this is "nightly business reportd sue herera. showing growth. thanks to strong spendi ining b consumers, the economy has its best showing in more than two careers, but harvey here and a government shutdown looming, can it strength last? start and this is where america's main street will begin its big, beautiful comeback. >> tax push. president trump hits road vowing to change taxes and bring back main street, but can it be done? and record storm. harvey already has dumped more rain than any storm in u.s. history, but now, his impact on

the mortgage industr more stagg. all that and more on "nightly business report" for wednesday, august 30th. good evening and welcome. tyler is off this week. the economy rebounded sharply this spring lackluster growth in the first quarter. it was led by spending on automobiles. gross domestic product grew a full 3% in the second quarter and that i quarter of 2015. steve liesman has more. >> there's some excitement t st path after twooday's upward y forecast for this quarter. second quarter gdp revised up to 3%. the best showing since the first quarter of 2015. consumers spent more than reported and businesses invested more. cnbc's tracking of third quarter growth has estimates run ining a healthy 2.8 p% clip on average

so far. we received better than expected jobs data today. the adp estimates 237,000 created in august. that's better than the 179,000 the street expects in friday's payroll report. of course, the impact of hurricane harvey and it's the reason one economist cited for not raising his outlook today. despite widespread pain and devastation in texas, economists expect modest gdp impact, at least from reports so far. i'm steve liesman. >> and while it is too early the to to estimate how much harvey might sh off the third quarter growth, rms says economic losses from harvey could be between 70 and $90 billion. and s&p is warning any government shutdown will hit growth in the fourth. n e rate iing agency's chief starte at the beginning of the quarter, which it likely would, take off .2 from gdp for

each week. that comes out to $6.5 billion a week. let's turn to beth ann, the s&p chief economist who issued that warning on how government shutdown could impact growth. welcome, nice to have you with here. zm i've heard conflicting things out of washi i've heard from paul ryan, but i've heard others from the president who say maybe a president who say maybe it wouldn't be so bad to get funding for the wall to build mexico. >> correct. we at s&p global week, certainly kid not expect an we don't expect a shutdown, but because you can't rule it out, so we're keeping an eye on that. >> what do you think impact would be immediate ly if it did

point, but what might the impact be. when talking about harvey, that's another thing it would be crazy to have a shutdown. we have to get funds to help the region. it seems insane. in terms of what we could expect, the government a s a mi would be furloughed. federal workers would be furloughed without pay so that means lost productivity and lost pay. they'll get paid back eventually, but ta means they don't have money to spend right now. it spreads further, goese s andd national parks that are chose d closed and private contractors e contracts with the government. they're going to be put those on hold as well. >> businesses also don't want to invest in a time of certauncert. >> when you see this hit from the government, from a

government shutdown, you can expect jobs to be hit hard and one of the things that we're looking at for example based on the based on the economic advisers, if they had to get about 120,000 jobs lost not made during 2013, so you're looking each week, about 60,000, if that still holds. >> given, we have this obviously looming, but put that aside for a few moments. is the growth rate that we're see iing in the u.s. economy or? a long time. happy to see it. it's been a long time coming. we don't however think, we do think that was a nice bump back from basically a kind of off setting what we saw on the first quarter and we're expecting growth to hold up. but we're sticking around the 2 to 2.5% range. a lot of factors in play.

the jobs market, while strong, you have a lot of people out of the market and that means a slower productivity ow road. >> on that note, thank you so much. >> thank you. with s&p global equity research. those strong economic numbers we talked about and a rise in tech stocks which were bolstered by apple hitting a high, led to gains on wall street including a fourth straight winning session for the s&p 500. the dow rose 27 points to 21,892. the nasdaq rose 66 and s&p added 11. and now, to harvey. where the flood waters in the houston area began to recede slightly, but the storm is far batte ne as it moved eastwa te louisiana better. an additional 10,000 national guard troops are being deployed to texas, bringing the total to 25,000. and as harvey moves east, the concerns it could have on the energy industry is sarting to

grow again. brian sullivan is in pas dadena texare >> hurricane harvey may have left the houston and galveston area, but it sent another reminder today it is still active and still dangerous. the hurricane swung to the east, smasf beaumont and port ar th along with southwest louisiana. many reporting rapidly rising waters and asking for help. it may add to concerve supplies beaumont and port arthur are home to four big oil refinery, including the single biggest in the united states. motiva, 600,000 barrel a day facility all are shuttered storm. another concern as well. maybe one closer to your kitchen cabinets. the simply of et lean. about 70% of et lean supplies kno from texas and 40 to 50% of offline. while not that common of a name

goes into a lot of things you use including bottled water, packa pack consumer product, auto products and thousands of other products, suppliers are going to b a meantime, as the ws clearly recede, housn may he problem, which is the clean up. no doubt, like you can see, the the buffalo bayou, the clean up will be long, missy and eck pensive. for "nightly business report", i'm brian sullivan in pasadena, texas. >> back in houston, some businesses began to open their came. contessa brew er is in houston wh as sunshine pierce the sky as reseed businesses that could open saw an immediate boom. >> community's been benefitting. that's what we're here for.

>> i'm hoping the pharmacy's open. i have some prescriptions, but didn't get a chance to get out before the storm hit. >> with limited stming te moh i asked customers to line up and take turn, in some cases, offering water and snacks for the long wait. >> i really don't need anything. i was going stir crazy, so i walked over here. probably get eggs and bread, but that's about it. >> getting those necessary supplies, the bottled water and fresh food have needed most despite flooded streets and impassable highways, takes lodgist cal genius. >> our vendors might be coming from a different location. our milk vendors might be having a different route. right now, they're working diligent ly to get us the simped wal say it's a challenge with more than 50 stores still closed and two distribution centers flooded. in galveston, customers encounter nearly empty store

shelves at a kroger with a crucial supply chain cut o so many re's the problem of employees were flooded themselves. >> my daughter came and picked me up. unfortunately, my car about, my car and stuff in my apartment, so she came by and picked me up and brought me up here. >> you have a nice day. >> with limited staff, some mcdonald's offereded only drive through service. 15,000 workers typically staff the 300 mcdonald's in the greater houston area, but only half those restaurants could open today. >> we're a big family. we're going to help each other out. if if i need to help another owner with their computer system, i'll do that. if they need people and i have more than i can spare, you know, we'll change. >> businesses in the same boat, pulling together to give their city back up and running. in houston, contessa brewer, "nightly business report."

>> and one company working hard to get supplies and deliveries to texas is home improvement chain lowe's. courtney reagan is in north carolina with ininside l >> this is the emergency command center in north carolina where about 30 lowe's employees are working seven days a week to make sure that critical supplies get to the 90 or so stores most affected by hurricane harvey in texas. this command center opened on thursday and will remain open for several weeks. the lowe's employees here are in constant touch with all the knows of lowe's supply chains. so far, around 900 truckloads have made it to tekds are in route to the area. the floo closu it difficult for the trucks to access the stores, so lowe's works with fema, homeland security and the tekds

>> the most critical in the area now is generators, water, tarps to cover roofs. bungee cords to hold down the tarps. fans. air movers. air conditioners for people that don't have power. they'll use a generator to run the air conditioner. very humid area of the country. so it's prone to a lot of mold and mildew. >> 17 stores are still closed, but inventory was sent ahead of the storm in preparation. more than 160 of lowe's employees evacuated or suffered some level of personal property loss. the corpus christi store reopened on saturday despite a number of empl the manager. low's said two truckload of food just arrived and more is is on the way. lowe's has donated half a million dollars to the american red cross and had a volunteer team called lowe's heroes working with the first response team of america to distribute five gallon buckets full of

clean up supplies on the ground. group also helps clean up debris, cut down trees or whatever homeowners may need. >> it's very important to the store managers. they take it personally when they see a problem in their s mmunity, they work almos neighbors that are customers get back to normal. xwu norm alcy may be a long tim now. for "nightly business report", i'm cour reagan. >> and coming up, why harvey may be the costliest if we want to reknew

prosperity and restore opportunity, we must reduce the tax burden on our companies and on our workers. >> prurp president trump making his case for tax reform, say in it is key for economic w and can he get it done? andrew joins us now to talk about that. sue, gre to be ice to have you here. >> when you listen to the president today, he's trying to sell his tax package, is there anything new we didn't know what his goals were? >> no. i mean, the president addressed one important as pecht, which is lowers tax rates. spe tha additional e, people in earnings. and that boys the economy. but there's a secondfo that's h reduce uing rate, simplification. which means getting rid of or

curtailing tax ceo ductions. that allows ta to revenue neutral for the government. you have a lower rate, but you revenue.o well, he didn't tell us what tax deductions he wants to change. we know sorry, go ahead. >> no, no. >> we've heard a little bit, but they want to eliminate the deduction for state and local taxes. we've heard that from the hill and the white house, but then what do you do? mortgage interest deduction? oil and gas deploegs allowances? ever's bu we don't have any details yet. >> so, wou up into two parts of a pie in there's tax relief, which is lowering the tax burden then tax reform. it seems to me the latter is going to be much more difficult for congress to achieve because you have all these lobbying interests. for instance, you mentioned the mortgage deduction, the real estate lobby is going to be actively pushing back. what are the odds you think that

congress will go along with the reform?ief, but not necessarily >> well, i think you really nailed it, sue, that's right. when ever you identify the a deduction that's going to be changed sh people come out of the woodwork and object. that's why we haven't seen tax reform since 1986, the easy thing to do if you can't get refo is to say okay, we're going to reduce rate, everybody r mos people do and go home. the problem with that is it adds to the federal deficit. we're already trying to ip crease the debt ceiling to a lou the o borrow more money. we're going to have to keep borrowing more and more if tax receipts dpo down. i think there's a really good possibility this year we see a tax cut. without tax reform. that lets republicans say well, we cut taxes, did what we promiseded. but it really kicks the can down the road for how are you going to deal with a government de, s what does this do for market volatility? because the market has been

counting on both parts of that pau pie. the tax relief and also the tax reform. >> i actually think the market, at least in the shor satisfied . it means businesses keep more of the earnings. i think that's what they're really looking for. the concern about the deficit, which will be a problem for the market down the road, probably doesn't hit that much this year. so, it seems to me one way or another, we get tax relief, that satisfies the market. yeah, will be volatile until then. we got to deal with the debt ceiling and keeping the government open, but we'll get through that. we'll see a tae happy with what happens. >> on that note, the optimistic andrew friedman. thank you very much. with the washington update and spirits are on the rise at brown foreman and that's where we begin tonight's market focus. the maker of jack daniels raised its full year earnings outlook for the first time in more than

six years as sales were better for tequila, rvodka and premium whisky products. it rose to 53.14. last month x we told you a panel voted in favor of recommending novartis' gene altering leukemia treatment. today, the agency approved the cutting edge therapy that's the first of its kind in a new class of treatment. the drug which was intended for a specific patient population carries a very steep price tag. 475,000. novartis shares were off 1% to 72.84. last night, we told you warren buffett's berkshire hathawayway became bank of america's top shareholder after he exercised his right to buy 700 million common shares. shares rose on the news. mr. buffett says he continues to back the company and it's happy with the investment. >> we're very happy we got 700 million shares in. i like the business.

i like the valuation and like the management very much. so, that, i think you'll see that for a long time in our holdings. >> b of a shares rose to 23.87. and h and r block shares were low er after the tax l yesterday. revenue did beat expectations. the company did note it usually reports a first quarter loss due to the seasonality of its business, but the shares fell to > the federal emergency management agency which runs the government-run flood insurance flad program says it has received 35,000 claims as of noon today as a result of harvey and warren buffett weighed in saying he thinks the uninsured losses will be something the to watch. >> there will be a high proportion of uninsured losses to insured losses compared to most events.

because just a straight hurricane, everybody cli homeow. fortunately, they did have some warning. a fair amount of warning on this, so there was a lot of evacuation that took place. but it's got to be devastating. >> and houston homeowners don't know what they'll find when they return to th sn homes. and what they do find may determine if they actually stay there. if katrina is any guide, a lot of mortgages will go unpaid. diana oleic has some numbers. >> all that water may as well be ice to the houston housing market because everything is frozen in place. banks from wells fargo on down have stoon sales and mortgage refinances as the houses have to be assessed an poten reappraised. and paying your mortgage is about the last thing you're thinking about if you're a houston homeowner. >> and a lot of these homes in given the level of floodi, you may have individuals who will be out of their homes for weeks or months! in the houston area, there are

twice as many mortgage properties with nearly four times the unpaid principle balance than there were in the louisiana and mississippi counties hit by katrina in 2005. a as the ity of these hous model, over 75,000 houston borrowers could be unable to make a mortgage payment within the nemonths, and 45,000 could become seriously delinquent on their loans within the next four hont months. fannie mae, fred ty mac and fha have said they will offer loan fore bearens which means you don't have to pay the mortgage, but the interest does agrew and it doesn't s t the house is t l totally destroye o the storm. houston homeowners today have more equity in their homes than katrina homeowners did because of stricter underwriting today and higher home prices, so they

should have the incentive to stay and pay, but if the amount of losses t they have, they could still walk away. for "nightly business report", i'm diana oleic in washington. >> and coming up, uber has a new ceo. but the challenges are mounting before he even begins. we'll expl here's a look at what to watch for tomorrow. a big data day starting with jobless claims.

we get a sense of how the consume r is faring when income and a snapshot of housing demand with july pending home sales. that's what to watch for on thursday. ford is reportedly looking a at puing s technology into its commercial trucks. ford's vice president of autonomous vehicles told reuters the goal is getting they will on the road by 2021, including things like delivery and ride sharing services and speaking of ride sharing, a day after saying he would take the job, uber's new ceo got a an all hands on meeting at the company's headquarters. and he told employees uber could go public in 18 to 36 months. diedra tells us what else is next for uber's chief who has a lot on his plate already. >> it's official. he will be uber's next ceo

starting the job this following tuesday after a se process, the stock -- drop out in the 11th hour, uber's board telling employees they voted unanimously to appoint him to lead the company forward after a difficult year. yet before he's even had time to settle in, fresh challenges are emerging. just a few hours of announcing, he confirmed the existence of a preliminary -- into possible violences of bribery laws and today as he meets his new team at headquarters in san francisco, at an all hands meeting, one of uber's biggest investors ben mark capital and travis kalanick heads to court. a fight that early uriber investor says could sign a major investment round and obstruct

filing a lawsuit against a urn founder and company in the mild l of ae of the major vest pment round is not prudent and not the way they should have accused t. >> there's there's the role of kalanick himself. in a statement, he said he quote couldn't be happs the toh to such an inspire iing leader. e mean it? reports say he's been reluctant to give up control of the company he founded and grew into a nearly $70 billion ride hailing giant. a source familiar with kalanick's thinking tells cnbc that he will be at his service. he will have to decide if he wants the help from kalanick or from meddling board members or if he wants to distance himself from some of the people who presided over a company that has faced crisis over crisis over

the past year. for "nightly business report," cvancouver. >> and that tonight. i'm sue herera. thanks for joining us. have a great evening and we'llu.

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