this is "nightly business report" with tyler matheson and sue herrera. >> home sweet home. home depot reports earnings that some call the best in retail, but why weren't the results good enough for wall street? >> taking a stand. the ceo of walmart criticizes the president as more executives leave white house advisory panels. >> flying high. boeing ramps up production of one of its key products and investors are hoping for a big payoff. those stories and more on "nightly business report" for tuesday, august 15. >> good evening, everyone. welcome. for much of this year economists have been wondering where the american consumer had gone. retail sales were tepid despite

an economy close to full employment. today that mystery was at least partly solved. in july, according to the commerce department, sales at retail rs and restaurants rose at their fastest clip since december. steve liesman has the numbers and an explanation. >> reporter: the government's retail sales report showed that consumers are finally spending in line with their levels of confidence and employment. july retail sales rose 0.6%, the best gain of the year outstripping wall street estimates. a decline in june sales has been revised to show a decent gain. >> i think the retail sales are pretty important. it was strong the last two months or week. there were factors that helped boost sales like amazon prime day which concentrated sales in july. >> amazon said the prime day sales was the biggest sales day in its history. and the nonstore category including e-commerce showed a strong 1.3% monthly gain.

but autos and department stores did well offsetting declines at gasoline stations. it was a mystery. confidence is high, job growth strong, wage growth modest. the retail sales numbers have been lack luster for months. today's report changed the picture. the june revision and strong july jobs report are serving as support for the forecast that the third quarter is on track for a near 3% gain in gdp. it's early in the quarter and the retail data can be revised. the ingredients are there for strong consumer spending. it took the data a while to. ka up. for "nightly business report," i'm steve liesman. americans may be spending more on line but they are also spending a lot at home depot. the world's largest home improvement retailer blew past earnings and revenue estimates. profits were up, sales were the best in its history. the company raised its guidance for the second time this year. that's pretty good given all of

the trouble facing the retail sector recently. courtney reagan has more on what's working at home depot. >> reporter: consumers aren't buying as much in department stores or mall specialty retailers but home is where the spending is. >> this is one of the few areas where the consumer is spending. that goes back to home prices increased now so it gives the homeowner consumer confidence to invest in the home. the consumer is clearly choosing to spend in the home improvement category and not as aggressively as elsewhere. >> home depot had a strong quarter with sales in the key u.s. market strong. all sales increased in all markets. the largest home improvement retailer expects even stronger full year results. while the do it yourself projects and merchandise sales grew, sales to professionals like home improvement contractors again outpaced the diyers. sales of expensive items like

appliances and flooring were strong. on line sales grew more than 20%. though e-commerce makes up just over 6% of home depot's total sales, stores are a key part of the execution. more than four out of ten on line purchases are picked up in home depot stores. >> in this retail environment, given what we are hearing from other retailers is absolutely amazing. what's incredible with home depot is that quarter in, quarter out they put up these numbers despite some choppiness in the business. >> some analysts question how long home depot can continue to benefit from a strong u.s. housing market and home improvement trends. the company says with a still tight supply of homes for sale and more than two-thirds of u.s. homes at least 30 years old there is still a lot of opportunity for home repairs and updates. for "nightly business report," i'm courtn reagan. despite strong results home depot shares fell. go figure. the stock dropping more than 2.5% which made it the worst

performer in the dow index today. why weren't the results good enough for wall street? we heard from brian and courtney. everything seems to be working beautifully at home depot. why did the stock go down? >> there is an easy answer. today was a very tough tape for retail stocks. i said before i thought home depot's results were really good. there were a couple other retailers reported bad results today. >> baby and bath water thing, right? >> that's exactly right. the tape was very tough for retail stocks today. >> interesting you should say that. i'm reading in the notes you say home depot was one of the best-run retailers in the world. is it just that the street gets too picky? i understand the retail sector as a whole has been under pressure this week and last week for that matter. is the street getting too picky about some of the internal

components of the report? >> i think that's a big piece of it. the other real big piece is everyone invests in retail stocks now is worrieded about the overall impact of amazon. you are seeing retailers clearly impacted and you have a retailer like home depot which is not. from an investment standpoint you wonder at some point does home depot start to feel the effects of amazon. >> your answer is to the question can home depot be amazon, your answer is -- >> the simple answer is no. i have studied retail for a long time and watched amazon for a long time. i have learned to never dismiss amazon. but i look at home depot. home depot and really the h improvement category is one of the best defended areas within retail against amazon. >> we are using home depot agency tas the example but there are other stocks where the results were good and the street sells it off for a variety of reasons. as an individual investor,

should you evaluate the pros and cons of a company irrespective of wall street's reaction to a report? >> well, look. in my view that's what gives you the opportunities. in a way, i always say to our clients and i primarily speak to institutional but also retail clients. fundamental is first. analyze the fundamentals. is the company performing. then worry about the stock price. >> where is the stock today? how do you see it in a year and how does it get there? >> i have $178 price target. the stock is around $150 today. i expect decent upside in the next 12 months for home depot. >> appreciate it. >> thank you. >> brian nagel with oppenheimer. >> positive news for the housing industry. a monthly index from the national association of home builders rose to its highest level since may. builders say they are seeing rising demand from buyers who seem ready to pay a premium for new construction.

>> activity in new york nearly tripled to a three year high. the empire state manufacturing index rose thanks to new orders and shipments. hiring picked up and according to the survey factories are optimistic that conditions will continue to improve over the next six months. >> those positive reports on two key sectors of the economy -- housing and manufacturing -- were not enough to give stocks a lift. earnings results from retailers in addition to home depot capped gains. the dow jones industrial average was up five points. the nasdaq lost seven and the s&p 500 fell one. >> in washington, the nonpartisan congressional budget office reports that health care premiums will soar 20% next year if president trump ends the obamacare subsidies to insurance companies. they are expected to rise about 25% in 2020. the payments help low income americans afford their plans. the report also says the federal

deficit would increase by about $20 billion per year over the next ten years. the president so far has not committed to continuing the payments. >> at a news conference today at trump tower the president signed an executive order to speed approval of permits for the construction of highways, bridges, and roads as part of the proposal to spend $1 trillion to fix the country's aging infrastructure. the president said the new process will happen without harm to the environment. >> meantime, the ceo of the country's largest private employer walmart took the unusual step of criticizing the white house today. in a note to employees doug macmillan said the president, quote, missed a critical opportunity to bring our country together by rejecting the appalling actions of white supremacists. a walmart spokesman told the "new york times" that mr. macmillan will stay on a presidential advisory council on economic development. in the past 24 hours several

more ceos and business leaders have resigned from the manufacturing council in the wake of what critics saw as a tepid white house response to saturday's violence in charlottesville which left one demonstrator and two state troopers dead. 20 were injured. under armour ceo kevin plank decided to leave because the company engages in innovation and sports, not politics. intel chief left to call attention to the serious harm a divided political climate is g to critical issues, he said. scott paul, head of the alliance for american manufacturing, said he was leaving because it was the right thing for him to do. yesterday we reported that merck's ceo ken frasier quit because he felt a responsibility to take a stand against intolerance and extremism. today in a tweet the president said for every ceo that drops out of the manufacturing council, i have many to take their place. grandstanders should not have

gone on. jobs. >> at that infrastructure news conference we mentioned things got heated when questions turned to the recent events in charlottesville. >> i think there's blame on both sides. you look at both -- i think there is blame on both sides. i have no doubt about it. you don't have any doubt about it either. [ shouting ] >> and -- and if you reported it accurately you would say. >> joining us in washington is john harwood. john, is this going to spawn more ceo resignations or comments? >> yes. this will increase pressure on ceos to separate themselves from president trump. i expect more and more of them to be looking at the admonition from former treasury secretary larry somers today when he said aural ceos should leave the presidential advisory councils because they are ineffective and they are associating themselveses with a president who is not united statesing the country. >> does the president have a

budding problem with business? >> he does. he has a budding problem with the american people. his ratings are below 40%. job approval. in gallop he hit a record low of 61% disapproval. that's the backdrop. more specifically many people in business have been accepting things they didn't like about trump in the belief that he was going to be able to do things they did like. deregulation, tax cuts. all of these things become more difficult the more toxic donald trump gets on a personal basis. that's exactly what today's press conference is going to -- a problem that it's going to make worse. >> do you expect comments from either or both sides of the aisle about some of the comments that the president made at this news conference? and how badly, if at all, do you think it hampers his ability to put through the agenda that you just mentioned? >> if people feel embarrassed or

ashamed to stand with their president it makes it much more difficult for them to advance common priorities. republicans are still going to be for tax cuts, whatever president trump does. but the more toxic he becomes in a political sense, the more difficult it is for them to work with him. that imperils the entire republican agenda. frankly, sue, it imperils the survival of the trump presidency. because he needs protection from people in his party as robert muell mueller's i picks up steam. there is the potential if democrats can retake the house of representatives that there would be an impeachment drive against him. i think the president is making his problems more difficult with every passing day. he did over the weekend. he did again today. >> we'll leave it there. thank you. john harwood in washington. still ahead, boeing is flying high. >> i'm phil la beau at the

boeing plant in washington. why is it the best component of the dow this year? we'll explain what's lifting the company to new heights when "nightly business report which stock helped lift the blue chip stock index to new highs? boeing. shares have climbed more than 50% this year. a big reason for that increase is boeing's rising profitability in its commercial airplane division. phil la beau reports from the

assembly line in washington. >> reporter: the pieces are coming together in boeing's push to build and deliver more planes. now cranking out new 737s faster than ever after building 42 a month earlier this year, boeing has raised production by five per month and will increase it another ten per month over the next two years. >> what it's really about is flow management. for instance if we have to push the airplanes out quicker then how do we sequence the jobs for the mechanics and the engineers to assure they've got the right tools, the right parts, the right paper to make sure they can manage this increase. >> reporter: boeing is not only building planes faster, it's become more efficient. it trimmed the payroll while increasing automation, a combination that fuelled a surge in productivity. >> over the last 15 or 18 months they have generated an 11% improvement in revenues per mr.

employee at the commercial business. that's well above national averages for productivity gains. i think they are finding that it's infectious. >> with deliveries of the 737 max just taking off boeing is focused on cutting into a backlog that now totals more than 3800 planes. that means airlines ordering a new fuel efficient 737 max won't be receiving it until well after 2020 which is why airlines are pushing boeing to build the planes even faster beyond the top target of 57 per month. >> even as we think about the rate of 57 in 2019 there is upward pressure on the rate past 2019. so the only way we can actually conceive of getting to those rates is making sure the automation works for us to do this job. >> reporter: lifting the 737 to new heights on the wings of workers moving quicker and more

efficiently. >> advanced auto parts had its worst day ever. that's where we begin the market focus. the car parts retailer faced industry challenges in the latest quarter causing income to splip and missed estimates. rev new -- revenue was in line. shares plunged 20% on the session to $87.08. coach's decision to exit many department stores due to heavy discounting resulted in fewer sales in the latest quarter. the company missed revenue expectations but the earning beat estimates by a penny. the company gave disapointing full year earnings and sames guidance and what happened -- you know what happened. the shares were down 15% to $40.64. after reporting weaker than expected same store sales growth dick's sporting goods said it would ramp up promotional efforts in a bid to attract more shoppers. in the latest quarter the retailer struggled to get

customers excited about apparel offerings which caused earnings to miss the mark. dick's lowered the guidance for 2017 and shares were crushed, falling 23% to 26.87. >> sticking with retail, tjx, parent company of t.j. maxx and marshall's said a rise in customer traffic helped earnings and sales beat estimates. sales rose to $70.16. according to a regulatory filing after the bell yesterday berkshire hathaway sold its position in ge while picking up more than 17 million shares in sin crony financial. meanwhile synchrony shares jumped. a federal judge ruled that costco owes tiffany nearly $20 million for misleading customers

by saling engagement rings labeled tiffany that didn't come from the jeweler. they used the word to describe the setting not the brand. sales fell a fraction. sales of tiffany for down almost 3% to 88.11. china is doubling down on the war of words with the trump administration. the issue is trade. today the world's second largest economy said the u.s. trade investigation that president trump ordered yesterday would violate international rules. here's the story from beijing. >> reporter: the chinese government is taking a tough position. the commerce ministry reacted to the trump directive by saying the u.s. should strictly observe trade promises and not become a destroyer of multilateralism. the ministry warned the u.s. it should act cautiously on the trade investigation and said

beijing would absolutely take measures to defend its rights if the u.s. harms bilateral ties. the chinese state media has been threatening retaliation. today, the state-run news agency said that the probe would have lose-lose prospects, calling it a unilateralist baring of fangs that would hurt both countries. the question now is how seriously the u.s. should be taking this tougher tone. analysts tell me it's hard to tell, particularly because it is a political season in china. china is heading into a party congress and is expected to see a leadership shuffle in two to three months. everyone is expecting president ping to consolidate and centralize power and the way government has been responding and reacting to outside forces has been with nationalism. take for example the south koreans. the chinese have been using strong language over its u.s. anti-missile defense system. even more aggressive language when talking to the indians about a border dispute in the

himalayas. this rhetoric could be aimed at a domestic audience as much as an international one. analysts say we have to wait and see toward the end of the year whether or not the tone changes. for "nightly business report" i'm in beijing. coming up, can americans take on more debt and save for retirement at the same time? here is a look at what to watch tomorrow. the first round of nafta renegotiations get under way with president trump meeting with the leaders of canada and mexico. the minutes from the latest

federal reserve policy meeting will be released. investors will look for clues on the prospect of future rate hikes as always. more retail earnings are due out. we'll hear from target and l-brand, parent company of victoria's secret. household debt is at a record. total debt hit more than $12.5 trillion marking the 12th consecutive quarterly increase which reflects renews confidence in the economy but there are signs that households are overstretched including credit card balances that are 30 and 90 days delinquent. >> debt is rising and a new survey shows a growing percentage of working americans are saving more for retirement. according to bank rate.com 23% of working americans increased their retirement contributions over the past year. that's the highest level in six years. greg mcbride, chief financial analyst at bank rate.com joins

us to discuss the findings and more. good to have you back. 23% of working americans increased their retirement contributions. is that empirical or what they say they did? >> that's what they say they did. >> you have to allow for fibbing there but we have seen tremendous improvement in this over the last several years consistent with an improving economy. back in 2011 when we looked at this it was 2-1 people cutting back their retirement contributions rather than boosting them. we have seen that swing completely around now to the point where 23% are actually increasing contributions and people who haven't contributed this year or last year is the lowest we have seen in the same period of time. >> that's the good news. i'm worried about household debt being at a record and some

longer than expected payment times on credit card debt. does that worry you at all? >> it gives us a signal in the sense that it shows there are households stretching the rubber band further and further. this comes at a time when we are near full employment. that tells me that unfortunately these delinquencies particularly for people that are living close to the edge, they are only going to get worse. they're not likely to get better. for people with good credit, they're going to find credit is still freely available. issuers will be more selective because of the increase in delinquency. >> i will ask you to channel your inner suze orman. if i have to choose between paying down high rate debt or putting more money in my retirement account which do i do first? >> people ask me all the time. the answer i give them is do both. it's not either/or. you have to pay yourself first,

have the money going into the retirement account directly from your paycheck. have a direct deposit from your checking account into your ira. then you live on what's left. what's left, you've got to carve out room for debt repayment. if that means driving uber or taking on contract work or a second job, do it. but you can't afford to miss out on the years of retirement savings in the name of paying down debt. by the same token a lot of people have an overhang of costly debt they never seem to make headway on. >> to your point, there are different types of debt out there. we pointed out this survey about credit card debt. one of the worrisome factors is auto debt. and the loans are much longer. used to be you could only finance three or four years. now it's seven, i think. is that a warning sign or not? >> think it absolutely is. as you noted not only is the

amount people are borrowing increase, they are stretching it over longer periods of time. wage growth has been sluggish for a lot of people. there is no give. a $500 car payment is $500. you have no wiggle room there. that's the concern i have. >> thank you very much for channelling your inner suze. earlier we talked about if there could be more resignations from the advisory council. tonight we find the aflcio director richard trumpka has stepped down. >> that's it for us tonight. >> have a great ev.

this is a bbc america. funding of this presentation is made possible by. the freemen foundation. and coal fuller foundation pursuing solutions for america's neglected me. planning a vacation escape that's relaxing inviting. and exciting. is a lot easier than you think. you can find it here in aruba. families couples and friends can all find their escape on the island