hi, everybody. welcome to "the wall street journal report." i'm maria bartiromo, today coming to you from right outside the new york stock exchange on wall street. panic and fear on the street, worries about the global economy, and watching the all-important jobs report. i'll talk to the president's top economic adviser. feeling labor's pain. my conversation with the head of the afl-cio and his ideas to create more jobs. also, little cars, big city. which give you the most bang for the buck? we'll sample "consumer reports's" favorite drives. "the wall street journal report" begins right now. >> this is america's number one financial news program, "the wall street journal report." now maria bartiromo. >> here is a look at what is making news as we head into a new week on wall street. a sigh of relief heard from washington to wall street after

the latest jobs numbers were released on friday. the economy added 117,000 new jobs in the month of july, and the unemployment rate fell to 1.9%, slightly better than economists' expectations. the payroll numbers for may and june were revised upward as well. a sea of red on wall street this week, a market meltdown with the dow industrials plunging more than 500 points on thursday, the worst one-day decline since december of '08. the markets tumbling on worries about european debt and a slowdown in america's economy. the major indices were down about 10% since the recent highs hit on april 29th. unofficial correction territory. the markets, though, rebounded a bit on friday. retail sales came in slightly better than expected. deep discounts and warmer weather sent shoppers to malls. many retail chains reporting monthly increases, averaging a rise of 4.6%. july auto sales also slightly better than expected. ford up nearly 9%. gm up almost 8%.

chrysler rising 20%. toyota was down more than 22%. the company still facing supply chain issues after the japanese earthquake. and breaking up is hard to do unless you're food giant kraft. the company announcing it will split itself in two, spinning off the north american grocery business by the end of 2012, separating it from the snack food business. wall street liked the news, sending the stock higher on thursday after the company announced the move. an awful week for the markets. worries about europe and america's economy and of course the jobs numbers. joining me now to discuss all of this and a lot more, austan goolsbee, chairman of the president's council of economic advisers. austan, it's wonderful to see you again. thank you for joining us. >> thanks for having me, maria. >> so we just got the jobs report friday for the month of july. 117,000 jobs created in the month. the unemployment rate falling slightly to 9.1%. these numbers are better than expected. are you happy with the report? >> i wouldn't say happy.

i'd say your characterization is right. it's better than expected. it's a breath of encouragement. the private sector add in order than 150,000 jobs, and over about 18 months has add about 2.4 million. but we've got a long way to go. and that's not near enough. now i'll say you never want to make too much out of any one-month report. and we took some heavy blows the first half of the year from europe, from japan, from gas prices. but we'll take it. >> so what can be done to accelerate things? there is clearly very little appetite at this point for any more fiscal stimulus. is there anything the government can do to help create jobs right now? >> yeah, you know, maria, i think it's a good question. the issue of stimulus, like the recovery act, that was the order of the day when the private sector's in free fall, we're losing $800,000 jobs a month. the government is the only thing that can drive recovery. now we're in a little different circumstance. so what we're trying to do is

get the growth rate faster than it is. but the private sector is starting to show some signs of promise in different industries. and so i think we need to do those things which will help facilitate the private sector. and ironically, there are four or five major things that are bipartisan in nature, like the ree trade agreement, thecc1: infrastructure bank, the patent reform, and extending the payroll tax, stuff that we had teed up in a bipartisan way before we got into the discussion of the debt ceiling. >> and of course all of this emotion played out, manifested itself in a wild market. terrible slide this week for stock prices, down 10% from the recent highs. surely shaking confidence. and do you think we're in more danger of a double-dip recession? is that the worry now? >> well, look, on the market, you know, they told them i was leaving today. suddenly the market went way up. ofcc1: 't know what to make that. as regards double-dip, all of that is a question of growth.

and it's not a secret that the first six months of this year we took some heavy blows to our growth rate from these outside factors, europe being a primary one. but gas prices played a big role, japan played a big role. most of the private forecasters said, and as you know, maria, are forecasting a rebound to growth in the second half of the year. and that's where we've got to put the focus. >> but it is difficult to do the facecc1: of what we're watching around the world. part of the sell-off this week was sparked by concerns about weakness in europe, the debt crisis spiraling there. how closely are you looking at what is going on in europe? and is there going to be a big impact on the u.s. financial sector which may have exposure to the european banks? >> you know, that's always a concern. geithner has rycc1: been monitoring and in contact with the european finance ministers on a regular basis. the president's talked to the people in europe. it's definitely something that we have to monitor.

we have had the circumstance a couple of times now that the u.s. economy looked like it was starting to come back rather robustly. and then some of the market fears about international economic issues kind of reined it back down. so we're monitoring that. but hopefully just that is not going to be enough to move us into more of a stall. >> let me go back to that debt ceiling deal this week. the president of course signing the debt ceiling deal after an ugly and drawn-out process. in spite of it all, austan, were you happy with the final agreement? >> look, i was happy that we're addressing some $2 trillion plus of deficit reduction over the long-term. i was happy that the president was able to protect some of the priorities like the education initiatives and to keep the big budget cuts off of this calendar year and next calendar year when

it might do some damage to the short-run prospect. but overall, you know, the best thing that can be said about that is that it's over. i mean that was a mess. we should never have been in that circumstance where people were literally threatening the default of the full faith and credit of the u.s. that was deeply unsettling to everyone. >> so today is your last day. >> it is. >> before you go back to the university of chicago. >> yes. >> how fortunate are we to talk with you on your last day. thank you. what do you feel you left undone? what is your greatest achievement, austan? >> my main feeling today is woo-hoo! [ laughter ] i'm not a regretful person. i think my focus to the president and the advice i'm going to give whoever gets named as my replacement is we've got to have the focus on growth. growth that we : will add jobs. it is through growth that we will help people who have jobs but have been struggling. and we must keep the focus there. >> congratulations, and we

always wish you the best. we hope to see you soon, austan. >> maria, i love talking with you. and i demand that you put the next guy through the same pace as you put me through. >> you've got a deal there. austan goolsbee, great to talk with you. we'll see you soon. austan joining us from the white house. up next on "the wall street journal report," the head of the largest labor federation in the country, afl-cio president richard trumka weighs in on the debt deal's impact on american workers. later on driving down wall street today, some of the smallest cars on the road. judging the safety, reliability and fuel economy of budget cars. as we take a look, take a look at how the stock market ended the week. mine was earned over the south pacific in 1943. vietnam, 1967. i got mine in iraq, 2003. u.s.a.a. auto insurance is often handed down from generation to generation, because it offers a superior level of protection

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welcome back. how did the deficit debate in washington and the plo slowing

economy affect american workers, 14 million of whom are members of the unions? my next guest leads the largest labor federation in the country, representing teachers, engineers, firefighters, miners and more. richard trumka is with us, president of the afl-cio. richard, it's wonderful to have you back on the program. welcome. >> thanks for having me back on, maria. >> so you and other labor leaders had a closed-door meeting at the white house, the day after the deal to raise the debt ceiling was struck. what message did you have for the president? >> we told him that the focus has to be on jobs. and we expect every politician to be as aggressive with job creation from this point forward as they were with the manufactured debt crisis that we saw over the last couple of months. that too many people are out of work. we need to put them back to work. and if you really want to solve every problem in the country, create jobs and you'll see them fall by the wayside. >> how do you do that, richard? how do you create jobs? there is so much uncertainty out

there. what would you like to see done? >> well, one, we'd like to see infrastructure be at the top of the list and create some of t the -- repair some of the crumbling infrastructure that we see around the country. i would like to see aid to state and local governments so they can continue job creation as well. and the focus, the entire budget, everything we have on investment in the future on the scale that is necessary to solve the problem. not nibble around the edges with a little tax cut here or a little credit there, but actually look at this and say here is our problem. it's our number one problem. we're going to give it as our number one priority. >> i feel like we're in a rock and a hard place. how do you get your financial in order without addressing some of that spending, without making some of these tough choices when it comes to entitlements, when it comes to pensions? >> well, i think first of all you create a tax system that is a lot more fair. those at the top of the heap have been doing quite well over the last several years, and

everybody else has been paying the tab for that. so you create a tax system that really is fair. we didn't have a short-term deficit crisis. we had a midterm and a long-term crisis. what they're doing, some of the policies are making it even worse. you're going to take people off of pell grants. you're not going to give them an education. they won't be able to find a job in the future. veterans coming home won't get the aid and assistance that they need. that will be worse in the future. all of those adds to the deficit, not create it or resolve it or make it less. so they're actually moving in the wrong direction. that's what we've been saying all this time. >> what was the president's response when you laid all of this out and said perhaps they need to reverse course and take on different policies and focus on jobs? >> he understands the importance of job creation, and i think he is going to try to pursue that. and what we have urged him to do is don't try to create little things that nibble around the edge of the problem.

propose a solution that is on the scale necessary to solve this massive job crisis. if people don't want to support it, the american public will deal with them. but don't temper, and don't put forward a solution that you know won't solve the problem just because that's what the tea party say that's all we will give you to you. >> what do you think would lead to job creation within infrastructure or elsewhere? i'm talking about stable jobs that the workers you represent are ready for, and in an environment when there is such little appetite for increasing government spending? >> i don't think there is little appetite for government investment. that's what they're talking about. we're investing in the future of the country. look, our bridges are falling down. our grid is falling down. our infrastructure is all depleted. we went from first in the world to number 17th in the world, and we're falling. we have a deficit where roads are falling apart and businesses are less competitive.

you can't compete unless we have a first-class, a 21st century infrastructure, and that means investing in the future. when a business first starts out, you invest in the infrastructure to build that business in the long-time. america needs us to invest in the infrastructure that will allow us to compete and excel and win in the global economy and put people back to work while we do it. it's a no-brainer, really. it's a winner for everybody. >> let me ask you this. unions gave the president $200 million for the 2008 campaign. going into the 2012 election, knowing what we know about where we are in the economy, are you willing to pony up that kind of money again? >> well, what we're going to do is try to build our own infrastructure. in the past what we've done in the labor movement is set up a structure six or eight months before the election, and then after the election we tear it down. right now we're going to create a structure that goes year-round so that we can move seamlessly

from election politics to advocacy to accountability, so that we can hold people accountable afterwards. and we're going to use a lot of our money to build and maintain that infrastructure and grow it. we're going to spend considerable amount of money, not just talking to our own members, but talking to workers in general whose interests in future and their children and grandchildren's future will be determined in the next couple of years by the policies that are either adopted or rejected. we're about trying to save the middle class. we're about helping the poor. we're about trying to get children an education and let them go anywhere their brains will take them, rather than where their dad or mom's pocketbook will take them. >> richard, we'll be watching. thank you so much for joining us. we so appreciate your time today. >> thanks for having me on. i really enjoyed the show. >> i'll see you soon, richard. so did we. richard trumka joining us. up next on "the wall street journal report," do small cars equal big savings? we'll take a look at the budget

class on the road today. and find us

welcome back. when your wheels are on a budget, does the car pay you back with efficiency and reliability? we are taking a spin today in the smallest cars on the road

with david champion, the senior director of the consumer reports auto test center. david, it's great to have you on the program. >> nice to see you. >> thank you for joining us. so let's go through some of these subcompact cars. tell me about the sector. are sales going up? are you seeing a good reception from people? >> we're seeing many more models coming into the market. really, with gas prices as they are, people want to get the maximum fuel economy out of their cars. and these cars all give you 30-plus miles to the gallon, and they're relatively cheap to buy. so it's an excellent time. >> is that the main criteria? what are your criteria for testing at the consumer reports auto center? >> we test bumper to bumper. testing braking, seat comfort, interior noise, rear seat comfort. this is the ford. it came out last year. it's a very fun car to drive. it's got great steering, nimble handling. fuel economy is around 30, 33 to the gallon. >> 30, 33 to the gallon versus

the traditional 25? >> 22 to 25 for an average family sedan. so you're really getting 50% more fuel economy. and you've still got five seats and reasonably roomy. the fiesta is a bit like the athletic shoe of these class of cars. it's relatively quick and the steering and the handling is really fun to drive. so this is a sporty version of the car. >> an athletic shoe. i like that. alan mulally was on the show from ford. he said this is really turning out to be a great seller for ford. >> it's a lovely car. >> tell me about what is going on here, and of course this is a honda. >> honda, this car actually started the small car marketplace in many ways. this came out in 2006. it grew a little bit for this model year. but as you can see, there is plenty of room inside. it's very nicely trimmed. again, it gets you 30 to 33 miles to the gallon overall. the room in the back when the seats are down is really quite large. >> that is large.

look at that. >> you can put a lot of stuff in the back. so then it does a neat feature, the rear seat is relatively roomy too. then if you've got maybe flowers or something tall, you can actually hitch the seats up and put something tall. even a bicycle will go across here. >> that's very roomy. it surprises you how roomy it is. it's a small car. >> it's relatively small. it's economical. this is what i call the birkenstocks. >> what have we got here? this is the brand-new hyundai accent. this is basically like a family-sized car, just shrunk a little bit. it's got reasonable room inside for five people. it's got a good-sized trunk. the 1.5 liter engine gives good performance overall. >> that's a athletic shoe. this is a birkenstock. >> this is the lace-up, the sensible shoe. >> and now you said the high heel. >> this is a brand-new fiat 500. this is like the high heels of shoes. >> what does that mean? >> it's very stylish. >> right. >> you look good in them.

>> okay. >> it's not exactly the most comfortable. >> ah, that sounds like my shoes right now. >> the ride quality is a little hard. but very good brakes, good steering. again, about the mid-30s out of the gallon for it. inside it's also got a nice amount of sort of don't inside. very narrow. >> only a stick shift or automatic? >> it comes as an automatic too. 10 the rear seat is not exactly the most hospitable. and the space in the back is a little tight. but you know, overall, it's a fun little car to drive. >> it's beautiful. it does -- and it doesn't feel that small inside. >> no. i drive it down i-95 last night, and i was dueling it out with all the big ones. >> thank you so much. we appreciate it. david champion joining us from "consumer reports." we'll take a short break here on "the wall street journal report." and when we come back, we'll have the news this upcoming week that will have an impact on your money. and then stay with us. wall street's delicious dish.

wh the menu at the very first restaurant in america. but it's our job to make them say something interesting. so how about this weekend we learn some new tricks of the trade... then break out our doing clothes and get rolling. let's use some paint that helps us get the job done in record time and makes a statement when we're finished. we're lowering the cost of a new favorite color. more saving. more doing. that's the power of the home depot. take your painting skills to the next level at one of our free paint workshops. take your painting skills to the next level a vacation on a budget with expedia. make it work. booking a flight by itself is an uh-oh. see if we can "stitch" together a better deal. that's a hint, antoine.

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for more on our show and our guests, check out the website, wsjr.cnbc.com. and i hope you'll follow me on twitter. look for @mariabartiromo. now the stories the week ahead that may move the markets. we will get second quarter earnings reports from dow and cisco, among others as well as nordstrom, kohl's and macy's.

the market committee will hold a one-day meeting and wednesday the international trade balance will tell us if the u.s. is importing or exporting more goods right now. friday the total sales report for the month of july, giving us a window into consumer activity. and finally today, printed menus, tablecloths, even use of the french word restaurant. all date back to delmonico's, a fixture of wall street east since the 1830s. >> it is the first restaurant in america. and we've been feeding this area for the longest time, over 170 years. >> so this delmonico's steak here, it's cut from the rib. so here you have a three-pound bone-in rib eye. the delmonico steak is the same cut. for this one we take the bone out, a single serving. this one we leave it in. and it's for two. >> famous diners abraham lincoln, mark twain, charles

dickens. >> in the daytime you have all the business guys. at nighttime the tourists. at nighttime it's 90% steak. and the weekend chicken a la king, baked alaska, even eggs benedict for dinner. we can run out of just about anything. we can't run out of steak. >> that's the show for today. thank you so much for joins u. my guest next week, harvard professor and author ken rogoff. join us for ken rogoff. have a great weekend, everybody. i'll see you next week.