>> tom: the u.s. job market stumbles in june, adding just 18,000 positions. it was the worst month for job creation since last fall >> i think what's most disappointing in this report is all of it. >> susie: what the job numbers mean for the sluggish recovery and whether they'll change the tone of the debt talks. it's "nightly business report" for friday, july 8. 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. the job market has gone from bad to worse. tonight the nation's unemployment rate stands at 9.2%. tom, that was just one of many disappointments in the june jobs report. >> tom: susie, wall street and main street were surprised that american businesses added only 18,000 jobs in june. estimates called for more than five times that amount. on top of that, the labor department revised down its april and may numbers showing 44,000 fewer jobs than originally thought.

>> susie: we have a lot of coverage and analysis of this jobs situation tonight: ideas for kick-starting hiring, the political response and the market reaction today. we start with suzanne pratt and a look inside the employment report. >> reporter: what's the state of the u.s. job market? in a word "awful." sure, businesses added some workers to their payrolls last month. but, two years post-recession, the economy should be making hundreds of thousands of new jobs a month, not a fraction of that. economist stuart hoffman says even the pessimists didn't think it would be this bad. >> i think what's most disappointing in this report is all of it. there's really no silver lining in the month of june in terms of hours, in terms of wages, in terms of either measure of jobs. >> reporter: here's a look inside the report. more than 14 million americans remain unemployed. of those, nearly half have been out of work for more than six months. on top of that the unemployment rate for teens and blacks is

much higher than the national average. and, government payrolls dropped for the eighth straight month. still, economist steve gallagher doesn't think the u.s. is headed for another recession. >> double dip fears are unfounded in the type of data that we're seeing. we're disappointed on the pace of recovery. and just because we're disappointed on that pace doesn't mean we're relapsing. >> reporter: many economists agree with gallagher and predict the economy will accelerate in the second half. they point to recent strength in the auto and factory sectors and the drop in gas prices. experts say the one good thing about today's bad news is that the federal reserve will likely keep interest rates close to zero percent for at least another year. but, don't expect any other stimulative measures from ben bernanke and co. also known as qe-3. >> today's the inflation rate is low but moving higher and i think that that in itself would

be a reason for the fed to be much less likely to launch a qe- 3 program. >> reporter: what is likely is that the unemployment rate will remain stubbornly high for the next few years. experts predict we'll be lucky to see 8% by the end of next year. suzanne pratt, "nightly business report," new york. >> tom: still ahead, lawmakers weigh in on today's dire jobs report. how politics are playing the sour employment numbers. surprisingly, wall street took the gloomy jobs number in stride. by the time the closing bell rang, the major averages had come off their lows of the day. the dow ended down just 62 points today. the nasdaq was off 15.5 and the s&p 500 lost nine. trading volume was light. 770 million shares on the big board, 1.6 billion on the nasdaq. despite today's job worries and a shortened trading week, the dow was positive on the week rising 0.6%.

the nasdaq gained better than 1.5% since last friday. and the s&p 500 also ticked a fraction higher, up 0.3% on the week. >> susie: that dismal jobs report has everyone asking-- how do we fix the problem? joining us with some thoughts mark zandi chief economist at moody's analytics. >> mark. >> hi, susie. >> how do we put americans back to work? >> well, i think this will put the onus back on congress and the administration to do at least a few more things to try to help the job market the next 6-12 months. one would be to extend the current payroll-tax holiday which if there is no legislation will expire at the end of this year, so that's a likely thing they could do. there is also a suggestion of providing more help to state and local governments. as you know, as we see in today's job numbers a big chunk

of the jobs lost is occurring at state and local governments under pressure and cutting jobs. we could take some of the pressure off them. there is another idea of cutting payroll taxes at least temporarily for employers to make it less expensive to go out and hire people. they're all ideas. i think some of those may come to fruition if the job market doesn't accelerate in the next few months. >> how much of a difference would those measures make? >> i think it would be helpful. i do think that the job market and the economy will improve as the year progresses even if those policy steps aren't taken but given today's job numbers and given the risks and the threats, i think it would be prudent for policy makers to start considering them and i think they would be a good insurance policy to make sure we're off and running late this year into next. >> why aren't businesses hiring? we see profits are up, balance sheets full of cash. what's holding companies back? >> i think they're just very

nervous. they have been through a lot. like all of us, it's been a very difficult several years and they're shellshocked, it was a nightmare and you don't forget that easily. i also think policy uncertainty is playing a role particularly with regard to the debt-ceiling debate, and businesses, unless they have a narrative in their mind with respect to how we're going to address our deficit and debt problems i think are going to remain cautious. they're not going to fire anyone. even in today's job numbers you can see that layoffs are very low. the problem is they're not going to take a big chance and expand their business. >> speaking about the nation's debt situation, important talks going on this weekend in washington. to what extent do you think that these job numbers will play a role in stimulating those conversations toward some kind of settlement? >> i hope they do. i think they will put on the stable some of the policy steps we were --ep put on the table some of the policy steps we were

discussing, that could be some of the debate but more importantly i think this should light a fire under congress and the administration. they need to settle this and come up with a reasonable plan with respect to future deficit reduction, sign on the dotted line and do this in the next couple of weeks before this becomes a problem for financial markets, businesses and the broader economy. >> there have been a lot of economists who have been saying we're headed for a double-dip recession yet you have been more confident about the outlook for the rest of this year. tell us why. >> i am more confident. i'm still optimistic. at core, american businesses are doing very well. we have to make a distinction between big companies, mid-size companies and smaller companies. smaller guys clearly aren't doing as well but in aggregate american companies are very profitable, their margins are very wide, their balance sheets are very strong, it's not a question of can they go out and expand, hire and invest more, it's a question of willingness, a matter of confidence. i think if policy makers dot right thing in the next couple of weeks that will nail it down

sufficiently and we'll get more hiring. >> i hope you're right about that, mark. thanks so much for coming and sharing your thoughts with us. we were speaking with mark zandi, chief economist at moody's analytics. >> tom: in the past two days we've seen two very different takes on the u.s. job market. today's government data show the soft-patch for hiring continued in june. just yesterday, private payroll firm a.d.p. reported companies added 157,000 jobs last month. why the big discrepancy? part of the difference can be explained by how the numbers are collected. the a.d.p. survey covers only private sector jobs while the data from the bureau of labor statistics include government jobs, which have fallen. >> susie: so where are the jobs? that's what john boehner wanted to know after seeing the latest employment report. the house speaker and other house republicans say administration-backed programs like the stimulus package haven't gotten people back to work. and they argue that increasing taxes to help offset the deficit? something the president wants to do? will only put more americans on

the unemployment line. boehner says he hopes congress does something big to help the economy. >> we have three really big problems. we have a spending problem, we have a debt problem, and we have a jobs problem. that's why i believe it's important for us to fundamentally fix our spending problem and our debt problem, and help get our economy moving again. >> susie: meanwhile, president obama is calling on congress to raise the nation's debt limit removing a big worry for american businesses. this morning darren gersh spoke with white house economic advisor austan goolsbee about jobs and those budget talks this sunday. the interview began with a simple question on jobs. what happened? >> well, look, this is a continuation of what we've known, and that we saw last month, that the growth rate of the economy slowed down in the first part of this year because of these headwinds, and so previous to the last two months

we had added 2.1 or 2.2 million jobs in the private sector. that slows down if the growth rate isn't fast enough, and that's why we -- i view this number as a call to action. we should take all bipartisan policy steps that we can to help get the growth rate back up and get the private sector moving. >> the jobs report was weak across the board, across all indicators. is this a signal that the economy is in danger of stalling? >> we knew that the growth rate of the economy -- we were growing slower -- that it slowed to something like the productivity growth rate and that the jobs engine slows down at a moment like that. that's why we ought to take bipartisan action to get the growth rate up. we ought to extend the payroll tax cut. we ought to create the infrastructure bank. we ought to pass the free-trade agreements to get exports going. and we ought to remove this cloud of uncertainty which

exists on the private sector for the last month or two of whether the u.s. government is in fact going to pay its bills. >> but a payroll tax cut can cost several hundred billions and infrastructure bank can cost another 100 billion. that's a lot of money. do we have the money for that? >> many of those cost virtually no money -- free-trade agreements, signing a deficit-reduction package. with the infrastructure bank, the entire principal of the -- the entire principle of the thing is that it requires little money up front from the government. it is designed to leverage private-sector money and get people to invest in the infrastructure of this country. we want to find the things that are about incentivizing the private sector to use their money to get growing. we don't want the government to be the primary driver of recovery. >> behind you, on sunday, they're going to meet -- the president and congressional leaders -- to talk about deficit reduction. should those talks now focus on pushing back any deep deficit cuts not into next year but

beginning maybe in 2013 or afterwards? >> the number one thing we've got to reassure the world is that we're a nation that pays our bills, we're not going to default. any discussion like that is extremely dangerous to the economy and nobody should be talking that way. we're going to raise the debt ceiling. second, we should address our long-run fiscal imbalances in a way that we're going to live within our means long-term but we should do that without compromising the growth strategy of things that we can do in both the short and long run to get the growth rate higher, because that's where the jobs come from. >> austan goolsbee, chair of the council of economic advisors, thanks for joining us on this very muggy day. >> my pleasure.

>> it was the worst day of the week for the major stock dices but not as bad as it could have been earlier today. let's go ahead and roll with tonight's market focus. after a stiff sell-off this let's start with today's trading of the s&p 500. the index sank about 1% by mid- morning. and slowly, some buyers came back. not enough to push the index into positive territory.

financial stocks saw the worst of the selling. bank of america slid 2%, the biggest loser of the dow industrials. bank of america shares have been bouncing around $10.50 to $11 per share for more than a month. j.p. morgan was the third worst dow stock off 1.4%. reuters reports j.p. morgan is close to swapping places with bank of america as america's biggest bank by assets. analysts have been getting more cautious on banks as earnings season begins. j.p. morgan is the fist of the banks to report on thursday. wells fargo was among the weak banking stocks off more than 1%. wells is the latest bank to settle claims from investors losing money in mortgage-backed securities. in this case, it has settled with pension fund investors. several other similar lawsuits remain however. google stock was searching for buyers. shares fell 2.7%. a couple of things today for google. first, morgan stanley's analyst downgraded its view of the stock to equal-weight. the analyst is not convinced google's spending on hiring and

compensation will pay off. and just before the closing bell, the company said chairman eric schmidt will testify in september to the senate anti- trust committee. last month, the federal trade commission launched a broad look into the company's business practices. google's second quarter earnings are due next thursday. as one may expected after the dismal jobs report, employment service companies saw selling. manpower, robert half international and monster worldwide fell at least 3% each. temporary hiring has been very slow this year. seatbelt and air bag maker auto- leave is in a u.s. and european anti-trust investigation of its own. the stock fell hard more than 10% after acknowledging the inquiry. the company warns operating results could be impacted when the investigations are finished. on monday, alcoa takes its traditional place as the first dow industrial stock to report quarterly results.

in previous quarters, growth has been fueled by china, russia and brazil. shares were down a fraction today. and that's tonight's market focus. >> susie: jobs were a big topic in florida today, at the launch of the space shuttle atlantis. thousands of jobs on florida's space coast will disappear now that nasa has embarked on its last shuttle mission. the engines of the atlantis roared off the launch pad around 11:30 this morning. the 12-day mission will deliver

supplies and spare parts to the international space station. almost a million visitors were on hand for the launch at the kennedy space center. with the end of the program and nasa's new reliance on commercial space launches 9,000 layoffs are expected. >> tom: here's what we're watching for next week. we'll get the latest on the economy from federal reserve chairman ben bernanke. he begins his semi-annual testimony to congress on wednesday. and monday, alcoa kicks off earnings season with its second quarter results. c.e.o. klaus kleinfeld joins us to talk about the results and if alcoa is hiring. >> susie: b.p. wants to end payouts for future losses to most victims of last year's gulf oil spill. the british oil firm argues those payouts aren't needed because the spill's hardest-hit areas are recovering and their local economies are growing again. last year, the u.s. government made b.p. setup a $20 billion fund for current and future

spill related losses. b.p. said it would continue future loss payments for some groups like oyster harvesters. >> tom: meanwhile, exxon mobil has a deadline for cleaning up its yellowstone river oil spill. the u.s. environmental protection agency gives the oil giant until september 9th to clean up the montana spill. an estimated 42,000 gallons of crude escaped when a pipeline under the river burst last friday. some of that oil has reached as far as north dakota as heavy rains have caused the river to swell.

>> tom: a lot of investor hope has been hung on the second half of the year, but tonight's market monitor is nervous about the next six months. sandy lincoln is the chief markets strategist for bee-mo asset management u.s. he joins us from the c.m.e. group in chicago. always good to see you. six months ago you were advising caution for the second half of the year. now that we're here, are you still cautious? >> we're cautiously optimistic. i think we still feel stocks are the place to be, you still want to favor stocks over bonds but the market which has been lifting all ships the last couple years is going to be more discriminating in the second half so you want to be very careful about the criteria you

use to pick stocks in the second half. >> i want to ask about the criteria in a second. what about your take on today's employment situation as it relates to investors. does it give you reason for optimism in the second half? >> definitely, we got a jab to jobs today and it was a serious one, not necessarily a setback. the markets surprisingly didn't respond that strong to it during the course of the day and i think the reason is because they still expect over time, it's going to take patience but we're going to gradually see job improvements but it's going to take time to get it done. >> looking for stock picks in the second half environment, what are a couple of things you're looking for? >> two or three things that you really want to watch for is make sure you get good top-line growth, because if you have revenue growth, 9-10%, or more, you have a good chance to protect your profit margins which are important in this as we get further along in the market recovery so you want those things then you want to be careful not to pay a price that's too high relative to profits. those three things, i think, in

conjunction would serve investors well as we get into the second half. >> you're finding those in cronus worldwide, paint, plastics, gave back 5% today. is that a buying opportunity? >> i like this entry point. i think people were taking profits. the stock has been red hot and the reason it is titanium dioxide goes into white cars, white aluminum siding, white patio furniture and this is the manufacturer. global manufacturing capabilities, a solid position around the globe with the product, a product in high demand, good pricing strength, good earnings prospects and selling at 10 or 11 times future earnings and this is a good entry point for cronos. >> cloud peak nfl, it's been a choppy one. what fuels it here from the $21 level? >> this is kind of an old company in a new wrapper. it came out of rio tinto. this is a low-cost coal

provider, wyoming based, it's a very high product that they deliver to electric utility companies -- it's a real high-quality coal, electric utility companies primarily in the upper midwest and midwest use it a lot, great expansion opportunities for the coal production into asia, they've gotten a series of new land leases so they've added additional reserves to the company, eight or nine times earnings on a good top line revenue and earnings growth. a good entry point at about $20 or 21 a share. >> the trifecta you mentioned earlier. previous picks in january, western union up 2.5%, safe guard scientific, financial services up 5%. do you still like them? >> we still like them, we own them, western union which is in the infotech sector has doubled the sector return and had a spectacular 12 months and the same thing safe guard scientific, twice the return of its sector and a spectacular return the last 12 months. we still own them and like them both. >> the quartet that we mentioned

tonight, do you have positions in all of them? >> we do, either through our mutual funds or our separate accounts, we have position nasdaq all of them. >> our friday market monitor. >> susie: landing a job is hard these days, but some people are finding that a temporary job can lead to something permanent. in our ongoing jobs series, "you're hired," we hear from one new mom whose job hunt accomplished just that. >> my name is kelly ruiz. i work for suzano pulp and paper in ft. lauderdale and my job is customer service rep. i've been here about six months in total, four months as a temp and i became permanent about two months ago. i had initially been working with another company in miami so i got pregnant and went on maternity leave and the commute was too much for me. so i decided to look for something that i would wait my three months and start looking for something else.

i just started looking online and different websites. i would send my resume and i didn't get calls right away. it took me about a month or so. i got one interview. i went to interview with them. they told me i was over- qualified, so i just kept on. i didn't give up. i just kept on. it took me about three months to find this job. i was very happy. i'm very grateful. >> inspiring story, tough, susie, keep on, keeping o. >> for every story like kelly, there are 14 million americans out of work. to put it in context. >> that's it for us tonight, "nightly business report." that's "nightly business report" for friday, july 8. i'm tom hudson. goodnight everyone and have a great weekend-- you, too, susie. >> susie: good night, tom. i'm susie gharib goodnight, everyone. we hope to see all of you again next week. "nightly business report" is made possible by:

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