nothing. federal workers and many contractors will get letters tomorrow or early next week giving them notice that they might be furloughed soon. it's hard to see how that would boost consumer confidence and retail sales next month. but the longer the cuts last, the deeper the impact. >> if this goes for the whole year, next seven months, there is no doubt we will have $85 billion in cuts. there will be people laid off, there will be furloughs, there will be contracts canceled, so if you take the whole time, yes. but on the fourth or march, almost nothing like that will happen. the real deadline to worry about now is march 27. that's when funding for the government runs out. and if that happens, it won't be a few workers who are furloughed. most of the government will shut down. from social security offices to national parks and the department of agriculture. >> if you live in iowa and you go to the local county agent in agriculture. there is a very good chance his

lights will be turned off on the 28th and he won't be there to give you a soil sample analysis. >> reporter: a shutdown may be more dramatic, but it probably wouldn't last long. but if the sequester does last, it would likely shave about half a percentage point from the economy's growth rate and cost 750,000 jobs. darren gersh, "n.b.r.," washington. >> tom: darren has more on the sequester on his blog, just head to: www.nbr.com and look for the blogs tab. clearly the sequester is a major concern for the u.s. economy. but today, at least, there was some good news: the economy actually grew in the final quarter of last year, instead of shrinking, as was first estimated. the revised gross domestic product grew 0.10% in the fourth quarter. a month ago, the government thought the economy shrank that much. but a drop in government spending remains a big overhang for the economy this year. erika miller reports. >> reporter: a tenth of a

percent gain in economic growth is not much to brag about, but at least the economy is moving in the right direction. >> the report was encouraging despite the very weak headline number. the reason is that the parts of the report that we think indicate the underlying trend-- things like business spending and housing investment, all of those were pretty positive in the g.d.p. numbers. >> reporter: but, today's revision does not change the fact that growth nearly stalled out the end of last year. in addition, many economists were hoping the revision would show an even bigger gain. what really held the economy back in fourth quarter back was a drop in inventory build-up. but that's not entirely bad. >> it's actually a positive for production in the first half of this year. a lean inventory situation means that factories will have to ramp up production. >> reporter: economists put some of the blame for fourth quarter weakness on superstorm standy, which slammed into the northeast in late october. it's also possible that part of the weakness in the fourth

quarter was payback for the third quarter's strong 3% growth rate. one of the most worrisome aspects of today's report is a sharp 22% drop in defense spending. >> we are in a declining defense spending environment. but we think the q4 decline of 22% overstates trend significantly. just to play an experiment: if we kept going at the pace, the defense budget would be at zero within five years. we think that's pretty unlikely. >> reporter: the concern for the economy now is even deeper government spending cuts, especially if the sequester takes effect. but for now, economists are confident growth will steadily improve through the year. >> we're looking for maybe 1.5% growth-- real growth-- in the first quarter. and then each quarter getting a little bit faster. so 2% in the second quarter, 2.5% in the third quarter, and by year-end 3% g.d.p. growth. >> reporter: and 3% g.d.p. growth, if sustained, could mean a long-awaited reduction in unemployment. >> reporter: so, although the fourth quarter growth may have

been the weakest of the recovery, at least it's still a recovery. the economy has now officially grown for 14 consecutive quarters. erika miller, "n.b.r.," new york. >> susie: for more about the economy, growth and the sequester, we turn to robert brusca, chief economist at fact and opinion research. hi, bob, how are you doing? >> fine, susie, thank you. >> susie: all right so, we've been talking a lot about how the economy did in the last three months of 2012 but how about right now, the current quarter? how would you describe the health of the economy right now? >> well, right now i would say confused. we have some positive indicators. we have some negative indicaters. we have had some recent indicators that were a little bit better than we expected but they're still in the good. consumer confidence, for example s a little bit better than we thought. it's still very weak. federal reserve has a survey of manufacturing in february, you look at the five

districts that report, some of them are, one of them at least is pretty strong. but the others are quite weak. so you've a lot of mixed numbers here. the one thing people are looking at that are kind of encouraged are the somewhat sporadic decline in job its claims this is really volume difficult-- volatile and it hard to pin it down. >> susie: you also have good numbers coming out in housing. so will you put this all together? are we on a positive trajectory or what? you say it's confusing. >> well, i think we have growth. i don't think we have much growth. and the question is whether like the other people we just spoke, you want to go with the idea that we're going to have half percent, and well 1 and a half percent and build from there and that is good or we have 1.5% and this sequestration will make the economy weaker. we have to concern ourselves with what people think. the economy is to the turning out very good numbers. the housing impact vim litted. you have need high credit scores to participate in the

housing market and the housing numbers although they have been positive, the new home sales number was very strong t occurred watch weaker prices than we've seen the previous month soichlt think you have to be somewhat cautious about how you look at those housing numbers. >> uh-huh. >> talk a little bit more with us about the consumers. they have been hit with higher taxes in their paycheck. higher gas prices at the pump. do you think that consumers are still going to be very reluctant to spend or are we such a shop till you drop society that they will come in any way? >> well, i always thought we were kind of a shop to drop economy but unfortunately pem are dropping. if you look at the sales results from pennies, if you look at sears, if you looked at the report that wal-mart has for the first sales report that they are looking at now, you're talking about some pretty weak numbers. these are the value shoppers. this is where they go. and they're now paying those taxes again and it's taking money out of their check and

it is going to have an impact there are people at the top that will continue to shop but there are people at the bottom that have already started to drop. >> susie: talk to me a little bit about the sequester. you know, we sometimes think washington will come up with some last minute deal, that's just the way washington works. any chance of that happening. and if not, what is all-- what is the sequester really mean for the consumer and for the economy? >> well, i suppose it's possible. you know, right now we aren't hearing anything about a deal. there doesn't seem to be anything in the works. both sides are talking about how we'll have the sequester. and it seems to be where we're headed. the president wants more cash revenues. the republicans think that they gave them tax revenues at the end of the year when they made that deal. and remember the sequestration is the part of the fiscal cliff that got shed into later in the year. so this is part of that deal. and the republicans think that basically they already gave at the office. but the president wants more. now the cbo tells us the tax revenues is share of gdp are

already headed for higher than normal levels. so this is where the battle is being formed. the republicans say you have enough tax revenue and the president says he wants more. he wants more spending. and this is going to hurt people's confidence. we don't really know how far it's going to go. economists can give you estimates but i think it's going to hurt confidence. when people get pink slipped and they don't foe if they lose their job or not that will have a real impact. >> all right. well, as darren was reporting. it will be gradual but still painful. thanks some of, bob. economist bob brusca, of fact and opinion. >> thank you. >> tom: still ahead, with student loan debt surging to record levels, delinquencies are hitting new highs too. >> susie: despite today's sluggish growth numbers, there was one bright spot in the economy, a drop in new claims for jobless benefits. unemployment claims dipped in the past week, falling by 22,000 to 344,000. so much for record territory, the dow stalled out late in the

day, and stocks slipped into negative ground. the dow fell 21 points, the nasdaq lost two, the s&p off one point. >> tom: with the major stock indices flirting with new highs, commodity prices have cooled off. an index of a basket of commodities like oil, copper and cattle, is down 4% this month, and off 9% from mid-september. lincoln ellis is managing partner of commodity fund poplar jackson. he joins us from chicago. > . lincoln, if it's sector,

asset class of commodities, or something with the individual commodities. >> well, it's a little bit of both, tom. you know this is the third year that we are in this downdraft in the commodity complex. and it continues to signal a number of different things. and you're right to point out that it's sector specific. obviously last summer, for instance, we had a huge rally in the grain markets off the back of that drought. and this year when you see energy coming off and the soft markets skochling off, you really are reacting to the fundamental supply/demand dynamics in those markets. >> but let's talk about financial demand. in other words, the easy policy that the federal reserve just this week ben bernanke essentially continuing to pledge that policy for cash is going to be easy. and the chinese is trying to stimulate its economy. so you would think between all the money out there, and demand maybe overseas picking up we would see a pickup in price, why not. >> well, there's a couple

factors going on. even in the gdp print you continue to see that u.s. consumer, consumptive demand continues to be rather weak, particularly relative to as you set it up here, high levels of equity prices. so the underlying fundamentals for a large part of the commodity market, not only in the advanced economies like the u.s. and europe where consumption takes place, but also in terms of the emerging economies where a lot of our production takes place, we continue to see weakness across the sectors. and that's why you have seen commodities really not been able to get out of bed for the last three years. >> speaking of production, we're seeing a lot of u.s. energy production come on-line. oil prices down from 98 dollars a barrel, around just valentine's day earlier this month, below 92. do you think the fall continues sm. >> well, i think there is potential further downside there in the energy markets and the oil market in particular you have to remember there is probably somewhere between a 10 and 15 dollar terror premium in

that market as well. and as we continue to move through both the sequester issues, and the federal reserve treasury borrowing issues midsummer there are so many unknown, and so many headwinds that could continue to depress demand, that oil really could slip back into the 80s. >> okay, so you mentioned that, on the flip side then you have got gold which traditionally benefits from so much uncertainty. it was 1800 an ounce in october, below 1600 an ounce tonight. is the bottom in? >> it's a good question, tom. i'm not quite clear sure where the bottom going to be for gold. gold has really become a corollary to the u.s. dollar it has become much more highly coreheated to that price move and we saw that again this afternoon with the dollar moving higher, gold prices moving lower t seems to us that the dollar is more of the safety trade in turmoil driven markets. and that gold perhaps may be

searching for a floor and perhaps for the near term, remember we have gold prices up 11 or 12 years in a row. >> right. >> we may have a top in here in gold going forward. >> so would you stay away from gold all together? >> we have been advising clients away from gold. we think gold probably ends right where it is right now, down about 5 or 6% on the year. >> leave it there. the world of commodities from chicago tonight. lincoln ellis with poplar jackson.

also week a state review showed that the city of was head ford a major financial emergency, with billions of dollars in debt. it recommended that governor snyder install an emergency manager to run detroit's finances. so what happened to this once vibrant city? tens of thousands of residents left detroit as the auto industry crumbled back in the 1980s and 90s, and tom, no matter what the governor decides tomorrow, detroit will have ten days to appeal. >> tom: and it comes right as the u.s. auto industry is getting its wheels underneath it again after the great recession. let's get going with tonight's "market focus." after making a run at new multi- year highs, the stock indices saw buyers disappear late today. the s&p 500 looked to build up its gains from the previous two sessions. but the gains disappeared in the final 90 minutes. the selling picked up momentum

in the final moments of the day for the index to finish down by a fraction. volume remained on the light side. 1 billion shares on the big board. 2 billion traded on the nasdaq. stock sectors made small moves. the best was the 0.2% of an increase for the utility index. technology was the weakest, down by 0.2%. groupon was in focus throughout the day, and into extended hours trading. after the closing bell, c.e.o. andrew mason announced he was fired from the company he helped found. his exit comes after a series of challenges, including the most recent quarter. shares lost almost a quarter of their value during the regular session after groupon lost money in the last quarter. profit margins shrank and its outlook was far short of expectations. then after mason's departure was announced, shares were trading around $4.60 share in the extended hours session, a small rebound from today's sell-off. meantime, online music service pandora is trying to manage its costs better. the company will limit its free mobile listening service to 40 hours per month.

music royalties per song for pandora are up 9% this year. shares fell 4.2%, even though the company predicted the change will affect few of its customers. retail stocks were in focus after the j.c. penney's much bigger than expected loss during the holidays. shares fell hard, down 17% to their lowest closing since december. volume was five times average. standard and poor's cut j.c. penney's credit rating into junk territory, calling its fourth quarter results, "extremely weak." but the gap had a strong holiday season. earnings were up significant from a year earlier, and two cents per share better than estimates. sales and margins improved. after closing up 1.3% during the regular session, the stock added another 2.5% in extended hours trading, putting shares near $34 per share. the company raised its quarterly dividend. book store barnes and noble. shares gained another 3.4% putting the stock at its highest

price since december. while stores saw a better sales mix of higher margin items, revenue was down and sales from its electronic book device "the nook" fell 26%. still, shares have continued rallying since the company's chairman proposed buying the company's retail business. three of the five most active traded exchange traded products ended lower, with fractional losses. the short term s&p 500 volatility note regained 3% as the broad market waned in the final ten minutes of trading. and that's tonight's "market focus." >> susie: it's getting harder

>> susie: it's getting harder for twenty-somethings to keep up with their student loan payments. according to a report from the federal reserve bank of new york. one out of every three people under 30 who have student loan debt, are at least three months late on their payments. that's a 10% increase from just four years ago. the new york fed also says people behind on their college loans are more likely to be late on other debts like mortgages, credit cards, and car loans. >> tom: some of that debt could be avoided if students find the right fit. about a third of students transfer colleges, adding to the high cost of higher education. ruben ramirez takes a look at one website trying to streamline the college search, and education experience online. >> reporter: max alcobi is like most high school seniors around the country, waiting by the mailbox for responses from college admissions offices. getting to this point wasn't easy. >> there were a lot of colleges i wanted to apply to but i really had to narrow it down.

my school told me i had to, my parents told me i had to. >> reporter: with more than 4,000 four-year colleges and universities around the country the search process can be tedious, especially for busy parents. >> you search for each college. you have to go on there website and then you have to look at which goes with what and its much more time consuming. you go on one website. you get everything you need. >> reporter: she's talking about noodle.org, the brainchild of princeton review founder john katzman. his goal, creating a one-stop shop for college profiles, reviews and costs. >> there is a reason no one has done this. that no one has put together a way for learners and parents and students and educators. the information is scattered. it's all over the place. giving you good advice really means getting in your head. >> reporter: noodle curates a list of potential colleges based on user responses to a questionnaire. >> they asked me what i wanted

because it was very scrambled in my head so they would ask me from extremely to not at all. >> reporter: but noodle hopes to be much more than a virtual advisor to choose a college, it wants to be a one-stop shop for all things education. >> at launch there are two things we focused on schools. whether that's a kindergarten or a college or a grad school or a study-abroad program, and learning content. i want to learn how to add two fractions. i want a couple of explanations that are going to make the most sense and are going to help me the best. >> reporter: to make the site robust noodle has partnered with more than two dozen firms, one of those is test-prep company the princeton review, katzman's former employer. >> we have been in test prep for a longtime but had always been segmented to working with students that were already in high school and he idea of

extending the conversation to students who were much younger and talk about college admissions, financial aid which are sort of taboo and noodle fulfilled that partnership very well. >> reporter: the site, which launched this month already has hundreds of thousands active users. katzman hopes it will be an ad- supported model along with other revenue streams from parternships with other education firms. >> this is the algorithm. here are some sights we think you might like and in the shaded grey box here is an ad. >> reporter: it's a model that's been successful for google and could make education easier for millions more students like max. ruben ramirez, "n.b.r.," new york. >> susie: monday on "n.b.r." warren buffett takes your questions! he's considered the world's greatest investor, and he wants to know what's on your mind. you can submit your questions on facebook, you'll find us under bizrpt.

>> tom: the rebound in the housing market may have you thinking about getting into, or back into real estate. tonight's money file has ideas on deciding if its for you. here's karen gibbs, founder of the gibbs perspective, a company focusing on financial literacy. >> with signs of slow, steady improvement in the housing market nationwide, is now the time to buy? before you start packing, ask yourself this question: are you planning on staying put for at least five years in one place and on the job? if the answer is yes, low mortgage rates and steady to rising home prices may prove attractive to you. to make the experience positive, get your house in order: make sure your credit history is accurate. recent reports cite a 20% error rate that can cost you time and money. pre-qualify for a mortgage from a mainstream financial institution willing to estimate how much you can borrow.

be prepared to pay closing costs of as much as 5% of the value of the mortgage on top of a 20% down payment. once you make the move, remember your home is, first and foremost, shelter. don't repeat the mistake of using it as a piggy bank. there are cheaper, more liquid and reliable investments at hand. i'm karen gibbs. >> susie: and finally tonight, inmate number 12191-029, better known as russell wasenddorf senior. he started serving his 50 year sentence today. the former chief executive of brokerage firm "p.f.g. best" pleaded guilty in september to embezzling more than $100 million, that he used to fund a life of luxury that included a lake-front condo in chicago. prosecutors said the amount stolen topped $215 million. and tom, in what is likely his last taste of the high life, he was transferred to terre haute, indiana by u.s. marshals on a private plane.

that's "nightly business report" for thursday, february 28. have a great evening everyone, and you too tom. >> tom: goodnight susie, we'll see you online at: www.nbr.com and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org

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