captioning sponsored by wpbt >> i am sure that a zero interest rate is not a sustainable interest rate without having undesired consequences. >> susie: this top fed banker says it's not a good idea to keep interest rates too low for too much longer. and he's alone in voting that way at the central bank. >> tom: in our exclusive interview with the kansas city fed bank chief, he also tells us the job market's improving. and january's employment numbers may show he's right. you're watching "nightly business report" for friday, february 5. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program was made possible by contributions to your pbs station from viewers like you. thank you. >> susie: good evening everyone. job losses continue to mount. the labor department said today american businesses cut 20,000 jobs in january. >> tom: but susie, there was some improvement. the unemployment rate dipped below 10%. it's now at 9.7%, we'll have more on those jobs numbers later. >> susie: tom, employment is a key factor watched by the fed. so when i sat down for an exclusive interview with tom hoenig, president of the kansas city federal reserve bank, we

talked jobs, and a wide range of other topics. hoenig's the lone fed official who voted last week against keeping interest rates at zero for an extended period. tonight, for the first time, he explains why. i began by asking him when we'll see job growth in a big way. >> i think our job growth will be modest, but consistently introducing over the course of this year. we had a very serious shock to the system. it has impacted confidence and i think rebuilding that confidence will take little time, and remember job growth usually does lag the recovery. so in the sense that we have a -- a relatively systemic but modest recovery -- and i'm saying 3.25% in 2010 -- we will have improvements in jobs, but i don't see a big bang as you're describing it in terms of job growth, but i am seeing consistent job growth. that's important. >> susie: you've said that you're optimistic about the

economy. >> uh-huh. >> susie: is that optimism the reason that you are the only one at the last fed meeting who objected to keeping interest rates low for "an extended period"? >> my view was we should change the language. i didn't object that interest rates were low at this time, but i think policymakers need the broadest options possible. the language that we use, that is very low for an extended period, was appropriate during the height of the crisis to assure that we were not going to make any changes, but now the economy is beginning to recover. it's been in recovery now for two quarters. we have to be thinking a little bit longer ahead, and that's really what my admonition was. >> susie: so do you think that the fed should begin signaling that it's getting ready to raise interest rates? >> no. what i'm saying is that the language should be changed so that we're not tying ourselves to language that says we won't

do anything for an extended period when in fact events are changing, the come is strengthening. i think those are -- the economy is strengthening. what i'm really saying is maximize your as a policymaker. remember, susie, we're at zero now, and i don't think we can be at zero for an indefinite period. remember, we want to get back to a more normal environment in the economy and with interest rates. >> susie: if not zero, where should rates be? what is normal? >> well, in the long run, of course, i've said in public speeches, you need to have the policy rate at least higher than 3%, but now, remember, that's a long time ahead. i said 3.5% to 4.5% in a long period. that's quarters or maybe years ahead depending on how the economy's recovery goes, but that's not something -- i don't want anyone to take away from this discussion that i think that should be the rate tomorrow. >> susie: so what is your

timetable for raising rates? >> it depends on the economy. it depends on whether the economy grows more quickly than i'm anticipating or less quickly. >> susie: the president of the new york fed told me that at least six months when we were talking about beginning to raise interest rates. do you agree with that? >> i think that's fine that president dudley made that comment. my point is watch the data. make your judgment based on information as it comes in, whether it's six months, three months a year, it will depend on new information. you can't -- you cannot predict the future with certainty. >> susie: what data are you watching? what's the most important data? >> i'm watching very carefully the industrial production numbers as they come out. i think today's employment numbers were important information. and we will watch that each month as we proceed. and a broad base of economic data. >> susie: as you suggest that

the circumstances have changed in the economy and it's beginning -- that it's important for the feed make note of that, you know, a lot of people are so concerned about talking about any kind increase in interest rate, at a time with today's news that 8.5 million people lost jobs in this recession. what is it that you're seeing that others are not? >> well, i don't know that i'm seeing anything different, but i think i'm trying to maximize the ability to assure that the recovery continues and assure that we don't end up with a new bubble down the line and inflation two or three or four years from now. remember, interest rates were very low in 2001, 2002, and the effects of that really came much later. and that's what we have to keep in mind for the future. >> susie: so are you concerned that the fed could make the same policy mistakes that it made in the past because interest rates were kept too low for too long? >> well, i am concerned that we

not leave interest rates too low for too long. that's my message at this point. people will argue about the past, but i am -- i am sure that a zero interest rate is not a sustainable interest rate without having undesired consequences. and i want to be able to make those changes when -- when the time is right. >> susie: let's talk a little bit about mortgage rates. there are concerns that once the fed stops its emergency lending program, that mortgage rates are going to shoot up. do you see that happening? >> i don't necessarily see that happening. i don't know what -- you know, that's a market, markets will help determine that, but i think there's a fair amount of liquidity out there. i think the market has the ability and i think it probably will, since markets work pretty effectively over a longer period of time to provide the necessary funding for housing. certainly has in our history. >> susie: let's say that mortgage rates do rise

significantly. would you be in favor of the fed stepping back in and supporting the mortgage market? >> i'm not willing to assume that mortgage rates are going to rise significantly and that we have to step n. remember we stepped in because it was a crisis, and the markets had frozen. and i don't see that emerging again. so i'm not -- i'm not really wanting to think of that as -- as a likely outcome. we are on the mend. the markets can work. the markets will provide credit in the -- in the mortgage market, and other industries, which are every bit as important for the long run health of the economy. and we have to allow that occur and to take place. and that's the healthiest outcome for the u.s. economy over the long run. >> you can see susie interview on our website, nbr on

"psr.org. >> tom: back now to analysis of today's jobs report. as we said, the headline unemployment rate dipped to 9.7%. but the devil's in the details. and an update on just how many jobs have disappeared since the recession began came in huge, 8.4 million. still, even with the unsettling news, some economists found hope in the numbers. suzanne pratt reports. >> reporter: out of work americans should find the latest employment data at least a little bit encouraging. that's what the president said today. >> these numbers, while positive, are cause for hope but not celebration. there's far too many of our neighbors and friends and family still out of work. >> reporter: yes, the economy overall is still losing jobs. but, sectors like retail and manufacturing added jobs for the first time in many months. on top of that, more temporary workers were put on payrolls for the fourth straight month, and the average work week got longer. both often suggest new and more permanent jobs are coming. economist steven gallagher sees the january report as more positive than negative.

>> it's a turn. it's a turn on the way. it's not as fast as we'd like. of course, we'd like more job growth immediately. but, some of the signs here are encouraging. >> reporter: as for the unexpected drop in the nation's unemployment rate, many number crunchers say it's more a statistical fluke than another encouraging sign. economist conrad dequadros says the unemployment rate will probably go back up before it falls further. >> we still need to create jobs in order to bring the unemployment rate down and sustain a lower trend in the unemployment rate. we're still not, according to the establishment report creating jobs for the overall economy. >> reporter: the january employment report also showed just how damaged the job market remains. the government now estimates about a million more jobs vanished in the great recession than originally thought. for some, that suggests the u.s. won't see a normal labor market for years. >> it tells us that it's going to be... it's a longer road to get us back to the employment levels we achieved prior to the downturn in the labor market and

the recession. >> reporter: so, just when will the u.s. start to create jobs in a big way? many economists say it will be this summer at the earliest before 100,000 jobs or more are added to payrolls every month. suzanne pratt, "nightly business report", new york. >> tom: here are the stories in tonight's "n.b.r. newswheel". wall street overcame steep selling late in the day to close in positive territory. the dow gained ten points, the nasdaq rose 15.5, the s&p 500 added three. toyota's c.e.o. in japan breaks his silence, offering a heartfelt apology to toyota owners. akio toyoda, grandson of the company's founder, said the automaker will put together a group to study quality, and encourage managers in japan, the u.s., and europe to work together. call j.p. morgan's jamie dimon the $16 million man, that's his bonus for 2009. it breaks out to $8 million in

restricted stock, about $8 million in options, but no cash. he's not the only one richer tonight. goldman sachs says c.e.o. lloyd blankfein will get a $9 million all stock bonus for last year. >> susie: still ahead, the super bowl is just 48 hours away, and it's the hottest ticket in town. an inside look at the business of buying and selling tickets.

>> tom: it seemed a lot worse than it was this week for shareholders. yes, the markets touched new lows for the year and it was the fourth straight week of losses, but for the week, the major indices were down less than 1%. the dow was up three sessions and down two. clearly, though, the losses on thursday hurt; it was the biggest single day sell-off since last april. still, the dow was down just 0.5% from a week ago. the losses were even smaller for tech stocks. the nasdaq slid just 0.03% thanks to the drop on thursday. the s&p 500 was the biggest loser of the three, down 0.07% this week. tech stocks were a stand-out today, helping pull the indices into positive territory. they were led by semiconductor and equipment stocks. the four biggest percentage gainers of the nasdaq 100 were broadcom, applied materials, lam research, and altera. the four saw decent volume on the buying interest. a stock options backdating lawsuit against broadcom was dropped late thursday.

some analysts credit the buying interest in this group of stocks to cisco. as we mentioned, cisco was a stand-out in the dow this week on the heels of its positive earnings results and outlook. cisco stock this week was up 5.5%. maybe the third time will be the charm for a buyout in the specialty gas business. we're talking about oxygen, carbon dioxide, and other industrial and medical gases. airgas is fielding its third buyout offer from the bigger air products. airgas stock jumping to a new high on huge volume, more than 26 million shares compared to the average one million. tonight's close of 60.96 indicates investors expect a higher bid to be coming, since the latest air products is for $60 per share of a.r.g. air products has been gunning for airgas for months. back in october it offered $60 a share for airgas in stock. then in december it upped the offer to $62 a share but in

stock and cash. and today's effort brings the bid back to $60 a share but this time its all cash. air products dropped to its lowest price since beginning its effort to buy its competitor. as the company has upped the cash portion of its offers, its stock price has sunk. the auto industry has been in the headlines plenty this week thanks to the toyota troubles. some auto part stocks were hitting the brakes today thanks to a disappointing sales forecast from american axle. axle was able to report a profit and higher margins, but it was thanks to lower prices. t.r.w., dana holding, and arvin meritor saw the bulk of the selling in the group falling between 3% and 10%. by this time next week, 3/4ths of the earnings season will be over. disney and coke are due on tuesday. pepsi comes out thursday. and that's tonight's "market

focus". >> tom: volatility is back on the menu for investors this week with the major indices at new lows for the year. tonight's "market monitor" guest is john hughes, president of quantum capital management of new jersey. john welcome back to n.b.r. >> good to be here. >> the jobs picture improving just slightly in the last month. is this a signal to get back in the market? >> it's a positive signal if you believe that this is a cyclical recovery. we believe that it is a structural problem that's going to take some time to work its

way through. >> what's the structural problem? >> well, the australian economists said a long time ago that prices send signals. we believe that 25 years of ever-increasing debt at ever-decreasing costs, lower and lower interest rates, has sent signals that have led to malinvestment, the types of education that people pursue, the types of investment that people make. and it will take time for this reeducation, retraining process, reinvestment process. and if we -- if we continue to run better than a trillion dollar deficits it will certainly retard this dynamic process that is capitalism. >> so with that kind of grave view in terms of the economy, and i classify it as a grave view -- >> yes. >> -- how does that shape your investment philosophy? >> nothing like the safety and comfort of a cheap stock.

>> are there cheap stocks still on the market? >> there are. certainly not as plentiful as march of 2009, but there's always something. >> a couple of ideas that you brought with you, one is the idea from june, progressive insurance, pgr the ticker symbol on the big board. sold off in the mid teens. do you still like it? >> yes. we own it and we're buying it at these levels. progressive is a direct sell insurer that enjoys some competitive advantages with a certain cohort of insured, within certain geographic areas. they have a pretty competent management team, and 10 times cash flow we think it's a good value. >> what do you think the catalyst is here in the mid teens? >> well, we think the -- the catalyst is that it's -- that it's cheap in that they're going to continue to grow and execute as they have in the past. >> okay. you've brought another insurance

company along here, c&a surety. what do you like about this stock here? >> surety is similar to an insurer. they certainly have the ability to be indefinitelyified by the principals for whom they provide bonds. their prospects are closely tied with the prospects of the commercial construction industry. we think that given the fact that the company was a balance sheet with $21 of cash and marketable security and is trading at roughly $14 a share, that the bad news, the imminent losses are occurred are baked into the price. >> with that kind of look at this stock, do you think the market's got it priced wrong? >> we do, yeah. the market prices individual security wrong often. >> the company did come out with

earnings, in fact, today. we'll take a look at these fourth quarter numbers. what do these tell you about the 2010 prospects? >> well, i think that -- i think these earnings speak more to the past and not the future. probably trading as 10 times less than steady state earnings. >> john, any disclosures about these two insurance companies? >> we own them all. >> in the portfolio. tonight's "market monitor guest" john hughes with quantum capital management of new jersey. >> susie: here's what we're watching for next week. our friday "market monitor" guest is jeff everett, president of ever-key global partners. also, quarterly results from coca-cola and walt disney. on the economic calendar, december wholesale trade and january retail sales. monday, over confidence and how it can lead your investments to under perform. it's part of our ongoing series "your mind and your money". we may soon find out whether

bernie madoff's family was involved in his massive ponzi scheme. today, his brother, two sons, and a niece agreed to give a full accounting of their finances to the trustee liquidating madoff's business. those relatives have been accused of taking almost $200 million from the business. separately, more money may be coming to madoff victims. his luxury manhattan penthouse has a buyer. >> tom: an advertising scuffle between jenny craig and weight watchers is over. jenny craig says it will stop running ads that made mention of quote, "a major clinical study." that study claimed jenny's clients lost more weight than those using weight watchers. weight watchers sued, calling the ads false and misleading because there was no such study. after pulling the ad, jenny craig's c.e.o. challenged weight watchers to go head-to-head in a clinical trial.

>> susie: just two more days until the super bowl. and if you're still looking for a ticket, there are plenty left if you have the money, and a ticket broker. as jeff yastine tells us, those brokers are very popular this time of year. >> reporter: it's super bowl week in south florida, and there's plenty of action happening before the big game. but the real action... >> this is for luxury suite 229 for the super bowl, a party of 29.

>> reporter: ...is behind the scenes... >> are you in touch with the lady in charge? i joke about it. we need a switchboard just to handle my cell phone calls. >> reporter: ...in the offices of brokers like tickets of america, and its owner, mike lipman. >> please confirm receipt, with a signature, for the block of super bowl tickets. >> reporter: he literally has the hottest tickets in town, tickets to super bowl xxiv. but just like on wall street, you have to know when to buy.... >> i told my clients, wait, things are going to go down. there aren't many corporations in indianapolis or new orleans. it's not like neyork city or a major corporate market like philly or dallas, so prices will eventually go down. >> reporter: ...and when to sell. >> now the day of the game, prices might go back up because rumor has it that everyone in louisiana is going to be driving to south florida so i wouldn't wait until last second.

>> reporter: in another era, ticket brokers had another name: scalpers. but, bit by bit, the state laws that made scalping illegal, are off the books. florida dumped its anti-scalping law in 2008, and today 38 out of the 50 states allow some form of ticket re-selling. you can thank the internet for that. the advent of stubhub, ticketmaster exchange, and sites like lipman's let anyone join the ranks of ticket resellers. and buyers can easily see exactly what the prices are at any given moment. the marketplace for super bowl tickets has also changed over the years. in the '90s, prices were set primarily by corporations, buying blocks of tickets for executives and clients. but with the recession, veteran brokers like lipman say the fans now set prices. which can lead to some wild volatility. case in point, last year's super bowl, pittsburgh versus arizona. >> a lot of ticket brokers would

dump their inventory, thinking this is going to be a bomb situation, a disaster, and wham! you have the steeler nation driving into tampa on the day of the game and driving the ticket price from $1100 to over $2000 within six hours. i mean, that's a tremendous, tremendous increase. >> reporter: for this year's super bowl, lipman is going all out. he has ticket kiosks set up around south florida. looking for those impulse buyers who just have to have a pair of super bowl tickets. today, the average sale price of a super bowl ticket is about $1350. but don't ask lipman what tickets will cost come game day. >> anything can happen in our business, we don't have to go to las vegas, every day is las vegas. >> reporter: jeff yastine, "nightly business report", miami. >> tom: that's "nightly business report" for friday, february 5. i'm tom hudson, goodnight everyone and have a great weekend. >> susie: good night, tom.

i'm susie gharib. goodnight everyone, we'll see all of you again monday evening. "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 to providing service to

its auto insurance customers for over 70 years. more information on auto insurance at geico.com or 1-800-947-auto any time of the day or night.