all right i am jackie deangelis, this was "the evening edit", i was in for elizabeth macdonald, she will be back monday pre-think is so much for watching and we wish you a ♪ ♪ >> from the fox studios in new york city, this is maria bartiromo's "wall street." maria: and happy weekend, everybody. thanks so much for joining us. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo. we have a lot to discuss this weekend. don peebles is here to talk about the reopening of the economy and what all of the above has meant for cities. and later, jonathan ward is here giving us his take on china and the latest steps to crack down on bad behavior from the communist party. but first, a shocker of a jobs report this weekend. the u.s. unexpectedly added 2

the.5 million jobs to the economy in the month of may. the expectation was a loss of 8 million jobs. in fact, we had a growth in jobs, and the unemployment rate fell to 13.3%. that is still in the double digits, but it is a lot better than an expectation of 20% unemployment by economists. so all in all, a much better than expected report. joining me now so talk about this is the former jpmorgan chief economist, anthony chan. great to have you this morning, your reaction to this jobs number. >> it's certainly encouraging. i think when we break it down, it really tells us that the brunt of the bad news on employment is probably behind us, but that doesn't mean that things are completely copesetic, because what you see in this employment report is virtually all the gains in jobs were due to those people that were laid off, on temporary layoff and now recalled back. when you look at the number of people that were not on temporary layoff, that category

of unemployment has continued to move higher. we also see, of course, on the wage front wages went down, but that's not something to get really worried about because what you see see is the leisure and hospitality component is really growing x that means more of the service sector is coming back, and that's usually a lower wage number. that explains why the hourly numbers was depressing. when you look at the categories between the goods producing and the service producing, it was really the service producing that ruled the day in this report. maria: so isn't it interesting when you look at sectors, when you look at the hospitality and leisure sector the, anthony, there was 1.29 million jobs created as, you know, the shutdowns in april made way for some partial openings in may, and people, companies brought jobs back. you saw jobs in construction, you saw jobs on factory floors, retail as the reopening

certainly created growth in activity and in jobs. >> that's exactly right, maria. and, in fact, when you look at that leisure and hospitality component that you just mentioned, that was basically 50% of all the jobs that were created, essentially. and that tells you that companies are bringing those workers back. and, by the way, it also tells you that those workers two months ago when they were the laid off and 78.5% of those thought they were going to be recalled, that is actually happening. people are being recalled. now there are 73% of workers that are not working, and they expect to be recalled. i expect more jobs to be recalled in the months ahead. but after after you bring all those workers back, some of those businesses that won't be reopening won't be bringing those jobs back, and that's the reason why once we get this easy, low-hanging fruit of jobs being recalled, it'll be a much longer haul. maria: okay. so what does this mean to you in terms of coming back and the economy recovering?

there was an article in "the new york times"es this week that said the economy will need $7.9 trillion to recover in the next ten years. when would you expect things to come back to normal in this economy and when we might start seeing growth again. >> i think we will not see the economy coming back to where it was before the pandemic for many, many years. but in terms of positive economic growth, we're going to see that in the third quarter, and that's simple because the hole in the second quarter is so deep that we're probably going to see a big bounceback in the third quarter. and then in the fourth quarter you see another pickup there. but for the year as a whole, we're still likely to see u.s. real gdp going down as much as 7%. maria: anthony, great to see you, thanks so much. anthony chan joining us this weekend on the economy and the shocker jobs numbers this week. don't go anywhere, don peebles here to give us his take on the reopening of america and cities

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♪ ♪ maria: welcome back. while our nation's cities have been pummeled this year between looting and rioting this week as well as the massive business shutdowns across the country due to covid-19 shutdowns, so is growth in the cities in big trouble, and what will it mean for real estate and services in cities? joining us to discuss that is don peebles, founder and ceo of the peebles corporation. and, don,s it is great to have you. we appreciate your time this weekend because you are really looking at a specialty in real estate. you built buildings across new york, across florida. let me tell you about what's going on and get your take, because we saw the pictures this week as a result of that police brutality on george floyd. our condolences with his family. what are your thoughts on the impact all of this is having on new york city let's start there,

don. >> well, i think, one, on the first side i think that the protests themselves are a positive step because they're highlighting systemic discrimination in our nation and our nation's economy. i think in the short term though you add this to covid, and the destructive aspect of these protests which don't reflect 98% of those protesting, i think that destructive impact along with covid-19, i think, is going to cause some short-term economic problems. and i think severely affect small businesses, those that have been closed and beginning to try to reopen. i think you going to see a longer term impact there. and i think it's going to cause people to begin to -- or continue, rather, to look at whether or not they want to live in new york city or whether they want to live outside of new york city. and i think you're seeing a shift of that continue, and that started before covid-19 and before these protests.

maria: well, don, you and i have been speaking about this for a lot of years, actually, and we were talking about the tax situation as one of the issues, you know? higher taxes in new york, the homeless problem, the fact that inmates, this bail reform law, inmates back on the streets. people just really were turned off by new york. they're moving out. and then when covid-19 hit us, then, of course, you've got people moving out to the suburbs of new york. so what are they going to do to get things back in new york, and tell us as a real estate developer yourself what you're thinking about in terms of how to retrofit, how to change things to adapt to this new normal in our big cities? >> sure. i think the first thing if you look at new york, you're right. we've been talking about this for the last couple years. the quality of life in new york has diminished. retail has struggled, brick and mortar, which began to create more vacancies. the high cost of living in new

york city combined with high taxes was pushing people to florida and other parts of the country pursuing a better quality of life and then better financial conditions. then when you add s.a.l.t. to that, more people left. after covid-19 one of new york's greatest strengths was its density. that became a negative. more people have left. i think that you're going to continue to see that. my concern as a developer who is developing in major cities around the country such as los angeles, boston, new york and other places is that there will be a reevaluation by people whether they want to live in dense cities or whether they want to go to more of a suburban environment and either commute or remote work in the future. i think that is going to be a systemic threat to new york city's immediate future. plus, because of the financial losses new york city and new york state and other major cities and states have faced after covid-199, i think --

covid-19, i think that the burden to raise taxes on businesses and wealthy individuals will be significant, and there will likely be a a tax increase say, for example, in new york city and new york state. and that will be very counterproductive in terms of pushing more people out. maria: yeah. i had mayor de blasio on a couple of weeks ago, and he said he needs $7.4 billion right now just to make the city whole. that doesn't include anything you and i is have spoken about, that's just the impact of covid-19. give us the implications of all of this, don. what will that mean in terms of services, in terms of real estate values, in terms of growth for the city if thety can't pay its bills -- if the city can't pay its wills and you're seeing a destruction of process that so much that they move out, what does that mean for the state of new york? >> well, i think it means some very tough choices. unfortunately, the city has had to already -- and the state -- have had to make some tough

choices about what summer programs for young people and summer youth programs are being cut. they're going to have to make much more aggressive cuts within the budget to have any chance of solvency. and they are going to have to look at other sources of revenue. because these businesses, while we're seeing a rebound on employment, many of the restaurant businesses and other businesses that are, have been operating in new york city, they're not going to reopen. and so the revenue generating activities in new york city are going to be diminished and in new york state, which new york city really generates the bulk of the revenue for the state. that is going to create a greater need for the government to make some tough choices. that's going to be the big challenge though, is the mayor and the city council, are they prepared to make the very tough choices that are going to be necessary to bring the city's budget into a manageable level. still they'll have to raise taxes though. maria: yeah. so higher taxes and fewer

services -- [laughter] real estate valuations down, not a good combination. don, you're investing and building all over the country. where do you see the growth right now? you mentioned los angeles, boston, florida. where will people go, and who's going to benefit from new york's problems? >> well, i think long term new york city will right itself. it it will take some difficult times and pain to do that. i think in the immediate and foreseeable future you'll see growth in places where there's better quality of life and more support for businesses. so you'll see that growth, significant growth in florida, places like tennessee, wyoming, washington state, other places that don't have a state income tax or places like virginia that are tax-friendly in terms of lower state income taxes. so you'll see a flight to quality of life but accessibility to the coastal

cities. california has such a great quality of life, but their residents have have consistently been willing to pay more to be there. i think that there's going to be a challenge, say for los angeles, san francisco where residents are going to have to evaluate and businesses are going to have to evaluate is the cost worth it, because that cost is going to have to go up as well. so i think the immediate growth will be around the sun belt. maria: don, it's great to have you. don't go anywhere, jonathan ward of the atlas organization is up next talking china. stay with us. ♪ limu emu & doug [ siren ] give me your hand! i can save you... lots of money with liberty mutual! we customize your car insurance so you only pay for what you need!

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from u.s. exchanges. and also there are moves in terms of flights coming in and out of the united states from china as well as u.s. airlines going into china. joining me to discuss this and a lot more is the founder of the atlas organization, the author of "china's vision of victory," dr. jonathan ward. jonathan, it's great to have you, thanks for joining us. first, let's talk about this memo on protecting united states' investors from significant risk from chinese companies that the white house is out with this week. what's your take on what the president is going to do with regard to chinese companies listed on u.s. exchanges? >> well, this is a big deal, maria. it's about holding chinese companies accountable at last. i mean, for many years they're been on u.s. exchanges, but they haven't had to abide by sec rules. so they've had access to u.s. capital markets, they've grown their economy, their businesses all through this, and yet they have not bided by its -- abided

by its rules. this move not only on trade, but also on financial markets is a very significant step, and i think it shows the widening of the u.s./china economic competition and the fact that we're finally going to hold them, you know, to what the rule of law is meant to be. maria: yeah, but is it going to affect the u.s. in a negative way? i mean, a lot of these major exchanges, the new york and the nasdaq, they get big fees from companies that are listed. i remember when i was on the exchange floors they would hope for chinese companies to list, and then you look at a situation like luckin coffee where they were basically fabricating their results until the stock actually plummeted. so investors need to recognize that these companies may or may not be reporting what they say they are because they're not following u.s. rules. >> right. and at the same time, this is part of a much larger thing that the united states has to do which is fundamentally we need a new economic grand strategy in

order to compete effectively with the people's republic of china. and there are really three things we have to do, maria. one, we have to remain the world's largest economy, that's number one. two, we're going to have to work with all the democracies around the world. and you've also seen a parliamentary group come together this week led by marco rubio and others in australia, germany, britain starting to talk about the need for democracies to come together. so this is happening. and third, we're going to have to get into a mode of economic containment towards china. we have to be reducing their ability to grow their strategic industries and their military industrial complex. so that's going to take coordination across u.s. government and across the globe especially with our allies. so, you know, people want exchanges, people looking to invest in china, they need to be ready for the new world. maria: a new world meaning what? should they be, should they be selling these chinese companies? isn't that going to impact things like the msci index and some of the world indexes where

so many of the chinese companies are and they're part of those indexes, but even when they're sanctioned they're in these, right? that was one of the issues, the president pulling that thrift money saying we don't want the 40 to 1k money of -- 401(k) money of our military men and women to be investing in companies that are building weaponry for the chinese military, for example. >> that's absolutely right. you can't be funneling money into their surveillance state, all of this is done by chinese companies. their state-level grand strategy is executed by chinese corporations. the companies that built the islands in the south china sea that are militarized, that wasn't the chinese military, these are state-backed corporations. so you have the msci and the bloomberg barclays aggregate that are pouring money into chinese companies. it's going to have to change, and you have to be prepared for a world in which supply chains are moving into allied countries, in which manufacturing is being moved

into countries that are friendly to the united states with, a world in which we're turning north america into a genuine industrial powerhouse again and using that to rebuild the world's bilateral relationships so that the 85% of the world economy that's not china can work together. maria: so let's look at some of these pictures here, because we had some scary pictures this week coming out of hong kong. protesters on the ground in hong kong, many of whom marked the 31st anniversary of tiananmen square and the massacre there. so you've got china overreaching in hong kong, communist party wants, wanteds -- wants it to be a crime if you do not respect the chinese national anthem, and you'd be tried, a movement for that as well. hong kongers on the ground saying, you know, you're breaking your promise. you've also got the south china military -- militarizing south china sea, china militarizing the south china sea, they said

they wouldn't. and then, of course, there's india. right now as we speak there are troops face to face on the border, china versus india. what are china's motives? what are they trying to do with this overreach in hong kong, south china sea and india as well? >> well, they don't see this as overreach, maria. that's the thing. china is used to pushing forward on all fronts. you know, they wage wars against all of their neighbors in the 20th century, they were able to do, essentially, sort of pushing on different borders at the same time, i mean, at the same time that they were threatening taiwan, they were also moving in india. this is sort of a usual thing in the people's republic of china. and the way they look at it, as they said in '62, teaching india a lesson. they are afraid of india's increasing a alignment with the united states, and at the same time that they're looking to exert control in hong kong, they also are, you know, picking a

fight with a major neighbor in order to influence the international balance of power. so the united states is going to have to focus very heavily on india. this could be the most important relationship of this century, the u.s./india economic and military relationship can create a stability in asia, in the pacific, in the whole sort of rest of the world that can counter china. we have to bring the other democracies along with us. you also saw this week india and australia sign a logistics agreement that is going to allow use of each other's bases. so the region is coming together to counter china. maria: jon jonathan, thanks very much for your expertise. we will see you soon, sir. don't go anywhere, more "wall street" right after this. ♪ ♪

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maria: hi, welcome back. thanks so much for joining me this weekend. be sure to tune in every friday, 9 p.m. eastern, for maria bartiromo's "wall street" and another edition next week, another big show for you. and i will see you on "sunday morning futures" on the fox news channel, live, 10 a.m. eastern with peter navarro, arkansas senator tom cotton, south carolina senator tim scott and fox news contributors all among my special guests this weekend. catch the show live, trey gowdy, tim scott, tom cotton and peter navarro, live on fox news. plus on fox business start smart every weekday, 6-9 a.m. eastern, "mornings with maria," former nypd commissioner bernie carrick

are join me and mark fields some of our special guests. "mornings with maria" is live monday through friday. thanks so much for being with me this weekend. have a great one. i'll see you again next time. ♪ ♪ gerry: welcome to the "wall street journal at large." this year the u.s. has been facing, of course, a big new challenge to our way of life, the impact of the coronavirus which has killed more than 100,000 americans. but recently, especially in the last week or two, some very familiar challenges that have faced this nation confronted us again, race, protests, justice and the rule of law. for more than a week now cities around the country have seen large protests in response to the brutallal death of a black man, george floyd, at the hands of a white police officer in minneapolis. while most protester