♪ >> this is "nightly business report" with sue herera and bill griffith. t looks.r than the economy added fewer jobs than anticipated last month, but the market looks past the headline and the dow climbs by triple digits. >> keep on trucking. >> the trucking industry says there's more freight than it knows what to do with. one problem, thoughug not e drivers and that could creategh waves throu the economy. >> and chemical attraction. meet two men whose quest is to make chemicalsetter, safer and cheaper. all that and much moreht ton on "nightly business report" for this friday, august the 3rd. good evening, everyone. and welcome. it is the first friday of the month and that generally means the monthly employment report is out, and that certainly was the case today. the headline tells you it was a

miss, but the economy created fewer jobs than expected in july. that would be true. the economy added 157,000 jobs last month, more than 30,00 off the mark. wage growth, not all that great, but ntunemploy broke back below 4% and it turns out may and junee w actually even stronger. so was the report really all that weak? steve esman has some answers. >> it wasan a weaker expected july jobseport that was stronger than it looked. the government reported that 157,00 jobs were created in july down from 248,000 in june and below the f expectationsm wall street. both the may and june reports were revised up by a strong 59,000 jobs and the three-month average growth which makes a l of noise is a very strong 224,000. what's more, t unemployment rate fell to aow 3.9%. >> overall, what we're looking at here is a very strong jobrk , very rapid employment

growth, far above the underlying tren that'seeded to stabilized unemployment rate which is in the low 100s, but wage pressure is still very mited. >> there was strong job growth in leisure and hospitality, manufacturing and temporary tialth. constr, retail was weak because layoffs at the bankrupt toys r us brought it down by as much as 32,000. it's also a big one-month decline and an economist saide there cou some problems adjusting data for norma summertime layoffs. the one standout weakness in the report, wag u are just 2.7% year over year, about the same as it's been, b it's all a muted gain given the low unemployment rate and robust job market. >> the bottom line is that rkers have lost the negotiating power that they once thad relativthe owners of capital, relative to the senior managers and it shows in the distribution of wages. there also is this sort of change in thee structure of job market that we're seeing out there to more lower wage jobs that is not helping as bell.

>> most forecasters expect wages to climb eventually amathe job et tightens further, but for now as schwab put it everyone can getut a job, no one can get a raise. for "nightly business report i'm steve liesman. >> joe davis is joinings analyze global chief economist at vanguard. thanks for joining u tonight, joe. >> thanks for having me. >> how much tighter does this labort, market do you think? >> i still think we can get tighter still. i think with the unemployment rate ticking down below 4%, i a ld not be surprised that year from now if conditions hold globally, that we cld be potentially below 3%. that would soundretty sensational, but given the slow increases we're seeing in the labor force and continued robust s, it would employ not shock me that a year or 18 months from now we would be 3% on the unemployment rate. >> i don't want t c throwd water on it at all, but

underemployment was kind of ans in this particular report. could you address that? well that still remained tlevated, sue. that's something t we've seen this ratio of underemployment, sue, to the official unemployment rate ever since the global financial crisis ten years ago. i think part of that reflects structural mismatches in the labor force meaning there's a critical demand forertain high-skilled industries or education levels which currently we're notble or employers are not able to find those workers immediately, and so that ratio or that gap will remain elevated for some now that means that we can still say wage pressures, but that is keeping a little bit of a lid down on some of these measures. >> speaking of wage pressures as steve liesman pointed oute're not seeing it in the aggregate and back when i was in school we were always taughthat 5% was full employment and that that's when you start to see wage pressures. we're not seeing it right now,

so when do you think we will at some point? >> well, our best estimate is roughly 3.5% on the unemployment rate which we're not there yet and we're slightly above that. should we drop below 3.5%, we'll start me meaningful wage pressures and there is at some point we will need to see higher wage pressures and it is very difficult to precisely estimate what so-called full employment is and it is lower than in periods in the past. which would mean towardhe end of the year is greater wage pressures. >> what does that do to overall economic growth? >> the estimates are kind of all over the board on does it get much better than this or dove w little bit of a deceleration. >> i think the job numbers, we will see some deceleration, if there's any truth at all and we believe there is to some sort of more muted labor supply condition. in other words, the number of workers or potential workers on the side and there are

demographic constraints and you mentioned trucking at the onset of the proam and that's just one of a number of industries running into supply constraints and theew good is that we continue to see modest upward trajectory in wag and that ensures a longer recovery and a longer recovery of the cycle and some are calling the potential o elevator ris recession in 2020, but i think if we could see higher wages, some are associating that with higher interest rates and i would also say, however, that would ensu re consumer spending going d. forw >> joe davis with vanguard, thanks for joining us tonight, snow. >> thank you for hsing me. >> i china's turn. china is threatening more tariffs on u.s. goo just couple of days after president trump is consideringg uppine tariff amount that could upgrade. >> tariffs are ranging from 5% to 25% i retaliation for president trump signaling he may

more than double the tariff level for it coming on $200 billion in chinese imports and some of the notable items in china cites 25% tariffs on aspartame, communion wafers,le and textiles and 20% tariffs on pencil creigh orngs golf clubs and contact lennes. li all, the items comprise roughly $60 b in the u.s. good as china imports lots u.s. goods than vice versa. larry kudlow anowledges the items are want engaged in trade etalks. >> i heen involved in the u.s.-china talks. there haven't been a talks recently. wroen what they're doing. the white house said it's open to furth discussion. in recent days i can report there has beene s communication for the first time in a good while. meantime, they're calling for a de-escalation of a

trade war and that doesn't appear to be in the cards for nightly business report i'm kayla tausche in washington. >> nowerhere's anoroup concerned about trade escalation that would be the apple industry. appl farmers think the tariffs of mexico, china and iia will cause serious damage and take a bite out of their business. seema modi is in walden, new york, for us tonight. >>er >> chris bros apple orchard in new york harvested 20 million pounds o apple last year and have been graduallyas increg the amount of apples they produce, partially thanks to growing demand from overseas. d the onset of tariffs has put a number of apple orcha s at risk. >> does market pricing fall below a certain point and we nnot make a profit and the margins are pretty thin to begin with and razor thin in some situations and if that pricing falls a littl bit we could be looking at an unprofitable situation, if we're lking at

an unprofitable situation, we stop investing and we stop hiring good wage jobs and you know, we'll suffer and if it goes on long enough we'll go out of business. >> if fewer apples are going overseas, farmers are worried the domestic competition between producers will intensify. another farme in hudson valley says the ongoing trade dispute andsi con over whether tariffs will depress the price of apples h made it hard to plan and predict how much demand they'll see in the future. >> the apple industry is when we planted thesere many of them were planted seven or eight years ago and they were just getting into full production and those decisions were made a long time ago and you can't quickly pivot and rip something out. >> the u.s. exported roughly 890 million there ares wor million dollars worth of apples to 2018, up about 20% during the same perd last year and it continues to be a key export for

top-producing states like washington, new york and pennsylvania. plus a source of jobs. >> u.s. apple industry is dependent on our exports. we export oneutf three apples and that's allowed us to each year generate $15 billion in economic activitynd create 71,000 jobs and contribute a billion dollars to the u.s positive balance of trade. so exports are super impornt and the tariffs are very concerning and we would like to see these disputes get settled quickly and amicably. >> with the apple picking season kicking off next week, farmers in the hudson valley are under pressure to sell as many apples as they can. for "nhtly business report," seema modi, walden, new york. on wall street, stocks closed out the week with solid gains led higher by apple and ibm. the market also shrugged off the china trade threat and the soft jobs headline number and the dow

rose 136to point 25,462. the nasdaq climbed nine and the s&p 500 added 13. for the week, the nasdaq gained the most up just about 1% and today's triple-digit move saved the week for the dow which barely broke into the black. >> when you hear that apple is now worth a trillion that a share of amazon is fast approaching $2y00, you proba think, boy, these are high-priced stocks and you would >> remember, though, value may be in the eye of the beholder, but the fact is that the average price of a stock in the s&p 500 is at a record right now. bob pisani explains. >> investors were all abuzz when apple hit $1ke trillion in m value, but what traders wantse is sky-high valuations in that department. trading volumes have been stagnant and the average s&p 500 stock is now $115.

five years ago it was $78 and it's not just amazon, approaching their 2,000 a share. in 1998st nks were $150 in the s&p and today there were 30 and the first $1,000 stock appeared and now t the s&p and you can thank the relentless rise of the stock rket which was up 50% in the last five years and there was the refusal of, and the companies used to split the stock becse they felt the lower price could make it more appealing to average mop and pop investors. in the last decade it seemed that institutional sinvest have become more dominant in the market and they don't care about pe actualce and they buy by there are otamount, n by stockp ice. that's why they split so few and far between. >> it was so common that standard & poor's would beat you when the company announced a

stock split. only three companies in the s&p stockplit their that's amazing. i'm bob pisani at the new york stock exchange. >> up, in, help wanted. i'm kate rogers in salt lake city utah and tonight on "nigly business report," we will tell you how a morsive labor ge in the trucking dustry is imaccoupacting every segment of the economy. ♪ ♪ > o as today's jobs report show the national unemployment rate is back under, but one area that could use more workers industry with about 70% of freight in the country moved by trucks, the demand for drivers hasser in greater. in ou saw, kate rogers i

salt lake city with a closer look at that issue. >> the nation's truck driver shortage is so severe its cght the attention of the white house. >> and here representing the american trucking associations, and we are committing to 50,000 new opportunities over the next five years. >> it's big stuff. thank you,an dan. thyou. me for dan england, former president of thecan trucking association, the labor crunchsn't just an industry problem. it's personal. as he looks to find drivers for his family's fourth-generation trucking company. >> we have right now about just a little und 6500 drivers and, gosh, if we had 500 more right now we' be -- we'd be very grateful. we were interested in growi i. the businethere and we need the manpower or woman power to get it done. experts say the industry couus an additional 65,000 long haul freight drivers as the shortagy's ripple effect impact

retail to construction. hathere's more freight ever and last year the trucks hauled 70% of it across th country accounting for $676 billion in revenues. long hours and federal age restrictions and con jepted roadways all make attracting new recruits a big challenge for trucking companies and the driver popul ion is ageing an lacks diversity and only 6% of truck drivers are female accordin to the ata. that means driversike longshell jenkins are a rarity. the 21-year-old just receivedl her commerc driver's license. >> i told them i can do it just because it's a man's job, i can do the samg as a man. >> to attract workers in a tight market, companies ag offer signing bonuses in the thousands. lexible schedules so that drivers can spend more time with family, new trucks and loan repayments forni tr. >> while starting pay can begin around $20,000 annually it's not uncommon to see multiple raises in a year. here is every reason to believe that the shortage is

getting worse, not better, right? as that happe and the demand for drivers is so strong and the supply is limited, that mea pay continues to go up. >> and while the industry e driver with shortage, a brewing trade war also stands to negatively impact sector. the ata says nafta trades generaer $6.5 billion for the u.s. trucking companies alone and directly empys 31,000 u.s. drivers. >> any interruption in that, anything in the dynamic or the relationship tween the countries that will harm a lot of people and not just us. we'd like to see the status quo remain. >> for "nightly business report," i'm kat rogers in salt lake city. raft heinz sees sales getting better and that's where we begin tonight's market focus. resultstill beat street targets and the key, though, is the company says increased spending on othnd maingew

products should lead to stronger sales later this yea separately, the new york post says krafteinz held preliminary talks with campbell's soup, but no offer is currently on the table. kraft heinz shares rose 8.5% to $64.48 while mpbell's soup cl>>bed to $42.76. ake two investors are taking two after the publisher easily topped street targets after the bell thursday and the results were due to stronges s of grand theft auto online and mba 2k18 titles. shares of take two rose 1% to 23.41. sharo of go posted their best days in a year after the company posted better than expected results last night and gopro says it sees sales above estimas and it plans to launch thre new cheap cameras for the holiday this year. shares were up 18% almost to

$7.05 a share. discover fancial says its xef david helms will retire next year and reel be retired by the company's chief operating officer and he's been ceo for 14 years now and discover shares were up to $73.34 and perry ellis says it haecved a new bid for $28.90 a share and that works out to $444 million. that's up from the earlier offer of $28 which was rejected and the sweetened offer is another attempt by the privately held randa to up end perryellis' previously agreed-upon deal and that deal was worth $437 million which works out to 27 1/2 and what's interesting is today's shares of perry ellis closed above prices and 9.10. this week's market monitor has names and y growth

they may give you some down side otection and the last time he was on was november in 2017 and he picked nike which was up 26% d cognizant solutions was up 5%. he is allen vaughn, co-portfol manager of the jensen quality growth fund which is up 9% so far this year. welcome back. >> thank you. >> congratulations on those previous picks. >> thanks. te you are giving us a little downside pion in case the economy turns a little bit south and there arenteresting names. the first one, basically we're going go to pzernd it's a global play, as well. so pfizer is a biopharmaceutical company with a wide-ranging drug portfolio and we think that's a real key distinction for pfizer and we think it limits its exposure and the risifto any one sp drug and as we look at the company's drug pipeline, we think it's a bit

underappreciated and we expect revenum pfizer to accelerate if the drugs in the pip line are converted to sales in the next three years. >> and then there's anfanel and we're going to fiber optics and cable, and thisoes all o that, doesn't it? >> right. anfanel is a bit under the radar company and it's a supply chain for electronic manufacturers around the world and they make electronic components into automotive devices and into aircraft electronics and we only think that positions very well for the trend we'rein seein which electronics are proliferating across the economy and across the globe. >> next we go to your final pick which is 3m and also a global play. you point out the dividend and its paid the dividend, and it's raised the dividend payment for 60 consecutive years. >> s3m generally thought of as an industrial conglomerate and

we think that's a bit of a misnomer because we get a meaningful amount of business, an we thinkhat helps to dampen the earnings volatility we might otherwisesee. >> the company has longstanding competitive advantages including the strength of their brands and their manufacturing in new pruct development expertise and like we mentioned, 3m is an excellent producer of ch and they have an incredible dividend history that we think isell positioned to continue. >> on that note, allen, thank you so much, have a great we bend. >> allend with the jensen quality growth fund. >> u next, how a pair of entrepreneurs can prevent chemical disasters like this, on drop at a time. ♪ ♪

there is currently roughly a $4 billion global market for hydrog peroxide or h202. you mightt use to rinse your cuts or bleach your hair among other things it has been made th highly flammable, petroleum-based solvents and two houston-based entrepreneurs got the bright idea to change the production process. >> a explosions arcemmis chemical blast in the aftermath of hurricane harvey next summer putus nox odor in the air. they recognized it more than 30 miles away. hydrogen peroxide. >> i smell it everywhere. >> plant accidents are only too familiar in houston, theworld's chemical et manufacturing market. in 2016 an explosion at a different hydrogen peroxide plant there killed one worker. >> petroleum-based solvent is aiammable and kind of like a

bombng to happen. at their company, solugen, han and chuck, his friends call him se the same process to make hydrogen peroxide, the same stuff we use to clean cuts and untertops. he learned pancreatic cancer cells contained hydrogen peroxide and it aids in the production of hydrogen peroxide. he won't say how, but he figured out how to create a enzyme that does just that. >> it turned out to be hunt studying ways to makeydgen peroxide with metals like platinum. >> it's liunbelievable. muscle milk, like the from teen powder. >> hunt had been taught thats enzyere weak and unreliable. >> the secret sauce to it all is in this fridge. >> but with machinelearning, it extended its life span from minutes to days to weeks.

>> to engineer those enzymes efficiently and below costss a slow competing power was not possible five years ago. >> most people from a petrochemical background, they have no idea that this has occurred. we are solugen. they pitched the idea in 2016 and received immediate requests to buy theirro biopexide so hunt built a reactor using parts that he bought at a home depot. now a bigger version of their minimill whichixes sugar, air and water with the enzyme took their hydrogen peroxide to market in the form of cleaning wipes. >> it's called ode de clean. >> in just a few weeks at four to five bucks a pack they were on track to sell $4 million worth in a year. no wonder a majorl commerc wipe maker has already bought the brand. that deal may bennnced this month, but g and hunt have even

bigger plans. solugen has an expensive setup to concentrate itsox pe. taking out the water makes it easy to ship and chu robardi and hunt believe they can centralize production. >> they're fairly large and nothing compared to an oil refinery. >> in the enzyme, they make their own hydrogen peroxide. >> 50 years a investors looking for a tip heard the word plastics and now they might hear enzymes or plant sugars. >> i think we already are and i guarantee you in 50 years we'll be using plant sanars for of our chemistry. if you can make chemicals from plants, plas are everywhere. you don't need to have the big, centralized facilities. >> isn't that fascinating? they use it to purify their water, g andunt see a day when those communities will make their own h202 and there may be

a therapeutic reputation and it helped ld it a dru aimed at fighting pancreatic cancer that is in phase two now. g right >> wow. amazing story. before we go, here's a final look at e day on wall street. the dow rose 136 points to 25,462. the nasdaq climbed nine. s&p 500 addedt 3 and tll do it for us tonight. i'm sue herera. thank you for joining us. >> i'm bill griffith. have a wonderful weekend. i hope to see you backn monday. ♪ ♪ ♪ ♪

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