>> announcer: this is "nightly business with tyler your hired! job growth is strong. the unemployment rate, low. but americans are struggling to get bigger paychecks. real jobs in virtual reality. the fast-growing technology could change the way a lot of industries do business and the way people work. small caps, big gains. if you think blue chips are pricey, our market monitor says there are other alternatives that could pack a punch for your portfolio. those stories and more tonight on "nightly business repor. good evening, everyone, and welcome. i'm sue herera. tyler mathisen is off tonight. the dow and the s&p 500 closed at a record. we'll have more on that in just

a moment. but we begin tonight with what some are calling the strongest job market since the turn of the century. the economy created a healthy number of full-time positions last month across a broad range of sectors. non-farm payrolls rose by 228,000, making this the second month in a row that gains have eclipsed 200,000. the unemployment rate held steady at 4.1%. but closely watched wages rose just 2%, falling short of expectations. hampton pearson takes a look at the unemployment picture and the myst those stuck wages. >> reporter: november job growth was widespread with professional and business services leading the way, adding 46,000 new workers. manufacturing continu to rebound, with 31,000 new hires. and repair work in hurricane-ravaged texas and florida helped boost construction hiring by 24,000. but solid hiring and an unemployment rate at a 17-year

low is still not boosting wages. up just 2.5% year over year, now averaging just over $26 an hour. even president trump's top economic adviser agrees wages are not where they should be. he says tax reform is part of the solution. >> we're still not growing wages in this country. we do believe that tax reform will help us drive real wage growth in the united states which is and reat te administra. >> reporter: the pace of hiring has slowed. 187,000 jobs per month last year to 174,000 per month this year. a key factor, leading economists say, in why wage pressures have remained low. >> i don't think there's any amount of pressure you could put on this economy that's going to generate really strong wage growth. >> reporter: the holiday shopping season is increasing the competition for new workers. retailers added 19,000 new hires last month. and the boom in online shopping

generated 10,000 new jobs in transportation and warehousing businesses. in washington, d.c. and other major metropolitan areas, small business operators are competing every day to find workers. kathleen donahue runs a game shop near capitol hill. >> i need people who have experience with kids, who can handle a room full of kids but also have a deep understanding of gaming and how to teach strategy games. >> reporter: a few doors down at a local sprint outlet, there are plans to double the workforce. but the store manager is having a hard time finding qualified workers. >> many of the persons apply online, every single day. they have to pass a test. and many other people that apply online fail that test. >> reporter: meanwhile, the november job recovery has most watchers anticipating monetary policymakers will raise key short term interest rates for

the third time this year at next week's federal reserve meeting. for "nightly busin hampton pearson in washington. for more analysis on the jobs report, the chief u.s. economist at s&p global equity research. beth ann, welcome back, nice to. >> great to be here. >> take a look at this report specifically as it relates to wages. we listened to some of the sound bites in hampton pearson's report, and they're having trouble getting qualified workers. wouldn't that push up wages? what's keeping a cap on that wage growth? >> we've been puzzled why wage gains seem stuck at 2.5%. it's a lot better than it was three, five years ago, when it was negative in real teams. there's a couple of reasons. one, sticky wages, meaning that the economy ually follow wi strengthens. but it's been ten years since the recovery, the recession end.

we think one factor is the skills gap. one thing not mentioned here was job openings are at record highs. yet the unemployment rate is at a 17-year low. we think there's a labor inefficiency happening. those vacancies aren't meeting the supply that's out there. >> does that also explain the participation rate, which is at a 40-year low? and does that equate with the move that we're seeing down in the unemployment rate? it doesn't seem to make much sense to me sometimes. >> that's the other lump of coal in this otherwise relatively positive jobs report. both wage gains being so low and of course the labor participation rate that's still near a 40-year low. you mentioned that the unemployment rate was about 4.1%. the good news in that was we saw those people getting jobs and people joining the workforce. but that wasn't enough to move the needle on the labor participation rate. that means that if you imagine all those people, now, many of

them won't because they're retired, but those of working age, if they return to the workforce, that unemployment rate would be a lot higher than what we see right now. >> does today's report influence the fed in a way that allows them to raise interest rates? do you think they will when they meet next week? >> i think the fed has indicated on many accounts, on many accounts that they plan to move next week. this just gives them one more reason to say we're full steam ahead. however, they will also be concerned about those soft wage gains. and one of the reasons why is because their other mandate is not just job growth but also inflation. when inflation gets lower and lower, they may have to reconsider what they do next year. they have three pencilled in. let's see if it's less than that. >> some people are talking about disinflation. do buy that argument or not? >> we at s&p global are somewhat concerned about the lower inflation readings that we have

seen. in fact just in october, we thought the fed would wait a little while, not raise rates in december, because of the inflation readings that are so low. if you look at the personal consumption deflator core reading excluding food and fuel, it's 1%. if he ev2 i%. one of t conce of cour is this low inflation reading that we're seeing. >> we will wait and see what they do. beth ann, thanks so much, we appreciate it. despite job market gains, consumer sentiment cooled for the second straight month. but even with the slight decline, overall sentiment remains near lofty levels. according to the unive of michigan, stock market gains and economic growth have underpinned consumer optimism. the report showed expectations about future inflation have firmed up a bit. as we mentioned, the dow and the s&p 500 both finished the

week at records. helped by that better than expected employment report. that suggests to investors that economic growth remains on the upswing. so here are the closing numbers for this friday. the dow jones industrial av advanced 117 points to 24,329. the nasdaq was up 27. and the s&p added 14. but it was a volatile week for the nasdaq, which was the only major index to f hours before the deadline for a partial government shutdown, the president signed into law a short term funding bill. the stopgap, which as we told you, passed the house and the senate last night, extends funding levels for two weeks. it does not resolve the budget issues that exist between the two parties. but the bill buys some time for negotiations betns president trump declared an emergency in california and ordered additional federal aid to help with the fires that are quickly spreading through the southern part of that state.

aditi roy is on the ground for >> reporter: day five of california's wildfires. and it's still not over. in fact, they grew overnight. half a dozen fires now burning throughout southern california. tens of thousands evacuated. rebecca torrez is the assistant manager at barrel house 101, a local watering home in ventura, california, a seaside community that's borne the brunt of the impact of the latest wildfires. with so many people in town evacuated and so many downtown shops closed, she says their business is down. >> we don't have that business right now. we do have the business of people coming in that need that spot. are we making as much money? probably not. >> reporter: still, she's thankful she has a home to go back to every night. others weren't as lucky.

for the homes that didn't make it, little remains. the shell of a car. the twisted metal of a garage door. or the charred remains of a washer and dryer. drive through this neighborhood, and you'll notice some homes turned to rubble, while others escaped mother nature's wrath. the evacuated neighborhood no longer a ghost town, as workers scurried about, making it safe for anxious neighbors to macome back. we found utility workers cutting gas lines to the homes. this as numbers pour in on the economic impact of the wildfires in affected neighborhoods. according to the online real estate site zillow, nearly $10.5 billion worth of residential real estate and 14,000 homes are in the evacuation zone of the thomas fire. and in los angeles county, where the skirball fire threatened mega mansions, nearly $6.5

billion of homes are in that evacuation zone. for torrez, the devastation means a chance to turn her donations for the weary neighbors who land at their doorstep. >> we just wanted to be a spot where anyone local, should they be in need or have things to donate, we could be a little hub. >> reporter: as to why there's an explosion of wildfires in the middle of december, fire officials tell us it's because the extended drought in the state made and high winds don't help matters. for the weekend, winds are definitely calmer. aditi roy, ventura, california. >> reporter: i'm kate rogers in new york city. tonight on "nightly business we'll tell you about virtual reality. it's more than just fun and games. it

president trump had something to say today about wells fargo and dismissed reports that the consumer financial protectio bureau will go easy on the bank. in a tweet, he said the, quote, fine and penalties against wells fargo for their bad acts against their customers and others will not be dropped as has incorrectly been reported but will be pursued and if anything, substantially increased. i will cut regs and make penalties severe when caught cheating, end quote. wells fargo has been accused of wrongdoing related to consumer practices. when you this of virtual reality, you probably think of videogames. most virtual and augmented virtual reality will likely have

a big impact on numerous industries. the fast growing technology is creating a lot of opportunity. kate rogers shows us where t. >> reporter: at 30 years old, this man is working as a developer in virtual and augmented reality. >> the best thing about working in this field is being able to solve creative problems on a daily basis. >> reporter: he's a developer in irvine, california. the company designs applications to help train workers in varying industries. exxonmobil has used their virtual reality platform to train operators and engineers in oil and gas production. >> the vr and ar industry is really young. and so there's a great potential for new applications that need to be built by content creators. >> reporter: virtual reality

replaces your reality. augmented related bridges the gap between the real and virtual world. the industry is seeking talent as the application of this technology spreads to medicine, transportation, education, energy and other field. they've grown from 90 workers in 2015 to nearly 250 today and is looking to hire an additional 100 workers like noland. >> we're looking for people who have programming skills, who know how to build these rather sophisticated applications. on the other hand, we're looking at people who know how to do modeling. >> reporter: finding the people with these skills is challenging. they've teamed up with several colleges across country to help educate aspiring workers. >> we hope, as we do this ourselves, that universities will pick up our curriculum and start expanding this new workforce. >> reporter: tina chang is part

of a traininm at layman college in new york. her prior experience includes broadcasting and work in an architectural firm. she felt it was time for a change. >> i found this opportunity to be able to reeducate myself. >> reporter: her coursework at lehman includes coding, animation, 3d graphics and web design. >> i think the opportunities for augmented reality and virtual reality are huge. >> reporter: the 11-month program costs under $600. prior experience in computer science or coding isn't necessary to succeed. >> there's a tremendous opportunity for people who are entrepreneurial. the most important thing is passion and creativity, because you can learn these skills. >> reporter: and with the global vr and ar industries set to grow by 100% each year through 2021, that opportunity is only expected to become bigger. for "nightly business repor i' kate rogers in new york city. a unit of caterpillar are paying tens of millions of dollars in fines.

that's where we begin tonight's market focus. a subsidiary of caterpillar is getting hit with $25 million in fines for intentional ly dumpin parts in the ocean to hide evidence. caterpillar says it's taking corrective action against the employees involved. honeywell is launching an $8 billion share buyback program. the industrial conglomerate said the new purchase includes more than 1.5 billion remaining from a previous share repurchase. shares were up slightly at $153.53. radius health says it's seeing positive results for its breast cancer drug. the company plans to launch the second phase of the drug's trial. shares jumped to $31.60. denali therapeutics, which

specializes in developing trea neurodegenerative diseases, went public on the nasdaq, pricing about 14 million shares at $18 apiece. denali's ipo raised $250 million. the shares climbed 19% in their first day of trading, closing at $21.45. and pepsi is moving its stock listing from the new york stock exch to the nasdaq on december 19th. the beverage giant said that move will give the company greater cost effectiveness and access to the exchange's services. pepsi's shares were off 16 cents to $116.57. well, need more evidence of etfs' growing popularity? more than $600 billion flowed into exchange traded funds globally in the first 11 months 54% more than in all of 2016. the growth stems from the preference among for funds that t performance

of large parts of the market but at a cheaper price. our weekly market monitor says investments in etfs have made large cap stocks overvalued. he h the names of some small cap companies you may want to consider owning over the next five years or longer. lamar villery is the portfolio manager of the villery balanced fund. welcome, nice to have you here. >> thank you, glad to be here. >> you also make the point that some of these small caps tend to have less debt. >> that's right. that's right. generally speaking, these companies are in growth mode. rather than like a mature company that sort of takes out a lot of debt, starts paying a dividend, these companies are aggressively reinvesting in their businesses. generally they're not taking on a heavy debt load. >> let's get to your picks. the first one, you say they all have strong recurring growth revenues, and you want to own them for about five years, as we mentioned. first one is exxon enterprise. why do you like it? >> sure. so the name that probably -- you

probably would recognize what it used to be called, taser. they initially made their name in the nonlethal weapons, the taser guns. the real growth engine here that we like is the axon business, their body worn cameras and fleet automobile cameras. they sell these cameras to municipalities and then manage the data, because there's a massive amount of content created this, and so they have long term contracts with these local police forces. in fact new orleans, where we are, we're here in new orleans, new orleans was just one of the first customers for the fleet vehicle cameras as well as the state of louisiana separately just signed on. so we think there's a massive amount of growth opportunity there. >> little bit of a recreational play here, pool corp. is the next one on the list. what is attractive about that? >> sure. so the great thing, now, when you buy a pool or when you have

a pool put in your house, you're not signing any long term contracts. but you're basically signing off on a long term spend. so pool is bigger than its next 52 competitors combined. if you own a pool, you're a customer of pool corp. they're a distributor of all products, what they say is we sell everything but the water. so they will sell you, you know, chemicals, a new pump, all those sorts of things. once you own a pool, it's very unlikely you're going to let it turn green or fill it in. there's a very long life, very long term revenue stream for these guys. >> next, and i hope i'm reading this title correct, to you. >> to you is exactly correct. >> i'm not familiar with this, tell me what they do. >> to you partners with universities in offering online degree programs, graduate degree programs. while you haven't heard of to you, you have probably heard of yale, northwestern, georgetown, university of north carolina. they partner with all these schools and more to offer fully

online versions of their graduate a couple of tim these are ten-15 year contracts. if you're a student, you pay full tuition as if you were in the bricks and mortar university. to you keeps 65% of your tuition, which sounds crazy until you realize from the universities' perspective, they're not -- they've never made money on anything before, they're making money even though they're only getting 45% of the tuition dollars, the universities actually profit off it, which is a crazy thing for them, so they love it, very long contracts. they've never lost a customer. they're adding on schools every day. >> we have to leave it there, thanks very much. you can find his stock picks on our website at nbr.com. coming up, affordable luxury. fashionable jewelry without breakdown the bank. it started as a bright idea. it turned in

the volatility in bitcoin was one of the week's biggest stories. today was no different. the price fell today after risen more than 40% in the preceding 48 hours. some have attributed the crazy moves this week to the coming launch of bitcoin futures on major exchanges. bitcoin futures start trading on the cboe on sunday and on the cme the following week. jewelry is often described as an accessory. and jewelry, especially trendier and cheaper fast fashion jewelry, is usually treated as an accessory business. as tyler mathisen tells us, that's changed since two young entrepreneurs from new york city got the bright idea to start a company that makes fast fashion jewelry .

>> we knew this was going to be successful within the first 48 hours of it going live. >> reporter: amy and daniella do their homework. how else could they have sold millions of on-fashion, hip, in the moment bangles, earrings, and necklaces, for 30 to $250 apiece? >> within a few days we'll have an idea for what she wants within that trend. >> reporter: "she" is bubble bar's typical customer. someone not unlike new yorkers amy and daniella. >> we're looking for that 25 to 40-year-old woman who wants on trend, fashion nov novelty jewelry. >> reporter: they met, moved on to business school, continuing their forays to places like sax fifth avenue, where they found themselves in the summer of

2009. >> amy turned to me and said, would you ever buy jewelry from this place? i sat there for a minute and said, huh, no. >> the two of us had never gone out to buy a pair of statement earrings or bracelets made us question who was. >> reporter: aiming to figure out who she is, they began quizzing fellow students on shopping habits and talking to wholesalers about turning product around, building a case to create a business, a brand around fast fashion jewelry. they put up about $20,000 each to build a website and began testing it after they graduated in 2010. >> we started getting all of these orders from women that we didn't know. and a few week later they were coming back and making another purchase. >> we were doing something right. >> reporter: tens pieces sold that summer, convm a real business. but pitching venture capitalalists more th 90% of whom are male, wasn't easy. >> they really didn't get it. >> reporter: the two kept at it,

eventually finding women who not only got it, but invested too. bauble bar opened officially in january of 2011. >> you'll be told no a million times. but you really only need one yes. >> reporter: bauble bar won't say whether it's profitable yet but wheeler says its perfor has exceeded her expectations. >> they've done a fantastic job building a business. and it's a completely different business today, which it should be. >> reporter: different because bauble bar and online jewel is sold at bloomingdale's, nordstrom, and 200 retailers around the world. they've expanded on the lower end with sugar fix, sub-30 dollar items sold in target stores. >> we have one that has letters in diamonds. that's $1,000. >> reporter: and a lucrative new chunk of the business is coming from other fashion companies, hiring bauble bar to design

products they sell under their own names. >> that element of the business now is about 20%, 25%. >> reporter: quite a nod to these shopping buddies. industry outsiders who have really worked th >> since 2011, bauble bar has undergone severaro included on the list of investors is the venture capital arm of comcast, the parent of cnbc, which produces this program. that is "nightly business for tonight. i'm sue herera. thanks for watching. have a great weekend, and we willay

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