everyone is so lucky. the death toll continues to rise in ohio more than 4,000 from overdoses just last year it will be a long fight. back over to you >> when someone relapses, what

are the -- is it a good -- anything positive in the number of relapses that can get back and get clean again? >> it's a hard thing there are no perfect solutions to this crisis just yet. we talk to one business, we worked with them for several months to profile them they pulled out of the story because three of the workers they tried to hire relapsed. one of them overdosed. it's tough out there for businesses and obviously for the workers who are struggling through this everyone is trying to figure out the best way to fight this crisis >> okay. all right. ylan mui, i don't know do you know at this point how much is heroin, how much is these other things that are more powerful >> fentanyl and the other

things >> yeah. how much is classic heroin versus oxycodone that you get for back pain. >> the fentanyl use has been spiking. ohio saw deaths from prescription drug painkillers, overdoses, that is actually leveling off or declining. but the deaths from heroin and fentanyl are continuing to climb. so the use has really shifted to some of the harder and potentially more dangerous drugs. >> more powerful than heroin thanks when we return, it is jobs friday we'll get an early look at hiring trends from tom gimbel, the ceo of lasalle network that's leading up to the big network at 8:30 a.m. eastern time later, houston astros owner jim crane will join us to talk about the hurricane recovery and his team's homecoming to play games this weekend yos all happening at the mar'request. stay tuned, you're watching

"squawk box" on cnbc when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

you know win control? be this guy. check it out! self-appendectomy! oh, that's really attached. that's why i rent from national. where i get the control to choose any car in the aisle i want, not some car they choose for me. which makes me one smooth operator. ah! still a little tender. (vo) go national. go like a pro.

as we count down to the monthly employment report this morning, it's time to get a breakdown of the latest hiring trends from one of the leading staffing and recruiting forms. joining sus tus is tom gimbel o lasalle network. have you -- i guess, you know, the way things change, tom, as time goes on, it may be more interesting to talk about it what is different about the current environment versus six months or a year ago is it different or are you still plugging away doing the same thing. >> i think it's a lot better we're seeing there was a bit of trepidation before we had that trump bump leading up to the end of the year and what would happen and where things would go what we've seen in the jobs market and hiring trends mirrors what the stock market has been doing. while people may not love the political aspect of what's going

on, from a business climate hiring really mirrors what we're seeing in the other aspects. >> we talked about it a lot. it's funny, we have people with a vested interest in things not getting better they are in denial about a lot of this. do you attribute it to deregulation or scott mcnealy said the waterboarding of the private sector stopped what do you attribute the better sentiment to is it consumers are more positive business owners are more positive >> business owners and we survey ceos and cfos quarterly. the numbers come back that the anticipation of more deregulation, and at the very least lack of new regulations coming into the market is what is driving a lot of the optimism for hiring that companying feel. i heard you say earlier interest rates are so low we have nothing to compare this to

where the stock market is high and companies are hiring it's a global economy. it's not based solely on what we're doing here the hiring is going off of that mark, and we're seeing companies hire across all positions. i haven't seen it like this in a long time. >> so many people that have not run -- i vent run a bhaven't ru business, they write off deregulation but sometimes jack welch used to come in and read the actual regulations for different industries it was mind boggling you wouldn't want to expand or hire more people based on what you would have to go through to do it. it's a real thing. it seems like it's helping right now. >> it's a huge thing that's party manipulation from washington people said that hope was a real thing in 2002008, when things started to turn the corner, that was real but intangible. a capitalist business driven economy versus something

regulated in d.c. is real. you can't argue with the fact that unemployment is at 4.3% we added almost 250,000 jobs last month this is a good situation we're in i knows there problems, believe me, i understand that both socially and with what's going on in houston and the south, but from a traditional jobs growth, unemployment, interest rate, liar i hiring, this is a good situation. >> glad you pointed that stuff out. we will keep it short. we'll see you next month when we have another jobs number thank you. >> look forward to it. when we come back, the market's locking in gains for august with the nasdaq leading the way. year to date all the major indices are up by double digits. nasdaq is up 19.4% where should you be putting your money? we'll get value picks after the break. hard to fi indn markets like these. ♪

♪ ♪

♪ ♪ integrate any part of your business, and have your systems work as one. the ibm cloud. the cloud for enterprise. yours.

welcome back, everybody. despite last month's volatility all of the major averages finished august in positive territory. although many areas of the u.s. equity market appear fully valued there are bargains out there. joining us is the ceo of hodges capital management, and craig as a value investor how much tougher is your job these days >> oh, it's not that much tougher. it's been a very, very narrow

market as everyone's aware i am seeing some healthy signs of, you know, some of the momentum stocks slowing down and some of the laggards catching up so i do believe that there are opportunities, a lot of opportunities out there. and that's what we're seeing at hodges capital >> let's talk about some of those opportunities. american airlines you think is one of those stocks that is prepared to take off if you pardon the pun. >> yes >> it's kind of surprising to think about that because there are have been so many people who have talked about the airlines going back to years and years ago, warren buffett saying it more recently. what do you see here >> you know, the airline business has totally changed we've gone from way too many competitors to really only now we have four airlines. and it's now investable. buffett's now a big owner in your latest conversation, i'm not sure if you mentioned the airlines, but we see that as a real opportunity it's very, very investable now the thing with american it was a $54 stock not three weeks ago and here it is around $44. and plus $5 billion in market

cap just on some concerns over maybe some aggressive pricing by united so, another thing about american is, believe it or not they've retired about 35% of their shares through buybacks in the last three years so their costs are up right now but those costs are going to stabilize. i think you're going to see earnings go up significantly and if airlines ever get more of a market multiple, you could see a big move out there >> how about eagle materials you like that. >> eagle is one of the -- we think, best run cement and wall board companies we know of and especially with this houston rebuild. we think eagle's going to benefit more than just about anybody. half their business is cement. but half is the wallboard which is going to be something that is going to be attractive from a rebuild of houston the thing about wallboard you can only move it about 300 miles economically so, eagle, being in those two businesses, is going to ben pit. and actually we see a lot of

opportunities in this houston rebuild. i guess it's okay to start talking about an opportunity >> still feels a little awkward. but this is what the market's already going to be doing. >> yeah, but eagle's one group one automotive that has about 20% of their stores in the houston market united rentals lgi homes has about 15% of their starter home business in the houston market owens corning in the fiberglass, and roofing business mohawk in flooring so there are a lot of opportunities out there, we believe, that this rebuild is going to really take advantage of >> craig, do you own all those stocks that you just mentioned >> yes through our funds, hodges funds, the hodges fund and the hodges small cap fund >> thank you very much for joining us today we hope to see you again soon. >> appreciate that coming up, treasury secretary steven mnuchin weighing in on tax reform in yesterday's cnbc exclusive interview. more on the tax time line is next

and we're counting down to the august employment report due at 8:30 a.m. eastern jobs predictions straight ahead. "squawk box" will be right back. if you'd have told me three years ago... that we'd be downloading in seconds, what used to take... minutes. that guests would compliment our wifi. that we could video conference... and do it like that. (snaps) if you'd have told me that i could afford... a gig-speed. a gig-speed network. it's like 20 times faster than what most people have. i'd of said... i'd of said you're dreaming. dreaming! definitely dreaming. then again, dreaming is how i got this far. now more businesses in more places can afford to dream gig. comcast, building america's largest gig-speed network. now more businesses in more places can afford to dream gig. you totanobody's hurt, new car. but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do? drive three-quarters of a car?

now if you had liberty mutual new car replacement™, you'd get your whole car back. i guess they don't want you driving around on three wheels. smart. with liberty mutual new car replacement™, we'll replace the full value of your car. liberty stands with you™. liberty mutual insurance.

a developing story the gulf coast starts to clean up from deadly hurricane harvey. meantime a crucial east coast fuel pipeline that was shut down by the storm is set to reopen by this weekend the latest from texas, straight ahead. jobs in america, futures higher this morning ahead of the big employment report. coming off a couple of pretty good ones the last two months.

plus, the ceo of td bank joins us to talk tax reform, the economy, and the state of banking. the final hour of -- i wish! it's -- somebody in there. somebody in there writing nose that it's a friday the second hour of "squawk box" begins right now hey, i'm out of here at 8:00 now. ♪ live from the beating heart of business, new york city, this is "squawk box." final hour for you i'm staying. see you later. >> you're staying after that >> yeah. final hour for you go ahead good morning, everybody, welcome back to "squawk box" here on cnbc we're live from the nasdaq marketsite in times square i'm becky quick along with joe kernen andrew is out today. ahead of the august employment report we've been taking a look at the futures you can see the dow futures have

continued to pick up ground. right now up by almost 65 points nasdaq is up by 11.5 points. s&p moved up as well, close to four points. here's what's in our headlines this morning the jobs report as we mentioned out in just about 90 minutes it's expected to show 179,000 new nonfarm jobs were added to the u.s. economy last month. the unemployment rate is expected to hold steady at 4.3%. we're also going to see how major u.s. automakers fared during august this morning although the pace of sales has slowed over the past few months, analysts surveyed by ed munds are being looing for a 1.3% increase over august of last year and a slow return of various businesses in the area of texas that were hard-hit by hurricane harvey the port of corpus christi where oil transports dock has reopened on a limited basis at least. cruise ships are once again able to access the port of galveston. rail company has begun to restore service in southeast texas. we're going to have much more on harvey recovery efforts in just a few minutes. >> treasury secretary steven

mnuchin sitting down with our own steve liesman yesterday to talk tax reform and more steve joins us ahead of today's jobs report. did you -- were you able to talk him out of this? >> out of what >> into cutting taxes and into your own personal thing, the rate -- i mean, did you tell him what you always tell me about how eisenhower had 90% marginal rates and things were great and how actually in the soviet union when you were there, there was no private sector? >> when do you sit down and make this stuff up? that's what i want to know is it at night instead of spending time with your lovely wife and beautiful children, is it in the morning instead of reading the paper and preparing. >> i think that just came to me. >> just right now. >> i heard you did a great job okay but you did not try and talk him out of it >> i did not try to talk him out of it. >> okay. all right. so you got your own feelings you played journalist and got your own feelings out of it? >> my feelings for a very long

time, before i even -- >> you're wasting time >> no i'm not wasting time i've been in favor of a tax cut for corporations u.s. treasury secretary steven mnuchin was very clear in response to my question yesterday about why there isn't a tax plan and why details haven't been released. he said there is a tax plan, and it's coming in the next few weeks. >> originally our goal had been august unfortunately things got delayed a bit. but we're on a track to get this done by the end of the year. so you're going to see the details come out later this month. it's going to go through a committee process. and we expect the house and the senate will get this to the president to sign this year and we couldn't be more excited about the progress we've made. >> investors have been skeptical the possibility of tax reform and tax cuts this year and they've actually awaited details of this plan the biggest one of all for investors the corporate tax rate which president trump wants to set at 15% and i asked the treasury is it going to be 20 to 25 and he sort of wasn't giving maybe a little bit of give on the idea, the

realism of 25. let me turn to the jobs report very quickly we're going to skip that other slot because we spent a little time on something else we're going for our third in a row above 200k the forecast is just 180 but adp came in at 237 jobless claims strong, survey also pointing to healthy growth. there is one possible negative here the chance the august number is first reported today lower than the actual number for the past five years, things have been more modest of late, but in the years right after the financial crisis they were like 80k or more. you can see right there the upward -- >> i think if you average it out it's still 50k even with the more modest ones >> yeah, it's a big number september is the most -- is the most revised month up or down. august is the month revised most up >> and i think a lot of -- i was reading yesterday that sometimes people don't respond to the surveys because they're on vacation in august so they respond to them when they get home.

>> my big question is when does the market trade the reality of the actual number? >> never >> never >> never >> it always trades a big num r number >> what did we decide -- >> we looked that up a couple years ago. i don't know what the mean is anymore, joe >> we had the guy from la salle on -- >> i did listen. >> oh, you did you saw that deregulation is a real thing to him. and business confidence and small business owners, a real thing to him he said now you saw the atlanta fed the latest thing, 3.3. so if we did 3 and they say 3.3, to get down to 2, we're going to need to do, what is that -- >> joe our argument is over what it's worth for gdp that's where we would debate >> is that 2.5 >> what's the reregulatory part -- what part is the president and the president's policies responsible for >> the trump bump and he was in chicago so he probably -- >> so is it -- all 2.5 because

of the president without president trump we'd be doing zero or i'm just trying to figure out how much >> maybe we shifted into third gear -- >> i think there's a couple tenths of a point that comes from the global expansion we've had. thet been a new surprise i think there's a couple, 0.3 that may be coming from the trump bump >> steve, i'm telling you -- >> people come in here that have a vested interest in talking down things like this, saying that they said this with a straight face, we're finally seeing the effects of the financial crisis waning, and abating. and that's what they're attributing it to. >> you know my vested interest, right? >> well, i have a pretty good idea >> and then tomorrow night at the acoustic those are my vested interest >> thank you, steve. joining us jack caffrey. and josh wow fineman global chief economist at deutsche. i can't get an economist to say maybe we're above that 2%. it's like i think you have to

beat him over the head with like six 3% quarterly numbers before they'd go above 2. are you going to tell me we're still at 2 that's all we can do they're stuck there. >> in terms of trend growth? >> gdp >> i understand in terms of trend, maybe a little bit more >> what 2.1? >> low 2s in terms of trend. i mean if we were to get some sort of productivity surprise ramped up, that would be great >> if corporations start investing? what if they got repatriation. what if we brought that money back >> these things could help let's face it our ability to forecast productivity has not been very good very few people anticipated the surge we had in the late '90s, early 2000s then it kind of petered out and we've been waiting for it to revive >> are you and steve surveyed -- >> i don't think he participates, no >> okay. but -- >> in the fed survey >> are you at 3 now? where did you get to >> our survey is 2.8 >> the atlanta -- >> for the quarter, yeah >> just adding >> the atlantic fed is part of

the survey they're the high side of -- >> 2.5 to 3. somewhere in there we'll have a couple of quarters of 3% growth >> and back to 1 >> a couple quarters doesn't make a trend >> i know but it's going to have to go back down if it's -- >> keep in mind we did have a 1.2 quarter. >> -- for years on the first quarter. >> which is the second quarter was part of -- >> our -- >> second quarter does borrow -- >> economist would actually instead of just saying well in the past we blah, blah, blah, just actually make a prediction about maybe we're -- >> the thing is if we don't get it from the productivity side, the point is, if the economy were to grow at 3 and we're not getting on productr and there a limits to how much you can do that when you're talking about sustainable growth when you're already kind of in the vicinity, we can quibble about that a little -- >> you've got to actually manage don't you think economists know too much right now the tree's right here and they think it's the only tree in the

forest i'm not talking about you josh wow. >> no, of course now >> sometimes they look at the tree sometimes they look at the branch we're going to talk about the employment all i know is it will get revised. so we're going to report a number we're going to react to a number and 30 days from now we're going to react to a new number >> the last three months with revisions, have been pretty solid. >> right but if you look at some of the economic surprise indices you tend to give much lower weight to the employment report versus some other data like orders due to the lack of prescription and the ability to forecast employment accurately and i think that just speaks to it's a big day it matters, but the fact is, it's kind of a -- all i know is the number's going to change >> all right >> we never -- the market never -- >> there's the potential of the economy is really, it's an ivory tower number where they sit around and they consider it and they don't change it based on two quarters i know you're excited. and look, everybody wants that

potential to be higher nobody doesn't want it to be higher well, maybe some people do but the idea of the productivity of the economy, and the labor force growth these are things that are set in motion a long time ago several years ago. and they end up resulting in this -- greenspan is the only one who saw it in '96. yellen argued against it she thought that you know we didn't have this magical productivity greenspan saw it in the orders for technology he said why are people ordering all this stuff if it's not doing anything so he's the one who kind of came up with that idea that there was this big productivity boom on the way. josh is right, we're not very good at seeing these things. we don't understand why the steam engine and the whatever it was, the electric motor were invented within 12 days of each other in the 1800s you tell me what the next big invention is going to be, when it's going to happen, when it's going to hit the economy, and i'll tell you what growth is going to be ten years from now >> -- already. >> we've already done --

>> it's electricification to be turned into productivity enhancement. >> all right gentlemen. >> but you're making investments over these horizons. that's why -- >> you don't go quarter to quarter. >> 19% for the year? >> 19% s&p up 10.5 >> yeah. >> did someone -- >> someone told me did melissa lee ask you if you are still aggressively overweight? i mean how did you take that did you get really -- did she ask you that >> aggressive overweight >> she was talking stocks, right? >> i hope -- >> did you take that wrong >> i'm just told that, i wasn't here, someone told me that last time that's just -- i mean, that's cold isn't it >> that would be mean. but, you know -- >> on the right call at the right time >> courtney told me that she filled me in because she had no memory around here, do we? we need to -- >> you can go home and get to come back the next day and be, okay, i have new data, new information, and try again

>> all right you're right it has been the right call for a very long time. >> and i hated bull market >> okay. coming up. thank you. you okay, josh >> i'm good. how about you? >> coming up -- >> people can't hear that on the radio, joe there are all these people driving in this morning wondering what just happened >> there's no nielsens for radio. we don't care about -- the latest on the cleanup following hurricane harvey many texas residents are starting to return to their homes to survey the damage, and then the ceo of td bank joins us to talk earnings and how policy changes in washington are impacting e nkthbaing system stay tuned "squawk box" will be right back it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing.

translation? why invest in average? ♪ ♪ ♪

did you know slow internet can actually hold your business back? say goodbye to slow downloads, slow backups, slow everything. comcast business offers blazing fast and reliable internet that's up to 16 times faster than slow internet from the phone company. say hello to faster downloads with internet speeds up to 250 megabits per second.

get fast internet and add phone and tv now for only $34.90 more per month. call today. comcast business. built for business. welcome back to "squawk box. check out the futures right now. futures are indicated sharply higher this morning, as they've been upticking as the day has gone on. 67 points indicated up four on the s&p, nasdaq indicated up 13. and that would be a pretty good bounceback week if they were to close here anything from changeal 8:to when we get the employment report >> now the cleanup following hurricane harvey texas residents are starting to return to their homes to survey the damage

major disaster declarations have been made in 30 texas counties and five louisiana parishes. chemicalmaker arkema says it does expect more fires at its flooded plant in crosby, texas there were two explosions as those chemicals kind of overreacted. reacted after the heating turned up there both of those happened yesterday. the u.s. chemical safety board has launched an investigation, and scott cohn joins us in baytown, texas, with more on that also an update on the refineries scott, good morning, again >> good morning, becky let's start with the refineries, first of all because at the height of this, upwards of a quarter of the nation's refining capacity was out. you see the flame behind me at exxonmobil's baytown complex where they refine gasoline and also chemicals a huge complex those flames general tend to go up when they're starting up these refineries again, and so that's a good sign because you see that up and down refinery row

so hopefully as we get an update today we'll get more of that capacity online, and ease some of those concerns. now this other story, of course. about 15 miles from where i am right now, over in crosby, texas, that arkema plant, where incredibly they're still watching and waiting for the rest of the 36,000 pounds of organic peroxides to burst into flames the first of the fires burned itself out yesterday, according to local fire officials. but there are a total of nine formerly refrigerated containers, the refrigeration went out and that's where the problem is the officials with the company, as well as locally are kind of downplaying the risk but that, for 200 people or so, who are evacuated, this just won't do >> you hear about it's not that big of a deal. it's a big deal to us because we just went through a pretty serious deal with this storm this company -- we don't need this crap here

>> the company says that everything is safe the epa is in doing air testing. nonetheless, it's a 1.5 mile radius that's been evacuated the company will have to answer some more questions. they have a conference call with the media scheduled for about four hours from now. there will be a lot of questions about what's going on in the community, did they have a -- the proper plan for dealing with this flooding. the company has said that six feet of water in that plant is unprecedented. but, should they have planned for it lots of questions to come with that, as these residents who got through the storm still can't get home, and they just have to wait guys >> you know, scott, i've been thinking around and around about this story since we first started talking about it yesterday, started hearing about it the night before that, even the backup plan was to put the chemicals on trucks. did the trucks get trapped they didn't move them soon enough because the water just came in too quickly? or i guess those are some of the questions they'll be asked, too? >> right

i mean it was kind of a last-ditch thing when the generators failed, and then the backup generators failed, and then they said well we'll move them into these refrigerated trucks then it was kind of inevitable they were going to burn themselves out all they could do i guess was hope that the water would recede soon enough or the trucks would have enough fuel there are going to be a lot of questions about that and about the overall response and you know, the company was asked yesterday about the other chemicals that were on site, some of which may be more dangerous than these organic peroxides. what the company said was that the peroxides are scored far away from everything else, but then they couldn't really provide a map or a location, and so, that's another reason that the residents certainly are concerned. and, you know, it's a relatively sparsely populated area. but still, if you live there, that doesn't really matter >> right, right. okay scott, thank you i know we'll hear more about this later today scott cohn, joining us from

there on site. in the meantime, folks, j.j. watt harvey relief fund has earned $13.6 million his original goal was to raise $200,000 watt has continually raised the target as more and more help poured in. several other athletes and team owners offered their support including tennessee titans owner, the new england patriots and the new york jets just to name a few of them tv host ellen degeneres surprised watt with a $1 million donation on her show this week and the goal has continuously climbed. we'll see where that ends up when we come back this morning, some of the nation's best-known technology ceos, joining forces in a letter to president trump we'll tell you what they want, next and then later, don't miss national economic council director gary cohn he's on cnbc today with energy that investors will want to hear at 9:30 eastern time "squawk box" will be right back.

are you ok? what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac!

welcome back to "squawk box. making headlines, samsung scoring approval from california to test self-driving cars on the state's public roads the company had already received a green light to test autonomous cars in south korea, and other companies with testing permits in california, include apple nvidia, gm, as well as bmw tesla has received a complaint over worker rights from the national labor relations board. the agency says that the company violated employees rights by making them sign a confidentiality agreement that could prevent them from talking about working conditions and safety issues. tesla has to respond to the nlrb's charges by september 14th and uber has hired the founder of firefox, blake ross, who is also a former facebook

executive, and he joins uber to develop product strategy ross confirming on facebook that he's worked with uber part-time from l.a., he's been very outspoken about uber on social media suggesting, previously, that sales force exec brett taylor should become ceo and technology ceos are speaking out today, calling on president trump and congress to preserve the deferred action for childhood arrivals program, also known as the dreamers program, for children who were brought here from other countries without papers the business leaders have created a website exclusively for an open letter addressing government leaders, urging them to preserve the policy the letter's been signed by more than 350 executives, including tim cook, jeff bezos and mark zuckerberg it reads in part dreamers are vital to the future of our companies and our economy. with them we grow and create jobs they are part of why we continue to have a global competitive advantage. this was a really sticky question the reason that we are looking for some decision being made is

that there are attorneys general, conservative attorneys general who have been pushing to have this plan undone. it was put in place five years ago by the obama administration, and i think -- >> was it that long? >> i think it's been five years since it started and slowly built up over time. >> did it with executive action -- >> he did it with executive action i believe it's been five years it's been building it up and running. that decision, that deadline that these attorneys general have placed on the trump administration is tuesday. trump in comments recently has said that it's very complicated. that they're going to be making this decision with heart that is something that's a little counter to what these attorneys general would like to see happen they want the program revoked. they want these people taken off. it's very -- a thorny issue, because look these are people who came forward, who said, we're here, we want our work papers, by signing up for it and taking the government at its word, they put not only themselves at risk but many of them revealed their family members, too if they get kind of booted out

as a result of doing that -- >> a lot of talk last night about it that, you know, it was done, and president obama admitted this is not -- >> it's not the way we do things >> probably. and that it did have the president, you know, they had a chance in 2008 to do immigration. >> right this was seen as a -- >> and they didn't they did obamacare instead >> a holdover for what they thought was going to be immigration reform along the way. >> right >> this is a really sticky issue. >> it is and some of them maybe his grandfather -- >> you would hope that, at least. >> when we ce ckomba the ceo of td bank is going to join us to talk earnings, interest rates, the state of financials, and nafta. what did we do before phones?

they save us from getting lost, getting hungry, and getting tired of places like this.

phones changed everything - shouldn't the way pay for them change too? introducing xfinity mobile. where you can pay for data by the gig, and share it across all of your lines. no one else lets you do that. see how much you can save when you pay by the gig. xfinity mobile. it's a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. ♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square. among the stories front and center, hewlett-packard enterprise has completed a spinoff of its enterprise software business as it shifts its focus to cloud services. that also closes the books on

the ill-fated 2011 acquisition of british software company autonomy which you might recall by the old hewlett-packard never went well hp subsequently had to write off three quarters of autonomy's value. 75% due to accounting issues and shares of cybersecurity company palo alto networks are rising premarket trading palo alto earned 92 cents a share for the latest quarter beating estimates by 1 3 cents also added a record number of new customers. tenet health care chief executive has been on many times will be departing the hospital operator along with several directors. that comes amid an ongoing conflict between tenet and its largest shareholder activist investor they've lost three quarters of their value over the past three years. sports news breaking overnight. the houston astros have acquired ace pitcher justin ver lander from the detroit tigers. the trade happening just before today's deadline, which means ver lander will be eligible to

pitch in the postseason and the astros have already have the best record in the american league but not in baseball. the dodgers have we're going to talk to astros owner jim crane at 8:50 eastern. the astros are returning to houston to play this weekend a weekend series in the houston stadium. at the request of the houston. and also trending on twitter today was kate upton saying that that's going to heat up. heat up houston, as well that's the fiancee of justin verlander. >> speaking of baseball, folks, check this out supreme court associate sonia sotomayor in the justice chamber at yankee stadium last night that's the small section that's set up in right field to root specifically for aaron judd. sotomayor was born in the bronx and is a yankees fan our next guest has a unique

perspective on the u.s. economy and the financial industry greg braca is president and ceo of td bank he just took over that role on june 1st greg, thanks so much for being here >> becky, good morning joe, how are you >> good, great >> we know that toronto dominion's earnings came out and were better than expected. u.s. retail bank has done very well as part of that looks like net income was up by about 15%. revenue growth about 10% what's happening what are you seeing? >> well, first it was, you know, all my colleagues in the u.s., and in toronto, it was a great quarter for the bank but i do think it underpins strong fundamentals. we're seeing in the market very broadly, you know, consumer confidence has been reasonably strong gdp numbers revised up recently. we're actually seeing stronger business sentiment a lot of discussions over the last couple of quarters about companies and business spending on the sidelines while we're actually starting to see that translate into some

action hiring has been strong exports have been reasonable and that translates to, you know, how we're facing off with our clients. >> what does that mean does it mean loan activity for you? >> yeah, so for us, td, if you know the history, in the u.s., you know, we're about 12 years old here in the united states, and obviously you know, we're continuing to see very strong growth after the downturn and we continue to take share across a lot of our businesses and commercial banking, retail, mortgages, home equities, credit cards. but generally, it's hard to outrun the underlying economy more broaddy and we're seeing, you know, reasonable results i know for the last few years we've been waiting for that ultimate downturn to occur but hard to outrun the pace at this point >> who are you taking share from in terms of the banking activity i think the problems wells fargo has recently been facing, including all these fraudulent accounts that have been set up for customers, is that part of it or are you speaking broadly across the board >> you know, if those of us that

have been in the market for a few decades, we've seen the consolidation of many of the legacy banks in the u.s., and very quickly we're the eighth largest bank in the united states in our own right. and you know we're fitting into a nice space where you've got the large money centers, very few large regionals, and from maine to florida we cover 1300 stores we call them stores, not branches and you know our brand has been received very, very well so it's really a cross as you'd expect taking share on the consumer side. net new accounts, households we started this whole seven-day week banking open late >> the green locally pot >> they're now a cover >> purple but they taste red they taste cherry. right? >> purple is the complementary color to our green, that's right. >> i do, too -- i don't think i've hurt your margins but i do take a few when i go -- >> at least i'm a customer >> we'll have to have a supply dropped off here >> but did you know that

they're cherry although they're purple >> we do >> we handed them out. >> in terms of where we see interest rates >> yeah. >> it's been a little surprising to see interest rates move all the way back to 2.1%, 2.2% but to be dealing with an incredibly low interest rate environment. what happens >> we never thought we'd get to this day, right? i do think it's a signal of underlying strength. and i know there's all sorts of discussion about how sustainable this is. but we really do see it, consumer spending has just been so stubbornly strong every time we've had over the last few years a very weak q1, q2, q3 coming back it's been the consumer but we are seeing investment on the business side now so we're seeing hiring one of the key numbers we really do look at is participation rates, jobs, unemployment. and even if you take a look, we have a large auto business we acquired the old chrysler financial and we've been signaling the decline of auto.

but auto sales continue to hang in there >> how big of a problem is it for you if auto sales fall off a cliff? >> yeah, again you look at the average age of the car on the road and we think there's still some legs to it. we watch that closely. but again, hard to have a downturn with the kind of employment numbers we're seeing. we saw the adp numbers we're waiting for the numbers today. >> that's only because we've had mike jackson from autonation, big car seller on and he said it's a lot tougher to move new autos. they're offering big incentives from the manufacturers if he's seeing that, you're not seeing any signs -- >> obviously from the highs of 17 million plus new sales, i mean it's obviously down from the peaks but certainly not at the kind of 10 million, 12 million level, used car sales continue to be strong. but honestly, we think there's a lot of pent-up demand that will continue on the business side. and we've talked about this for quite some time. we see it on the commercial side of the bank, folks waiting for,

you know, tax reform, deregulation, some clarity around that. but we are beginning to see in q3 some business investment, hiring and if you look at some rates as well about the thoughts of whether a small business or larger companies, there's some positive signs that hiring will continue >> we heard that earlier you like rates to go up a little, wouldn't you >> it wouldn't be the worst thing. i think it actually points to a more normal market -- >> a yield curve, too? >> the yield curve has obviously been a little flat so a little premium is not the worst thing built in eventually, i think you might see some of that but, you know, i think we're in this kind of sweet spot here you've got rates rising, a little bit of a normalization for the broader economy. yet you're still not seeing rates that would preclude housing markets to continue to be strong. oil sales. investment by business borrowing. i still think the fundamentals are pretty strong for further borrowing. >> greg, thanks for your time today. >> nice to see you

>> okay. >> coming up we're going to hear from dennis on oil, gold and the dollar plus the u.s. open is under way this week. tennis we're going to talk about the business of tennis with legendary iconic coach and he's a pretty good player, too, brad gilbert. and he plays the stock market. he's like better than most of the -- >> -- want to talk about -- >> plus don't miss national economic council director gary cohn on cnbc today an interview investors will want to hear. he comes on, maybe it's a friday thing. he'll be on at 9:30 eastern.

welcome back, everybody. august was a tale of two energy sectors. wti crude prices down sharply. wholesale gasoline prices, though, up incredibly sharply. joining us right now is dennis gartman the founder, the editor and publisher of the gartman letter thanks for being here today. >> always a pleasure >> we have been watching what happened with harvey and obviously it's led to all kinds of chaos on the ground, and in

the markets. >> it's going to get worse, i'm afraid the fact that they closed the colonial pipeline yesterday, one and two, really was a shock. the fact that the brazos river is not going to top out for two days is going to continue to put pressure on pipeline ability so, you have refineries being closed and not going to be open for several days if you'd have asked me a week and a half ago, having lived through as many hurricanes as i had, would this be a disastrous hurricane, i would have thought no the fact it stayed, continued, blew up and stayed for four or five days, this could be weeks, perhaps even months before we return to any sense of normalcy. you could have gasoline prices 25 to 35 cents higher for retail in a very short span of time >> i heard somebody today saying it could happen that you're watching prices at the pump rise by about five cents a day or many days to come. >> for days to come. it well could. i have no doubts that that's going to happen. what really is interesting, however, is we have an abundance of crude in the united states, and a shortage of refining capabilities and that's going to stay for

another several weeks. this is not going to go away any time soon. >> but it's not going to be, i'm sorry, we don't have any gas >> no. because we do have plenty of crude oil. and as we bring each new refinery or each old refinery back onstream the circumstance will get better. it was good news to hear they're bringing motiva, the largest refinery in the united states, almost back to full capacity probably by next week. the problem will be what happens if the brazos river really doesn't top out for another 48 hours, 54 hours, and you have more problems. >> what would you be doing because every day we watch up 5%, 6% >> it got a little goofy yesterday. steph remember, ar bob rolled over >> somebody was saying it was up 28%, somebody else 14% >> you took without getting too esoteric you took a small contango in arbob to a massive

position where the front months had gone 25, 30, 40 cents. if you were short of arbob going into this hurricane, you got a problem. and it's nice to see september having gone off the board yesterday. >> but what would you do is this a position where even though we know it's getting worse, futures have moved to such a crazy position, would you still be telling people to buy into arbob >> no, i probably wouldn't what bothers me is we have another hurricane brewing in the atlantic, irma is coming at us and you've got one in the gulf this is hurricane season it hits peak september 15. >> haven't had much of a hurricane season >> for several years global warming and all that. >> right, right. but, well now they're saying they're less frequent but more powerful but they're powerful there were 65 storms, hurricanes that hit texas since the -- >> let us remember, galveston, i think it was 1902, 1905 -- >> 15,000 people >> 600,000 people.

>> and it was a hurricane that dumped 100 inches on cuba. >> yeah. >> at one time so i mean, this was an egregious storm, no question about it. and i do worry about irma coming at us, because what refinery capabilities we have on the east coast may be adversity affected. >> don't know which way that's going yet, do they >> it's early yet. >> could be -- >> it's a cat 3, it's going to be a cat 4, could be a cat 5 but a lot of those that come out of that area follow up, go to the north carolina coast, catch the gulf stream and go off towards nags head and that direction let us hope. looking at it this morning, living in suffolk, virginia, near norfolk, one of the tracks had it going right at us so you never know. if it does, that will be problematic, because then refinery capability on the east coast -- >> -- the whole alphabet >> that was only three or four years ago. we actually had to start over. >> i thought that was longer ago. >> sandy >> because we went all the way

through sandy and back through and had to start again -- >> greek they used a couple greek letters? >> it's greek to me. >> it's greek to you >> greek to me >> dennis, thanks so much for coming in. >> always an honor chasing the bottom of the barrel again and here i was thanks for having me on. >> thank you for bringing your godson today, too. >> great young man >> nice to meet you. >> thanks for coming in. we'll talk to him off camera in just a minute. >> looking good. mini me. all right. coming up the u.s. open under way in new york. we're going to talk to tennis and stock legend, coach brad gilbert. he's the legendary coach there he is. giving some stock tips to cameron i think. check out the futures which are indicated higher open this morning, up now almost 80. i think we need a good jobs number to stay that way. we'll see. you're watching "squawk box" on cnbc you always pay

your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. ♪

♪ ♪ for years, at&t has been promising fast internet to small businesses. but for many businesses, it's out of reach. why promise something you can't deliver?

comcast business is different. ♪ ♪ we deliver super-fast internet with speeds of 150 megabits per second across our entire network, to more companies, in more locations, than at&t. we do business where you do business. ♪ ♪ we are entering day five of the u.s. open tennis tournament. joining us now with some of the major story lines that are developing, brad gilbert, b.g., tennis coach and analyst for espn 25-year groupie almost love "squawk box. >> i get up early in the morning. i get my coffee going. see what the market's doing. you know me, i'm a home gamer

grinder. >> you even gave me a nickname >> you are superjoe. >> you got one for andrew. >> he's three namer. you got to be ross -- >> got a pick, right >> i'm surprised he's not three namer. he's like the fourth or the fifth >> three namer the fourth? >> exactly >> i got a nickname? >> becky there's a lot to work with with your last name >> some of yours are great we're going to get to tennis in a second then some of your stocks, too. because you've got to do that. >> of course i do. >> the last time you were on which ones did you get >> go daddy and morgan stanley a little bit upset about the banks, how they're going but go daddy is very strong the last, you know, five, six months and a lot more upside to run because i think that, you know, considering you have to hear about north korea all the time and trump. the markets still just like wants to run it's up to you to be positive -- >> i keep -- >> we're extremely positive.

>> at least we don't have no doom and gloom to do from asia always thinking the markets -- market's going to zero always. >> exactly >> before you go to tennis, let us give him the jobs report. >> 247 >> ooh he's high. >> very strong today >> you have adp? >> exactly i'm the ee turnal bull >> i think we're going to hit 24.5 >> you do? >> i do. at some point this year we hit 24.5 we finish above 23,000 easily end of the year. >> too bad >> despite trump despite north korea. >> what about so nadal and federer are in the same bracket. that can't happen in the final federer almost lost yesterday. >> yeah and rafa's section, a couple of the seeds in his

section dimitrov and berdych lost so his path got a lot easier fed is struggling a lot. mightily first time he's played back-to-back five setters at the open but he's finding a way through. do i dare say ever about roger won ugly yesterday >> i saw that. he didn't look like the same federer. the guy finally -- >> he cramped up severely. but roger's definitely struggling a bit physically he's reaching. he's not moving the same as he is i mean, he had an absolutely amazing year i mean, to say that he's played beyond off the charts would be an understatement. and i think expectations here coming in, that we're going to see, it's almost like people tell me that, almost think you know, espn we have it arranged that these guys -- because they've never played at the open and the bottom half of the draw is just so wide open you know, three of the guys in the semis last year didn't even play so obviously with djokovic out,

stan out, nishikori out. >> joe what was his name >> tsonga. >> joe willie -- >> you go after this young kid that i think dennis schaap off love >> what do you call him? >> schaap stick. >> serena's out. the baby >> the baby. >> but venus won >> 37 years old. amazing. >> the hal pejalapeno went out. sharapova -- >> do we love her? people love a comeback are we mad what was that call >> people love a comeback, absolutely but this one is a little bit of a cloud because she's coming back -- >> from -- >> from a -- we'll say some sort of a performance, you know -- >> you know, i still want to give her props though for coming up and stepping up and taking the punishment for whatever happened and went down

>> that's the only way to do it. if you did something wrong, there's no -- there's no going -- >> no shirking it. no lying okay, whatever here it is and i'm going to take the punishment >> is that what becky quick would do >> i hope. you never know what you're going to do. it's a lot of pressure >> performance enhancing -- >> you know what >> no, not oneof those >> superjoe i'm from the '70s and '80s so it was only performance dehansing. >> got his own -- >> all right >> don't ask don't even >> i'm one of those 2:00 a.m. like late night commercials. no negative >> this is -- >> don't even. >> all right so, your final -- who's going to be there for the women who's going to be there for the men when it's all said and done? and i'm going sunday night query could face isner >> i'm going to say querrey, isner are on a collision course. the bottom half on the men's side is absolutely wide open you know, nothing we've seen in the longest time i would love to see one of the young guys, especially this

dennis shapalov, i think he's exciting on the women's good nickname for you. she's playing really well. i think she's the player to beat >> kerber baby is good >> kerber baby has lost the plot at the moment. first winner to be out first round in a long time i think the women i'll be shocked if we have something, you know, out of the ordinary because normally we do with serena out, but i'm predicting the way she's playing her and venus are on a collision course you want to see -- but it's live sports, right? >> right >> i'm glad that with even though serena's out and andy murray is not there, and joker, that's your name for him, right? joker is not -- nothing holds back at the u.s. open. i mean, getting ticket was was like, i had to mortgage my house to be able to go

>> you know, that's the great thing is demand is higher than ever >> unbelievable. >> and the sport i wish querrey would go all the way to win for the u.s. that would be -- >> we haven't had an american make a run since -- >> you were there. >> since 2003. >> andy. >> and we haven't had anybody really make, you know, past the quarters in a long time. so, we're so overdue i do think the big -- >> two -- >> what's that >> i'm taking wi gtho daddy. and nvidia who's he? he's green money, for spending today. makes it easy to tell you apart. that, and i am better looking. i heard that. when it's time to get organized for retirement, it's time to get voya. [he has a new business teaching lessons. rodney wanted to know how his business was doing... ...so he got quickbooks. it organizes all his accounts, so he can see his bottom line. ahhh...that's a profit. know where you stand instantly. visit quickbooks-dot-com. excuse me, are you aware of what's happening right now?

we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that.

breaking news. ♪ the august employment report just minutes away. we'll bring the numbers, market reaction, analysis from our panel of experts >> recovery in texas cleanup under way following hurricane harvey's devastation we have a live report from houston straight ahead >> plus the astros back on their home field the owner of the houston team pledges 4 million through harvey relief efforts he will join us as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box.

>> good morning -- is my dress pretty good morning welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square, i'm joe kernen. along with becky quick waiting for -- >> new nickname. >> for our new nicknames and andrew ross sorkin is out today. he'll be -- i think he's in on monday -- or tuesday >> tuesday, yeah >> it is jobs friday we're about 30 minutes away from the big payroll number and i'm sure it's going to be big. we're hoping it's big. it might be big. given the adp. but, at this point, the forecast is 179 209 was the big upside surprise that we saw from the july number two straight 200 plus. so we'll see whether that 179 is more accurate than the adp and of course the brad gilbert forecast 247 unemployment expected to hold. first a check on futures right now.

some strong all morning long up 71 indicated on the dow. s&p indicated up just over 5 nasdaq up almost 17. 10-year, by the way, has been between 2.1 and 2.2. we've been talking about that, 2.13 is where it is today. >> among today's top stories the >> mary joe::er of dow chemical and dupont is a done deal. the newly combined company which is own as dow-dupont is going to begin trading on the new york stock exchange under the symbol dwdp shareholders got one share of the new company for every share they held. dupont shareholders got 1.3 shares in the new company for each share they health recovery is under way on the gulf coast the port of houston is is reopening to ships today officials say there was no evidence of flooding at termi l terminals and no visible damage to containers. the nearby port of galveston expects normal operations to resume today, as well. we expect a live report in the next half hour tesla has received a

complaint over worker rights from the national labor relations board. the agency says that the company violated employees' rights by making them sign a confidentiality agreement that could prevent them from talking about working conditions and safety issues. tesla has to respond to the nlrb's charges by september 14th it is jobs friday. so let's get right to our panel this morning joining us is jason furman the former chairman of the president's council of economic advisers under president obama now senior fellow at the peterson institute for international economics. james lew is the founder and head of research at clearnomics, and cnbc senior contributor larry kudlow folks, great to see all of you this morning i want to start with you jason because you're at the disadvantage you're away. you're going to have a much tougher time breaking into the conversations we have here around the table tell us what you think about where we stand right now the numbers have been coming in much better than anticipated not only for the jobs number but for gdp and other growth numbers we've been seeing. is that you think a real read of the economy right now? >> i'm also at a disadvantage

because no one gave me the number in advance. as they used to do when i went on your show i've been trying to get it but no one will give it to me. so, i think our economy is doing well i think this number's going to come in a bit low for seasonal raens. the last couple months were really good. so i wouldn't be worried about what this number shows us. i'll be looking at the wages that's where i've been most disappointed that we haven't seen wage growth pick up we'd love to see something different on that score this month. >> larry, how about you? >> i agree it's interesting, you're in, what are we the eighth year, so -- >> of the recovery >> we're at the end of the cycle, plus. it's been a very slow growth rate but nonetheless, we're picking up steam last couple quarters of gdp. i'm very anxious the last couple quarters, business investment, which is a key to productivity and wages, has done nothing, and now it's showing life signs.

>> mm-hmm. >> this is very interesting and important news >> why do you think that is? >> well, that's a good question. so a lot of reasons for that number one they're very profitable profits are really doing well. the gdp accounts which are irs related profits, you know, if you cheat you're in trouble, and they're growing now, year-on-year prp all the measures are growing about 8% year-on-year those are very good numbers for these so-called gdp profits. the other thing that's fascinating is, inflation's coming down. >> right >> inflation is a tax cut. lower inflation is a tax cut for the whole economy. and even though we talk about, i know commodities are pushing higher recently and the dollar lower, if you go back three years or so, we've had steady dollar, steady gold, steady commodities. low inflation is terrific. and, also, i will say, donald trump's group have used executive branch to roll back, listen there's a couple articles about this

"wall street journal," atlantic monthly, in the first six or seven months, 800 pending regulations. listen, 800 pending regulations. have either been rolled back or frozen that is a tremendous boost to the business, and business confidence i know the tax cut thing hadn't gone through yet i get that but i'm just saying, the regulato regulatory rollback may be the kind of hidden factor giving business some confidence these investment numbers are doing very, very well. >> james, let's talk about the wage growth that jason was just mentioning, that hasn't shown up yet. now larry mentions inflation's been low we talked a little bit earlier this morning, productivity numbers have been down maybe that's part of the reason that we're not seeing the wage inflation that you would expect given how low the unemployment numbers are. >> we do expect a solid jump this time around the question now isn't whether or not the jobs report will continue to strengthen you know for years the debate was, well the jobs numbers are

great. but is the economy really doing that well? we're way past that debate the economy is on solid footing. the question now, your point is why isn't inflation rising as expected and wage growth should be one of the leading indicators of that. if we see wage growth finally break above 2.5% we should start to see inflation pick up as well ultimately the question here is what's the fed going to do later this month given this number >> right and that's what kills me we're talking about how you don't see inflation, so it's not necessary for the fed to raise rates. but we're getting to this point where we are so long in to a recovery, don't you want some dry powder to get us back off of zero of these emergency rates that we've been living with for so long >> slowly. very, very slowly. >> so not september? >> you know, i think they got one more left in the arsenal right now. because now and year end i think they're going to announce some balance sheet limitations. whatever that comes to, $50 billion a month or so forth. okay i'm okay with that as long as it's measured, announced, and slow on the rate

i mean the fascinating thing is, since the fed has turned short rights up, not long rates but short rates up business has done better go figure. business has done better now, it may be -- >> because the economy's doing so well because there's confidence because of all these things >> all this stuff going on it's fascinating and you know, maybe people are getting off the fence. they're flush with money, there's good cash in profits, maybe they're saying all right the fed is raising rates in the next couple of years we now -- >> very slowly >> slowly. >> it's not going to get back to - >> but we believe them so we're going to take our actions before they get really bad. which i don't think rates are going to slide i'm just saying sometimes when rates go up, businesses get off the fence and make the investment >> what do you think about that? >> look this last downtick in the pce inflation this week was the final nail in the coffin of the september rate hike they have a target of 2% inflation. they've been cleared at that target is symmetric. they're upset when inflation is

below the target they're upset when it's above it it's basically been below it for, you know, the last five, six years. shouldn't be a rate hike in september. there won't be a rate hike in september. and, you know, i don't -- you know, i wouldn't do one until we start to see that inflation rate heading up does operate with a lag, but there's something going on we understand part of it, which is temporary factors here like cell phones, but you see this in just about every measure of inflation. you see it in wages. this is not an economy that's anywhere close to overheating. not an economy that needs a rate hike >> can i make one quick point? wage earner income if you look at -- i'm just going at july, last month's jobs report, interesting, year-on-year, 12-month change. all right. wages. average hourly earnings. twelve month change plus 2.5 now that's a number that's frequently cited as indicative of slow wage gain.

jason's not wrong about that however, you really want to do this right you got to take your average hourly earnings times hours worked >> because the hours -- >> that boosts your total income so as a proxy, for i'm going to call wage earners income you're looking at 2.5% wages. 2% growth in hours worked. all that 4.5% -- >> that's really interesting >> less 1.5 inflation, really gives you real incomes for the middle class of about 3% >> what are the average hours? i mean what -- >> larry, they have -- they have average weekly ernst i can't remember what the number is off the top of my head. it's not growing a whole lot foster than 2.5% but the bigger issue -- >> that's right. >> this is a real wage gain. this isn't nothing inflation is 1.5 the real wages are going up. the problem is, they're not going up any faster now than they were you know, two years ago. and the unemployment rate has come down, the participation rate has come up, which is really exciting. >> right

>> didn't expect that to happen. but the wages are -- they're going up real wages, they're just not going up any faster than they were >> i'm just saying -- >> getting to -- you would be expecting those wages to be rising faster now than what you've seen -- >> i don't disagree, jason i don't disagree and in fact, the -- >> there's an argument for tax reform >> yes, we're going to get to that i know this is wonderful you and i are going to have this agreement again. hours worked have outperformed expectations hand that's giving you a little bit of boost in earnings and with the low inflation it's, you know, these are real gains. >> all right we're going to -- >> dogs and cats we'll be together. >> exactly >> we really need support for tax reform that's more important -- >> the point though is that it's not going to change what the fed does in september. 9 fed is probably still going to shrink the balance sheet and a rate hike is off the table >> scary name. okay all right. we're going to slip in a quick break. up next the aftermath of

hurricane harvey a huhdown of what economists say is different than katrina. that's next. and then later we're going to talk to houston astros owner jim crane. he pledged to donate $4 million to harvey relief he will join us at 8:50 a.m. eastern time ahead of tomorrow's houston astros/new york mets game back in houston tomorrow night. athod setng you're watching "squawk box" on cnbc it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?

welcome back to "squawk box" now. to the latest on the cleanup following hurricane harvey many texas residents are starting to return to their homes to survey the damage major disaster declarations have now been made in 30 texas counties, and five louisiana parishes chemical maker arkema says it expects more fires at its flooded plant in crosby. there were two explosions there yesterday. the u.s. chemical safety board has launched an investigation into that. hurricane harvey is expected -- is estimated to be one of the costliest storms in u.s. history while it's too soon to assess the damage in texas we do know that post-katrina there were

some 95,000 jobs lost within the first ten months kate rogers breaks down katrina's damages and what economists are saying is different about houston this time around. >> joe, that's right you said it, the damage is still being assessed in houston, in the aftermath of hurricane harvey which is estimated to be the costliest storm in history at $190 billion. that's according to accu weather, surpassing hurricane katrina's price tag of $160 billion. in the first ten months after katrina, new orleans lost some 90,000 residents, and about 95,000 jobs. nearly $3 billion. that was lost in wages, mainly from the private sector, and the city had a job vacancy rate of nearly 7%. that is one of the highest ever recorded in the u.s. according to analysts. now in the immediate aftermath, 42% of jobs were lost, most of them low wage jobs, tourism, retail and health care services, they were among the hardest hit in new orleans now looking at the main industries in new orleans during the ten months after the storm,

more than 22,000 jobs were lost in tourism and food services, 3500 jobs in port services and more than 13,000 jobs were lost in health care meanwhile, construction, that was the one industry that actually saw some job gains as the recovery efforts began, adding nearly 5,000 jobs some of the economists say will likely happen in houston post hurricane harvey economists say there is one silver lining for houston and that is not new orleans. it has more than 2 million people houston is the fourth largest and most diverse city in the country and it was growing before the storm hit at the time of katrina, new orleans had a population of roughly 450,000 people and its population was declining there's also a strong diversified economy in houston in addition to the energy sector there's high tech, medical research, health care and professional services. 20 fortune 500 companies also call houston home and the population there is also much wealthier so experts say all of this makes it very likely people

will come back home after the storm instead of fleeing the city the way so many people did in the wake of hurricane katrina back to you guys >> amazing differences much bigger. incredible the size difference. >> absolutely. and the economy like you said, it's so much more diversified. they did point out the fact that the population is so much wealthier means they are much more likely to come back home. people aren't fleeing the city the way they were new orleans before katrina hit >> when do the refineries kick back in? >> it's been three of them that were shuttered have already been opened back up they didn't have any flood damage just depends -- >> about 20% of our capacity -- >> 22% the other day but they brought three back online since then and on a case by case basis. of course in louisiana water is still rising there, too. >> you surprised that gas at the pump and the futures have not gone more? >> yes, and no we're starting from such historically low levels. but i did hear that you could see gasoline prices rising at the pump by five cents a day for

some time to come. it's still not going to get us to $4. >> hate to sound like an economist but i know the supply is dried up but so has the demand right now. >> coming out of -- >> the whole area. so you've got a balancing there. it's not going to be catastrophic on that side. the rest of the story is heart breaker. but i'm just saying fuel side. we'll get back >> all right thank you, kate, larry larry will be with us. still ahead we're going to talk to jim crane, owner of the houston astros about how he's helping harvey relief victims and the team's return to their home field that's at 8:50 a.m. eastern time return to their home field with a new member of the team, too. and heard of this guy. plus it's jobs friday. we're minutes away from the number of the month. predictions from our panel that's next. "squawk box" will be rig bk.htac ♪

♪ ♪

your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.

automakers are rolling out august sales figures today phil lebeau is here. he's got us with a look at what to expect. phil, good morning >> good morning, becky these are going to be interesting numbers. there's an expectation on the street is that these will be solid but not great numbers. the sales rate that we look at every month, expected to come in at about 16.it maybe 16.3 million vehicles.

of course, the question that's going to be asked on a lot of the sales calls at the automakers today, what is the impact of hurricane harvey and the flooding afterwards in the houston area really along the entire gulf region of texas. most believe that when you look at the automakers and the impact and the sales rate, probably is going to be down 100,000 to 200,000. that's the rate. that's not the actual number of new vehicle sales that will be lost in the month of august. the big three likely taking the brunt of that impact, ford, gm, they have big presence in the houston area especially when it comes to pickup and suv sales most also believe that while we may see an impact on that, same for general motors these are going to be delayed sales. you're going to see a boomerang effect over the next couple of months where they'll be able to cut into their inventory a little bit because of people replenishing, rebuying, getting new vehicles, getting new pickup trucks the expectation is 16.2, 16.3

million. again, solid, not great numbers, we get the first of those coming in next hour guys back to you >> all right, phil, thank you very much. when we come back, we're just a few minutes away from the august jobs report first we're going to get predictions from our panel of experts. then we will bring you the data, the instant market reaction to all of this. six minutes to go. in the meantime let's take a very quick check on the u.s. equity futures positive all morning long. in fact those gains have continued to build the dow futures indicated up by about 73 points. s&p futures up by almost 5 the nasdaq up by 17. stick around "squawk box" will be right back.

your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

♪ good morning, everybody. welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square, it is jobs friday and it is time to get our final predictions from our panel this is going to be very quickly as we only have 2 1/2 minutes before the number. jason, what is your prediction >> 145 but not that the economy is any worse, just seasonal that's seasonal adjustment >> larry >> i think i told the producer

168. there's -- >> it's up on the wall >> there's a 100,000 error factor in these monthly jobs but i think the trend line is still going to be very strong. 180 for seven months so 168 because it's seasonal what do i know literally what do i know >> james >> 190,000 we think that, you know, it's going to come down from the past two months but it's still going to be stronger than consensus and a solid report >> i like your estimate better than mine. i really do. >> you want to trade up? >> split the difference. >> i'll trade up later in the revision report. >> steve, how about you? >> i'm the most likely to be pleasantly surprised >> we, meaning the entire cnbc economic's department. >> meaning you >> meaning me and my great producer harry lee, we're so -- >> i thought i was -- >> yes >> we're 206 because we think the bls gets it right over time. they make a mistake over time. they'll fix that seasonal adjustment looks like the last couple years

have been a little better. >> i love that -- >> the strong factor but i'd love it to be well above. rick >> 244,000 >> whoo! >> i think that we are gaining some momentum. and larry's right none of these numbers are accurate they come from the government. but having said that, we make the best of what we have to work with >> i thought right now, rick, given who's in office, i thought you think they're right now. >> no, no -- >> ooh i'm starting early. >> political style that i don't have i call it the way i see it and i see it strong. >> you know, rick, those bureaucrats are good people. the models are -- >> thank you very much, larry. we work to get it right. >> just not accurate >> that's right. >> well -- >> and what they said is something like 140 million jobs. they're very, very close on that number >> these little differences. >> all right we're going to go now -- >> means together, right >> we don't have 100s on our

clock. we're just seconds away. >> it's not a luge race. >> to 9 report the futures right now are strong up 73 as you can see and hampton pearson is standing by a lot of pressure on hampton to get this but he's always great the numbers, hampton, please >> 156,000 august nonfarm payrolls went up by 1 56,000. the unemployment rate is 4.4%. average hourly earnings up 0.1%. below the consensus for 179,000 jobs at 4.3% unemployment. august private sector added 65,000 jobs. significant downward rescissions for june and july. june is now being reported 21,000 fewer jobs than previously reported. so 41,000 jobs lower than what has been reported for the past two months two months report.

the average now for the three months is 185,000. job gains in august, manufacturing, plus 36,000, construction plus 28,000 professional and business services, 22,000 health care, 20,000. job losses, 9,000, and the government sector, mostly at the state and local level, also information related jobs lost, 8,000 workers there. 8.6%, labor force participation rate, 62.9%. both unchanged the three month average 185,000. long-term unemployment, 1.7 million. or just under 25% of the total unemployed no hurricane harvey impact data in this survey the surveys were done before that big storm hit back to you guys >> okay, hampton, thank you. hampton does not have an ifb so he can't hear us does anybody want to say anything >> did somebody say --

>> he does a great job >> 168 >> yes, jason said 167 -- >> 145 >> 145 he's 11,000 off. i did the math already >> 165 -- >> private >> 165 private >> but jason is closer jason is closer. >> i'm at 166. >> you don't want to do this you made fun of -- >> 168 he said 145. >> let's get -- >> i was voting for rick >> reversion, liesman. >> i was >> i want to get on my little hobby horse here and make a point, the revision to july, down by it looks like 20,000 >> yeah. >> the government employment was revised down in that month by 17 the government cannot count the government and how much employment there is. that seems to me one of the most ridiculous things. revisions to government employment in themonth of june

was originally reported 37,000 down to 3,000. my models don't work too good when we -- when the old numbers get revised because i use a lot of the momentum numbers. when they revise like this, look, this is a win-win thing here for the current economy as follows, if we create a lot of jobs, that's good if we revert or regress or whatever verb you want to use, down to 1 45, 150 area, we are where we should be the numbers at 200 given population growth are the right numbers relative to what we should have. 150, 160 or even on the high side -- >> point out real quickly the dollar is coming under pressure pretty sharply on this we're almost back at -- >> because it reduces the chance -- >> maybe we should go to rick and ask -- >> you have 184. first seven months of the year you're at 184. so at some point that has to be your baseline.

>> the baseline -- >> this came in slightly below that baseline. >> should be the percentage of the population growth you think ends up in the workforce that's the -- that's the lodge haul of this thing so the baseline ought to be the fed believes it's around 100 but if you -- >> oh, yeah. but they're all -- that's because -- >> no, no. >> mumbo jumbo new normal stuff. you don't have -- >> they've been off. >> they've been off. >> it's a high but remember the government's been getting back and let's not forget what we said we're so stupid sometimes. what did we say with about the august number? it ends up coming in low and being revised higher guys you have that chart inthe back i could show you. it's been 80, 80, 80 and the last two months have been a little better. i thought they'd get this right. i guess they can't see people who don't submit >> i'm amazed 160 kudlow, wow, right on target. really that's the first time since -- >> the gateway to drag it out again.

>> now he stands behind it >> it was extremely scientific >> by the way just very quickly, guys the dispersion, there was a lot of job growth in a bunch of sectors, right construction 28, manufacturing 36 those are good numbers a couple negatives here. information technology minus eight and government is the only other sector that's down so most of the sectors were up you just didn't get big numbers -- >> jason furman, it's kudlow does this change any of the economic improvement we were talking about at the top of the segment? >> absolutely not. we have an economy that's adding 180,000 jobs a month that's what we saw in 2016 that's what we've seen so far in 2017 that's what we've seen in the last three months due to the sort of seasonally adjust this my guess is that's where this number is going to end up and i think that's got a remarkably

strong number because as steve was saying it's not pessimism. if you just take a flat unemployment rate, you take on an age adjusted basis, a flat participation rate, we only need 80,000 jobs a month to stay in the same place we're 100,000 jobs a month more than the steady state number we've been there year in and year out, way into an expansion. there's actually been a lot more room to bring people back into the workforce to get that participation rate >> and jason, what happens when we get a 15% corporate rate on large and small businesses >> if we get that together with several trillion dollars added to our deficit, these numbers will go into the tank. if we can figure out how to pay for it i think that would help a little >> don't you think 3% growth is the greatest pay for of all? i would love to have 3% growth but i hope none of the

businesses watching the show are building that into their business plans as their assumption, the federal government shouldn't either. but a little bit like my jobs prediction here. you know, a little bit better to be pleasantly surprised than end up with a big deficit and be like -- >> jason you're the happiest person here. and because you went low you went low and you did >> i'm the happiest person here because i was right and you were all wrong. >> that's a good motto in life in a lot of different areas. set your expectations low. wherever that's like a woody allen -- >> look, i know it's early in the game but, you have what 1.4 in the first quarter gdp. 3.0 in the second quarter. the atlanta fed is 3.4 for q3. say it's 3%. are we, look, here's my deal you know i'm going to say because you and i don't disagree all that much. if you're lowering the business tax rate, you know, with some expensing improvement, repatriation, whatnot, if you do

all that, you're going to get your productivity and your investment why can't we keep it 3%, jason why not? >> first of all, to some degree that doesn't matter that debate because we should do the things that will raise our growth rate as much as possible and then we'll see what the growth rate is the big problem we have is our demography now is very different than what it was in the past in the 1980s, our primary population was growing at 2% a year now that population is basically flat if we have restrictions on immigration like this administration is talking about, we could actually see a decline in our workforce over the next decade and even with a lot of productivity growth, really hard to make up for workforce that's basically flat because people are hitting the retirement age >> but you would agree with me you would agree with me, if you lower the corporate tax rate, let's leave the rates aside, just the direction, and you increase expensing limits, and

you repatriate, overseas, let's not argue the numbers, that will have a prominent, positive impact on productivity, don't you agree with that? >> i think if you do a plan like that, and you pay for it, you do things like limiting the deductibility or eliminating the deductibility of interest, then that would have a positive impact if you add to our deficit, which is already on the high side, manageable right now, but rises any more it wouldn't be, that would subtract from our growth so i don't think we should -- >> also if you -- >> while making one problem work it's a critical -- >> you democrats are such sticklers for paying for everything what -- what, what -- larry what was the total debt in that last administration >> 10 trillion >> 10 trillion but you're such sticklers. it's great -- >> you know, that's -- >> i have to do something really fast >> it's a massive recession of course we're going to see a big increase in the debt >> oh, we're still dealing with

that >> that's why he's happy with 1 50,000 >> there's a "washington post" piece citing like 15 different sources that here's the one -- the one paragraph, that some of trump's friends fear that the short tempered president is on an inevitable collision course with white house chief of staff john kelly reason i bring it up is the president just tweeted, general john kelly is doing a great job as chief of staff. i could not be happier or more impressed. >> whoo! >> and this administration continues to, i think we have to stay tuned because i don't have the second half of the tweet, as so often happens when we do get it. we'll bring it to you. but that's something we're going to have to deal with democrats, you know, have never -- it's never been budget busters, and they're -- >> ever? >> sticklers >> they're sticklers they're sticklers for paying for things >> with all respect to my good friend jason furman who i admire and respect, nonetheless, they had a trillion dollar stimulus

package that was never scored. and nobody complained about it i'm going to tell you, over ten years or longer, okay, the trump plan will pay for itself, and there's no reason why that cbo window as senator pat toomey thad suggested couldn't be 20 years. when i was working there years ago, the window was two to three years. then it went to five to ten, why not 20 unless the full impact on this >> let's real quickly get down to rick. rick, just give us an update on where markets have been heading from all of this it looks like the ten year is down to 2.1 1 after being at 2.13 before the number >> yeah, this is -- the entire curve is moving lower on the long end, but you are seeing pretty much drops even in two year notes but they're still above 1.30 the big story is the dollar index. the dollar index lost over a half a cent or down close but when you look at the euro versus the dollar, it tried to get up to close to 1.20, came up shy.

then it reversed so you really want to, i think, the bigger story here is watching the euro 1.20, knowing mario draghi and the other central banks are integral doesn't matter who waters the plants as long as they get water and the ecb is in play if they don't get into any balance sheet reduction any time soon i think that you're going to see the dance continue to go on and we didn't even bring up earnings, you know, wages were on the soft side with the negative revision. work week shrank this isn't a good number and anybody who is satisfied with mediocrity, you know, it just isn't good enough because you can get used to it doesn't mean we should be happy with it. >> it might be a disappointing number but it doesn't change the overall story about the economy. the story is still the same. the debate within the fed is still going to be the same so in september we think the fed still starts to strip the balance sheet. remember, took us six years to get back to precrisis levels on the balance sheet. we're talking a long time frame for december in terms of rate hikes. as of yesterday the market was

pricing up 35% chance. that number's clearly going to come down. so, you know, basically we're pretty much where we started shrinking balance sheet. maybe a right hike in september. probably not probably next year >> steve, quick final thoughts >> the probabilities for december continue to erode i got it here at 25% we were at 28. i don't get 50% until i don't even have it on my chart here. i don't have 50% -- this is the first time i remember looking at this my chort september 2018, and i do not see 50% on the quarter point hike >> all right thank you. >> the entire complex is below >> thank you to our panel today. appreciate talking to all of you. and happy long weekend before we head to a break folks a quick programming note for you. president trump's top economic adviser gary cohn will be on "squawk on the street" in just about 45 minutes time. 9:30 eastern time. up next a live report from houston, as residents begin to return to their homes after harvey and later, the storm's impact on

sports franchises, in texas. we will talk to the houston astros owner jim crane he donated $4 million to relief efforts. the astros playing this weekend at the request of the mayor. take a quick check on the futures again. still positive even after the disappointing august jobs report dow futures now indicated up by 65 points. s&p futures up by 5. the nasdaq up by 21. "squawk box" will be right back. ♪ it's been over 100 years since the first stock index was created,

as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average? your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. we have a question about your brokerage fees. 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.

when we return, the houston astros are going to face the new york mets on saturday on their home field in houston. we're going to talk to owner jim crane about the rv riehaeyelf efforts right after the break. ♪ ♪

keep your insights from prying eyes, so they won't be used by anyone but you. the ibm cloud. the cloud for enterprise. yours.

welcome back, everybody. let's get down to texas for an update on the hurricane recovery effort contessa brewer is in a moving vehicle right now as rescuers deliver emergency medical care contessa? it's a big company, 180 plus u.s. patients. thousands in houston trapped by flood water or stranded by the fact that they don't have access to their typical transportation they need to get to clinics for dialys dialysis this company has an amazing coordinated storm disaster respobs army vehicles, genere tors, rental cars to get patients to the services they need and deliver supplies and they're tlifring supplies for home dialysis they're also delivering groesh race long the way for people running out of food scott is with me we're on the way to pick up a patient to deliver him to a clinic. why is this complex disaster

response necessary >> our patients need die y'all lis every three days and every other day is ideal after three days they start to experience acute respiratory distress and heart failure issues it becomes a serious life threatening concern for those patients. >> they have been picking them up in the military vehicles. it's one of the many ways you have to get business done despite the flood. >> it's amazing the stories you have been bringing to us this beak the stories of hope and the heartbreaking stories we have seen thank you for your coverage. we really appreciate it. >> thanks. thank you. >> the houston astros are headed

home they return to face the mets on what the mayor is calling a much needed one for the city he's also a chairman and ceo of the capital group and jim you have seen some of these events in the past or moments in the past after the nation has gone through something like this and sporting events can really be a booster. for morale and everything else it should be special tomorrow night. >> yeah, the town has taken a severe hit along with the surrounding area and we were on the road supposed to be home this week

and all of the players were concerned because they wanted to get home and we called the mayor. the mayor said you have to play. we need a little relief here but sometimes sports teams and a little game of baseball can unite people and we hope it can do that and we're going to give away a bunch of tickets on saturday and do a bunch of fund-raising so should be a fun day. we're excited to get back and get the town back to normal. >> the ballpark is fine. there won't be any problem for people getting to the ballpark. >> there will be spot where is people won't be able to make it and we'll take care of those fans that already have tickets but most of the town is moving around and things are starting to progress. most of the main highways are open so we hope to get people's

mind off of what's going on but should be able to access the stadium easily have you earmarked anything special for that >> we want to look at our staff that's been impacted and try to focus there first but certainly big organizations will look at where the money can be best spent. we're assessing that right now and should make some announcements here by early next week what happens in a situation like this, everybody wants to help and we're very thankful that that's happening in a big way with donations we have a website going you share.com astros harvey and we raised some money there.

hundreds of people want to help. and we have seen big companies and the money is pouring in. sometimes people want to donate stuff and it's not the right stuff. the food is great and water is great and we have to ghetto cussed on all sorts of things. you'll see this town unite and get back to building as quickly as possible. >> i hope houston wins you have a good chance because last night i think even my reds beat the mets last night so i think it's maybe a good situation on saturday. justin verlander that's the news overnight. that's pretty amazing for going into post season

>> the waiver trade deadline was last night and we would close it minutes before the deadline. he was kind enough to get a no trade clause to come to the team an all star and cy young winner. it's going to be a big boost for the team we do have a good team and we want to get to the playoffs and see where we can go. >> do you have a monitor down there? can you see the tv screen? >> yeah. yeah >> it's in georgia that course. >> there you go. that's a good one. you brought a place once >> yeah, we have a place called to floridian that we have

redone. >> i might be able to help you out if you're looking for another course. >> there you go. that's a good one. >> anyway thanks for everything you have done and that should be great tomorrow night and very generous with your own contribution and i thought the as tfr astros were going to have the best record in baseball. we'll be right back. thanks what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.

morgan stanley

♪ ♪ ♪

>> have a great long weekend and make sure that you join us on tuesday. right now it's time for squawk on the street. >> good morning, and welcome to squawk to the street i'm david faber. we are like from the new york stock exchange carl and jim have the day off today. let's give you a look at futures as we head into the final trading session of the week. of course coming off the jobs number we're looking for a higher open. european markets you asked and we answer they were higher when