this is "nightly business report" with tyler mathisen and susie gharib. brought to you in part by -- >> the street.com, featuring stephanie link who shares her investment strategies, stock picks and market insights with action alerts plus the multi-million dollar portfolio she manages with jim cramer, you can learn more at the street.com/nbr. solid but not spectacular. the economy created steady jobs growth last month but is it enough? motor city reprieve. detroit's restructuring gets a green light. so what happens now? a big hitters. market monitors that he thinks could get you up to 20% in the next year. all that and more tonight on "nightly business report" for friday, november 7th.

tgif, everybody. good evening. i'm bill in for tyler mathisen. >> and i'm susie gharib. a record close to a record week. the s&p closed at new highs against but investors returned to the big report on the job market. now, it wasn't stellar and some analysts are calling it a goldilocks report. less than expected jobs were added and the unemployment ticked down to 5.8% and last two months revived higher. the big disappointment for american workers, though, wages. average hourly earnings were up 3%. hampton pearson reports that president obama made the most of the numbers. >> reporter: at a white house cabinet meeting, president obama said it's the hard work of the american people that has driven the unemployment rate to the lowest level since the beginning of the recession and reduced the

best-based overall jobs growth in more than a decade. >> the unemployment rate grew again. 10.6 million new jobs in the last 56 months and this is the strongest jobs growth that we have seen since the 1990s. >> reporter: so far this year, employers have been hiring on average nearly 230,000 workers per month. today, at a jobs fair outside baltimore, aimed at hiring veterans, both job placement professionals and job seekers were cautiously optimistic. >> i think that there's certainly opportunities there, if nothing else, even irrespective of the economy because of the shift in the generational focus of our workforce and, you know, desire to bring on board new folks who had the latest background in technology skills. >> reporter: but stagnant wages remains the biggest shortfall. average earnings have risen just 2% over the last year.

october saw job growth in nearly all sectors. the unemployment rate went down for all of the right reasons. more workers found jobs and returned to the labor force. and leading economists say the pace in better paying jobs is picking up. >> we're seeing more broad base gains in manufacturing and the professional services hiring full time instead of part time in things like accountants, engineers, consultants. that's something that we lost dramatically during the recession and we're seeing consistent gains back. >> reporter: job growth with better pay is the biggest challenge facing the economy. the latest jobs report tells us the foundation is there. the question is, can the private sector keep the momentum going? for "nightly business report," i'm hampton pearson, in washington. well, stocks waivered throughout this friday but in the end both the dow and s&p hit new all-time highs today. all three of the major averages

have been up for three straight weeks now. today the dow was up by 19 points in some late buying. nasdaq fell by 5 and the s&p 500 was up a fraction. the week, the dow was up 1% and a gain is a gain. right? >> that's absolutely right. lindsey piegza is joining us for more analysis on today's jobs report. she's chief economist for ag. thanks for being here tonight. >> thanks for having me. >> what is it going to take for businesses to hire more? >> that is the number one question. certainly while todays report was positive, it's far from stellar and that really is the tone of the jobs market at this point. we continue to see the american economy bouncing along. but until i think we start to see reform in terms of uncertainty, tax policy, health care costs, these are the barriers and burdens that businesses big and small continue to point to when we ask why aren't you hiring? it's certainly not a balance

sheet issue at this point because corporations are awash in cash, billions of dollars sitting on the side lines. but when we post the question, why haven't you hired, they point to uncertainty and tax costs. >> lindsey, i know you're not impressed with the jobs data lately but from the market perspective, they have to like the growth that we're getting. if you go too strong each month, that's more likely that the fed is going to be raising rates sooner rather than later which the market doesn't look forward to, right? >> i think this is a pretty positive report for the market. it came in under expectation but still at 214,000, this was the ninth consecutive month above 200,000. but really, i think what the market was looking at was further decline in the unemployment rate. and it was a decline for the right reason. certainly we did see 500,000 americans drop out of the labor force but household employment

actually increased by that amount and more leading to that one-tenth reduction. certainly a positive sign that we're slowly getting the labor market back on track, enough to keep momentum in the market but not enough for us to really force the fed's hand at this point. >> what does all of this mean for the economy? you have a pretty mild forecast for growth for the rest of this year. you're coming in at 1.6% of gdp growth for this year. 2% for next year, which are both lower than what many of your colleagues in the economics profession are forecasting. what is it going to take to get the economy to pick up a little bit more? >> it all comes down to jobs creation and income growth. that really is the third piece of the employment report that we saw this morning. we are not seeing any type of wage pressures. meaning the top-line job creation, while positive, is not sufficient to lead to income growth. we're still seeing stagnant average hourly earnings at 1.9%.

this was the pace that we've seen since 2010. so if we're not putting more money in consumers' pockets, once we top out taking on new credit, eating into savings and temporary price reprieve from lower energy prices , if we dont see that top-line growth, consumers are limited and that's going to drag down the ability for growth going into 2015. >> lindsey, thank you so much. lindsey piegza with sterns a.g. company president zain abdala is leaving at the end of next month and brian left pepsi last month to take over target. by the way, she has yet to announce plans to retire any time soon. also on the jobs front, more jobs cuts coming at jpmorgan. the bank will cut 3,000 more jobs than previously expected. the layoffs will come into the

retail banking division. what we're talking about is credit card, merchant services and mortgage units. with those cuts, jpmorgan will slash 27,000 jobs with consumer bank over the last two years. >> so where should those former employees and many others look for work? since the beginning of this year, we have been looking at where the jobs are, examining the skilled labor gap that many businesses say is hindering their growth. this month, mary thompson finds that jobs the are everywhere, as a matter of fact, as long as you're schooled in technology. >> reporter: for 32-year-old justin wu working as the software developer for paypal, he does what he loves and brings social goods. >> these technologies haven't changed for 30, 40 years. at paypal itself, they are on the cusp of changing the world using payments. >> reporter: wu joined paypal last year.

>> i was shocked. i was surprised. i felt like crying. >> reporter: like this one in las vegas, many of the tools paypal now uses to recruit the hundreds of technologists it needs. >> they get to learn more about our products and our company and we get to see what they are able to produce. >> reporter: to meet the needs of companies like paypal, the company needs to produce more technologists. the need is only expected to grow. the bureau of labor statics says from 2012 to 2022, 700,000 i.t. jobs will be added. >> we want to hire software engineers, product managers, we're looking for people who might have specialty in mobile engineering. >> reporter: chief technologist notes the market is increasingly competitive as paypal isn't alone in looking for talent. companies of all sizes across all industries needs technologists and that could put smaller companies at a disadvantage because they can't compete with the pay bigger companies can offer.

the blf says i.t. jobs can pay anywhere from 50 to $120,000 a year. that's a price that may be out of reach for smaller companies. companies see tech industry trade group comp tia will pay a price for not having top talent. >> it translates directly to their customers and how competitive they can be with those competitors. >> reporter: a veteran of fab startups prefers to work on his own. >> i'm not as productive as a full-time employee. as a consultant, i can get fired any time. >> reporter: the skills have never been more valuable to business. for "nightly business report," i'm mary thompson in las vegas. coming up, detroit gets a new lease on life. so what's next for the motor city? ♪

♪ a new challenge to the affordable health care act is heading to the supreme court. the justices will decide whether that law authorizes federal subsidies that help millions of low and middle-income people afford their health insurance. opponents of the law say those subsidies are illegal. an appeals court upheld the irs rule that allowed for those subsidies. it's a new model in detroit. a new lease on life. a federal judge today approved the city's plan to restructure and emerge from the largest municipal bankruptcy in history. scott cohen has the story. >> reporter: the ruling achieves what few thought were possible a few months ago. a city on the rise.

$7 billion in debt wiped out. more than 1.5 billion in new money for city services, blight removal and new development, some of it financed by the city's largest creditors. >> it was pretty remarkable day. >> reporter: the city's perpetually troubled pension system is back on ground with only modest cuts for retirees and all got done without selling treasured art at the world renowned detroit institute of art. for rick schneider, the former business executive who orchestrated the process and cruised to re-election on tuesday, it's a good week. >> you go back to july of last year, people had many different concerns and very few people believed we could see a successful conclusion, let alone a conclusion in this time frame. it's here today. >> reporter: but getting here has not been easy. the city's employee union bitterly opposed the bankruptcy

filing arguing the state constitution guaranteed their pensions. bobd holders and the companies that insured the bonds said they were forced to give up millions of dollars to save the art collection which they felt should be sold. the grand bargain, more than $800 billion in private donations and state aid to shore up the pensions and save the art, transferring it to a private trust. arthur o'reilly negotiated with the museum. >> this is an historic day. the city has a new lease on life. it has an opportunity to lay the foundation to become, again, another great city in america. >> the judge said it borders on miraculous with the exit from bankruptcy, he said, now is the time to restore democracy to the people in the city of detroit. but restoring the city itself could take years.

there's widespread poverty and decay. the case sets a course for detroit and maybe for dozens of other american cities in the same both. scott cohn, nightly business report. >> judge rhodes decision is historic and a validation for everyone working for detroit. working together we can transform the city and you can see clear progress in the restoration of downtown. the entrepreneurs who are flocking here, the massive building projects getting under way and the work being done to improve education, neighborhoods, and city services. well, it was a pretty good quarter for berkshire hathaway and that's where we begin tonight's market focus. the earnings beat wall street's estimate by 29%. $4.5 billion in a quarter. class b shares were slightly higher to $143.61 and just for fun, if you want to dab bell in

the class a shares, they cost a mere $215 per share and they were higher today as well. doesn't seem like things are getting any better for be a bett abercrombie and fitch. they said that sales were weaker towards the end of the quarter. shares stumbled by more than 16%. investors got a chance to react to guidance from gap, the retailer posted disappointing october sales figures but investors were more optimistic because of their outlook down the road. the company will not report results until later this month. there was cost cutting and a tax benefit. shares were 2.5% higher today at $38.83. meanwhile, sears is exploring a new plan to raise cash as it has been struggling to return to profitability. the retailer this time is

considering selling up to 300 of its stores to a real estate investment trust or a reit which it would offer a rights offering in order to raise money. that's according to a regulatory filing. sales surged by 31%, adding $10 per share. general mills lowered its profit and sales guidance for the year blaming weak food trends and slow growth in emerging markets. the stocks fell more than 3.5% to $61.36. humana saw shares fall after weaker than expected third quarter results. the insurer blamed health exchanges and higher specialty drug costs. that stock closed at $130.58. intercept pharmaceutical plunged based on negative side

effects like increasing bad cholesterol levels. that means more studies may be needed. it posted a wider than expected third quarter loss. and transocean hit investors with news that it will take a $2.8 billion charge when it reports its third quarter results. shares fell a fraction to $29.71. tonight's market monitor is a true blue bull. he feels the average investor is just too bearish right now. he'sed a federated investors. phillip, always good to see you. >> bill, thanks for having me back. >> what leads you to believe that the average investor is too bearish right now and why do you think that is? >> if you just go back three weeks ago, the stock market was down 10% or so on october 15th. the vix, volatility index spiked up to 31, treasury down to 6.8%

and stocks trading at 14 time forward earnings. in our view, that was completely out of whack and we thought there were three catalysts that would play out over the next three weeks that would reverse that. we thought corporate earnings would be better than expected, the third quarter gdp growth would be better than expected and we thought the republicans would do a better job in the election on tuesday night. we're three for three and now stocks are 10% higher. >> and maybe this will encourage investors to become more bullish. at the top of your list, tjx companies. tell us why you like this one, trading now at $64. >> sure. tjx is one of our favorite retail stocks. we're expecting a good christmas but this is a stock that typically doesn't do well during christmas. it may trade off 3, 4%. we think the stock is worth $75 looking out over the next year. so the point is, if we get a couple of percent tradeoffs here

in the next couple of months, that's a good stock to put away. >> we have a couple in the transportation sector. i'm going to guess that i know why but one is rail and the other is aerospace company boeing. why do you like boeing right now? >> boeing has a five-year backlog. the stock is weak because crude oil prices are down. they fell to $75 a barrel. i can assure you, bill, crude is not going to be at $75 a barrel forever. this plane is very fuel-efficient. i think this stock will be back in the $150 neighborhood over the next year. >> tell us about csx. that's another transportation companies that you like. >> transportation, rails in general are an economic play as the u.s. economy continues to do well over the course of the next year. we think there will be more volumes and transportation companies, particularly enjoying the provement of pricing and and if you look at other major rails, it's a lot cheaper. we think that combination will drive the stock up to the $40

neighborhood over the next year. >> you don't think oil will remain at $75. you think it's going to go higher. that wouldn't be good for csx and csx and other transportation companies are already doing very well right now. are we getting in at too high a price? >> it's really a function of what are the different items that a company like csx moves across the country. one of the things that they move is coal, for example. and coal movers have been under pressure over the course of the last year because of what's been going on in washington. well, as a result of tuesday night's activity, we suspect that there will be less pressure on coal going forward and that pressure on the stock will likely lift. >> all right. phil orlando of federated investors, always good to see you. thank you for joining us tonight. >> thank you. >> you bet. coming up next, two people trying to make made in the usa a little bit easier. that's next.

♪ a new development in the faulty airbags made by takata. "the new york times" says the company deliberately destroyed test results after finding defects in some airbags. reportedly this happened back in 2004 after an inflator in a honda juried a driver. meanwhile, there are older versions of the most popular models, including the accord. here's some evidence that domestic made in the usa manufacturers are still growing. 16% of large manufacturers, those with at least $1 billion

in revenues annually, are bringing jobs home from china. this according to a recent survey by the boston consulting group. that's a 20% jump from a year ago and more than double the 7% doing so back in february of 2012. it hasn't always been easy to find a factory here at home. as tyler mathisen tells us tonight, that's changing now thanks to the folks that came up with our later bright idea. ♪ >> matthew burnett created watches for big name designers and for his own line, all made in china where large orders get priority. shipping times are counted in months and quality control issues can be very costly. >> if there's a manufacturing error, less than 3,000 watches, about $35,000 worth of lost merchandise. i couldn't take it. >> so he started over making leather goods in new york city.

quality control was easier. and turnaround times quicker. but finding domestic manufacturers, the people who actually make things in the usa, wasn't easy. enter a friend, tonya menendez, who eventually left a job at goldman sachs to work with burnett in brooklyn. >> it was shocking to see the way that people looked at how businesses run and how inefficient it was, i thought, there has got to be an act to that. >> there wasn't. >> instead, brokers sold the list containing the numbers of manufacturers, often for thousands of dollars. >> 5 to $10,000 for any small business and i'm paying $10,000 for maybe my first run of products. >> to give more people access to that information, they built a website, makers row. 50,000 entrepreneurs have signed on along with about 5,000 manufacturers, mostly apparel and furniture makers. the change didn't go over well with at least one broker.

>> he came to our office and threatened us to shut down the site because that was livelihood. >> we felt really uncomfortable and it was also really enlightening for us to understand what was going on in the old industry prior to us coming along. >> one reason manufacturers are so hard to find is that many don't have their own websites. >> it is very hard to find a domestic manufacturer using google. >> mitch conn's company makes baseball caps and a few other novelty items. he gets several call as day from entrepreneurs who found him on maker's row. brooklyn bow tie and necktie maker gina bam nearly went out of business during the recession. she's practically around the corner from the maker's row. >> the phone calls doubled.d. i picked up about seven new customers.

>> with labor costs overseas on the rise, entrepreneurs are looking for domestic manufacturers. ari, alexa sells scarves with built-in carbon filters. they made them with their own hands until they couldn't keep up with demand. maker's row helped them cut a two-month search for a manufacturer down to a couple of we weeks. >> we found that it was cheaper for us to manufacture here in the u.s. >> and with walmart now looking for u.s. manufacturers, maker's row may be on to something. >> these are the kings of industry that we're looking at here. when we saw them sign up, we knew it was a much bigger issue that we were tackling. >> that from tyler mathisen. and to help manufacturers get on board, maker's row has partnered with newark, new jersey, los angeles, chicago, and as you saw, brooklyn in new york. they hope to add different types

of makers, by the way, beyond the textile and print manufacturers already on line. >> this goes to our top story about more jobs. >> exactly. >> if they keep this up, we'll have more people with jobs. >> more jobs are coming from those smaller businesses right now. that's "nightly business report" for tonight. thank you for joining us. i'm bill griffeth. tyler mathisen is back on monday. >> and i'm susie gharib. >> nightly business report has been brought to you by the street.com, featuring stephanie link who shares her market insights with action alerts plus, the multimillion dollar portfolio she manages with jim cramer. you can learn more at the street.com/nbr.

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