of. >> and steve liesman. forget about cheap beer.can consumers, they want none other than the good stuff, despite these tough economic times. we have details on booming boutique beer. the industry, straight ahead, only on "the call." >>> okay, welcome back, everyone. check out shares of smucker's here. jm shucker, sjm, the company known for its jam posting strong quarterly profits. helped by strong results at its foal engineers coffee business. of as a result, said full-year profits come in at the higher end of this outlook. and stocks trading up, 4%. some investors like it. mandy. >> here is an interesting factoid for you, this friday, and, of course, friday means perhaps we're counting down to beverage consumption. one beverage group that is benefitting from the recession is craft beers or boutique beers as we know them in australia. it seems patrons are more willing to pay a little extra for those premium pierce beers as well as wines and cocktails. we have the director the brewers' association, and local craft beer bar owner, jus

for more on the future of the economy, we're joined by cnbc's senior economics reporter steve liesman. steve, how much of the economic improvement can be credited to the government intervention? >> lester, most economists think that the government added several percentage points to the second quarter growth, which as you know was minus 1%. so the think something it would have been quite a bit worse without government deficit spending. the stimulus was only a small part that's been spent so far, but more of if is to come as well as government doing other deficit spending that's helping the economy out right now. of course, the dark side of that is going to be the deficits that were mentioned in mike's piece which are high and rising into the future. >> and then friday's gdp numbers, the drop was smaller than predicted. that offered a glimmer of hope. what's the forecast for this quarter and beyond? >> we did a quick survey at cnbc last year. we talked to a bunch of economists. they've raised their forecasts for the third quarter by half a percentage point to 2.1% for the third quarter.

senior economics reporter steve liesman. wow, he sure does have a good job, speaking of jobs. okay. you hearing? >> first off, i'd like to point out that somebody has to do this, okay, erin. i just happen to be the guy who was picked for this. i want to go inside the numbers here, for a long time,

our seniors economic reporter steve liesman is in jackson hole. th more. before i get to it, steve, let's get right to the real news and that is this reuters story. i don't know if you heard us talking about it in the last hour. it's largely about color in jackson hole, what's going on, who's going on mountain trails. they say the lodge's bar is the only one around for while and it's known to feature a beer-emboldened television correspondent playing guitar. is that you? >> i'd have to check on that. i only have the single source there. we don't remember, steve. >> so there have been rumors about a tv guy playing some guitar there. there's also rumors this year about a certain administration official who brought his harm harmoni harmonica. so i'll be checking on that for you. >> wait a minute. is that austin? >> you know, i can't confirm or deny that either. >> usually, you're such a -- usually you're such an aggressive reporter. i sense you wanting to, i don't know, not take part in this story. >> some things we just don't want to know, carl. some

martin barnes and steve liesman. thank you all. >>> coming up, james faber back inside those numbers from fannie mae. hey, it was about a year ago that some say the crisis truly began. a lot of people say it was not lehman. it was the way the government dealt with fannie and freddie. undefeated professional boxer floyd "money" mayweather has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather. (announcer) switch to the nation's fastest 3g network and get the at&t laptopconnect card for free. >>> you're watching cnbc's "squawk on the street." >> welcome back. aig may have found some firl footing, perhaps a stabilization, and perhaps a capital structure that will not require the u.s. government to put any more money into that ailing insurer. not the case, however, for another ward of

steve liesman gets the supply side award for correctly understanding the savings being rechannelled into business. thank you steve. >> he gets all of the awards. the s&p 50% climb off the march lows isn't enough to term mohammed elarian bullish. his comments on how to invest coming up. >> and then the philadelphia eagles are taking a gamble on michael vick. new details on the contract. and is he worth the risk? all that coming up only here on "the call." esesesesesesesesesess >>> i'm scott cohn in the cnbc newsroom with the latest on colonial bank shares one day after a federal judge froze a billion dollars of the bank's assets, it appears the fdic is taking the company into receivership, and bbnt will buy the the branch and its branches, according to dow jones news wires. no word on what will happen to the bank of america litigation. remember, bank of america had sued bbnt over the return of some funds, but it does appear now that colonial bank shares which have been halted all day today will now be taken over by bbnt. guys? >> okay, scott cohn, thank you so much at our breaking new

cnbc senior economic reporter steve liesman joins us for his nuancement of the fed statement. and steve, it's not only that it's leveling out but it is still fragile. >> i think that's definitely true, rebecca. first of all, let's talk about what bernanke has said and how this is very much consistent with that. he has said he does not want to take away the punch bowl too soon. he sees that, along with tim geithner, by the way, as a big problem that has happened both in the depression, where they took it away too quickly, and in other countries that have really gone to the floor and then all of a sudden see a little sign of recovery and come back. he is really using those heavy fed terms, extended -- and by the way, rebecca, i will pont out one thing the economists are abuzz about. the split infinitive inside the fed statement to gradually flow the treasury purchases. i did get one note from one -- a guy said -- >> they sort of hedged there. >> well, which is actually joking about the idea that the last time the fed actually split an unfinancetive in a statement. >> in terms of

that's a great point, steve liesman. >> why would not the private sector come back and grow the way it normally grows if we remove the shock? that's what i've learned about economics, and nobody's convinced me that's wrong. >> steve, this is very important. this is back to fundamentals. i think steve is right in one respect, and that is that -- look, there is a lot of -- there are new products. there are new investments. there are all kinds of new things. we don't know what is going to be over the horizon. here's my concern. it has to do with the aggregate demand. it has to do with the demand side of the equation. export markets you can't rely on. consumers we can't rely on. many of these jobs are never coming back again. business investments, again, if there are no consumers out there, it's hard to see. >> this is about productivity. let's get tom to weigh in a little bit. >> we were told we're all going to starve because there wasn't enough food. there was a brilliant economist that had the technology wrong. >> on the supply side of the economy, tom, the better than expected earnings

steve liesman's theme song is playing. he'll be along.d to trading pits of chicago to check in with rick santelli. oof! i hope he has that insurance. aflac! you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage... ...and groceries. it's like insurance for daily living. so...what's it called? uhhhhh aflaaac!!!! oh yeah! that's it! aflac. we've got you under our wing. a-a-a-aflaaac! >>> with today's people, planet & profit report, at&t is bringing high school students into it's headquarters today, hoping many will come back tomorrow as employees. >> we want you guys to be successful so that in several years you guys have the ones who walk through our doors. >> concerned kids don't see the kek between their education and eventual career, at&t is devoting $100 million to programs like the job shadow event. >> we have a vested interest in making sure we do everything we can to make sure that those students are graduating from high school. that the

steve liesman joins us with an exclusive cnbc survey. finally a little bit of good news. >> we were on the phone this weekend and did a survey to see if they were changing their forecast. we've become more upbeat about second half growth and a bit more upbeat about job growth. economists in our survey increased their forecast of gross domestic product by nearly a percentage point to 2.65 from 1.75, and by about .25 point to 2.5% in the fourth quarter. they hit the 2.5% rate, which is seen as economic potential just barely fast enough to keep the unemployment rate stable or even to help it fall slightly.. these numbers would follow the 6.4% decline of the first quarter and a 1% falloff in the second quarter. inventory clearing and a slight increase in home building and maybe a surge in auto production as growth drivers for the third quarter. for the second half of the year, 2.6% growth on average versus a 3.7% average in the first half. that's a very big swing. here are the numbers economists expect for friday. minus 275,000, a big improv

of steve liesman pointed out this morning, but now we'll get the immediate reaction from bob pisani. bob. >> thanks very much, john. the important thing here, mr. bernanke helps, but it was the economic news on kay shiller, as well, and the consumer confidence numbers. take a look at the s&p intraday here, a little discussion that that conference board number may have been leaked a little bit before. the conference board said they put up the number at the same time on their website for everyone 10:00 eastern time, but they did move up, the numbers -- or the s&p certainly moved up ahead of the numbers at 10:00 eastern time. take a look at the home builders. case-shiller, 1.4% increase month over month. that was the second month in a row we saw an increase in prices. all of the home builders are up nicely here today, many sitting at month highs. the big debate is whether financials in commodities will continue to dominate. there is financial stocks in the last month or so on the top line. dominating the s&p 500. commodity stocks also dominating, as well. a lot of people are trying to a

steve liesman will have the headlines for us in half an hour's time. anything you really want to hear from him about his plans and how he's going to get us out of all of this unprecedented liquidity? >> a strange time for him to get into exit strategy. i think people are talking about that. you know, if he does give us a forward looking statement that talks about that, i certainly take much in the buffett's op-ed piece this week. it's a venue for that. another thing i point out, erin, that's not getting enough of the conversation this week, as you look at march high, it's the same. american consumers are much stronger than we're giving them credit for. mall traffic in august is turning up for the first time since october 2008. and a lot of the stories reported over the last week or so are talking about a better august, august is better than july. back to school being much stronger than anticipated. that's going to be a trend as we look back to school in the fall is going to start catching some people's attention. >> art hogan, thank you. mark, art, i d

steve liesman talking about the cpi this morning. the headline number falling to levels, i guess, not seen since they started keeping records. which brings us to the state of the consumer as well. a lot of revised gdp forecasts oar the last few days. and many of them looking for growth. but the division in those who see significant growth perhaps and those who don't really does come down to the belief as to whether we will start to see significant increases in consumption here. given that consumers for the first time in recent memory started to save money and, of course, where unemployment is, and any number of other things, which i will get to, no spending a lot of money. not a lot of demand so you see prices falling for any number of different things. mohammed el-erian earlier gave voice to that concern. and his, at least, outlook for the overall economy. not sure that we have that for you. when it come down to where the consumer stands, certainly housing plays such an important role there. we want to give thank you latest analysis

and we have somewhere in between steve liesman. so ned, you're the bill bull. y you got ism numbers. jobs light today. what do you do, do you stay launching through with your bullishness or larry, i do. got news is the psychologist is a big enigma. the point is simple. people are still looking at the down side. they're looking at a market that they want to keep their money in short time investments and they really don't believe in this rally. it's really a mystery to many people. all i say is the recovery is here, housing is coming, the cash for clunkers is great, larry. i'm telling you, get $4 billion -- >> i caved last night. on the other side, factory on orders in june were very strong. and on on the jobs, the adp looked a little light to some people, but actually that is the smallest drop in nine months. so you could construe this being quite optimistic. how are you going to play it? >> still losing jobs and aren't we only profiting from cost cutting? we aren't seeing revenue increasing here. we're not seeing a turnaround in the jobs market. or really even

cnbc's steve liesman joins us. beautiful there, steve. >> reporter: thanks, melissa. you know, bernanke is here. i have to come. what can i tell you? they gather here every year. this year, i think there's probably a lot less panic than last year. last year the feds set up a special communications equipment in the room here so they could hold an emergency meeting if they had to. certainly there's not the feeling that -- as they were doing last year. you see the guys on their cell phones, planning what would become the takeover of fannie mae and freddie mac. but there is a lot of talk about exit strategies. nobody is saying right now the fed needs to reverse course. here are the things the fed has mentioned in the past. how do they get out? one of the things that they end up doing, they raise interest on reserves. it's probably -- or on fed programs like, for example, the taf, the term auction facility. it raises interest on reserves. right now there's some $800 billion of excess reserves by the banks. if they raise the rates, they decrease the incentives from the econ

steve liesman will be joining us as well. >> steve goes fishing a lot. >> thank you. >>> and then later the new school year is just around the corner. back to school, folks, meaning a very busy time of year for staples. the cfo of the office product giant will be joining us up ahead. >>> time now for today's aflac trivia question. on this day in 1835 the first in a series of six articles announcing the supposed discovery of life on the moon appeared in what newspaper? hey, it's great to see you're back after that accident. well...i couldn't have gotten by without aflac! is that different from health insurance? well yeah... ...aflac pays you cash to help with the bills that health insurance doesn't cover. really? well, if you're hurt and can't work, who's going to help pay for gas? ..the mortgage, all kinds of expenses? aflaccafcccc! it's the protection you need to stay ahead of the game... exactly! aflac. we've got you under our wing. aflac, aflac, aflac... aflac, aflac, aflac >>> now the answer to today's aflac trivia question. on this day in 1835, the first in a series of six articles

and cnbc senior economics reporter steve liesman at jackson hole. gorgeous shot behind you.t you're hearing there with all those economists. >> maria, the basic story here is people see stability in the financial system, certainly compared with last year. people are not arriving here with a sense of panic that prevailed at the jackson hole conference last year. there's a sense the next couple quarters could be positive but what happens next, the big concern we keep hearing is the growing deficit, how the fed is supposed to operate and how it conducts monetary policy when the treasury and fiscal authority is going to be issuing trillions of dollars of debt. >> sal, how worried are you about that deficit? >> it's certainly a concern, and it's unlikely the government will act concertedly to reduce the deficit while the economy is trying to dig its way out of the recession and until the recovery is much more durable. so yes, it is a concern. right now investors, though, seem quite willing to finance the government deficit. interest rates are still low. u.s. dollar relatively ste

>> i'm steve liesman.e kansas city fed conference in jackson hole, where central bankers from around the world are gathered here to visit the ghosts of monetary decisions past, present and future. what's worked, what hasn't worked. we've talked to some of the players, and we'll give you some of the trail talk coming up. >> i'm jim goldman, live in the silicon valley bureau. google has been on a steady climb, and despite losty levels, the internet store is at it today. the firm saying google has finally come up with a way to enjoy some returns on its $1.6 bin

senior economics reporter steve liesman joins us with all the answers, right, steve? >> all the answers. . >> i tell you one thing, the selloff around the globe does appear to be reaction, in part to the uncertainty over an economic turnaround a, its timing and strength. immediate trouble looks to be this, markets, 50% gain his some cases, priced for a near straight line recovery, guess what the data is not cooperating it has been choppy, positive on manufacturing but negative on the u.s. consumer. let's look at where the surprises have been. empire state this morning, manufacturing, market completely ignored that, that was four times the expectation, looking for three big. industrial production last friday, on friday as well, france and german gdp, i pup the gentleman knee in the upside there 1% growth after minus 3% decline, got nude. look at the downside, u.s. retail sales, consumer sentiment, joblessness, all the stuff to do with the consumer all disappointed to the downside. over the weekend, jpmorgan economist writing, "as each week passes, we get more confident

steve liesman joins us now with the breakdown. good morning, steve. >> only you could get away with that one, erin. only you. this is a really interesting number. what you have here is signs of some stability in global trade after it really fell off a cliff. but here you have demand for u.s. exports abroad essentially offsetting what happened with really surging oil imports. look at the number, better than economists had estimated. better than bea estimated for second quarter gdp. june, the trade deficit down $27 billion. still a big number but way off what it was. it was $28.7 billion. it's a little bit deteriorated from the may number. look at the longer-term chart here to balance the trade. it's gotten quite a bit better from where it was, down in that $50 billion range on a monthly basis. that's still a large number. minus $27 billion. imports and exports, you can see here that exports beginning pretty much, what do you want to call it when the recession began picking up steam. it helped offset a decline in imports there. so wh

. >> let's get straight to senior economics reporter steve liesman for more on those jobless and retailfigures. steve, what do you see and is it fair to say walmart really was the place people were shopping in july? >> i think it's also important that haines, i don't believe, was shopping in july. when he goes to the store we see a measurable bounce to the numbers. >> he even grew his own tomatoes. >> that's part of the problem. >> i'm going shopping in september. fair warning. >> that's an issue. i'm going to talk about that in just a second. overall these numbers are disappointing, especially for those who see a straight line up when it comes to the recovery and the economy. the recovery is going to be a bouncy one and not a straight line. july down 0.1%. look at the estimate among economists. ex-autos, that bothers me. i expected a big surge in the auto sector. that was down 0.6%. now let's look at the kind of choppy consumer out there. we took out the autos there. you can see that's down after being up. we can't really put together two up months since january or february when we had

. >>> our senior economics reporter steve liesman back from his latest fact-finding mission. a fishing trip with a bunch of economists in maine. he joins us now with our economic outlook. i bet you sat around discussing the economy until the cows came home. >> we did, mark. and that's where the story was, so that is where i traveled.. >> right, yeah. >> i went to where the story is. >> notice the coincidence that fish happened to be there as well. >> fearless, intrepid reporter that i am. >> yes, you are. >> most fishermen debate the size of the fish and the right bait if me and economists, are money managers, too, they gathered to debate the shape of the recovery and whether the economy is still vulnerable to toxic assets. i think we still have a lot of sort of feedback between the real economy and derivatives. i think the fixed income derivatives market is still huge, outstanding.g. seen some compression in cdfs. but we still have some significant issues on all kinds of exotics. >> well into the process of dealing with our bad assets. we go back to shortly after we were her

. >> and the biggest event of the year for federal reserve insiders, steve liesman must be shaking in his underpants. ben bernanke and friends meeting at jackson hole this week, from washington to wyoming. we'll tell you what's being heard on k street. this is where steve gets to see the moose. >> i know. >> we'll be back. >>> you're watching cnbc's "squawk on the street," live from the financial capital of the world. >> all right. let's take a look at the futures. right now they are down significantly. 20 points. we've sunk a little bit since the last time we checked. we are looking at a decline of 125, 130 points on the dow at the open. and here to tell us exactly why, art cashin, ubs. what's going on? >> chine? >> china? >> china. i think the big push is the strong dow is developing about the validity of some of the chinese data, whether it's apples and apples and whether you can compare it and whether it's change fpd shanghai index was down 150 points on the dow. that makes it the focal point of interest to me. add on the fact that the chinese need the american consumer who looks

steve liesman is in studio with us.t away with the cpi numbers for july. >> here they are. no big surprises. unchanged on headline. if you strip out food and energy, it was up 0.1. these will almost identical to the overall expect takings. let's look at year over year. year over year headline is down 2.1. maybe that's a little further down than most would have expected. year over year after the year we've had with the volatility in commodities may not be the best meertdic. ex-food and energy it's up 0.5 year over year. there isn't really meat in these numbers. if you remember, if you remember where the prices started to get volatile to the upside in commodities, this might be one of the last numbers that looks so tame. i'm not saying infrags alation commodity prices are one in the same, next month might be the month to look at. after supply, when everybody's got pockets full of securities, they of course like data like this. it is rallying a bit. maybe some secondary market buying of some issues that were tough to jump

now to steve liesman with treasury news. >> rick santelli, thanks.have breaking news from treasury. they're taking the unusual step of naming names of those banks and mortgage servicers that are and are not doing a good job keeping homeowners out of foreclosure. they're saying servicers covering more than 85% of loans are modifying the loans, and more than 400,000 modification offers have been extended. 230 trial modifications. let's get to the names here. jpmorgan, according to the treasury here, has started mortgage modifications of 20% of those eligible. those are 60-plus days delinquent. bank of america, 4%. citi mortgage, 16%. when i looked at the average in the table provided by the treasury, it is just 9% overall of those mortgages that are eligible. treasury trying to modify some 3 to 4 million mortgages over a three to four-year period. they've done 230,000, and trying to ramp that up to 50,000 by november. part of the way they're trying to get this done is by publicly announcing who's doing an aggressive job by modifying these mortgages and

>> we have him here for another 24 minutes. >> you know, steve liesman has to go fishing. jackson hole. >> never. >> we're going to build him a pond outside headquarters here just -- >> to keep me closer in. >> apparently fishing is the only way you will do your job. >> i have 18 months of fishing to make up forgiven the crisis. how good is that that is for the environment and fishing stock. >> pool and pond for steve. >> steve liesman, mr. santelli, thank you for joining us, mr. trennert, mr. mishkin are sticking around. >>> jobs are the hot topic in richmond, virginia, where 80 companies are looking to hire at a special job fair. joining us is house minority whip cantor joining us from the job fair, i believe.e. companies are actually hiring. that's a good thing, no? >> i'll tell you one thing. we were pleasantly surprised, is an understatement, here in the richmond area when we floated the idea of having a job fair. as your former guest, as your guest just before me said, you know, the jobs really have not been forthcoming as we were all hoping for a pick up in this eco

senior economics reporter steve liesman is here. what happens?w they are not doing to mess with the federate what will we hear about the economy, quantitative program, we think it will end in september. we have trader that said she doesn't think they will say that, that they will extend it beyond. >> the survey was four days ahead of the journal. 56% of our respondents said the recession was over or would end in the next three months. >> zero percent chance -- >> i did that specifically -- carl, would you back me up on this. >> he was the hole in the door. >> i said specifically this was the outliar guy that gave us something to think about while 66% of our respond ebts said bernanke would be repointed. essentially, over, we were there on all that stuff. i brought him up -- i couldn't have done it more. i said, look, this is the outlier. >> you're free, you're easy, you take your jacket off, wild and crazy. >> i'm excited about the fed meeting. in answer to becky's question, thank you very much, i do believe they will -- could end that bond progr

steve liesman will be fishing, forecasting with the nation's top economist as the banjo plays, steve.hought it would be interesting to look at tape last year. very hard to do with a straight face. a close-up on joe, if possible. he's dying to chime in. he wants to make -- it's a bucolic setting, serene. there are 30 to 35 hedge fund managers, economists. >> sweaty. >> several cabins. within the cabins, joe, are several rooms. do you get that concept? >> no bunks. >> no bunks. >> no, there were separate rooms in the cabins. >> we've had viewers write in that the numbers like so many economic numbers don't add up and there's musical chairs. there's not enough bunks. >> what's interesting is your concept that the viewers write in in a vacuum not prompted by the host on the show. a complete vacuum. let's go back and get serious here and listen to some of the economic forecasts these guys made last year. >> i don't know yet how one finds a bottom. >> no one here is really upbeat. there are no cheerleaders here. >> give us an outlook on next year when we come back. >> oil prices primary dri

. ♪ take a load off >>> steve liesman back from the fishing hole.the day, economic forecast. "squawk box" begins right now. ♪ you put the load put the load right on me ♪ ♪ right on baby >>> good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with carl quintanilla. joe's out today. he'll be back tomorrow. we just heard from mcdonald's, the company out with the same store sales number showing global comps up 3.4%, better than expected. the street was looking for a gain of 3.2%. also in the united states, comps coming in better than expected, up 2.6% versus the 2.1% the street was expecting. again, mcdonald is a dow component. we'll keep an eye on this. you're talking about the futures, the s&p futures, down by about four point below fair value. the dow futures down by 28 point below fair value. >>> let's get to some other top stories we're following. french ad giant is buying microsoft digital ad agency paying $530 million as it seeks to expand digital ad revenue. it is one growing during the recession. >>> warren

let's go to steve liesman with a special fwest from the automaker. i'm very interested in this interview. >> me, too. there's a lot of controversy over the cash for clunkers and economics around it. does it pull forward future sales a. let's have a serious discussion about this. joining me now is the chief economist at ford motor company. thanks for joining us. >> hi, steve, how you doing? >> great. let's talk about first the numbers you guys estimate. according to some data you sent along, how many units have been replaced toe sew far? >> well, we're getting close to the top. the d.o.t., the department of transportation indicated they've got about 80,000 already registered. well see what they come up by the end of the day, but clearly this has been a home run. the program has done exactly what it was designed to do, stimulate the economy. >> let's talk about the economics of this, with whether or not you feel like we're pulling forward future sales or are they new sales or is there any way really to know? >> well, i think, we are seeing some increme

and our senior economics reporter steve liesman, thank you off. they obviously coordinated their apparel last either. they were both in the navy -- i'm sure khakis on and white shirts. >> i think that's a uniform on martha's vineyard. >> that's what it appeared. the only difference we noticed is that the president had on a flag pin and chief did not. >> he didn't? >> no, he did not. >> what should we read into that? let's convene a panel. >> why did ben bernanke not have a flag pin on? >> yeah. there could be some deep meaning in there. why are we not moving on? >> are we ready? we're ready. after the case-shiller latest report are about home prices. >> we were told that -- oh, they have to -- >> we let our viewers know exactly was going on here every second. home prices are in an upswing in the second quarter of the year, depends how you look at it, but there are promising aspects to these headlines. here to dissect the data. this is a very special day. it is here. bob schiller, creator of the case-shiller index. >> who knew there reallies were a

senior economic reporter steve liesman is in charge. he knows all the economists. he knows what they have to say. steve, do those words belong in the same sentence? >> now they do. at least more optimistic than they were. a snap survey by cnbc we found economists are more optimistic about the second half of the year after that better than expected report on gdp for the second quarter. making some more upbeat on the jobs front. we talked to eight economists over the weekend. found they upped their third quarter forecast by a percentage point. 0.9% to 2.65%. about a quarter point to 2.51% in the fourth quarter. here's what's important. they both hit the 2 1/2% rate. they could start the beginning of bringing down the unemployment rate. these numbers follow, by the way, 6.4% decline in the first quarter and a better than expected 1% fall in the second quarter. economists cite government stimulus, less inventory clearing. slight increase in home building and rebound in auto production as broet drivers. for the second half of the year, growth on average, versus is a key

steve liesman, do we need a second stimulus.nswer the question. >> i would like to wait, see the fed program, see how they are designed to run offer. we have more stimulus from the stimulus package in addition to the deficit spending already in place. i don't want it overdone. if they got this right, don't bet on getting it right again. >> will the public let them? has everybody read the papers lately? people are not happy. >> rick, if you take the $800 billion. >> some people are not happy. >> rick, if you had taken $800 billion and lowered marginal tax rates, personal rates and business rates, would you have signed ontd that stimulus package? >> yes. a lot more than i would have in this current -- yes, i would have. >> just asking. i just wanted to ask that question. i wanted to put that on the table. there were options here.. that's all i'm saying. there were options. >> we've got santelli on record. thanks, guys. when we come back, cnbc exclusive on the state of the housing market. >> by the way, personal tax rates and busin

we welcome steve liesman and economist and author of the upcoming book "it's not as bad as you think," and mort zuckerman, it is worse than you think and steve is with us. in addition to what geithner said and greenspan said, we had the fed numbers better than expected and leading indicators better than expected.g is this recovery for real? >> absolutely. you can add those two pieces of data to about 42 other pieces of data all showing a v shaped recovery. back two or three months ago, this is what we were talking g about here at first trust.g all the data, copper prices, oig prices, the baltic freight shipping index, philly fed, em empire state index, manufacturing, on and on tracing out a v-shaped recovery. >> mort zuckerman, you wrote the op-ed that says it's worse than you think. will you retract that head line now or do you think it's worse than you think. >> i hope the previous speakers are right. alas, i don't think so there. are positive numbers for sure but also very negative numbers particularly in terms of consumer spending and what's weighing on them. house prices still

steve liesman is here to break it down for us. steve? >> melissa, thanks. despite walmart's better than expected profit numbers, it was a number of miss when is it comes to sales at the nation's largest retailer and the nation's retailers as a whole. bottom line, the consumer is undermining the clear-cut bullish recovery case, at least for now. take a look at walmart's sales. not the prove it's. down 101 billion, down from $102 billion by 1.4% from the prior year. economists had been expecting a gain of almost 1$103 billion. just like walmart, the overall count of national retail sales disappointed in the month of july. july was down 0.1%, the estimate again for a gain. x autos was the thing that bothered me down 0.6%. we knew we had the cash for clunkers. automobiles, not as much as economists expected. and then i don't have to read the details. all the rest of the stuff was negative when it came to stuff beyond automobiles. a gas station down on lower prices. look at the depth this year compared to other recessions. how much automobiles are down in this d

economics reporter steve liesman joins us now with more on what wall street is expecting and hoping to hear tomorrow. >> expectations are pretty low for a significant shift in fed policy that comes from tomorrow's statement. but with so much on the line with all that which can was talking about, the statement is going to be scoured for clues when that policy shift could come because if the economy recovers, it will come. ben bernanke arrived for a two-day meeting that finds the fed in transition, unwilling to pin self down what it would do when the economy recovers. >> he's not going to do anything with the rates. he should give the impression they are considering all alternatives for the end game whenever that comes and it won't come real soon. >> the three main things on the agenda. this last phase of ballot she the expansion, remember the talf? they're going to be talking about the new tools to sterilize balance sheet growth, including using interest on reserves. whatever outlook there is for a rate increase. woo he don't know how much of any of those three things end up in the stat

you heard steve liesman out earlier, the same in terms of momentum and strength in the economy.ave entered a recovery. the dow jones industrial average holding on to a trim-digit move on the up side. financials, technology, retail all higher, very much across the board situation here. let's kick it off with our team covering the markets and bob pisani inside

. >>> i'm steve liesman at cnbc global headquarters, where tomorrow we're watching for the adp unemploymenteport. economists look for a decline of 350,000, a marked improvement from the decline of 470,000 in the prior month, and the hope is that this continues into friday's overall payroll number. >>> i'm matt nesto. be watching for a busy day in earnings central. tomorrow, proctor and gamble, devon energy, transocean and baker huge. a wild card to watch will be orbit th orbit. then after the close, cisco, prudential and news corp. >> we're going to end the show with some empty calories here. the playmates at the playboy mansion are getting a new neighbor. founder hugh hefner has sold his private residence next door to the iconic playboy mansion for $18 million. of course, in this tough housing market that was $10 million below the original asking price. according to reports, the lucky buyer, anonymous. a wealthy man in his 20s. he'll probably enjoy meeting his new neighbors. i think they are kendra, bridget and holly. that's what the producer in the control room tells me, because he watche

. >> i'm steve liesman where tomorrow we're watching for the fed's policy statement from its two-day august meeting. look for a slight upgrade to the update to the economy. >> i'm michelle caruso-cabrera. thanks for watching. "fast money" is up next. >> frank dipascali pleads guilty to ten criminal counts and says in court he helped bernie madoff and others defraud investors over two decades. he is cooperating with prosecutors. >>> the fda's medical device chief is stepping down after staff scientists complained about improper pressure to approve some products. microsoft and nokia scheduled a conference call tomorrow to announce an alliance. that's cnbc.com news now. i'm sharon epperson. fast money with melissa lee starts now. >> stocks sliding again as the summer rally turns into a summer swoon. how do you protect. welcome to fast money. i'm ma list sa lee. these are your traders. we've got a big show tonight. new developments in the madoff case. he did not act alone, plus moments away, a first interview with the vice chairman of gm on the new chevy volt and the one and only regis p

all this, former fed vice chair and current princeton economics professor allen blinder, cnbc's steve liesman and rick santelli. allen blinder, let me go to you, sir. good to see you again. if you look at the feds' balance sheet, which has not risen in about seven months after the initial stimulus last fall, allen, to some extent, as the emergency loans go down, it looks like they have started an exit strategy. is that possible? >> well, it depends on terminology. they've -- the banks have started an exit strategy by demanding less credit from these facilities and the fed's attitude was always to be kind of passive about the amounts on these lending facilities to make sure the banks were liquid enough. of as the banks think they need a little less, these facilities will naturally be drawn down, so you can call that an exit strategy, but it's not any action by the federal reserve. >> yeah. >> rick and steve, i mean, my concern is that loose money is kind of how we got here in the first place. now, i'm not saying they should raise rates now, but that is always on the back burner. do you think t

bring in former governor bob heller, and former chief economist to hank paulson and the great steve liesman is also here. mr. bob howard, let me start with you. do you expect any significant changes from this statement of their last meeting? is anything really going to shift here? >> no. i think they will say that economic activity is now stabili stabilizing. i think that will be the watch word all over the place. >> and phil, just a quickie here. any shift on the fed's purchases of treasuries, mortgage-backed securities? some of that stuff is scheduled to expire, and i think it's september. do you think they're going to make any signals there? >> i do, larry. i would expect that they'll start to hint that those purchases will start to end. much they see the same stabilization that we all see, and that's the first thing about getting back to a more normal monetary policy. >> steve, talk about this productivity number we got today, the rise in 4.6% makes it feel like business is a coiled spring, ready to unleash as the economy rebounds. at the same time, unit labor costs going down, the empl

cnbc's senior economics reporter steve liesman joins us now for what that data means for business and why sometimes companies are starting to root for inflation. >> just a little bit. you know, root for a little bit. no one wants a lot of it. as many of you may be fiefrnding out first hand it's a tough environment in which to invest. here's the c pichlt data. unchanged on a month-to-month basis. minus 2.1% year on year. the core rate up just a little bit. 1 1/2% year on year. we'll look at those. the inflation rate has now been negative for five straight months. that is the longest stretch since 1955. core inflation you can see here it's not deflation but it certainly is disinflation. down from the highs. this takes out food and energy. not as bad as the deflation scare of '03-04 but maybe on the way there. economist joe naroff says -- >> 2 the% inflation is not going to be anything that gets any businessperson or any households to guess worried. 0% is a problem. negative is a problem. if we get up to 2, 2 1/4, it's not an issue. >> look at some of the issues surrounding deflation and

. >> well, we've got steve liesman.nyway, there is a fable, an aesop fable where a bird is trying to drink out of a pitcher and he drops stones in it. you don't think it works. crows are -- they did this as an experiment. it's amazing to me. you had tubes, a bunch of tubes in a closed environment, not out in the wild, where you have pebbles, a tube filled with water and a bug floating on the water but the level of the water is down way too far for the bird to get. they immediately start picking up pebbles, dropping them -- >> get out of here. >> -- the and the water level rises -- >> crows are supposed to be so smart. they're one of the only birds that get bored. they're smarter than they need to be to survive. >> they yawn because they're that bored, right? >> but crow ares supposed to be so smart they get bored. >> watching one of our competitors. >> ouch! >>> we talked about the ft story, the new york fed is hiring because they have so many more assets to manage. new college grads are getting jobs? >> where. >> china

steve liesman is with us on the set.eve, i heard you grownan a couple times. >> i did not like the jobless claims number at all. i was hoping for more improvement there. these numbers are still consistent with declines in payropa payro payro payroll. i do like the continuing claims number. a couple problems with retail but overall a negative number again. it did not seem to pick up as much as economists had estimated in terms of the gains in auto sales. you've got a 2.4% gain, so that's going to affect the top line number, why it was minus 0.1. some economists were looking for a 6% gain because of cash for clunkers. >> cash for clunkers was only around for -- you're talking about july numbers. >> that's true. >> you're talking about some crunches that got put through because there were problems in the first few days and -- >> i don't know why -- i don't know why, becky, economists would have dialed into such high numbers for auto sales but they did. we have seen this in the past, the difference between the unit sales by

steve liesman will be on the scene. "the fed: crisis & recovery." >>> new jersey broke through unemployment slump, breaking a seven-month streak of job losses. not all news in garden state as an schwarzenegger 8 billion budget deaf looms ahead. we're joined by new jersey's governor, jon corzine. if you were going to -- would you plan something out of state if you were going to talk about new jersey's fortunes? don't you have the sense to keep it here? >> we'd go to long beach island. there's no question. >> you'd run into becky. >> we'd run into becky on her vacation. >> governor, do you give a state of the state? >> we do, in january. >> you do. can you give us a preview? what is the state of the state? >> i think the economy is actually beginning to turn. i don't -- i don't think it is a sharp "v" turn but i think we're seeing positive movement in employment beginning to happen. i probably will see -- y'all probably see weekly claims again show diminished layoffs on a national scale. as you said in your opener. 13,000

and medicare guide. ♪ ♪ >>> tomorrow, not do we get the jobs number but steve liesman and his gang of >> economists. robin hood gang, all in tights. >> they make some great calls last year. great calls on the economy a year ago. >> negative a year ago. >> yeah. >> lousy economy. >> things were pretty negative. i mean, so they were negative. >> we're going to see what they say tomorrow as we get the jobs number. wrap it up with our guest host of jpmorgan private bank. you want to tuck about inflation. we showed gold before the break. >> yeah. >> should people be build that into their portfolio? >> i think you need inflation protection. right now everybody has been worried about deflation. look at the retail story. margins are strong. why? because they're not having to discount the stuff asieh gresively. imagine when we get real growth. inflation is going to be an issue. you need an inflation hedge in your portfolio. that means inflation protection security, commodities to a degree and commodity currency. look at the canadian dollar recently. >> they're trying to talk it down up north.

steve liesman drew the short straw and is going to have there to cover it. the ten-year yield at 3.25%. taking a look at gold. seeing a move toward safe havens. gold is not one of those spots right now. it is down quite a bit, down 8.8 at the moment. rebecca? >> joining us is now is mark matthews, asia pacific. mark, let's start with you. does this undermine the bull market view, or can we not take too much from the one-day moves? >> i think we're seeing an overspill from last week's confidence data from the u.s. bear in mind, we've had an extended gain on thin volumes. the ftse trading on 95% of its daily average. on thin volumes, markets tend to grind up. the seasonal aspect of the summer. i think for me, we can't take too much into one particular move for one particular move. it's more of a period of a few days or a few weeks. we look at shorter term to medium term in the markets. for me, the real acid test will be september. i think volumes will increase and perhaps a more decisive move in the markets. >> september is the point at which we'll know more w

senior economics reporter steve liesman has more. steve, this is a tough one. >> mixed blessing, you're right. on the one hand, productive tifty is a good thing. on the other hand, it's short-term negative for jobs, the question is are we squeezing workers more and are did we essentially as you might expect lay off the less productive workers first leaving higher output workers in the workforce? let's look at the numbers blowing the doors off the estimate. 6.4% is the number. estimate is 5.5%. q10.3 brs. in general, this economy is much more productive during this recession than it typically is. rewriting the textbook about how productivity works during a recession. you can see that surge right there, the biggest number in six years. we did a quick calculation of average quarterly productivity during recessions. you can see here what's happened has become more of the rule. in general, we thought during recessions, employers are reluctant to fire workers, so productivity goes down. it looks like we are very fast now to fire people out

for more on the adp employment report, let's get to our senior economics reporter steve liesman. >> the number coming in a bit hotter, a bit worse than economists expected. this is the adp report on private payrolls. mine with us 371,000. economists had expected 350,000. it's the best number we've had since october since the change here. 467,000 is the estimate for private and payroll losses -- private and government losses for the bls report which comes out this friday. let's look at the year over year -- maybe we're not going to look at that, but you have a sharp decline and pretty sharp improvement. this is -- we were doing 700,000 job losses at the worst level here in the month of march. looking at it by company size, small businesses 138 those, medium 160, and large businesses 74,000. the kind of industry. and what you see there is the goods producers still down again and they have been down for a very long time, but down less than they had been. the service sector lost 202,000 jobs. no one wants to say losing those jobs is a good thing, but compared to 700,000, viewers can make th