>> this is n.b.r. >> tom: i'm tom hudson. susie has the night off. stocks dive as new job growth slows to a crawl in may and the unemployment rate heads higher. have we seen the best part of this recovery? what can be done? we talk with white house economic adviser alan krueger. the sour jobs report may make you feel like getting away. we wrap up our summer travel series with the forecast for the cruise business. that and more tonight on "n.b.r."! may was a tough month to be looking for work. hiring slowed to its lowest level in a year in what can only be described as a very disappointing read on the american job market. only 69,000 new jobs were created last month, much less

than even the most pessimistic predictions. and the unemployment rate moved up to 8.2%. sylvia hall has the details. >> reporter: yes, the economy added jobs in may, but at a stunningly low rate. and most of the new jobs that were added came in just two industries. health care was a bright spot, adding 33,000 people to its payrolls. and so was transportation, after losing jobs in april, the industry added more than 35,000 jobs in may. but construction took a big hit, losing 28,000 jobs. the public sector also subtracted from its payrolls and manufacturing job growth slowed down. it's the third month in a row the employment numbers have been disappointing. economists blamed a warm winter with unseasonably strong hiring for weakness this spring. >> the underlying trend that may's report suggests is that we're adding around 100,000 jobs a month. that's not that great. that's the kind of rate we need just to hold steady. >> reporter: one thing that didn't hold steady-- the unemployment rate. for the first time since last summer, it ticked up to 8.2%, as more people started looking for

work, a sign of optimism in the workforce. >> i think the unemployment rate will come down, more people will be hired over the course of the year, but it's not going to be a gangbuster year. >> reporter: and there was little change in the number of people who are longterm unemployed or out of work for more than six months. right now, they make up more than 40% of out of work americans. sylvia hall, "n.b.r.", washington. >> tom: still ahead, it's political uncertainties holding back the economy, so says tonight's market monitor. david kotok with cumberland advisors with join us. "nightly business report" is brought to you by: captioning sponsored by wpbt >> tom: the disappointing jobs

data led to a brutal sell-off in the stock market today with the indices experiencing their worst session so far this year. the dow shed 275 points. the nasdaq fell almost 80. the s&p 500 fell 32. erika miller reports from lower manhattan. >> investors stampeded out of stocks today, raising fears the end may be near for the bull market. the dow jones industrial average posted its steepest drop in more than six months erasing all of this year's gains. the s & p slipped below 1300 and is now flirting with a correction. that means the index is down nearly 10% from its april peak. today's disappointing jobs data is stoking fears about a slowdown in global growth. >> we don't think it's going to be a recessionary environment in the u.s. that said, until europe cleans up, this mess that they've got over there, you're going to see

investors be kind of skitter. >> reporter: and that's why they're scurrying into bond. prices on treasuries have soared, sending interest rates to their lowest level on record and there could be further declines to almost unthinkable levels. >> the overwhelming driver near term for the bond market is going to be what happens in europe, and if the situation in europe deteriorates further, then, yeah, bond yields could move lower still. >> reporter: stock market bulls are hoping the federal reserve will ride to the economy's rescue with more bond purchases, but interest rates are already at record lows, and they've done little to spur growth. erika miller, nbr, new york. >> diane swonk is the chief economist. the federal reserve's latest stimulus effort due to come to an end this month, interest rates at a historic low. what more can be done? >> well, you know, there's a big question on what more can be done and what it would do to the

economy. i think the fed is going to keep its powered dry for the moment even though the economy is clearly weakening. what really is an issue for the fed is the need to do something perhaps intangent with what's going on with europe and maybe at the same time with europe. what we saw during the financial crise is decisions made together across the atlantic had much more powerful impact than they do alone. and so i think the fed will wait to see if we have a further deterioration in europe that's of a crisis magnitude, although we're getting awfully close. >> tom: diane, the cost of cash doesn't seem to be the problem here. it's not how much borrowing costs are right now. it's the demand for that as well as in europe, it's the liquidity, it's the turnover in the financial system that's getting gummed up. >> absolutely. and one of the reasons what the fed has tried to do is use different tools. one of the tools they've used is said, listen, we're going to give you the opportunity. we're going to make cash absolutely repulsive to hold so there are no returns in cash. on the other side, europe has helped them out, clearly, with that. on the other side of it, we're going to tell you we're not

going to take away that opportunity if you invest today any time soon, by saying they're going to leave rates low until 2014. that really is a two-step part of their toolbox is they're using communications as one of the tools to try to provide some certainty in an increasingly uncertain world. the problem is it's just not enough given the headwinds of uncertainty in the u.s. with the fiscal cliff. all of that is causing hesitation in an already hesitant economy. >> tom: back home here in the u.s., we've got slow job growth, stagnant wage growth, higher unemployment rate. have we seen the best that this recovery can deliver? >> it's not clear we have. we've been down this road before where we sort of sputtered in the middle of the year-- in it's like deja vu all over again. the problem is being a repeat of the last two years it's a repeat for the same reasons. again, europe is one of the main issues out there kicking the can downtown road, and every time they hit a problem they built a bridge over the crisis for a moment but the crise got worse.

by kicking the can down the road the problem is compounded. also our own fiscal problems of sequestration, the debt ceiling debacle last year, the fiscal cliffs we face this year. all the problems are that much bigger this year. although i do think we'll be able to muddle along the risk that we stumble gets greater and greater every time we hit these midyear sort of skipping a beat in our heart. >> tom: diane, we have to leave it there. it seems like the can keeps getting larger but the shoe keeps getting smaller as we try to kick it. >> absolutely. >> tom: diane swonk with us tonight.

>> tom: any report on the job market is important, but it takes on a lot of political significance during this election year. presumption republican nominee mitt romney calls the weak job growth an indictment of the president's handling of the economy. the president though is trying to take the offensive urging congress to act to boost jobs. washington bureau chief darren gersh spoke with the chair of the president's council of economic advisers alan krueger at the white house. >> let me start with a question everybody is asking-- why was this report so weak? what happened? >> you know, i think it's important not to make too much out of any one report. i say that every month when the numbers are better than what people expected or when they're weaker what people expected. and i also think it's important to take each report in the context of other numbers that are coming in, other data that we're receiving. and there are parts of the economy that continue to look better, like manufacturing sector. chrysler reported this morning that their sales were up 30%.

the housing sector is beginning to stabilize, and there are parts of the country where we're seeing expansion. i think it's good that we've had 27 months in a row now of private sector job growth but we would like to see stronger job growth. >> reporter: it's true the numbers move around but they have been disappointing. we've had this pattern of thinking the job market was better than it was, and people are beginning to ask, is there something structural going on? are we just going to be growing jobs at a lower rate than we used to? your response? >> you know, darren, i think there are a number of factors that are affecting this recovery. and we knew all along that coming out of a financial crisis, that recoveries tend to take longer. we face headwinds from europe. we have faced shocks last summer and again this sprig from oil pries shooting up, although, fortunately, now they've been receding. some of the mild weather that we had in parts of the country probably brought some work forward over the winter.

>> reporter: we've tried a lot of tax cuts. we've tried big stimulus spending. at this point are, we kind of out of ammunition? >> first of all, i think what we've done has helped. we knew this would be a challenging recovery. given the over-borrowing that households faced, given the shock to confidence, the weak demands in our economy. there are more things congress can do right now that would strengthen the recovery and help job growth. the president is in minneapolis today talking about his checklist of ideas, commonsense ideas that would help strengthen this economy. >> reporter: polls show people are losing faith in the president's handling of the economy. what would you say to them to convince them that the president is up to the job? >> you know, i think when you look at where the economy was before the president took office, as he walked into the oval office, we were losing 800,000 jobs a month. we lost four million jobs just in the six to eight months

before the president came to office. and that situation very quickly turned around. you know, once the president's policies took effect, the economy started to expand. beginning in the middle of 2009, just six months after the president was in office, the economy started to expand. we've now added jobs for 27 months in a row. i think the policies the president has put in place have helped to strengthen the economy. >> alan krueger the chair of the council of economic advisers, thank you. >> thanks for having me. >> tom: prices and growth weren't the focus of wal-mart's annual shareholder meeting today.

ethics were. the world's largest retailer is dealing with allegations of bribery in its mexican operations. c.e.o. mike duke told shareholders and employees, quote, "if you work for walmart, there is no gray area between right and wrong," end quote. despite the scandal, shareholders voted for all 16 members of walmart's board of directors to return. the controversy hasn't hurt wal- mart's business either. >> those stores in mexico are already open and they keep generating cash so they haven't changed our fundamental view on the company because of that scandal in mexico. >> tom: shares of walmart haven't reflected any worries about the outcome of the investigations into the bribery claims in mexico. while down a fraction today, the stock is up more than 20% over the past year. >> eligible borrowers can receive up to $50,000 of federal housing money. some see the plan as usual

because it helps homeowners who are current on their mortgages. borrowers must owe more than 150% of the value of their home and must earn less than $99,000 per year. nevada has one of the hardest hit housing markets in the state. two-thirds of that state's mortgage holders are underwater on what they owe. how about some economic glimmer of hope here today? despite the slow job growth, americans were buying more cars and trucks compared to last year. double-digit sales-gains by the u.s. automakers. chrysler, up 30%. ford up 13%. and g.m. 11% increase. pickup sales have picked up and detroit's big-three say truck sales are up by 20% from april, as well. asian automakers saw a huge jump. a year they were reeling from the japanese earthquake and tsunami. toyota sales were up 87%. honda, up 48%. and nissan up 21%. strong may sales didn't help

auto stocks. we saw broad based selling in reaction to the weak job growth. the s&p 500 spent the entire session in negative territory, never finding any real buying interest to stem the losses. the selling takes the index below its low earlier this month, down to levels not seen since the first week of the year. more than 80% of new york stock exchange and nasdaq stocks were down. volume on the big board was 988 million shares. almost two billion on the nasdaq. today's market capped a difficult week for investors with stocks starting june in the same fashion they spent much of may down. for the week, the dow lost 2.7%. the nasdaq shed 3.2%. and the s&p 500 finished down 3% from a week ago. as june got underway, all ten major stock sectors were lower. the losers were led by the

financial sector down 3.7%. the consumer discretionary area down more than 3%. and the industrial sector lost 2.8%. credit card company discover financial was the big loser among financial stocks, falling more than 7%. volume more than doubled with investors moving out of companies exposed to consumers. big banks were hit, too. wells fargo down almost 6%. bank of america falling 5.5%. j.p. morgan continuing lowers down 3.7%. today's jobs report was just the latest disappointment. earlier this week we saw a drop in pending home sales. homebuilders were hit by that one-two punch. this sector has seen some big gains over the past year. investors were lightening up today. pulte group was down almost 12%. d.r. horton fell 8.4%. lennar was down 8.3%.

with job growth on the decline, the u.s. dollar was hit by some selling, helping gold prices. after suffering its worst may in 30 years, gold rallied almost $58 an ounce, settling back above $1,600 an ounce for the first time in three weeks. gold stocks were one port in today's selling. gold-corp up 8.8%. barrick gold gaining 7.3%. and newmont mining up 6.7%. worries about a slower economy are not confined to the u.s. and europe. one of the engines of global growth is showing signs of braking. brazil's economy grew by only 0.2% in the first quarter compared to the end of last year. this exchange traded fund follows brazil. it was down 2.5%, closing just 50 cents off a 52 week low. brazil is the world's sixth largest economy but after a

decade of strong growth, its economy has slowed considerably. in our exchange traded fund market flash, all the most actively traded funds fell by at least 2.5%. the steepest losses were in the financial sector and russell 2,000 funds. and that's tonight's market focus. political uncertainty is feeding the economic uncertainty, but the american economy has enough momentum to prevail. that's the optimistic outlook

from tonight's market monitor. david kotok is the chairman and chief investment officer for cumberland advisors. with us tonight. david, if you're optimistic here, the author of "from bear to bull with e.t.f.s." congratulations on the book, a bestseller. where is the economic momentum you see? >> i see three pieces under way-- housing making a bottom in different places in the country more and more of those places-- that's number one. number two, the energy sector is growing in the united states-- natural gas, shale, it's a good story. getting better. and the manufacturing sector in the united states is improving, and both of those-- all three of those are strategic improvements. they generate high-paying jobs. they're going to be with us for a decade. they're going to boost g.d.p. growth. the size on the verge of a long, good story. >> tom: certainly we don't feel like that today, a big sell-off. this outlook that you've got

leads you to play the consumer on the stock side with the consumer discretionary exchange-traded fund, xly. what makes you so optimistic those jobs are you predict regular going to come to fruition? >> woman, we don't have a recession in our forecast. we have slow growth, low inflation, low interest rates, gradual recovery. you go through periods like today, it doesn't look good. but as a practical matter, it's hard to see a recession. we had job growth, not shrink. and the fact is that will carry this momentum on, slowly, accelerating slowly. it's a very good strategic story in our view. >> tom: and long term, you mentioned homes, and the home sales numbers that provide you have some optimism. you like the home building stocks which are certainly well off their highs as measured by this exchange traded fund. what do you anticipate? what's your kind of holding period for home builders? >> i think you look at the home

builders for three to five years. x.h.b. captures the survivors. it has a survivor bias. these companies have been through the ringer for four or five years. those that are there will benefit from the housing recovery, albeit at a slow pace. i like x.h.b. we still own it. we've held it for months. >> tom: last time we spoke to you was back in the summertime, august 26 of 2011, right before we saw a big booming market take off in september. since then you've liked the regional bank exchange traded fund, up 20%, and real estate investment trust up 10%. >> we like k.r.e., the regional banks. we own it. we've owned it this entire process. we are rebalancing and buying. and we're starting to add the big banks. on the real estate side, we've taken profits which we're out. we would rather switch to the home builders which we have done. >> tom: do you own anything we

have mentioned except for the e.t.f. exchange traded fund for the real estate. >> we do not own the real estate e.t.f. we do own all the others. >> tom: clive davis, our friday market monitor with some glimmer of optimism with cumberland advisors. this year was supposed to be another record year for the cruise industry. that is until the costa concordia cruise line tragedy off the coast of italy. it scared many passengers away from the open seas. six months later, however, the cruise business is picking up. tonight we say "bon voyage" to our summer travel series with suzanne pratt. >> reporter: at the port of miami today, it was not a great day for sailing. still, passengers weren't too upset with mother nature. after all, a cruise is still a vacation-- rain or shine. >> i call it total escapism. you just walk on the ship, turn on your cell phone, and you're done. >> i just like being on a huge ship and on water. >> we wanted a mini vacation. we wanted to relax and eat and drink and have fun, and we've heard it's fun, so we're going to try it. >> reporter: the cruise industry

is hoping more people have that attitude this summer, which is typically the busy season for bookings. but, the industry has yet to fully recover following the january disaster on the costa concordia and the rough seas that came with it. >> you still have pretty significant discounting going on in europe in the eastern and western mediterranean. but, here in the u.s., it's been substantially better. >> reporter: so, if you want a bargain, it looks like a european cruise is your best bet. whereas, caribbean and alaskan trips are selling well and can be pricey. this year, american tourists are all about easy access and many lines now offer ships that leave from new york and new jersey. >> so, the convenience, especially if travelling with a family is a lot easier. cruising as well you get all of your meals on board, so it's a very stress free way of enjoying a vacation. >> reporter: and, perhaps somewhat of a surprise: high end cruises have encountered smooth sailing.

>> those customers i think are feeling more confident about their jobs, about their pocketbook, their income. they have discretionary income to spend. >> reporter: as for safety worries, following the costa disaster, passengers don't seem too concerned. >> the cruise line should have regulations to make us safe, so i'm sure we're okay. >> you can get hit by a car stepping out on the street. >> reporter: plus, if you skipped the cruise, you'd miss the chance for some fun in the sun. suzanne pratt, "n.b.r.", new york. >> tom: all next week on "n.b.r.", a special series looking at the defining issues this election year: jobs and the economy. from the wisconsin gubernatorial recall election to an interview with a former pennsylvania governor, we're covering the hot topics for this year's election. those underwhelming jobs numbers show just how difficult it can be to find work. author and educator lou heckler has been thinking about the

three "p"s of success. >> i've been fascinated by top performers all my life, from athletes to adventurers, from money-makers to money donators. it seems to me their peak performance success comes down to three "p"s: prepare, persist, and prevail. prepare-- oddly enough, most high achievers have told me they weren't always sure what they were preparing for, but they knew if they read voraciously, studied their competitors and aroused their curiosity constantly, they would be prepared to seize a new direction or new market when the need arrived. persist-- people i've interviewed mix their naturally impatient selves with the patience to allow a new idea to germinate. they welcome feedback, even change minor directions if needed but, keep their eyes on the prize. prevail-- peak performers don't prevail with arrogance or heavy- handedness. they may seem a bit ruthless in their personal pursuit but, they still recognize the need to be gracious with those around them. when i was a youngster, people used to say, you'd better mind your "p"s and "q"s: for me the

"p"s means? prepare, persist, prevail. i'm lou heckler. >> tom: and then there's this: it wasn't all bad in the markets today. after all, it is national donut day. dunkin donuts rang the opening bell at the nasdaq. krispy kreme took-on the closing bell at the new york stock exchange and handed out 3,000 free donuts on the floor. to celebrate, both donut giants will be running in-store promotions. the donut companies say their sales are very reliable despite the trend toward cupcakes. both stocks, though, were dunked today along with the rest of the market. good night, i hope you have a wonderful weekend. and we'll see you on the web at nbr.com and back here next week. "nightly business report" is brought to you by:

captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org >> join us anytime at nbr.com. there, you'll find full episodes of the program, complete show transcripts and all the market stats. also follows us on our facebook page at bizrpt. and on twitter @bizrpt.