thanks, see you at the top of the hour. record setting stock market, a recovery in housing, a boom in energy but where are the jobs? good morning, everyone. i'm christine romans. the economy is doing better and analysts have been raising estimates for first quarter economic performance but the resilience is not translating into faster job growth. last month the economy created just 88,000 net new jobs, far short of the expectation. the unemployment rate dropped to 7.6%. but that's because nearly 500,000 people dropped out of the labor force. in fact, the labor force participation rate fell to its lowest level since may 1979, but we saw losses in retail, what economists are discussing bitely is whether you've seen the expiration of the payroll tax holiday that didn't have an effect the first couple of months of the year, maybe it was

starting to bite a little bit and that could be reflected in the retail jobs or sequester talk, all kinds of other things happening in the economy, europe. maybe people are feeling less confident and spending less and translating into fewer of the retail jobs. greg valliere, and rena brouhar, nice to see both you. maybe this is another spring slowdown. we've seen job gains in january and february and a pullback and beginning of the year, gains and a pullback. ben bernanke even said maybe there's that pattern. why the slowdown in job creation? >> well i think that you saw an unexpected strong first quarter to be fair. the end of last year everyone was waiting to see what happened with the tax increases w deficit talks and we got over that and there was this sense of okay, things are booming, consumers

are spending. if you look at the jobs numbers they haven't changed that much in the last few years. wages are not up. if you think about our consumer economy, 70% is based on consumer spending you can't have a sustained robust recovery unless people have more money to spend and that requires the unemployment rate going down so it's a chicken and egg cycle. >> greg, republicans jumped on this report, house speaker john boehner saying "the president's policies continue to make it harder for americans to find work. hundreds of thousands fled the workforce last month and unemployment remains far above what the administration promised when it enacted its stimulus spending plan." is that politics or is that fair? >> that's politics. i think, christine, that boehner and the republicans were largely responsible for the sequester and we don't know for sure how much the sequester impacted this number. it was a very cold and snowy march in much of the u.s. and that was a factor as well but for the republicans to complain

when they were complicit with the sequester is disingenuous at best. >> payroll tax holiday, when it went away at the beginning of the year we were surprised that the the strength in the economic reports. could it be that is starting to bite? >> yes, for the first couple of months, christine, january, february, everything looked fine, into march it looked fine but when you combine the payroll tax hike, which does hurt consumers, and then you combine all this anxiety over furloughs and layoffs coming with sequester, you add them up plus high energy prices the stars are in alignment for weaker growth. >> rana, the idea we're entering into a new phase in the american economy where the normal economic growth that we're used to seeing doesn't translate to the commensurate jobs growth you're used to seeing. >> absolutely and this is a huge shift. in the past when companies would do well workers to a lesser extend would also do well.

in this age of globalization you see the disconnection between the fortunes of america's largest and richest companies and its workers. you look at marge multinational firms they make about 60% of the profits of the s&p and make up 20% of the jobs in the country. the firms can put jobs anywhere. many people's jobs higher up the white collar food chain can be done by software and technology so that's another compressing factor. >> rana, greg, stick with me. we'll come back. we have a lot of things to discuss about what's happening with the economy and jobs right after the break. [ garth ] bjorn's small business earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth ] why settle for less? ahh, oh! [ garth ] great businesses deserve unlimited rewards. here's your wake up call. [ male announcer ] get the spark business card from capital one and earn unlimited rewards. choose double miles or 2% cash back on every purchase every day. what's in your wallet? [ crows ] now where's the snooze button? when i'm hungry, my tummy growls.

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we're talking with greg valliere and rana foroohar, nice to see both of you this morning. manufacturing jobs fell by 3,000

in march. president obama says he wants to create a million new manufacturing jobs in four years, you guys, but the manufacturing jobs of today require a skill set that's pretty high tech. rana you recently wrote "while all the technology will translate into higher end jobs it also means borrowing dramatic growth, fewer jobs overall especially in the middle. positions will either be high end or lower paid since swowork still have to compete with cheaper overseas labor." i'm so worried about losing the middle because that feeds into the income and equality, the standard of living and equality in america. >> absolutely. it goes back to the point 70% of our economy is about consumer spending. if you lose the middle it's hard to have a recovery. there have been a lot of hopes penned on manufacturing and i'm still relatively bullish that longer term american manufacturing can create more job growth. i think you do see a lot of interesting technological developments, you see companies line ge hiring software engineers, they're becoming big

employers in silicon valley. it's bifurcated or lower paid. the $20 union jobs are gone. >> greg two things, the long-term structural change and the hollowing out of the middle and the federal reserve pumping all this money into the system to keep the economy going. if we're looking at first quarter economic growth 2.5%, a jobless rate at 7.6%, with all of that historic unprecedented fed stimulus and also the stimulus that is the budget deficit, i mean we're kind of going along at 2% and 7.5% unemployment, we have those two things pushing us, too, that can't go on forever. what does that say about it? >> two quick points. number one if there's a life preserver it's cheap natural gas prices and there's a trend, an amazing trend of european and other foreign companies relocating their factories in the u.s., because energy prices are so low.

that's one good among many negative. as far as the fed goes i think the big development from the unemployment report is that the fed's probably going to have to stick with qe3 and borrow $85 billion a month, not slice it back for many, many more months to come. in some respects there's not a bad scene area know for the markets, really loose monetary policy and tight fiscal policy. >> greg there's the markets and everybody else. >> right. >> there are the markets and when i say housing is recovering and the fed is propping up the economy and i get all this mail from people who say it doesn't feel any different than ten years ago. that's a real problem. >> it's maddening and it's glacial. the progress on unemployment is going to take years before we get to 4, 4.5% unemployment. no way to sugar coat that. it will be a slow process. >> what is the legacy going to be of this, it's early to start talking legacies but you're talking about a glacial process, what is the legacy of this

president and his economic policies? >> i think we still are looking at a recovery that will gradually gain momentum. again i wouldn't overreact to one number but it could be 2014, 2015 before the economy is really humming. >> what do you think? >> i agree with most of that. the sad thing is that the president could have probably done more on the economy if we'd had less political gridlock. let's face it the government and the dysfunction in congress has been a major headwind to growth in this country. >> house speaker john boehner says it's the president's policies to blame and the job support this week is proof the president's policies are hurting the job market. >> i'm going to disagree with that. i actually believe when you have slower than average growth, investment to create more growth, investment in right things, education, infrastructure, if we could have gotten more of that we'd be better off today. >> stimulus, greg, is a very dirty word, with interest rates this low, shouldn't you be borrowing money to build out infrastructure and create jobs? >> the next debate will be on

more cuts. we'll have a big debate this summer on entitlement cuts. >> nice to see both of you. have a good weekend. what do kobe bryant and your third grade's teacher have in common? not much. [ female announcer ] when a woman wears a pad she can't always move the way she wants. now you can. with stayfree ultra thins. flexible layers move with your body while thermocontrol wicks moisture away. keep moving. stayfree.

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one america, two economies. the rich versus the rest. each week we tell you about the things that are improving like jobs or housing, but are you feeling it? cnn money has a fascinating video that visualizing income inequality in the united states. it shows how much the rich make in just 60 seconds. that first bubble is kobe

bryant's income, in just five seconds he's earning $14, twice as much as the minimum wage worker makes in two hours. the ceo of exxon mobil $5 in 15 seconds. an elementary school teacher in half a minute equals 21 cents. kobe bryant at $81 and 50 seconds the president is earning $2.40 and if we add up to a minute a median wage worker in the u.s. has 27 cents. it's an interesting video at cnn money but if you look at incomes there are two americas growing further apart. mort zuckerman, welcome to the program. you wrote an op-ed in "the wall street journal," you called this phase of america the grand illusi illusion, the happy talk and

statistics give a rosier picture than facts justify. you say the country is not advancing, we're going backwards. why? >> simply because we've had very, very slow rate of growth in the economy, over the three years in 2010, '11 and '12, cumulatively the economy grew by a little bit over 6% but typically in a recession we grow at 15%. this is the largest monetary stimulus in histovoi something has not worked in our economy and the disproportionate number of people who are unemployed are low wage people. we do not count the unemployment, the fact that we have 8 million people who are working part-time and want to work full time, and they get not only lower wages, as you were pointing out here, but they get very few benefits and they have an unstable economic life. >> i want to read something you wrote about the labor market, "just to absorb the workforce's new entrants the u.s. economy needs to add 1.8 million to 3

million new jobs every year at the rurnt rate it will be seven years before the jobs lost in the great recession are restored. is that a natural reaction to an unnatural financial crisis? >> yes. the financial crisis was unprecedented, we haven't had that kind of financial crisis since the 1930s, in terms of the huge drop and the rapid drop in financial assets, there was a bubble in the world of finance and it blew up. however, that's not the only issue. the issue is did we have the right program to respond to the decline? and that's where i disagreed with the administration. i felt we had the wrong program but what we should have done was to spend the money in different ways. i'm not saying it would have ended immediately but we'd be much further along in terms of the recovery. >> did this administration made it worse? >> i don't know if they made it worse. >> they wasted time? >> yes, you have a few, there's a period of time when you could really make a difference in turning around the economy, turning around the optimism or pesism in about the economy.

that part was missed because we got too much in the way of politics, determining what our stimulus program was and we lost the chance to do a lot of things i think would dramatically improve the economy. >> what would dramatically improve the economy? >> i would absolutely increase the amount of what we call infrastructure. infrastructure at least if you're spending money you have something to show for it. on top of that it improves the efficiency of the economy. when we built the interstate highway system the rate of growth of the economy jumped between 2% and 3% a year. we have a huge need for infrastructure bridges and roads. >> that would be a new form of stimulus and stimulus is now a dirty word in washington because they botched the first one. >> it's not a new form. we've done it many times, we could have spent the money, we could have financed the inf infrastructure developments with low interest rates. that has a job multiplier effect that has long been proven. we didn't do enough of that. another thing that we absolutely

had to do in my judgment was to increase the number of people who are qualified in the world of science and engineering and mathematics. we have a huge shortage of thes. we had an industry there where we're doing very well and we don't have the people to expand the industry. >> you don't have the right skilled workers that the economy is demanding right now? >> that's right and we need to focus more on that. >> the rich get better every year over the past few years, infamous 1%. you're among these. i really want your view here. recent tax data from the irs shows $370,000 to get into the top 1%, top five percent. meantime median household incomes are falling. it's down from the year before. the rich are yetting richer. the rest of us are trying to get by. we see this divide and worry it's permanent. >> it's been around for a long

time, gap between the relatively we well-to-do. >> natural byproduct of capitalism? >> natural byproduct of capitalism and it's it's a natural byproduct of education. intellectual capital and education capital is just as important as financial capital. that's where we haven't done enough. >> mort zuckerman, we'll have you come back very, very soon. have a nice weekend. >> thank you. you probably made a pile of money in the market. at loest on paper. when is it time to turn those green arrows into greenbacks? a look at the art of selling, next. with stayfree ultra thins. flexible layers move with your body while thermocontrol wicks moisture away. keep moving. stayfree. while thermocontrol wicks moisture away. you know it even after all these years. but your erectile dysfunction - you know,that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet

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velshi, cnn's financial correspondent and host of "your money." it looks like we've seen a bit of a pullback in stocks. >> let's see how it works. friday we had the jobs number out, which was week. north korea talking about nuclear attacks. china, with people dying of h1n1. just a few, but that scares people. even made it into hong kong. when a market is this high you worry about what happens. the market opened and sold off. almost within moments you saw people who thought this was a high market buying in, because they had opportunity, and they got in. you always have to think in a high market like this, what are good opportunities? what would you buy if you weren't in the market? would you hold on to a stock? the trick, as you and i have discussed isn't finding the good buys. that, anybody can do. when do you sell when a market is doing what it's doing? >> lots of rules. 25% after you have had a 25% gain. some people say after their investment has doubled they take

out their original principle and keep it going. when you have so many people talking about profit taking, my concern is the little guy is getting it in the end and the big guy is getting out. >> if your money had gone in at -- in october of 2007, when things were feeling good and you invest and all of a sudden you now just made back all of that money, so you are now skittish but stayed in. i'm going to take my money and go. what you need to do is not look at the market as an index. that may only go up 1% tore 2% for the year, s&p 500 or the dow. sectors are beaten down and undervalued. caterpillar which suffered because china is slowing down construction. that's undervalued. stocks on the s&p 500 and dow pay 3%, 4% dividend. you can't be sloppy here is $1,000. i'm putting it into the market. you want sectors, geographies. you want values. they're a little harder to find.

you actually have to tune in to this show 9:30 on saturday morning. >> it's interesting. you point out talking taking money out of the market, we don't mean all the money out of the market. you should always be exposed. people say they're not exposed at all to stocks and really get hurt when there is a pullback. you can't predict when the market is going to rise again. >> eight asset classes. stocks are one. s&p 500, one class out of eight. cash is one class out of eight. there are six more classes most people don't even know about. if your 401(k) you will have seen them. be in all eight asset classes at all time. you may only need 2% in precious metals but one day that will be useful to you. be diversified. you and i say it -- i get bored when i say it to myself. >> you bore me, too. >> boring but important is what the show -- no, the show is actually not boring and it's important. so much of the stuff we talk about is boring but crucial. >> ali velshi, it's been a fun

12 years. see you at 1:00. i'm not saying good-bye yet. people ask me all the time whether to get in, the smarter question might be when to get out. ♪ you've got to know when to hold 'em ♪ >> kenney rogers sang about it in the gambler. dow just wrapped up its best quarter since 1998. other indexes have soared. you don't make any real money until you sell. one strategy is to cash out, lock in your gain. >> most stocks that have great earnings in sales will run up on average historically 25% before they begin pulling back in price. you might want to think about locking in profits at 20%, 25%. >> if you bought a sinker in this bull market, don't hang on. >> if it falls 7% to 8% below what you paid for it, consider selling it. >> reporter: and if stocks start

to decline, that can be a warning to get out. >> watch the momentum in earnings year over year. if there is a deterioration in a growth rate, one should be weary. >> exactly how some money managers feel about this market. cnn money surveyed nearly 30 of them. their prediction, stocks won't end the year much higher than where they are now. others say we're due for a pullback. >> one, two three, four years, that's a great bull market. history shows when you have very euphoric bull phases, they give way to corrections. it's a normal thing. from the november lull, we're up 2 20%. at this point, this is exactly where a normative pullback or correctional pause occurs. >> problem is that most of us can't time the market, which is why the oracle of omaha might apply. next time ask yourself, are you feeling greedy? >> are you fearful, greedy, buying stoc