>> the employment report was weak. there's no question, it sort of reinforces the general picture of an economy that's struggling to recover, struggling to grow. >> susie: zero job growth sparks heavy selling on wall street with the blue chips tumbling triple digits. >> tom: the top housing regulator is suing more than a dozen of the nation's biggest banks, after taking billions of dollars in losses on securities backed by soured mortgages. it's "nightly business report"

for friday, september 2. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: good evening, everyone. no jobs. precisely no jobs were created in august, the first time that's happened since world war two. tom, the only bit of reassuring

news in today's employment report: the unemployment rate was unchanged at 9.1%. >> tom: economists expected the report to show a gain of 75,000 jobs, susie. it's a low number. the worst we have seen all this year, but it also means we didn't lose any net jobs either. here's a look at the job numbers, month by month, over the past year. we go from negative job growth last september to a march high of 235,000 jobs being added to today's report of zero job growth for august. stocks sold off sharply on today's dismal report. the dow tumbled 253 points, the nasdaq fell 65 and the s&p 500 lost 30. >> susie: no matter how you look at it, today's labor ws wasn't a good way to kick off labor day weekend.

joya dass reports. >> reporter: zero, nada, none. no new jobs! no matter how you say it, the news for the 14 million unemployed americans is not good. experts say the problem is the economy is simply too weak to produce the hundreds of thousands of jobs it desperately needs. market strategist joseph tanious doesn't see that changing anytime soon. >> we found that we need to see 1.5% g.d.p. growth in order to hit the threshold for job creation in the private sector. but it isn't until we see 2.9% for overall meaningful improvement in the unemployment rate. these numbers shouldn't come as a surprise given that we're growing at an average of 0.7% this year. >> reporter: adding to the dismal snapshot of the labor market: the government also revised downward estimates for job creation in june and july. on top of that the average hourly workweek contracted by an hour, signaling that hiring

isn't picking up anytime soon. so is america in a new recession? economist josh feinman says no, at least not yet. >> sort of the normal precursors to a recession, in my view, are not present. the imbalances, things like housing and consumer durables and inventories are not there. >> reporter: attention now turns back to the federal reserve and what policymakers could still do to stimulate the economy, also known as another round of quantitative easing. >> i think the central bank had done all they can do. q.e.-3 doesn't make sense but it's not off the table. >> reporter: others would like to see more aid from washington, namely tax incentives and infrastructure spending coupled with an effort to tackle long- term problems with entitlements. >> it's not going to be the magic bullet to cure everything that ails us, but it will be helpful.

the problems when i look at the political landscape in washington. frankly, i'm not terribly optimistic. >> reporter: many economists are also not optimistic that president obama's speech on jobs next week will offer any meaningful fixes. but, certainly everyone from main street to wall street will be listening. joya dass, "nightly business report" new york. >> susie: will today's jobs report ring alarm bells in washington? here to talk about what we can expect from government policymakers, stuart sweet, president, capitol analysts network, one of washington's top political analysts. stuart, nice have you with us. >> well, thank you for having me today, susie. >> susan: all right, so people are very eager to hear what president obama is going to propose in terms of a jobs plan when he talks next week. from what we know so far, i'd like to get your take on it. he's going to propose some kind of infrastructure spending program, some tax cutes, a payroll tax break, a tax credit for businesses that hire, and

extending unemployment benefits. they don't sound like a lot of new ideas. will these actually create jobs? >> well some of these ideas have been tried before and not worked out terribly well. some of them actually could do some good. i think president obama's proposal is well targeted. when we started the recession, there were eight million construction workers using hammers. now there are six million. we have two million underemployed or unemployed construction worksers. they should be building schools, fixing highway hoys and are jobs that could be created if congress approves the program. others are not as attractive. paying people more in unemployment insurance will not create jobs. it will make people feel better but it will not add to the workforce. i would say in terms of providing tax credits for business, that has a mixed record. during the carter administration, they tried a

version of this, of giving business tax breaks for hiring folkes, and the weight of evidence is is it did some good but the bang for the buck was not terrific. so none of these ideas are really new. some are better than others, but none of them are going to really all by themselves pull us out of this recession. >> susan: and them it's one thing to propose ideas and it's another thing to get democrats and republicans on board to come together to approve them. do you have any confidence that they're going to pull together? >> well, here the story is actually more positive than perhaps the public is aware. this new super-committee born from the controversy involving the debt ceiling increase had very strict timetables for implementation. we should no, no later than december 21, whether some of the proposals president obama will outline make it into the package. if they do, there's a streamlined mechanism for having these votes, up or down, on the house floor none of shenanigans

we've seen. these votes will take place. it will be up to president obama, if he can get the republicans to agree to some of his ideas, and they, too, will come in with ideas of their own. there is a potential here for a deal that gets put into this fast track process, and there might be good news just before santa arrives. >> susan: let's see what the next timetable is. we have the president speaking on thursday. the supercommit semeeting september 13. how fast can we see some kind of implementation of the jobs program? >> well, the timetable for the super-committee, their recommendations must be out of their committee by november 23, and congress must vote by december 23. this is all set out by statute. the trains will run, and if they put a caboose on this train, it will make it to the president's desk, and he will sign it. >> susan: all right, well, we'll see. stu, thanks so much for coming on. have a nice labor day weekend. >> same to you, susie. thanks for having me.

>> we have been speaking with stuart sweet. >> i'm vito and i'll tell you how i got a job in this tough economy. >> tom: also ahead on the program, market monitor guest jack ablin is going on the defensive and staying in the u.s. with his investment strategy. as we mentioned stocks finished lower today, on that dismal jobs report and that led the blue chips and the s&p 500 to negative closes on the week. the dow losing ground in just two of this week's sessions for an overall net loss of 44 points. the nasdaq the only one of the major averages to eek out a net weekly gain, up less than half a point over the past five sessions. and the s&p 500 down almost three points on the week. >> tom: uncle sam is taking on the nation's biggest bankers over securities backed by bad mortgages. the federal housing finance agency, which oversees mortgage buyers fannie mae and freddie

mac sued 17 banks this afternoon, including bank of america, citigroup, j.p. morgan chase and goldman sachs. and joining us now our washington bureau chief darren gersh. darren, what is the central allegation here that the federal agency is making against these big banks? >> you know, tom, it's very interesting. basically, the federal regulators are suing these banks as an investor, and they're saying that the banks when they put together these complicated mortgage-backed securities, basically didn't follow underwriting procedures, and essentially lied to investors about the ability of these borrowers to repay their alones. very interesting detail in here is som of these suits allege that the banks hired due diligence firms to make sure these loans were okay and then ignored their advice. if that's true, that's very damaging. >> tom: very damaging. it's not the first time the banks have been alleged to have

behaved improperly when this came to hand, out these mortgages. i want to ask first about request possible remedies here as they try to negotiate a settlement, perhaps. >> when i was adding up the amount of money involved, i thought my calculator was going to catch on fire. they're asking for $188 billion. and they want some damages, which would be hard to get. one very important thing-- the federal regulators, the federal housing finance administration, has hired plaintiffss' lawyers. these are private firms, very skilled in security lawsuits, very aggressive. they're serious. >> tom: this comes at a time when the obama administration is likely to put more pressure on banks to ease some of those underwater mortgages. we may hear more of that on thursday with the president's speech. darren, we appreciate the insights into this big lawsuit here announced late today from washington this evening, our bureau chief, is darren gersh. >> thank you.

>> susie: tropical storm lee is causing problems for the nation's biggest oil companies. they're shuttering some of their oil rigs in the gulf of mexico. daily oil and natural gas production from the gulf is running well below its normal rate. and nearly a third of the gulf's 600 manned oil platforms have been evacuated with helicopters carrying workers back to shore. >> oil prices moved lower on the sour jobs data as opposed to the threat of the storm in the gulf. let's get you updated with tonight's market focus. >> tom: it may only be two days old but september is living up to its reputation as a bad month for stock investors. the dow industrials spent the entire session in the red thanks to the sour jobs data. this 200 point plus drop is the biggest fall for the dow in two weeks. bank of america was back at the

bottom of the dow, falling more than 8%. b. of. a. was the most heavily traded new york listed stock today. this is the past 30 sessions as it fell from over $10 to $6 last month. of course, today's market action came before the federal housing finance agency late today sued bank of america over losses tied to bad mortgages. other big banks facing lawsuits from the agency include j.p. morgan, citi and barclays. j.p. morgan shed more than four and a half percent before the lawsuit was disclosed. citi shed more than 5% during the regular session. and barclays dropped more than 7.5%. thanks to the disappointing jobs data, investors were back buying bonds. here we have the yield on the ten year government note. it dropped below 2%. the high price, low yield during the financial crisis was just above 2%.

the market seems to be betting on the slow economy shing the federal reserve to launch another bond buying strategy. gold also saw plenty of buying. it jumped more than $47 dollars an ounce, more than 2.5%. the gains brings gold almost back to its high last week before it dropped $150 an ounce in two sessions. as a sign of market worries regarding the economy, the economically sensitive industrial sector was the second worst today, behind only financial stocks. companies with defense businesses saw some of the stiffest selling. textron, rockwell automation and i.t.t. each fell by more than 4.5%. technology was also weak. hewlett packard fell more than 5% today. h.p. has had a tough year and an awful summer. announcing its getting out of

the computer hardware business has not helped kick-start its stock. shares are less than $2 above this low, which is a six year low. finally, we mentioned netflix last night. it's content partner stars announced it ended negotiations with net-flix over streaming its movies. shares fell 6%. and that's tonight's "market focus." >> tom: smartphones may be

cutting edge technology but they are fragile little things. you know that if you've ever dropped one. fixing it is ridiculously expensive and living without has become impractical. one young entrepreneur saw those choices as an opportunity. his business started by accident to fix accidents. >> i bumped into a girl. she made me drop my phone when i was walking; picked it up and it was smashed; didn't really know what to do with it; went online and found i had to go to the apple store. they wanted $199 to replace my phone that i bought for $199. >> reporter: so justin wetherill put his tech-savvy skills and curiosity to work and decided to fix it himself. at first he failed, but on his second attempt and with the help of his friend david reiff, he successfully fixed his iphone. >> at that point, i realized there were probably a lot of people in the same situation that i was. >> reporter: with that, u-break i-fix was born. the first office was justin's living room in this house.

the 21-year-olds started taking repair orders on ebay and craigslist. justin and david made $80 for each phone repair, and they were fixing up to eight phones a day. that's when they knew they'd found their niche. >> we started realizing over time that we were on to something here. this is going to be big. >> here we had an idea with healthy margins. it was scalable. everything was working in our favor. >> reporter: the pair took that momentum and opened their first brick and mortar store in orlando in august, 2009. unlike their online venture, customers could have their phones repaired in just a matter of minutes. still, the young company is making money, good money. u-break i-fix made $6 million last year, up from about half a million dollars in 2009. the company now has 18 stores from florida to california and there are plans for expansion. >> we're looking to grown exponentially over the next few years. i see a u-break i-fix store or

multiple u-break i-fix stores in every major city in the u.s. hopefully in the next two or three years. >> tom: you can see other young business owners on monday's special edition of "nightly business report." find out how they got started and what it took to become a success. our special "young entrepreneurs" airs monday, labor day on "nightly business report." >> susie: here are other events on our calendar next week. chuck carlson is our market monitor guest. he's c.e.o. of horizon investment services. jobs will be an important topic next week with president obama's speech thursday night. also next week, we'll look at what it would take to keep the u.s. economy from falling back into recession. >> susie: president obama today asking the environmental protection agency to scrap a proposed rule to limit smog pollution. the reason: the heavy cost to

businesses could kill jobs. president obama said he supports clean air, but that by dropping the regulation, businesses would have more money to invest and hire. the ozone quality rules would have cost an estimated $19 billion to $90 billion. >> tom: china ordered conoco philips today to stop pumping oil in that country's largest off-shore oil field. the texas oil giant says it has fixed leaks coming from a platform in the region, but china's state oceanic administration ordered production shut down anyway. conoco has been working closely with the regulator and says it is puzzled by the move.

>> tom: defensive and domestic describes tonight's market monitor's investment strategy. he's jack ablin, chief investment officer with harris private bank. he joins us tonight from chicago. jack, welcome back. nice to see you again. >> thanks, tom. >> tom: so we've got the federal government suing big mortgage lenders. we have no new jobs in the past month. why buy stocks at all in this environment? >> well, i guess the good news is stock investors have been reading the headlines just like the rest of us.

so, you know, i think that, you know, with the market down as much as it is, you know, what we really need to do now is look at how much of the future is already embedded, already baked in the cake, so to speak, in current prices. and then really it's just a matter of, okay, how will reality play out versus those expectations. >> tom: so what do you think about it? first of all, the outlook for corporate profits. still pretty positive there? >> yeah, i mean, if you look at last quarter's earnings, we were running about $26 a share, putting us just over $100 a share run rate on the s & p 500. let's take it this way. if, for example, earnings don't move at all-- let's just say we sort of stall for three or four years at our current run rate-- that puts us, as i said, 100 on the s & p, you know, get back to a normal p/e ratio of 16 times and that gets us to 1600. >> tom: yeah, pretty positive.

asun, about half of the profitss are come from overseas so why play domestic in your investment strategy well, a lot of it is we want to be domestic. we want to be denominated in dollars and sell into these markets because the u.s. dollar has gotten completely tattooed. over the last year or so, against major currencies, the u.s. dollar is down, say, pushing 20% or so, and it's starting to put the dollar in a favorable trading position relative to some of our trading partners. >> tom: let's go to new picks. you have playing defense and that leads you to health care, x.l.v., the ticker symbol, on the ishares health care exchange traded funds. what do you expect out of this for the next year? >> well, the good news about health care, it's rather stable, so we like that. it's got a decent dividend. we like that. and as a bonus, health care as a sector is trading about 30% cheap to its relative relationship to the market. sure, some of that is the health care bill, but overall, i think

it's a cheap sector that's moving in the right direction. >> tom: you mentioned dividends there for health care. you like dividends. the pey, for the pro shares high yield acwitty dividend achievers, paying over 4% when the 10-year benchmark is paying right around 2%. >> that's it. the key nowadays is yield. the simple fact is inflation, headline inflation is running at about 3.6%. anyone who invests in a 10-year treasury in my view is locking in a lower standard of living. we need to find stable yield and these dividend achievers have a track record, have a history of not only paying solid dividend but actually increasing their dividends over time. >> tom: less than a half minute left. quick update from your march 11 picks. you liked guggenheim canadien engineer income, down 20. you liked the industrial sector, down 16%. do you still like them?

>> no, we moved on. when the momentum broke back in august 4, we raised cash, and a lot of the-- what i'll call pro-cyclical bets that we made were taken off the table. so those positions were held until august 4. >> tom: you own the first two funds we mentioned, jack? >> uh, it's possible. i have-- harris manages my money and it's possible they put that in there for me. >> tom: we've got our market monitor this friday, jack ablin with harris private bank. >> susie: just a reminder, you >> susie: and finally, while the august employment report showed no net gain in jobs, we introduce you to a man who managed to find one in of all things the luxury business. today, he wrapped up his first week on the job. in our ongoing series: "you're hired," he tells us he found his new gig-- the old fashion way. >> hello, i'm veto miceli and i'm a sales rep. i worked for a national boating

magazine that got shut down. i was in sales. i sold advertising, and i was really starting to get concerned that it was going to be a long period of time. i was unemployed for three months before i found my new position. i stayed, you know, in touch with everybody i knew. i asked. i told people i was looking, and, you know, like i said, sure enough, through an old industry friends, through a contact, i get a phone call from new england about a job in miami. this is called yacht controller, and this is the company i'm working for now. you have to let, really, as many people you know, know, and put that network to work for you. i think you have to look for not only what you've been doing but, also, what else you're capable of. you may need a little bit of retraining or reeducation. but it's worth it. really, i think the best advice is stay positive, stay in contact with people, stay on schedule, and, you know, just,

you know, realize you're not the, you know, the job is just an aspect of your life. >> tom: stay positive and stay in contact. some good advice here, susie. that is nightly business report this friday, september 2. i'm tom hudson. thanks for joining us. have a great holiday weekend, susie. >> susan: thank you, tom. i'm susie gharib and hope all of our viewers have a great holiday weekend as well. tom and i hope to see all of you again next week. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org