report" with tyler mathisen and sue herera. >> picking up momentum, the economy grew in the second quarter, just not as fast as many expected. but is it just enough for the fed to move on interest rates? >> brace yourselves. what one energy expert says oil prices could hit $30 a barrel by late summer. and crash test dummies. the new question being raised about the nation's best -selling vehicle. all of that and more on "nightly business report" for thursday july 30th. >> good evening, everyone. the economy seems to be getting its act together and economic activity this summer is picking up after a brutal winter that has caused growth to pretty much come to a standstill. the commerce department says that the gross domestic product, the broadest amount of the

activity expanded at a rate of 3.2%. although the number wasn't as strong as many expected or as had hoped, consumer spending which makes up the majority of the economic activity was strong. but even though the report was slightly below expectations steve liesman tells us why it may be enough to seal the deal for a possible rate hike in september. >> reporter: the government saying today there was more growth than it first reported in the first quarter and less growth than the market expected in the second leading to a bit stronger growth in the first half overall. first quarter gdp revised up to 0.6% was originally reported to be negative. the second quarter came in at 2.3% for a decent but unspectacular bounceback. and there was more inflation than initially forecasted something that the federal reserve has been seeking. many say the data is sufficient to seal the deal for september rate hike from the fed. >> i think they want to go but if they do go they are going to

explain to the market very clearly this is not the beginning of a very consistent rate hike cycle. they are going to be again, very data dependent. >> lots of data to come before the fed meets in september. a couple of jobs and inflation reports that will ultimately determine if there's a hike. >> we get a strong number next friday i think september is looking increasingly likely. i think the statement we saw yesterday showed the fed opening the door to september and all we need to get through that door is two good jobs numbers. >> the bureau of economic analysis announced its regular annual revisions of the past three years and also a correction to how it seasonally adjusted the data. following stories raising questions about the gdp reports. the revision meant the big scare in the first quarter of 2014 when it looked like the economy could plunge into recession, was mostly revised away from a 2.1% decline to a more manageable 0.9% in the fall.

overall, the gdp was revised down ending by a modest 3/10 of a percent but changed the first steps of the way it calculates gdp to account for anomalies, changes that could mean smoother data and less anxiety among investors in the future. for "nightly business report," i'm steve liesman. the energy industry is a big part of the economy and one that had been a major job creator but the tide is turning and now more than a few of those jobs are vanishing. a prolonged slump in the price of crude is forcing companies to lay off workers. today, west texas group fell to $48.52 a barrel. it's down nearly 20% over just the past month. and some of the world's biggest energy companies report earnings many aren't optimistic that prices will rebound any time soon. jacque deangeles has that report. >> reporter: a big week for energy. the market dealing with not only

volatility but a slew of earnings to consider as well. conocophillips out with a report this morning. a beat on earnings but estimates have been dramatically reduced in an environment of low oil prices. reading between the lines, the outlook is hazy. the company telling investors it will cut capital spending this year by $500,000 and they are dealing with more volatile prices. >> i think the energy companies are front running themselves with bad news right now. we have a lot of bear sentiment in the market with china, with what may be coming forward with iran so why not have it in the market now so if it does happen it won't be as bad. >> reporter: and it's not just conoco. the layoffs initially focused on blue collar workers.

6500 jobs slashed at royal dutch shell after its profits fell. to add insult to injury, halliburton and baker hughes reiterating cautious outlooks for the second half of the year. tomorrow we'll get reports from two bellwether energy companies, shell and exxonmobil. how will they guide the market and what are they doing to weather the storm? >> it looks like we could go up a little bit but when you look at the long-term charts it looks very much like it did in december and it looks like we could head to the downside once again. >> where oil goes from here is anyone's guess. oversupplied the potential for iranian products to flood the market and dollars remain in downside pressure. but slight declines in u.s. production and saudi arabia's plan to make slight production costs after the summer could be the start of what could tip the scale the other way.

for "nightly business report," i'm jacque deangeles. oxidental petroleum fell and revenue fell sharply. the energy exploration and production company says capital spending will continue to decline throughout the year if oil prices continue their slide. we are halfway through earning season, hard to believe, and some big themes have emerged. as dominic chu tells us the energy sector is sandbagging overall results. >> reporter: we're over the hump. as of today, two-thirds of the s&p 500 companies have reported earnings. the majority of the companies that have reported have beaten profit expectations. according to numbers compiled by thompson reuters, we'll see profits grow by 1% over the same period last year. now, before earnings season started, the expectation was for a 3% drop.

the bad news though is coming from the revenue side of the reports. we're currently on page to see what could be a 3.5% drop in sales over the same time last year. that has some traders and investors worried, although others do feel more optimistic. >> we feel good about the u.s. earning season. if you look through reported companies so far, we're looking at 3 to 4% growth across the s&p. that number is expected to be negative 3 to 4% and x energy something like plus 11%. it's slow and steady like the economy. >> reporter: energy is going to be a big focus for many in the coming weeks and months. it's no surprise that the sector could be one of the biggest drags on growth given the sharp drop in oil prices. and that's leading a lot of stock pickers to be much more conservative about buying into the recent weakness in those stocks. >> the energy sector today does not appear to be a particularly attractive area to invest because of the uncertainty about oil prices.

ultimately we're going to need more information about growth rates in the emerging market particularly china, which is a big part of the demand for oil prices. >> reporter: with oil giants like exxonmobil on deck to report earnings a lot of attention will be paid to what they have to say about the industry. and because both companies have operations ranging from exploration and production all the way to refining and selling gasoline they could provide some more clarity about the energy industry outlook. for "nightly business report," i'm dominic chu. so let's turn now to our two guests for more about the slump in the energy sector and whether or not it will hurt growth here in the u.s. economy. we have gus joining us senior economist and here in the studio john kilduff. welcome, gentlemen. nice to have you here. >> good evening. >> gus, let me start with you. how serious do you view the slump in energy and the resulting job cuts that we're starting to see and what do you think the ultimate impact will be on economic growth?

>> well i think that the downturn in energy prices is having a negative impact object the u.s. economy right now. we saw that in the second quarter gdp numbers with a dig decline in investments. that being said it's going to be a positive over the longer run. the u.s. is still an energy importing nation. i think consumers are going to be spending the savings that they are getting from lower gasoline prices and nonenergy businesses are going to see higher profits. it's a hit up front and then we get the benefits from it later. i think the second half will be better. >> john you heard it said that where oil prices go from here is anybody's guess. you're anybody. what's your guess? >> absolutely. >> what's your guess? >> and leave anybody packing. >> go ahead. >> my guess is that they continue lower, tyler. and i think we're going to first challenge the lows from march but ultimately settle down around the low 30s. >> do you agree with gus, though that on net that will be a positive for the american economy despite the dislocation it will cause in the short term?

>> absolutely. probably more enthusiastic than gus is about the overall impact. 80% of our crude oil consumption is for transportation. this is lowering transportation costs for shippers airlines the cruise ships, for mom and pop going to their jobs and part of what we've been seeing is this huge -- these gains in employment have generated terrific gasoline. >> gus, where does that put us in terms of what the fed does? i know they are watching the employment cost index. they are looking for higher wages and a little bit of inflation yet, at the same time you have oil prices which have been heading lower which, at one point, people were calling disinflationary? >> that's right. certainly that is something that the fed is watching. what they are going to be looking for is are the lower energy prices passing through the broader inflation into core inflation which excludes food and energy? the fed is expecting that to pick up as wage growth accelerates. if we see core inflation start

to slow that could cause the fed to slow on rate hike. we're still expecting it this september but it depends on what happens to the labor market and inflation over the next couple of months. >> gus, did you think today's number on the gross domestic product, 3.2% was kind of a goldilocks number not too cold or hot for the fed? >> i think the fed would like to see a bit stronger growth. first quarter was only 1.5% in the first half of this year. that's below what the fed would like to see. that being said i think we'll see stronger growth in the second half and i think that should be enough for the fed to raise rates, either in september or december. >> the other factor we haven't talked about, john is china and the plunge in its market. china uses a lot of energy and oil. what is the impact on the oil markets from that? >> it's big. i always refer to china as the swing demand center. we talk about saudi arabia and the swing producer of oil, they are the key to really holding up energy prices. there's been a lot of

discounting of this stock market swoon. i see -- you see how big the measures are being taken by the chinese government tells me it's a serious problem. i think it's a serious problem, because of what you just said consumer confidence the ability of consumers to buy cars. a lot of them put their money into the stock market and now it's vaporized. if we see car sales retreat, that's a hit. >> quick answer if i might, john. if oil does go to $30, is that going to run a lot of weaker performers in this industry out of business and will that ripple through to the high-yield bond market? >> there's a day of reckoning coming tyler. i think they pulled every trick out of their bag. the banks are not going to be able to lend against the oil in the ground any longer and they are going to call a lot of loans, there's going to be a lot of defaults and consolidation. >> on that rather sobering note gus, thank you. john, thank you as always.

stocks ended the trading day with a mixed bag of earnings and the gdp. blue chip with a nearly 100-point drop as procter & gamble weighed in. by the close, dow fell 5 points to 17,545. nasdaq was up 17. s&p 500 up 0.06 points. and proctorer & gamble is easily the worst performing stock today after the company reported a stunning 40% drop in profits from the same period a year ago. that sent shares south by 4% in today's session. p & g gets two-thirds of its sales from outside the u.s. and is facing the same issue that other multinationals are, currency headwinds. it's bottom line that is hitting. it's been a difficult stretch for the world's largest consumer products maker.

procter & gamble maker of products you know like tide bounty paper towels and gillette razors reported its sixth straight quarter of a drop in revenue highlighting the challenges that the company faces and how difficult it has been to find growth in this economy. one major obstacle currency moves. take russia for example. the devalue situation of the ruble forced the company to increase prices to maintain profitability but that came at a cost. it turned off russian consumers and pressured sales and the same thing happened in other markets as p & g hiked prices to offset the stronger dollar. >> particularly in some pretty tough markets like russia we've made the latter choice and that shows up as well. >> the quarterly results come at a pivotal time as it sheds tens and billions of dollars worth of

brands and a new ceo. the drastic move will in theory allow the company to find the growth it's been looking for. during today's call executives assured shareholders that the incoming ceo is equipped to address the slim-downed strategy. the new strategy does come with concerns. concerns that outgoing ceo gave a very simple answer to. >> if it's not working, we will change. we will make acquisitions and probably have another d ichlt divestiture. >> earlier this month the company announced it planned on selling its beauty brand, including clairol and covergirl. but investors will be watching closely to see if the new ceo david taylor can find the growth

that shareholders have been looking for. shares of procter & gamble have been lagging the market as we said. the stock is down 15% this year while the dow jones industrial average is flat. still ahead, america's truck. how concerned should drivers be about the result of the new f-150 crash test? the senate voting to pass a short-term funding fix to avoid the peak construction season keeping the highway trust fund running for another three months

preventing a halt to end road and bridge work that would have happened at midnight tomorrow. the 91-4 vote sends the measure to president obama's desk. and the obama administration wants the supreme court to hear a case that challenges the legal definition of insider trading. last year a federal court overturned two insider trading convictions and set a higher standard for proving the crime. the ruling could hurt market participants and wants the supreme court to take a second look. perhaps surprisingly more homeowners in this growing economy are still drowning in debt. this despite a rise in home prices and that improving economy, according to a new report from realty track, almost 7.5 million borrowers were still under water on their mortgages at the end of june meaning they owe more on their homes than the house is worth. that's a slight increase from the first quarter of this year. linkedin turns in a strong quarter. the social network for professionals saw its revenues

pop more than 30% and earnings grew faster than expected. the best-performing division was the recruiting unit. shares popped in after-hours trading before falling back. before the close, the stock was at 227.15. shares of arthritis drug hiking its revenue forecast. shares rose right after the session. ending up a session. cigna, which agreed to sell itself to anthem reported better than expected earnings. medical service use was low which helped the insurer keep costs down and see customer growth. the deal would combine two of the largest insurers and as the ceo explains expand it is offering. >> the key to our transaction is the companies are quite complementary. in general, we operate in different businesses. for example, about $20 billion or over half of our revenue are

in businesses that anthem is not in. one is a complementary nature. >> shares were at 143.90. another company pointing fingers at the stronger dollar, colgate-palmolive managed to meet expectations. this is the toothpaste maker's fourth straight quarter of declines at 68.02. >> you need toothpaste after you eat products. they make oreo cookies, by the way. this helps bolster the top line despite the same currency headwinds that have buffeted other companies. good news for avon the beauty products firm reported another quarter of sales decline but managed to turn a profit for the first time in years. also avon declared dividends of 6 cents a share. the stock rose about 2.5% to 5.51. and starwood beating consensus on both fronts. the hotel chain says a revamping

of it the cost structure helped results separately. the company is in talks with potential bidders, including intercontinental hotels and wyndham. the truck maker osh kosh reported a double digit drop in quarterly profit blaming, what else the u.s. dollar and cut its earnings forecast. shares tumbled more than 7% to 36.05. new crash tests are raising questions about the f-150 pickup truck. the insurance institute for highway safety says the truck is safe. but as phil lebeau reports, fixing it after a crash could be costly. >> reporter: it's a mixed review of a popular pickup truck. the insurance institute for highway safety crash tested two versions of ford's f-150. the model got all good marks for the super model while the extended cab edition was good in

all tests except for a small collision where experts rated it marginal citing potential injuries to a driver. >> the extended cab is still a safe vehicle but for those people shopping for the safest vehicle, they should put their emphasis on the crew cab. it clearly provides better protection in a wider variety of frontal crashes than the extended cab version. >> reporter: ford says it is modifying the 2016 f-150 extended cab. with high-strength aluminum panels, the dur ra built and cost of repairs have come under scrutiny. fixing it is 26% more expensive compared to the same repair of a steel panel f-150. primarily because repairs take longer and are more expensive. >> they may end up having to pay a slightly higher insurance rate because the data would suggest it's going to cost more to

repair the vehicle when it's in a crash. >> reporter: ford believes the iihs is wrong, saying when you look ateal world repair cost not staged repair costs for the 2015 f-150 they are comparable to or less than other full-sized pickups. it's unclear how much these crash tests might impact f-150 sales. it's been the best-selling vehicle in the u.s. for more than 30 years and it has a very loyal ownership base. phil lebeau "nightly business report," chicago. still ahead, drone traffic control. what some big companies and nasa are doing to help the drone industry lift off.

here's what to watch for tomorrow the employment cost endecks index. rounding it out, a report on consumer sentiment and that's what to watch for on friday. two very different companies could soon start trading. sole cycle, a company that offers high-end cycling class will go public. they and pointed a new ceo. petco could also become a public company soon. according to reports, the company has been in talks with investment banks for its own ipo. this would be the third time listing its stock on the market since the 1990s. facebook is making a big bet on drones. the company built its first

full-scale drone to provide internet access to remote parts of the world and plans to test it in the u.s. later this year. but what does the future of the drone business look like? nasa hosting a forum in silicon valley to explore the prospects and challenges. jane wells has our report tonight. >> reporter: amazon wants drones to deliver packages. facebook is building one to provide internet access in remote places. sisco wants to network all of them. >> in essence, it's going to require technology that enables these devices to talk to each other. >> reporter: however, the faa has yet to come up with rules allowing drones to fly in domestic flying space and those that do have to get an exemption. it's creating havoc, interfering with firefighting efforts in california clearly some sort of air traffic control system needs to be created and that is

exactly what companies were mapping out at nasa's ames research center. >> another way to look at it instead of driving a car, you need a lane and stop signs and such to keep things flowing efficient as well as safe. >> reporter: amazon has proposed a skyway with different lanes for different drones based on their sophistication and purpose, including a no-fly zone to separate them from manned aircraft above. mini drones would need to be able to communicate with each other and have technology like collision avoidance systems. companies are trying to come up with operating systems across several drone platforms and it has raised $40 million in funding. >> some of the investors are horowitz, perkins. >> reporter: this is not to say there won't be room for hobbyists to fly their unmanned machines but they need to follow rules. >> we have people who are nonaviators that have access to devices that fly in the air

space and we're trying to educate them about that. >> reporter: the drone industry claim it is could generate $82 billion in the u.s. over the next decade and employ 100,000 people that's given if the faa can finally approve some rules. for "nightly business report," jane wells, los angeles. and that does it for "nightly business report" tonight. i'm sue herera. thanks for joining us. >> and i'm tyler mathisen. have a great evening. we'll see you back here tomorrow.

every single bite needed to be -- >> twinkies in there. it's like a great big hug. >> about as spicy as i can handle. my parents put chili powder in my baby food. >> french fries all over the table. >> a lot of chewing.