steve liesman tells us what it al means. reporter: the latest data shows the sector is whether consumers can hold uphe u.s. economy. >> everything we see shows the u.s. consumers are there. they're beginning to pass through. the tariffs and into consur prices. we haven't seen that wlesale yet. thth section. >> so what's behind the factory slowdown. china and the u.s. it's specifically in manufacturing sectors. factories have trouble finding w enoughkers and also the dollar is strong making the u.s. exports me expensive relative to their foreign competitors. chad, chief economist of the national association of manufacturers says the manufacturing sector is contracting in large part becal of slowing glo growth and uncertainty on the trade front. what m mufacturers need mt now is more clarity on trade. another possible factor, the slowdown in boeing plane production from the issues surrounding the 737 max. it's unclear how that cog d be impactthe national data and it's unlikelyhat it's only just domestic. it's up0 companies. mu

i'm steve liesman. zblncht there was some positive new us on the economy today. construction spending tked high er in july after falling more than 2% this year. acco t to the commerce dertment, government spending on schools, suers and the w ter supply picked up as did construction for single family >>homes. a key vote in the u.k. parliament tonight and a popontial major blow to the new prime minist. law mmakers mooued to take contl of parliament. a will held tomorrow whicd prevent the withdraw from the european union without a deal at the end of october. a so-calledreardt is something economi have viewed as a risk to the global economy. >>> slow trade, onomy, the fed, they conti to weigh on stocks as we begin september. what's it going to bring f investors? we have two market pros with posing views withus. barry, head of equity strategy at steeping. he sees tough month ahead for stocks. christina hooper thinks thema mas going to hold up well. chief global market strategist ato. invesc thanks for joining . ris christin christin epic volatility in august. if i'm r

steve liesman takes a look at what's expected. >> reporter: wall street expects cuts in interest ratmid concerns about economic weakness and the trade where. 0 oh% of the cnbc survey see the fe cutting rates a quarter point afte results of the september meeting. all expecting another quarter point cut which year end. . the problem is at forecast with lower rates come with freduced outlook u.s. growth and increased probability of recession. the chance of a recessi i the next2 months soared to an 11-year high of 32%. according to the survey. it was below 20% for most of aloft year pch groh forecasted decline though 2.2% from 2.5 process 2010 and sinks to 1.8% in 020 j economisl naroff writes in response to the survey saying trade war that continues to next spring or summer cses a recession likely to spread world with an. not everyonegrees. a senior investment strategist at the philadelphiaoovet trapays recession talk is overdone. yes there are slowdown economic indicators but the robust holiday spending id. goo based on high levels of consumer confidence driving growtst on ks higher. f

steve liesman explains. >> boston fed president eric rosengren explaining his ecision to vgainst the rate cut this week. said the big concern is interest rates too low too rung canoo le to financial instability and bubbles in asset prices created by those low rates. and rosengren signalled out a business model used wy wek as a possible source of future losses and the boston fed president said low rates can encourage excessive risk taking, create too much leverage or debt in the system and causeto inv to reach for yield, one example he said, the real estate model known as coworking space used by we work which rosengren didid n specifically name. >> very aggressive monetary policy has b bst some of the issues we have in the cycle with respec to stores i like we work. the question we need t ask ourselves is wework the tip of the iceberg. >> does it call into the value of the other unicorns does it have a ffflo-ont into the real kmm investment, spending and growth that then coule lead to s kind of unrachlg of this cycle. >> under the coworking space model wework rents vastom space landlo

, by any means, but soft, differently >> steven weis, you kind of dug in a little bit, i think steve liesman is here around me. is the jobs number really that relevant only in the sense that everybody's working. right? you can't grow jobs -- that's 7.5 million open jobs in this country. how do we expect the number to grow -- you live in new jersey i'm sure you see like i do, help wanted signs everywhere. >> i'm not looking like you. >> well, you never know with this kind of talent. i'll probably be somewhere else soon >> yeah. >> here's the thing, does it matter as much as it used to >> absolute lit not. and that's why i ask the question, i thought there were positive things to come out of the jobs report. but i don't think it changed your position if you're bearish or bullish it really didn't change your view on that look, we had wage growth we always have the adjustment, so we had the prior adjustment down but it's a three-month number you're looking at. in august, as larry said, it's kind of funky. summer months are difficult, particularly august. so, i don't think the fed should go i thi

new york stock exchange, eamon javers at the white house where optimism spurred this rally and steve liesman on the year of the right cut. we start with seema. >> a triple digit rally for the dow as u.s. and china trade officials confirm a meeting frg october. the s&p 500 is back above with a 1% gain. for the week, the dow is up about 1.4 being led by banks and industrials. and if we dig into the financials, you'll see the big banks like citi and goldman are up about 1 to 2% 2.6% for goldman industrials that initially sold off this week on fears that a meeting would not take place between the u.s. and trade officials are now all higher and what's also helping is a weaker dollar. it's down about 1% in the past three days, which is good news for multinationals that do business overseas. now both the dow and s&p 500 are about 2% away from their respective all time highs hit back in july the nasdaq is about 3% away from high and as to whether we can get there, it comes down to the jobs report. tomorrow, the fed meeting in mid september and the trade talks to see if we can get progress >> as we m

i don't think rate cuts are the only thing we have >> steve liesman saddled up to the table. >> i heard my name called and made a beeline >> didn't know when you were going to get your mic on >> a bag of doughnuts out there. >> rosengran says he's unconvinced. liz young says -- >> she on the fed yet? >> no, but her opinion is a smart one. >> maybe next year >> how tall are you? >> 5'4". >> let's get back to the matter at hand. bullard says she can consider 50 basis points >> all over the place. is that your point >> there's a bunch of camps. there's the, i'm not ready yet the i'm leaning there. the, let's do it now and the let's do it now! and the let's do it now! bullard is in that camp. if we're going to do 50, might as well do 50 now in september the lower case now folks are the ones who are 25 basis points the people leaning there, they want to see it in the data and the people who are not there yet are the ones who look at the data, don't see it and don't expect to see it >> the problem is, i almost feel like now you have a debate and you have a silent debate that we haven't heard

is singling out a particular area of the economy that could pose a risk overall and with that, steve liesman joins us with that and i'm surprised. >> maybe a little more particular than an area of the economy. >> real estate sharing come on. >> all right, boston fed president eric rosengren against the rate cut says the concern is financial instability and bubbles created by low rates and he singled out a business model used by wework as a possible source for future losses and instability. he says they can occur with risk-taking, too much leverage and a reach for yield. one example, he said, is the real estate model known as co-working space what did you call it, dom? whatever it is. >> yes. >> rosengren did not specifically name wework, to be clear. he talked about co-working space. under this model, wework or a co-working spaceperson rents the vast amounts of space and becomes an important leaser in the markets and subleases space to tenants what's wrong with that rosengren says it involves short-term leases to small, less mature firms who are most vulnerable in a downturn landlords and ba

also with us on set today is cnbc senior economics reporter steve liesman in a few moments, as you heard, joined by adam bain stocks focussing on the fed. the two-day meeting underway why they expect to cut rates tomorrow the question is as we asked at the top, is it the week that sets stocks on a course for a new milestone or not >> it's possible i want to be constructive here so if you're looking at -- if you're looking at technicals, you can say, okay, for the first time since last september, you've now got 72% of the s&p 500 above the 200 day, which means more than two-thirds of stocks almost 3/4 are in their own structure bull market. that happened last october i don't know how forward looking it is. it is a positive especially when you consider the fact that we're getting participation from across the market it's not very narrow it's very broad. that being said, there's junky retailers that had a monster move over the last couple of weeks higher all of that is now falling apart rolling over the big energy boom we saw yesterday, those stocks are now softening. so it's not as good as

what happens when we do this >> we've got some breaking news from the fed let's get straight to steve liesman with the details. >> boston federal reserve president in a late speech is pretty much unconvinced about the need for any more rate cuts. he says should the risks that he talks about the trade war, global economic weakness become a reality in u.s. economic data then he says the fed should ease aggressively but so far economic forecasts the level of the market, talks about the level of stocks, talks about credit spreads, so far they do not indicate the kind of weakness that everybody is so afraid of he does say that the trade disruption and the global weakness are the biggest risks in the u.s. but he's still expecting 2% growth which is slightly above the potential in the second half and he says it's right around this potential range. gradual slowing of gdp is what he expected not a single of a coming recession you may compare and contrast that with st. louis fed president jim bullard who earlier today suggested the fed go 50. you either get nothing, you get 25 or you get 50, melissa, b

steve, thank you as always steve liesman for us carrie mentioned while ago fedex getting hammered today missed earnings estimates. the big issue seems to be the commentary, is this a fedex problem? that they've had management missteps and failed to recognize it that was the deutsche bank comment. price targets coming down. bigger picture or fedex? >> i think this company has that had this series of mistakes for years and one could say the fact they've walked from the amazon business might be a mistake also or to figure out a way to compromise there on the other hand, they are an enormous carrier of product around the world and to see the level of weakness that you saw in the numbers, the volumes just weren't good and you have to attribute some of that to global demand that's softened so they're not the only company that's seeing it this may be a fedex problem. in particular, but i think it's emblemmatic of what you might see from other companies that are going to be reporting over the next few weeks that's fair. the analysts who i spoke to in the ls hour said you can't attribute everyth

y business report", i'm steve liesman. >>> let's turn now to beth ann bovino for more on the jobs report what it could mean for the fed and economy.e hief u.s. economist at standard and poors global ratings. nice to have you back with us. >> great >> give me your take on the jobs report. street wanted but wages were goodgo >> well, a couple of things to faor in. on l it wastle sofr, about augubut august is a tricky month for a couple ofns rea one, the kids with summer jobs go to school and jobs go away for thatreason. second thing, a lot of the forms weren't filled out, a lot of business owners were alson vacation so they didn'tar get nd to filling out tha form to send to the bureau of labor statistics. what we'll see is probably in september those forms will be ent a little lnd we probably will see the numbers change, and most likely to the upside. >> i mean we have to keep pointing it is still a very strong labor market, a tight m labor market at this point. is this slowing though enough to convince the fed to want to cut month?his >> we look at this report s, sure, y know, the headlin

steve liesman starts us off from the federal reserve in washington. >> reporter: a divided feral reserveutting interest rates by a quarterin point bri the overnight lending rate to the range of 1.75 to 2%. process taking back two of the last yea four rate hikes but the votas 7 to 3 with two dissenters opposing and one favoring a full half percentag point cut. the result the fed is not definitive forecasting to come as the market hopes but instead taking it meetingme by ing. >> it's an unusual situation because we -- you know, the u.s. economy itself, the largest part of it, the consumer part is in stronghape. the difference here is we have gnificant, really, risks to that outlook from not just the geopli willinglivents but slowing global growth and trade policy uncertainty. we'll be looking at that and also financial market conditions and how they are affecting the outlook. >> as it stays now ten members forecast no additional rate cuts this year and seven forecast one more. but powell noted that the committee has changed the views over theou ve of the year as the economic data has chang

the one and only steve liesman's got that data to share with us steve. >> thanks very much.rvey have ratcheted up their concern and the effects of the trade war. they've lowered their outlook of growth and slashed their approval of president trump's handling of the economy. spiking the 32%, the highest level of the trump presidency and the highest since 2011 it was below 20 for all of 2018. now recession is not the base case for the 43 respondents. slower growth is gdp slowing to 2.1% this year from 2 1/2 this is q 4, q 4 and slipping lower to 1.8% in 2020. the hit to growth is a hit to president trump's economic rating president trump's handling of the economy dropping to 20 points to 41%. his net approval which is approval minus disapproval is at 2% the lowest of his presidency we talked about this in the 6 a.m. hour. 62% say that trade changes are playing a significant role in the global slowdown. that is up from 31% in april respondents still say there's a 51% chance the president's re-elected to a second term but that is down from 58% in july. >> steve, thank you for th

look at the market >> we want to bring in steve liesman as to a money question, steve, about the repo market what did you make of that and everything else that powell said >> i think there's news there, the second half of my question where he said we may have to begin organic balance growth sheet sooner than we thought and i did see, by the way, yields come down when that happened briefly and then they seemed to resume their rise again i have sort of lost a little bit, sarah, as to what the market wants from the fed. going into this meeting thinking that the fed was going to do what paul mcculley eloquently described it, maybe a little less eloquent than that. basically we'll see. we'll do a cut and we'll see we'll do another cut and we'll see again. it appears as if the market wants some commitment that the fed is going to do something that it doesn't feel, at least at this point, it needs to do and doesn't have the data to justify. so, if you had asked me a week ago what the fed was going to do today, i would say they were going to cut and we'll see now, the market still is baking i

steve liesman is here, he has more on that front steve. >> good morning, becky he wouldn't promise futurets are on the way. more commentary after the decision by the fed. b. of a. says the fed is not done cutting rates this year bar clay says the bar for further insurance for interest rate reduction sz relatively low. over at goldman they say we see 85% chance of at least one cut by year-end. finally oxford, they're on the outlier here we foresee two more 25 basis points rate cuts coming in october and december to avoid unwanted tightening of financial conditions the bond market, though, took the fed's rate cut decision as ultimately hawkish the two-year yield shot up by 10 basis points when the fed announced the quarter point cut. only seven of 17 fed officials forecast more cuts this year two dissented against the rate cut entirely they wanted to hold the line fed chairman j. powell in his press conference suggested the fed could go either way from here >> if the economy does turn down, then a more extensive sequence of rate cuts could be appropriate. we don't see that. it's whan we exp

steve liesman is here to discuss the big week ahead for the fed jobs numbers on friday, but eunice unith the trade front >> and i'm coming to you from a shop in a part of china that is known as a christmas village because this coastal city makes roughly half of the world's christmas decorationdecorations. and manufacturers have said that for the most part the christmas industry has been spared for this year anyway, a lot of the orders have been priced and shipped. but what they are worried about with this weekend tariffs and more tariffs hitting in december, that next year is going to look bad. some of them have said that they anticipate that the orders for next year could drop by at least 10%. so this is a low margin business and with the confrontation with the u.s. they think not going away for another 1 to 2 years, a lot of people that we're talking to here said that they are trying to find new ways to survive this situation. they are looking to try to find other ways to move away from the trade war. >> okay. eunice, thank you for that investors will want to watch a couple other ec

some new details on that china delegation bob, sarah, highlights from her interview with clarida steve liesman brings us more commentary and news on walmart and their e cigarette announcement this afternoon. but kayla, first to you on trade. >> well, carl, the talks are over here in waurk but that smaller chinese delegation will not be visiting u.s. farms in montana and nebraska next week after all, the montana farm both confirming the vice minister of agricultural will be heading back to china in weekend officials had been arranging these visits, not through official trump administration channels the chief purdue confirmed knowledge of the trips yesterday, but said he didn't know whether they would produce any puchls deals in response to a question by eamon javers today, president trump said purchases wiare good but not enough >> china has been starting to buy our agricultural product and some very big puchpupss. >> the president said he did not think the big deal would happen before the election, but it's clear the chinese are trying to ramp up the pressure by going to their customers and ve

steve liesman joins us with the results. good morning. >> thanks very much.for tomorrow among our cnbc fed survey respondent, 43 fund managers, strategists and analysts as well 100% say 25 basis points cut coming at the meeting announced tomorrow 92% say that rate cut will come in december. just 25 cut not a 50 and then 1.6 the average for next year. perhaps another one coming in 2020 at the same time they've done this, they've raised or ratcheted up the chance of recession. see now it's nearly 32%, the second highest as we've been doing this survey. one, two, three, this is the fourth peak. there's been no recession after it each one of these peaks, though, is associated with a change in federal reserve policy you can also see that last year it was below 20% it's high. now, recession is not the base case slower growth is the base case for the group. take a look at the change. 2.5 was the q4 number for 2018 1.8 in 20 and towards trend, 2% in 2021 with a decline in the outlook for growth, a decline in the president's economic approval rating. this group you ca

steve liesman joins us now with more on what the beige book, steve, is telling us about a possible slow down >> you see the continuation of the krkz we had in the last hour about the mixed message in the fed. did a great job covering all the different, you have one place where they're cutting back and another place they're expanding. very hard to figure it out we do know on balance nationally the latest data showing the industrial sector is shrinking and raising concerns about the other side of the coin so, let's go in. we talked to a bunch of people what is behind this factory slow down that we are measuring trade uncertainty everybody says is number one. global economic weakness related or not is number two or a close one. work force limitations you heard her talk about that right there. they can't find the workers to get the job done all this uncertainty creates dollar strength which makes u.s. exports more expensive, which hurts the manufacturing sector chief economist chad moutray says the manufacturing sector is contracting right now in large part because of slowing global growth

steve liesman is here with more. what does it tell us about powell >> if it feels or seems like the fed is all over the place, it is we have divided what we think are all the comments made by fed officials into three buckets let's go through them. the economy doesn't warrant a rate cut yet we got four, five, maybe six people who think that. monitoring the data, ready to act, maybe leaning toward acting is another one finally, we need easing now. let's go through the comments in the categories eric rosengran yesterday said he doesn't see as much need for taking immediate policy action he says, i got 2% growth i was planning on that that's the potential of the economy. move on until the data change. john williams, vice chair of the federal market committee as the new york fed president says carefully monitoring this nuanced picture and remains vigilant to act as appropriate we read it as leaning toward the a rate cut now to the we need it now group. jim bullard aid i would respect the market signal. better to get reali

. >> leslie, we're getting breaking news from the fed we're going to steve liesman >> thanks very muchbreaking first of all, new york fed announcing it will hold daily $75 billion repo operations through at least october 10th as a result of what's been happening in the overnight lending market, some disruption there. the fed moving in, going to regulate through october 10th. it will also offer at least three next week, 14 day repos, instead of supplying money overnight, it will extend out the term effort by the federal reserve to get ahead of this by new york fed and get on top of those, $30 billion operation. one of the dissenters, coming out with additional comments about dissent. he says first of all it is unusual for the fed to be so easy with the economy quite so robust looking for 2% growth, getting it says the expansion will continue so far trade is a risk, but impact has been limited. lower inflation appears to be temporary, it has been up the past several months he points out. this is the concern, that low rates encourage excessive risk taking, too much easing causes risk of f

we're glad we have you with us, steve, to make sense of it all, especially days like today steve liesmansee you in a bit. when we come back, stay tuned for our interview with dallas cowboys owner jerry jones here at post nine to discuss the business of football, the extension for ezekiel and the nfl's 100th season, take another look at the premarket as futures are up on this hong kong withdrawal of the extradition bill we're back in a minute ♪ ♪ i've been a caregiver for 20 years. no two patients are the same. predicting the next step for them can be challenging. today we're using the ibm cloud to run new analytics tools that help us better predict and plan a patient's recovery. ♪ ♪ ultimately, it's helping thousands of patients return home. ♪ ♪ >>> you're watching cnbc "squawk on the street. the opening bell in three and a half minutes there is a lot to cover today. we have talked about hong kong, boris johnson and the uk the china data, the ism. the dorian recovery continues as at least five deaths as we're looking at what some are calling a humanitarian crisis in the bahamas today. in

what the market is expecting from the meeting and steve liesman ining us from washington with a preview. steve? >> hey, kelly, thanks. as you mentioned at the top this rate announcement comes amid unprecedented pressure on the central bank to cut turmoil in the feds own fund market pressure from other central banks like the ecb which eased just recently. pressure from the markets which they threaten to sell-off if you don't get the kind of cut you want and then pressure from the president of the united states the question today, do we get a hawkish cut suggesting future cuts are limited or dovish 25% cut which is more to come. the fed fund probability 82% and 52% of another cut in october. that same cut you don't see it there has a 66% chance of happening in december. and then to get a third cut from where we are march 2020 where there is a 53% probability and now there is a bit of a difference now that we might get clarified in the feds own forecast the fed as of the last time it forecast the outlook for rates in 2020 was looking for about 2.13% for the fund rate for 2020 where our rec

coming in headline numbers weaker than expected let's get to steve liesman for more on what was underneath headlines. >> tfirst it came in below expectations second, in the mix of good and bad data, it didn't provide the definitive judgment on what's going on with the economy that some hoped let's go through the numbers nonfarm payrolls 130 we revised out 20,000 jobs from june and july combined but average hurley earnings on the positive side. and more people came into the work force 63.2%. so let's go through the good and bad. on the good side we have the rising rages we have the growing labor participation. temp help on the upside. a strong household survey that larry kudlow just spent a lot of time talking about really modest private sector job growth 96,000. that's like we have all this difference in opinion and it comes to really reading this number jefferies writes the headline increase in payrolls is disappointing. all the peripheral data is good. lombard said when they soften like this the economy is slowing, period, full stop the government added a lot, a big chunk was added for t

are paying interest there is a lot there to unpack let's welcome in senior economics reporter steve liesman, also the new backup quarterback of the jets. steve, good to have you on set here start where you'd like, sir. >> so, asked about that specifically the ideas, are you targeting the currency he said no we are doing this because we're not hitting our inflation target you know, that said, the president has something of a point here which is that if you think about how he intends for his qe and rate cuts to work through the export channel is not a crazy means by which that would happen improving the trades of europe and the united states is probably a method right there. the thing the president doesn't recognize and i think we've said this a lot is that he has a very different set of facts than we have here. the inflation forecast going down he has growth going down we have gdp growth at 2% it's come down from 3% we actually have inflation rising the three-month annual inflation rate which is 3.4%, which is not, we see that the year over year is 2.4. four months in a row of strong gains.

steve liesman is here with the results. >> what comes after widely, if it is like everybody >> 100%. >> totally expected. and in fact if you look at the cnbc fed survey, you find 100% of our 43 respondents expecting a 25 basis point cut to be announced tomorrow on the second day of the fed's meeting 92% say the next rate cut comes in december. so there will be one more this year and then by the end of next year, we'll bring it down to 1.6% from where we currently are around 2%. now, should the fed cut or not that is one of the questions that we asked. what you see is that 51% say yes and some percentage ever that wants the fed to cut 50. meanwhile 44% say the fed should not do so. and the fed should be on hold. now, why do this in tell us why. 25% of the rationale comes from the trade war. 25% from the weak economy. 24% from low inflation and then coming down, we've left a few out here, pressure from the market not many see it as pressure from the president. economist from oxford writes while the fed does not want to underwrite the ongoing trade war, it has no choice but to buffer th

ali is managing director at ubs and steve liesman is here as well just so everybody's on the same page here, the ten-year u.s. treasury yield at 1.794% we were there overnight. came back up steve we had the kind of ecb pulling everything down on the one hand then the cpi report pushing everything back up these are major swings in the treasury market seeming to happen every other hour. >> the reason is pretty clear. i took off on tuesday. and then 20 evaporated i'm back today not doing much good. i think there are a couple of things at work and we might have mistaken some technical trades for some fundamentals. i think a lot of guys were short swaps or variable rates and all of a sudden, long-term came down to where variable was so everybody went to the other side of the trade and that pushed things down further. i think things backed up a little bit >> the positioning in the treasury market, people said that was at 20-year extremes there was the first time ever this summer it was named the most crowded trade by fund managers in august, such extreme lows an element of -- >> it had to go

that's where i am and that's where i think the bulk of the committee is >> steve liesman cnbc. i wonder if you are concerned about how the federal reserve operated through the recent liquidity crunch in markets. we talked to many traders who said the tax payment was known well in advance, there were several reports for people pointing to september as a potential crunch time. you closed monday at the top end of the fed funds rate. tuesday came along and there wasn't an operation until 9:00, and no announcement of an announcement until 4:00 in the afternoon, was the fed listening to markets well ahead of time, going back a year when there were blowouts in the overnight rate at year end and the turn of the year >> are you concerned about how -- for example, the new fed operated to this >> so i would say i doubt that anyone is closer to and has more invested in in carefully following the behavior of these markets. we were well aware of the tax payments and also of the settlement of the large bond purchases. and, you know, we were very much wait willing for that, but we didn't expec

let's get straight back to steve liesman with more headlines from jero powell. >> fed chair jeff rome powell in zurich taking questions from the audience and answered a good one. voters say 50 basis points and some are saying don't cut at all. here was his response to that question about all the different viewpoints on the committee right now. >> it's challenging and we are clearly at a time where there's a range of views again, i do think that's a very healthy thing. we will of course reach a decision i expect we'll have a strong support for the decisions that we made as we had in july. i expect that will continue. but this process of having desperate views i think is not something that i feel concerned about. in fact, i think it's appropriate given the situation we're in right now >> kelly, there was another part of it right there where he said the situation is murky we talked about that a lot on your show as well, quite a bit in the 1:00 hour about how you make a case for holding, you can make a case for cutting. powell, like the prior chairman before him, doesn't want to front run

joining us now is harry knappe, senior economics reporter mike santoli and steve liesman. look in the kitchen, turnoff the lights, mice come out, turn on the lights they go away, everything is fine it's super boring. it was 2%, it is 2%. it's running 2% q3 going on all around the 2% is the trade data which is boosting the inventories which will be run off in the inventories you've got boeing, accumulating planes which is having a long-term impact i had a long talk with mike england about the impact of boeing which makes the 737-maxes but doesn't sell them. that boosts inventories. you come up with all that drama on the outside with 2% and i watch the data come in every month, every week, every day, and they go into a rapid update and it comes out 2% the consumer 4.7 we had this little slow down it's important to talk about in business investment. it was up 4.4, now down 1% the big change there is going to be in structures, down 11% they're not building buildings i guess is the deal. government purchases are reall helping. and the consumer so bottom line, the government -- b

we bring in senior economics reporter and correspondent, steve liesman. does this adp number alone change the fed's thinking? >> not alone if it's confirmed tomorrow it will help. it was not the only piece of data that confuses the picture of those who want to see a definitive move either way you just, you sort of want to tell the economic data, pick a direction and go with it but we have that real scare earlier this week on manufacturing index. take a look. the 195 on adp above expectations for the adp number, and above expectations for the government plus private payrolls tomorrow some talk about people adjusting upwards their expectation. jobless claims right in that zone that tells us the job market is still strong productivity doing pretty well we'll see if that continues that way. factory orders above expectation and the august ism that was also not so great under the hood on the details. i would say a really cool little factoid i was just digging around in, tale of two economies, brian the gap right now between the ism manufacturing and the ism ser

central bank president mario draghi is speaking now they announced they are cutting a key rate steve liesmanweakness that he's highlighted in the european economies. he said incoming information indicates more protracted weakness of the euro area economy than previously projected. he talked about the persistence of downside risk to the economy, talked about muted inflationary pressures. he had earlier said that the ecb remains ready to adjust all instruments and it adjusted a bunch of them this morning we'll talk about it in a ekd is. he talked about uncertainty of geopolitical factors and uncertainty of markets 1% ecb growth this year, 2% next year, both of those are lower than previously projected. as for what was done they lowered the refinance rate, increased quantitative easing. becky pointed out more forward guidance at these rates it will go lower until we get or the ecb gets the inflation target that it desires, which is close to 2%. joe? >> all right, steve. thank you. guess who is here, liesman >> who is that >> sri kumar >> oh, man, why am i here and he's there i'm going to go lis

joining us now, senior markets commentator mark santoli and senior economics reporter steve liesman isit says you need to go first you need more time >> i don't need more time, real quick, jobless rates up. 216. usually 300 was the number we were concerned about i think it fell to 350 we are well below that, the jobless weekly numbers tells us the job markets is healthy productivity is weird. there is declines in several sectors, manufacturing productivity is down, non-durable is down. total business is what's up. you want to be careful to watch that productivity number it's a good number, a solid number it goes around with decent growth we want to watch to see if manufacturing productivity can rebound. that's all i got. >> that's all you got. all right. >> that leaves it, will you have to do the heavy lifting then santoli. what do you got? >> well, i think it confirms the baseline view. the u.s. economy seems to be plucking along the bopped market has been relaxing already the stockmarket was going to have this almost 1% pop on the overnight news with renewed plans for china talks so

you. >> rick, thank you let's get more reaction to the data from our senior economics reporter steve liesmaneak. capital spending is weak but the consumer is strong we have data on both of those things to chew on here not definitive either way. rick was right to point out the capital spending ex-aircraft which is a proxy for business investment it gets rid of the durable goods and the vagary they make them and they don't and they've rolled into inventory and up and down with the orders we get rid of transportation and look at what's happening overall. that number is not healthy down for the second month in a row. let me give you the tale of the tape had a good month of june which came back after a bad april but negative in july and negative in august the idea that the fed sees in this, wall street economists, they see the trade war, global certainly and the counter to this, i'm sorry to do one hand on the other hand, we haven't seen that manifest itself in hiring if you're a ceo and worried, you would think you might also if you're cutting back -- >> not necessarily. >> i'm going to hold on

and steve liesman who is not going away he's staying here for this conversation, too.ou one quick thought on what the repo activity means. is this something in this discussion, is this something that you kind of look at and say, it's okay for the moment? >> yeah, i think so. this isn't a solvency issue like 2007 was, this is a technical mistake that the market made and the new york fed i don't view this as something that's telling us something about the economy. >> what do you think, david, in terms of what the fed should be doing today? >> well, i think that the repo sthing a technicality but i think it is a problem because there's two things the central bank has to do is move interest rates the right way at the right time and look like it knows what it's doing this undermines the latter i expect as everybody else does the fed to cut interest rates a quarter of a point i think there will be a lot of focus on what jay powell says going forward. he's had problems in the past explaining what is their reaction function as economists and market people call it. what will le

steve liesman, cnbc. i only done this a dozen, a lot of times. wonder if you're concerned about how the federal reserve operated through the recent liquidity crunch in markets? we talked to many traders who said the tax date payment was known well in advance. there were several reports from people pointing to september as a potential crunch time. you closed monday at the top end of the fed funds rate. tuesday came along and there wasn't an operation until 9:00. no announcement until of a second operation until 4:00 in the afternoon. was the fed listening to markets well ahead of time going back a year when there were blowouts in the overnight rate at year-end and turn of the year? are you concerned for example, how the new york fed operated through this? >> i would say i doubt that anyone is closer to and has more invested in carefully following the, behavior of these markets so of course we were well aware of the, you know, the tax payments and also the settlement of the large bond purchases and you know, we were very much waiting for that but w

>> we don't like zero, but we're prepared for zero. >> beth, thank you steve liesman -- >> i'm going want to talk at home if you have time. >> maybe we can get it on network. maybe network will take it let's call andy lack over there, see if he wants a repo story. >> we have to switch stories and talk about a new front in the battle of autonomous vehicles. this can affect how you get your breakfast soon listen up. phil lebeau joins us with more on that story. phil. >> reporter: andrew, this is a deal that's been announced between postmates and the delivery of phantom auto here's what's going on postmates is partnering with phantom auto as postmates continues to test what are known as autonomous delivery bots, vehicles, whatever term you want to use this is some video of those postmates bots they're already testing this in los angeles. here's the deal between postmates and phantom auto it basically works like this tele operation is where you have drivers or pie 4r09s who can remotely monitor and control these delivery vehicles, these autonomous delivery vehicles if they run into a pro

. >> steve liesman, steve, thank you. >>> for more let's bring in richard fisher, former president oflas federal reserve. do you agree with that market interpretation, richard? when powell says he's going to do what's necessary to sustain the expansion, that means more rate cuts are on the way >> sara, i used to always feel that when the fed chairman made an announcement or we made a decision it was like the sacrificial ceremony the markets slash you open, try to read the entrails, try to infer what they want to hear or what they're worried about hearing. i think powell handled it very well he didn't say a thing, which he shouldn't. i don't think there's any indication whatsoever as to which way they're likely to go of course we all assume they're likely to do a quarter i think the idea of a 50 base point cut has been thrown out the window, but it's not clear remember, they have a limited number of pennies in their purse. they only have so many cuts to offer before going back to the 0 balance which nobody wants to do and they don't want to think about going negative nothing was said t

. >> guys, hang on for just a second i want to go to steve liesman. we've got breaking news on the fed. steve at headquarters. steve. >> reporter: sara, thanks very much chicago fed chairman charles evans making stronger criticism of the policy, trade tariffs with immigration restrictions could grow trend u.s. growth for the long-term. he said trend u.s. growth could be closer to 1 1/2 compared to 1 3/4 or lower because of such policies trade polls increase uncertainty near-term effects among the business community longer term you have tariffs in place, competition, reduce productivity, motivation for firms to innovate. it points out restrictions on legal immigration could reduce labor hours. two key components for determining gdp growth international trade, he says, expands economic opportunity so sara, there's somebody from the fed who is giving the economic case for having open and free trade. >> so he's a voting member right now, correct, steve? >> i believe so, yes. >> is he a cutter, in the cutting camp as well >> he wants to cut rates charlie ha

steve liesman joins with us the breakdown. >> reporter: the european central bank cutting rates and launching a new round of bond-buying which meant a tweet from the president blafgt the federal reserve. saying visk risk is to the downe mario draghi said to cut rates by 10 basis point to minus 0.5%. the president tweeted european central bank acting quickly cuts rates ten basis points they are trying and succeeding depreciating the euro against a strong u.s. dollar the u.s. fed sits and sits mario draghi was asked about the president's tweets >> the answer very simple. we have a mandate. we pursue price stability and we don't target exchange rates. period >> reporter: not mentioned by the president u.s. growth is stronger here than in europe which is thought to be weaker and inflation rising here falling in europe which rates suggest rates should be higher in the u.s the fed has authority over dollar policy. if the president want as weaker dollar he can order his treasury secretary the to intervene >> steve, the president does have a point to some extent about the euro does he not? >> reporte

steve liesman, let's get to the opening bell, s&p 500500, on the big board, celebrating the -- network we said earlier, the smile direct club, consumer medical technology company celebrating its ipo today. original range projected in at 23 >> this is incredible because this is a company that is valued gigantically it's goes up against invisiline. this is a do it -- part of a subscription economy basically and everybody who has had kids that have been using invisiline, the kids are happy they tend to be instagram-aholics. but this is distranscriptive to the industry there are orth dontsicodontistsg me right now saying this shouldn't be allowed >> it is kind of do it yourself. >> yeah. >> they take pictures. then they make the molds and then you have a box that spits out every week or whatever it is a new one to address the gaps in your teeth or whatever it might be >> what worries me is why is the market going nuts for this one is it a revulsion? >> is it a stretch to put it in your ulta estee lauder portfolio? >> no, it's not a stretch. i think millennials love straight teeth gen-x, st

i know steve liesman, i was listening to little stevie, he was saying, there is no real reason to cutwell, if you read -- fred smith is a top flight economist, we had kudlow and cramer, larry kudlow, chief economic adviser, this is the most dispiriting call about the economy that i've heard in a very long time. >> it is interesting, guys, 24 hours ago, we were talking about randall stephenson presenting at the gold monday saks conference not far from here. we focused on the things having to do with at&t. the most interesting comments, i had a chance to go back and read them, very similar to what mr. smi smith is talking about at at&t, the biggest thing he follows is business investments, number one indicator, and it is flashing yellow. not red, but yellow. whether it is china or the u.s. embassy, mexico trade agreement, mr. stevenson went on to say it shouldn't surprise anybody business investments start slowing down, that's exactly what we're seeing. he's hopeful as they get new election season they'll get more motivation, get something done but definitely slowing down, you can't hav

number falling in contraction for the first time in three years our senior economics reporter steve liesmank do you think, breakdown of sbernls? >> a lot of that a surprising contraction, carl, reported in this closely watched ism where the details were as bad as the headlines nine of the ten key components are in contraction territory that includes employment, new orders, production, and exports as well. in fact, the fallen exports provided in global tarve economics was the most striking, fell down 43, five points at the lowest level since the great recession on that export component of manufacturing pmi u.s. followed china's pmi down into contraction territory suggesting what's hurt in china also ailing the u.s. how good a recession indicator is this, about 50%. if you look, it has contracted that shaded area there those are the recessions it does fall ahead of it there are several false declines there that donor did not lead to recession. one in 2012 and one in 2016 where it just contracted but did not lead to recession. guys, this is an indicator closely watched by the federal reserve.

the bottom of the screen, the fed had three consecutive days, he was asked about it by our own steve liesman or stevie you like to refer to him. >> yeah. >> yeah and seemed to indicate they have the situation under control. >> yeah. i thought that steve asked him questions that indicated that he had nothing under control. it was kind of -- you want to ask what the most embarrassing moment was, i thought that steve knew more than powell did about what happened. but powell was like, okay, listen, we know more than anyone and but he didn't back it up with facts >> he didn't discuss specifics. >> no. >> he left them the generalities. >> that's what he did the whole time is generalalitys. let's say something like mid-cycle correction i parced everything he said, carl, it was really clear he said absolutely nothing and that's good. we all expect him to do something. we want him to be belichick. you got to do your assignment. we want him to be denny green, he se what he says he is we want him to say rate cut surface rate cuts? we can't get inflation going i feel he's become so boring he's more bori

. ♪ >>> breaking news from the fed steve liesman joins us to try to fix it a little bit? >> yeah. the repo thing the fed is doing dislocation of the overnight funding rate this looks better, i have to tell you, because the fed offered $75 billion of cash to do repo overnight skbl over subscribe? >> and it was 75.5 this is the closest they've been to meeting the demand out there in the market. the stop out rate which is the low rate was 180 high was 185 low was 180. weighted average, 182 which is closer to where the fed wants it to be. i'm talking about the treasury issuance for 59 billion. they offered agency, mortgage back so, you know, it may be that we've gotten sort of further from the events that were out there. the tax payments the treasury issuance. even the saudi aramco thing has been mentioned amongst some traders that they needed some cash and so they withdrew from the reap poe mark-- repo market one is that the fed keeps doing the temporary operations two, it creates a permanent standing facility to do these sort of things and then, three, which powell told me in answer

. >> steve liesman >> 136 i don't have a model for the unemployment rate but i would like to. >> can'tsay something that's the difference between you and me, jason, one difference anyway. >> rick, how about you >> 229,000 >> whoa. >> now, rick, you get that because you looked at adp or because you look at other things what makes you go high. >> adp is a distraction to me, i have various ways to calculate some of the numbers have popped better i think we are going to catch a bit of a back wind on this one and gain some jobs and move out some of the averages >> steve, tell us one other point we should be watching. the average hours -- average hours earnings >> i am interested in the whole report for the tenor of the job market, whether or not we hit a number and it is weak underneath or stronger underneath i want to see wages and temporary hiring whether or not that's up or down that can be a leading edge or a leading number i am interested in the household bias, are they interested in entering the job market or do they want to leave. >> dow futures up by 81, the s&p under the circumstan

steve liesman is here.usly at his -- >> i mean, do you guys remember when we ever spent any time within the international trade data now very, very important economic and political data. i went to with the trade balance with china before that, i want to give you quickly the overall which is that exports were up 0.6%. imports down a little bit. and it may be that the reason why we have a little bit higher trade deficit is because of people trying to jump in ahead of the tariffs let me tell you what happened here exports to china fell 2.3%s and imports from china rose 6.4% so that kind of spike depending upon where -- whether or not those are potentially tariff affected goods maybe people are trying to get in ahead of these tariffs. i mean, we had the jumpiness in the trade data what i did is i looked at trade year to date very quickly i want to show you one way of looking at this shows the u.s. winning the trade war and what i looked at was the first half of 2019 versus first half of 2018 okay, year to date

steve liesman has done nothing but think about the jobs report since friday. >> really?to all people who came out. wall street economists noticing two separate job points. not a lot of people have put them together. key point number one, job growth slowed and it's been slowing steadily all year. average job growth just 158,000 last month, last month it was 223,000. often revised upward but the trend is pretty unmistakable key point number two, wages have been steadily rising let's annualize the past three months they're rising at a very healthy 4.2% fastest pace since 2008. at the same time jobs have slowed to just 129,000 on the annual three-month average basis. it would be slower if you took out the census hiring. this is more or less what you would expect in a tight labor market job growth would slow because workers are harder to find wages would rise because labor supply becomes more scarce it's something the fed has got to be watching to see if strong wage gains show up in inflation data which we get pretty soon. for now it should propel consumers to keep spending a