>> the employment report today had strong aspects to it. but it wasn't a blockbuster report. >> susie: still almost 200,000 americans got jobs last month and the unemployment rate fell below 9% for the first time in almost two years. >> tom: can the hiring continue? the outlook for the u.s. job market from two top economists. you're watching "nightly business report" for friday, march 4. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: good evening, everyone. finally we got some good news today about the job market: strong business hiring in february. but tom, that was overshadowed by a big jump in oil prices. >> tom: susie, oil prices surged again today as anti-government protests continued in libya, bahrain and yemen. april crude futures now stand at $104 a barrel up $2.50 to more than a two-year high. but on the bright side, american businesses added 192,000 jobs in

february-- the fastest pace of hiring since last may. the unemployment rate dropped to 8.9%-- the third straight monthly decline. >> susie: from wall street to main street, everyone's trying to figure out if the worst is over for the job market. suzanne pratt reports. >> reporter: so, should we be celebrating the latest snapshot of the labor market? most experts say don't open the champagne bottles just yet. sure, february was the best month for unemployed americans in the past nine. but economist josh feinman says we're only starting to repair the damage from the great recession. >> it's better. it's certainly not a robust report. i think it's consistent with a gradual improvement in the labor market. it's not as rapid and strong as we'd like to see, and i think we're going to get. but it is getting better. >> reporter: to be sure, there were positives and negatives in the february report.

as for the negatives: both government and retail hiring fell last month. on top of that, average hourly wages barely budged. that's raising concerns about how consumers will cope with higher energy costs. on the positive, the private sector added 222,000 jobs; factory and construction payrolls each added 33,000 and the world largest staffing firm is experiencing another labor market positive first hand. tig gillum, adecco's north american c.e.o., says firms are finally hiring permanent workers. >> many companies have preferred to maintain flexibility. they've been looking for temporary workers and contract workers to meet their real needs for additional talent. now they're gaining more confidence about bringing those workers on as permanent employees as well. >> reporter: nevertheless, many americans can only give a mixed review on the state of the job market.

>> i not only lost a job. but, i know too many people looking for work and it's just not fair. >> people come in all the time looking for work, all the time into our shop in norwalk. >> i just moved here six months ago and went through the whole interview process and it seems like compared to two years ago it's coming back to a certain degree. but there's definitely a ways to go. >> reporter: even if the job market is finally on the road to recovery, the road is still very long. by some estimates, the economy would need to add five million jobs in the next one and a half years, just to get the unemployment rate down to 8%. suzanne pratt, "nightly business report," new york. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks tumbled on higher oil prices. the dow fell 88 points, the nasdaq lost 14 and the s&p 500 was off nine. trading volume, just over a billion shares moved on the big board under two billion on the nasdaq.

as oil climbed, nervous investors piled into precious metals. gold added over $12 to close at $1,428.60 an ounce. silver neared a 31-year high, climbing a buck to $35.33 an ounce. airbus' parent e.a.d.s. will not appeal a decision giving boeing a $35 billion contract for u.s. air force tanker planes. e.a.d.s. says the pentagon chose the low-ball bid, instead of quote, "top of the ladder equipment." and the n.f.l. and its players' union will keep talking, contract talks were extended for another week. >> tom: still ahead, how this laid-off social worker networked her way back into the workforce in tonight's "you're hired." >> susie: an anxious time for state workers in wisconsin. the governor has threatened to send out pink slips to 1,500

state workers, an ultimatum to if those jobs go, they will join hundreds of thousands of government workers laid off in the past three years. joining us now to talk more about the impact of those lost government jobs and the outlook for the labor market. bob brusca of fact and opinion economics and mark zandi of moody's analytics. hi, bob, hi, mark. nice to have you. >> hi, susie. >> good evening. >> susie: mark, let me start with you. what do all those lost government jobs mean for the economy? >> well, it's a significant weight on the job market. we've lost 4-- almost 450,000 workers, state and local government workers since the peak two and a half years ago. and i expect that we'll lose another quarter million between now and the end of the 2012. so that's 15, 20,000 workers that we're going to lose each and every month. and that is a lot of jobs, a lot of income, and a very significant headwind to the

economy. >> susie: now, bob, you toad me in a normal recovery, you usually see an increase in government jobs. what has to happen to turn this trend around? >> well, right now, municipal finances are in pretty bad shape but if the private sector does continue to ref up, we had a very good private sector job number, that will help to feed revenues into the state and local governments and they will be able to retain some of these people they would otherwise let go. really, it's up to the private sector to try to create some optimism so the worst case of these scenarios didn't have to to fruition. >> susie: mark, do you think private american businesses with do lots more hiring to make up for this loss of government jobs? >> i do, susie. i'm optimistic. i think the stars are getting aligned. american businesses, particularly large and mid-sized companies, are very profitable. their balance sheets are very healthy. credit is starting to flow. i sense that business people are growing more confident. so all the things are coming together for much better job

growth which i would anticipate as we make our way through the year into next. >> susie: mark other we do have these higher oil prices. do you think it will make employers a little reluctant to hire at a time their costs are going up? >> well, at the very top of the list of things that make me nervous are indeed the higher oil price. i think we request digest the little over $100 a-a barrel of oil. anything above that for a time, than we have a problem. there's nothing that is a greater hardship on the economy. >> susie: bob, will private businesses make up for the slack in government jobs? >> pretty much the same thing. i think the oil prices are not insurmountable at this level. i think as they begin to move up they become more of a problem. i do not think the economy will be stumbling over that. i think we are gathering momentum in the private sector. i think optimism is changing. i think confidence looks like

it's really improving on businesses. small- and medium-sized businesses are growing, and the businesses that aren't growing in terlz of jobs are the large businesses, large firms in the services sector really haven't added anyone to their payrolls and it's those big companies that have to start hiring. >> susie: one thing that stood out in the report is wages. they have been flat for a while now. mark, when is that going to change? >> well, we have to get more jobs, lower unemployment before labor can start negotiating bigger pay increases. you're right, susie, the wage growth is about 2%, about as week as it's ever been. i would anticipate by this time next year, certainly two years down the road, that we'll be at a point where those wage growth numbers begin to pick up. because of the wage number others i think concerns about significant acceleration of inflation are quite low and it's one reason the federal reserve is going to remain quite aggressive and continue on with its quantitative easing efforts through midyear. >> susie: do you agree with that

bob? >> i don't think the inflation rate is going to pick up. everybody is looking at commodity and food prices. i know you're not anorexic and walk to work. i know that's not america. but the fact of the matter is, these core prices are much more important overall, and the food and energy prices have some permanent elements to them but they also are some temporary elements. i think we're going to see the worst of the pressure go away. i don't think it's going to mount and i don't think inflation will be an issue. but there will be wage erosion, at least through the third quarter of this year. >> susie: where do you see the unemployment rate by the end of this year? it's 8. the 9% now. bob, you first. >> well i think we could see it almost down to 8%. i think these jobs are going to begin to ramp up. i think we're going to see a lot of progress and i don't think labor force participation rates are going to rise very sharply in the early part of the. >> susie: mark, what's your prediction? >> well, i think it's going to

be slow going on the unemployment rate for the remainder of year. even if we get a lot more jobs because there are a lot of folks out there that will come back into the workforce. but by the end of 2012, i think the unemployment rate will be definitively headed south and 8% sounds like a reasonable estimate of where we'll be. >> susie: all right, a nice upbeat note to end conversation. thank you, gentlemen, both. >> su, susie. >> thank you. >> susie: we've been talking with brusca, and bob brusca.

>> tgi"f," tom. it's been a jittery week and nice to end all the worries about oil prices, problems in the middle east, and other concerns. >> inflation concerns, commodity rallies. we've seen kind of a nervous stock market this week here, susie, but a surprise total five days of trade in terms of the performance. susie, let's go ahead and get everybody updated this tonight's market focus. a volatile week of trading ends on a down note, but all the major indices still squeezed out gains compared to a week ago. the dow industrials put in the best weekly performance among the big three indices, up 0.3% this week. the nasdaq added 0.1%. and the s&p 500 gained just over

one point, just enough to register a one-tenth of one percent gain. earlier, we mentioned the rallies today in oil, gold and silver. those price hikes were helped by the continued drop in the u.s. dollar. let's roll out the past 180 sessions of the dollar index. this measures the dollar against a basket of six currencies. this week, the index fell below the february low and with today's drop, it is now only 0.1% away from the low in november. big banks were among the weakest stock group today, led down by citi, morgan stanley and bank of new york mellon. this trio were the biggest losers among financial stocks. each of these lost around 3%. goldman sachs dropped to a new multi-month low with today's 2% fall. it takes goldman back to prices

last seen in december. goldman along with citi were downgraded by the banking analyst at bank of america- merrill lynch over worries about weak first quarter earnings. here's the past 90 sessions for j.p. morgan. it fell 1% today, but this week, it was the worst dow industrial component, falling 2.5% since last friday. meantime, drug giant pfizer was the best dow stock this week. despite this fractional loss today, the stock was up 4% this week and hit a new 52-week high yesterday as big healthcare has staged a comeback. in fact, the healthcare sector was the best performing sector today. following-up on the employment services stocks we mentioned last night. some of the gains ahead of the jobs data did not hold. robert half, s.f.n. and manpower dropped by at least 1% each. online jobs site monster

worldwide saw stiffer selling off more than 6%. this is the past 90 sessions. this drop in january came when monster missed earnings estimates and had a disappointing outlook. today, investment bank william blair cut its opinion over worries about monster losing market share. alcatel-lucent continues its recent climb. shares have really ignited in the past month, moving from $3.50 in early february, when it announced strong fourth quarter results to over $5.60 tonight. volume was very strong as well. and on the heels of strong factory orders in january for manufacturers and it's own big jump in profits. check out this pop in l.s.b. industries. ticker l.x.u. shares shot up 13% to a new high. it makes fertilizer and industrial heating and cooling machines. and that's tonight's market focus.

>> susie: on tuesday, the trial starts for the man at the center of the largest crackdown on hedge-fund insider trading in u.s. history. the feds say galleon group's raj rajaratnam conspired with a former goldman sachs director for inside tips on the bank. prosecutors plan to play audio- tapes of conversations between the two men. they may also call goldman c.e.o. lloyd blankfein to testify. rajaratnam is accused of illegal trading and conspiring to get inside information on other companies including google, intel and ebay. he's alleged to have made $45- million in profits from that data.

>> tom: here's what we're watching for next week: our friday "market monitor" guest is jack ablin, chief investment officer at harris private bank. we'll also see retail sales for february and the january reports on wholesale trade and business inventories. monday, beyond the scoreboard looks at the economic impact of the n.f.l.. does having a home team help or hurt a city? >> susie: cbs is buying online video watching guide clicker.com. the move will help cbs marry its tv content with its online properties. terms were not disclosed. clicker has 2.5 million monthly visitors who use the service to find t.v. shows online. clicker's c.e.o. will replace the head of cbs interactive overseeing sites like tv.com, "cbs sports" and "game-spot." >> tom: another blow for toyota- - standard and poor's cut its credit rating on the japanese auto maker by a notch on weak profits.

still s&p says toyota's outlook is stable. toyota called the move quote, "regrettable." the cut comes as toyota works to repair its image after recalling over two million vehicles worldwide. it's now focused on regaining the trust of customers.

gasoline prices may be nearly $3.50 a gallon. cotton prices are rising, along with coffee and corn. but tonight's "market monitor" thinks inflation worries are overblown and he's buying bonds. chris orndorff is senior portfolio manager at western asset. >> thank you very much, tom. >> tom: so why aren't you a are wart about inflation with all these commodity prices rising? >> well, when food and energy prices are rising but wages are not, that leaves a lot less money to spend on other things. and i think that dynamic is really going to keep inflation in check, largely for the next 12-plus months. >> tom: so it may keep inflation in check but it sounds like it's going to keep consumer spending in check because of all the other things that we'd be buying with that money is instead going to go into our gas tanks. >> that's exactly right. as a rule of thumb, roughly for every penny rise in the price of gasoline you get about $1 billion out of the pocket of

u.s. consumers. so if you have a 30-cent rise it essentially offsets half the stimulus we've seen this year. >> tom: with that in mind you're expecting tepid economic growth, i imagine. that leads you to bonds instead of stocks. why? i think economic growth probably is going to be around three and a quarter percent this year, maybe 3% next year. if you're gog see it accelerate, it will have to come from services or construction, neither of which participated in the recovery. the reason we think bonds are particularly attractive is, if inflation remains well behaved, bondses are a real attractive value. >> we have seen market interest rates begin to pick up. >> the federal reserve is largely going to be on hold for a while. after the two quantitative easings this year and last year, the fed has another tool they can use and that's this huge amount of excess reserves in the banking system that can both be a brake and accelerant, and i think they're going to use that as a break first before they

hike short-term interest rates. >> tom: we have a few bond ideas exchange traded funds beginning with d.m.o., western asset mortgage defined opportunity fund. mortgage? bonds? chris, these sound like pieson words in this housing market. are you calling the bottom in housing? >> this is a closed end fund, 7.5% yield. i think, tom, pretty much everyone who is going to default on a mortgage probably already has, so these are cheap assets, and it's really an area with improving fundamentals and as a value investor, you love to see cheap assets improving fundamentals. >> tom: so those who are going to default already have on their mortgages. >> i think so. >> tom: you also like government paper here, the long bond, as it were, the spider barkley's capital long-term treasury e.t.f., t.l.o. the ticker symbol we're talking about looning money to urngle sam for 30 years and still inflation is not a concern. >> this is a bit of a contrarian play, but if you think inflation

is not going to be a problem, remaining around 1.5%, maybe 2%, long bonds are a real value at these levels and the price of the e.t.f. will go up as bond yields go down. >> tom: are you price sensitive on the e.t.f. if the e.t.f. hits a certain price you sell it rather than lose money or look at inflation expraets & if it creep up 2% you scale back? >> it's a tactical trading opportunity and clearly the rate of inflation is going to be something we'll watch closely. >> tom: final one is not fixed income per se. you're look at currencies, against the dollar, going astraul yan. f.x.a. the ticker symbol for the currency shares. this has benefited from the commodity boom and china's appetite. what's going to fuel it from these levels, though? >> two things that influence the valueave currency are short-term interest rates in relation to other major economies, and investment flows into that country. and for australia, both of these things are very strong and point to a stronger australian dollar.

>> tom: why not metals,? why not gold or silver or something like that when thinking about currencies? >> gold certainly is much more than just a rate of inflation play. gold in many cases is really a portable store value for the rising middle class in emerging krirkz but i think the australian dollar is probably a safer way to play that. >> tom: you'd rather go down under positions on these funds. >> i own them. >> tom: it's chris orndorff with western asset. >> susie: just a reminder: you catch us online at nbr on pbs.org. there you can comment on our blog and catch any stock recommendations you may have missed. or you can follow us on twitter at "biz report" or my personal feed @sgharibnbr. if tweeting isn't your thing, friend us on facebook at "biz report." finally tonight, february's drop in unemployment is giving hope to many americans.

one person who found work this year is lynne cunningham. in our ongoing series "you're hired" she tells us the strategies she used to help land a new job. >> my name is lynne cunningham and i'm the director of the michael barlow center a program of st. leonard's ministries. i'm responsible for leading the job training, placement, and education components. we also provide housing to men who are coming out of prison and are looking for a supportive environment. i was out of work from the beginning of april until the first part of january of this year. so, nine months. one of the first things i did was to put together my linkedin page and get that up to date. then after that i started looking at the site called npo.net. it's mission is to work with nonprofit groups. i actually signed up for career transitions centers. the thing the career transitions center helped me do was put structure to my search, which i thought was really important.

i took the four classes. i got my resume together. and started doing my networking. it was through networking that i found out about the position at st. leonard's opening up. st. leonard they posted it on npo.net. i got an early draft of the job description and so i was able to prepare myself by also doing more research on st. leonards. i think the takeaway that i would offer people is to use whatever resources are out there and to stay active. job search is also an emotional process and it's great to be with a bunch of other people who are doing it. and it's also great to have experienced people who can guide you through the process. change is going to happen to us whether or not we want it to and hopefully we take it, as opposed to letting it take us. >> tom: that's "nightly business report" for friday, march 4. i'm tom hudson. goodnight, everyone and goodnight to you, too, susie. >> susie: good night, tom. i'm susie gharib goodnight everyone. we hope to see all of you again

"nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org