. >> let's go to steve liesman for the headlines from the beige book today steve? >> thank you, kelly. excuse me one second yes. i'm sorry. >> steve, we can give you a moment, sir. we'll come back in a second. steve liesman has the task of trying to comb through it all to get the timing right, ty it's much more difficult than it was before >> it is, because we're not really right there he needs time to pick it up. okay he's been ability to read the entire book. a serious speed-reader. >> sorry about that. i hit a bad button economic activity increased, but gains were modest, activity remained well below levels prior to the covid pandemic. consumer spending was sparked by automobile sales many districts noted a slowing pace of growth in these areas, and total spending remained far belowpre-pandemic levels though the overall -- a few districts noted some pessimism, continued uncertainty and volatility seemed to be pretty widespread unemployment increased overall among districts, but some districts also reporting slowing job growth and increased hiring volatility, par

we do keep them in mind. >>> thank you, steve liesman. >> reporter: mr.i want to understand how the projections of the committee line up with the goals of the committee. you have now al the projections to statement, but when i look in the next four years that you are ever above 2%. in fact each year you're below it so are you confident -- is it that the committee is not confident, that not only can it not hit its 2% goal, but can't hit i goals of being above 2%? >> not at all. you also don't see people raising interest rates so we don't reach 2%, but we get very close to it we reach 2%. it will be set and be propose until such time we reach 2% inflation. and that we are on track to achieve moderate inflation moderately above i don't think there's any conflict between the two, because the way they're set up, the projections don't show the out years. you asked about confidence i would say this very strong, powerful guidance shows both our confidence and our determination. it shows our confidence that we can reach this goal and our determination to do so >>

steve liesman. >>> what can we expect for the direction of the fed in 2023 joining me, julia coronado, founder of macrobiology perspectives and brian would you tie the froth, if i can call that, in software ipos to the fed's liquidity is that emblematic of what's happening in the market? >> i think it's more emblematic of portfolio managers having a hard time managing their apple positions or their microsoft position or their amazon position and really the need for additional companies that are giving growth. it's really a factor, quite frankly, kelly, of the changing dynamic. we said it, i think, a thousand times. from every recession we've got from despair to hope and we're going to see new leadership, and i think the market wants that, it needs it. you get a lot of questions on the froth of stimulus and the fed. what are you doing with all that fed money and stimulus money, well, you're buying stocks that's why i think america is still best poised with respect to equities around the world, because we have the best companies in the world and that's where the money is going. >> what

economic recovery which is it and where are we getting back to pre-covid levels in the economy steve liesmanthe fed survey steve? >> yaureah, the economists we p and fund managers, half of them think the recession is over. 53% say it ended, 47% say no, so there is a debate on the street of whether we are still in a recession. looking at specifically when it ended, those who say it's over say it ended in may of 2020 making tt shoit the shortest reo we've had. those who say it's not over think we'll go to april of 2021. the original forecast back in july, minus 4.5% on gdp this year, that's about half, to minus 2.6%, but they took some of that away from the 2021 outlook at 3.3%, down from 4%. overall, however, 67% saying the economy or the economic recovery is going faster than they originally forecast back when the pandemic began 22% saying about as forecast looking at how far we have to go, still a long road ahead. when the economy will be fully restored is now pegged at the end of the third quarter of 2022, and that's about a quarter later than the july survey and quite a bit longer than th

let's get straight to steve liesman. >> jay powell testimony before the house services committee will note improvement in the economy saying household spending has recovered three quarters of the decline and say this is in part response to federal spending and higher unemployment benefits which is running down he said housing has rebounded and business investment showing signs of improvement but overall employment and business activity with well below the pre-pandemic levels an the out light is uncertain. he makes special mention of the fed's main street lending program, a $600 billion program with a backstop from the troo z treasury he'll be speaking tomorrow before the house financial services committee with treasury secretary steve mnuchin and this is required testimony about the cares act where they have to quarterly appear before congress and discuss progress with the lending programs. >> the terminology, highly uncertain, is that different from what the clair has used in the past. >> this is the same language he's been using and a theme of his from the very beginning while the m

steve liesman has the highlights hi, steve. >> good afternoon. both treasury secretary steve mnuchin and the fed chair jay powell agreed the economy is improving and additional help is still needed powell explained the economic reasons why congress should pass another stimulus bill. >> it's going to take a while to get 11 million people back to work spending will decline, ability to stay in homes will decline. so the economy will begin to feel the negative effects at some time. at the same time the economy is recovering >> now a bill has been stuck because of political battles over how big it should be and who should be helped he explained his thoughts on who needs assistance >> the next package should be much more targeted it should be focused on kids and jobs and areas of the economy. that are still hard hit, particularly areas such as the travel business and others, restaurants. i think is broad bipartisan support for extending the ppp to businesses that have had revenue drops. >> now with hundreds of billions of dollars unallocated shts they

meantime steve liesman is back with us for more reaction on that take those numbers, layer on the adp think, steve >> reporter: so, rick is right in sense that we had a big decline in the second quarter that was well-known led by the consumer i think the relevant information here is that we're looking for a big increase in third quarter that gets us most of the way back we were looking at 30% increase in the third quarter if you go down 30% and come ac30% you don't get quite to where you were we're looking for something like 3% or 4% decline for the full year taking losses in the first quarter add it to the second quarter. that's a pretty substantial recession by itself if you're going to lose 3% to 4% either off the top or 5% from where you would otherwise have been. both are pretty substantial. and none of this, either the rebound that's expected should really dissuade according to most economists on the need for additional stimulus in system. jpmorgan writes if we get this stimulus there's upside troisk our forecast if we don't. there's down side risk that's how spoirt. very determ

steve liesman is here with more.is, dow jones down more pointing fingers back to this move it may be a little bit of a lack of clarity curious what jumps out to you 12 hours later. >> i think that's an important play just a second, kelly let's talk about the incredible dovish part. it made history saying for the first time in the statement that its policy is to seek inflation above 2% for a time hoping to average out low inflation back up to the 2% target. here are the main things that happened explicitly aiming for 2% inflation. forecasts no rate hikes through 2023 it links policy changes to economic outcomes for the first time and gives an upgrade to the economic forecast. fed chair powell pointed out we're well below the levels of january. comparing the three year forecast from 2016 to 2019 shows how the policy role has changed dramatically back in 2016 they expected unemployment in 2019 to be 4.5%. they expected similar inflation rate but they forecast a 3% funds rate very similar conditions now forecast for 2023

steve liesman has the details. >> chicago fed president charles expense saying a new fed action could be coming pretty soon. he expect, quote, outcome-based guidance where the -- specifically to hitting certainly economic targets as well as new quaint at a timive easing he says that could soon be beneficial, very explicitly saying it could happen soon. perhaps he does. he goes on to say the lack of fiscal aid represents a, quote, very significant downside risk, and puts vulnerable households and businesses at risk he a forecasting is strong third quarter rebound, but ultimately sees the full year, some other details on the economic outlook. he says the return to the pre-crisis level doesn't happen until later in to 22 unemployment will be around 9% by the year end, the unemployment rate will hit 5 to 5.5% by the end of 2021. finally inflation he expects to be under 2% for a time, and he talks about the human and economic toll both on kids and parents, and the broader economy, very large with not opening schools. >> 858 points down a moment ago, to very, very close to session lows so r

steve liesman has more >> reporter: good morning, brian.manufacturing sector one of the parts of the economy undergoing a v-shaped recovery and both in the u.s. and its global yesterday's smism hit the highe in two years a good sign for future customer inventory is seeing this too low they have to rebuild them joel naroff writes the manufacturing sector is picking up some serious steam and could start pushing housing for the number one driver of growth. barclays report gains in its manufacturing confidence showed gains in europe, asia and americas, all turning around barclays says for now pen up demand supports the manufacturing activity however it's too early to die couldn't supply chain risk and covid-19 resurgence. it's not without its challenges like everything else in the economy these days there are higher input and output prices and that could be related to supply constraints of getting the global supply network working again. exports have not been a bright spot and employment still remains negative autos after good example sales fel

stay with us definitely want to get to you guys but we want to bring in steve liesman. he was part of that virtual news conference with the fed chair, asked a question about the guidance steve, what were your main takeaways? >> go back to the statement. it is an historic day where the federal reserve says it's aiming for inflation above 2%, long-term strategy in august now makes it part of policy. some of the keys leaving interest rate unchanged. more than that forecasting, as wilf said at the top of the show, zero funds rate into 2023. raising gdp recovery going faster and lowering unemployment rate outlook sarah bloom raskin asked about, she was being kind about the way the chair struggled to explain this policy. he struggled when i asked why the forecast didn't show him exceeding the goal >> it's a slow process but there is a process there inflation does move up over time we do expect that will continue today. we expect our guidance is powerful and will help that outcome. we think effectively saying policy will remain highly accommodative until the economy is very far

steve liesman has a look at the highlights of that report for us high, steve. >> hey, wilf yeah, the fed's beige book reporting economic activity gemelli increased across most districts but provided some warning signs for the economy as it continues to struggle with the pandemic consumer spending toipd pick up with gains in retail, tourism. a slow pace of growth in these sectors. in addition residential construction was termed a bright spot for the economy but commercial construction was widely done. finally the overall outlook was modestly optimistic with continued uncertainty and volatility related to the pandemic unemployment increased overall with gains noted in manufacturing. some districts noted slowing job growth there were said to be rising instances of furloughed workers being laid off permanently at the same time firms reported difficulty finding workers stemming in part from the trouble workers themselves have finding daycare. lastly on inflationary pressures that increase, supply problems or surges in demand, for example, for lumber. sara and wilf, it's an interesting eco

steve liesman with the powell heads. new opportunity for esg investors. to invest in a global price for carbon. the exchange traded funds was created by crane shares and climate financial partners and joining us for an exclusive interview is john kerry, the former secretary of state and the advisory board chairman of the climate finance partners along with bob pisani that covers a lot of our etf coverage bob, kick it off >> thanks very much, sara. thank you for joining us, mr. secretary. now this etf is attempting to set a global price for carbon emissions for the cost of pollution. can you explain how does it work and how is this connected to the climate change issue >> it's very directly connected to the climate change issue because the climate crisis is the result of the amount of emissions that we and other countries have been spewing into the atmosphere which is warming the earth. way see it in california and floods and the additional heat around the world, water, food production refugees. there are a lot of components hitting us sir nicholas stern a

steve liesman has details. >> yeah, he is making striking comments he is talking about the issue of too big to fail. he's been very, very strong about. he said he is calling for bank equity levels to be raised to 24% from the current level of 13%. he says he can't believe the banking system needs to be bailed out again just 12 years after the financial crisis here's a quote from the speech right now. he says what kind of absurd financial system do we have that requires the central bank to bail it out every decade he points out that the essential banks have -- sorry, that financial banks have benefited from the bailout that went to average americans by keeping default rates down he says it's absurd. again, using that word again we have financial firms to fund themselves overnight we can't keep doing that we're doing. he is urging the institutional investors to put reform at the top of the list. it's a good question because the fed has -- it seems to me been strong on the banks t the buybacks, cap dividends and yesterday as you reported, they're now doing that second stress test or i gues

for a second, because speaking of the fed, we have some fed speak to tell you about, don't we, steve liesman >> yes, bill, thank you very much bra bra bra brainerd speaking at the institute saying the fed has to go from stabilization to accommodation. what we've been doing in the markets is even the markets out, not helping the economy grow anymore. she's really suggesting that she also said the strong pace of job gains has appeared to have slowed and there are certain risks tilted to the downside and that further fiscal support from congress and the president are key factors, so there she is urging that. she said the current fed policy, really the first fed policy to say this in the wake of the new fed policy could have avoided prior rate hikes she suggested that the fed in the future will pursue opportunistic inflation and try to limit the job shortfalls. bill, i'll send it back to you just saying brainard making a really strong signal saying the fed may cut rates -- things in september. >> do you think they'll cut r rates? >> i don't think rates, but definitely more patient. >> jack, they

thank you, sir, steve liesman interviewing the boston fed. >>> on the heels employment report, we have some good news about new hires. fedex said they're going to be hiring 70,000 workers to help with packages. this is a 27% increase over last year's record. shares of fedex have jumped about 46% this year amid the boom in e-commerce plus amazon said they'll hire an additional 10,000 workers. amazon shares have soared 75% this year. add it all up, there are some places looking to hire >>> coming up, are election betting odds impactsing the market jp morgan thinks so. we'll look at the selloff. >>> can't forget to mention apple and tesla. tesla is down 1% right now, apple down 3%. we're back in two. [ thunder rumbles ] [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know there's a 30-minute limit, right? tell that to the rain. [ beeping ] for those who were born to ride, there's progressive. at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪ we see companies protecting the bottom line by putting people first. we see a bright future, still

we want to check in with steve liesman as we get headlines from others like evans, steve >> yes, carlwing pessimism on wall street that congress can reach a deal for the phase four relief bill one issue is the debate for the new relief bill and second is the impact of the deficit and third, whether or not the fed and the treasury are using existing funds as well as they might. both officials will tell the house financial services committee the economy has improved but are going to link those gains to the aggressive government spending and the trillions of dollars of loans from the fed and the fed purchases. powell will say in his statement household spending looks to have recovered about three-40s of its earlier decline, likely owing in part to federal stimulus payments and expanded unemployment benefits. mnuchin for his part will add that some industries hit hard by the pandemic still require additional relief. his statement says i believe a targeted package is still needed and the administration is ready to reach a bipartisan agreement. but the hearing takes place a day after the ne

selloff putting a brighter spotlight on the august employment report due out in less than 90 minutes steve liesmans on what to expect. steve? >> good morning, mike. a big gain expected in the jobs report if businesses continue to open from the shutdown the consensus would represent a sharp slowing in the pace. here are the numbers wall street is looking for up 1.3 million it would be down from the gain of up 1.7 million. unemployment falling to 9.8% to 10.2 average hourly earnings flat and here's the adp coming in weaker than expected at 428,000 economic data has been to the up side consensus until last month seriously underestimated the strength of the jobs recovery. that said the high frequency indicators that are used to forecast the jobs report have shown a slowing of the expected slowdown, can be seen in the forecast for the unemployment rate it fell more than 2 full points between may and june expected to drop 0.4 points later this month some of the commentary, citi economists say a strong increase as we expect should help encounter a stalling u.s. economy. they're looking for stalling u.s.

skip the checkout line >>> and the federal reserve is set to kick off a two-day fed meeting, and steve liesmant results of a cnbc fed survey. so that's today. they really sneak up on us, don't they, steve? >> they do every six weeks and then you blink and all of a sudden there's another one. we have some pretty profound results from the survey, joe, about just how long the federal reserve is going to be on hold we all can take a nap for a couple years now i'll show you the results here 92% expect the fed balance sheet to grow. that's the main action expected from the federal reserve it will grow to just about $10 trillion it's now about 7 trillion. add 3 trillion only 43% expectadditional action from the fed, and the next fed rate hike on average is estimated to be in february 2023 that will be three years from the last fed rate hike -- rate cut that has been on hold. that's six months later than the prior survey, and that suggests that the new fed monetary policy strategy where it went to average inflation is having a pretty profound effect on the outlook and maybe also helping the stock mark

steve liesman has a cnbc rapid update. >>> then the passing of supreme court justice ruth bader ginsberga new political free election fight in washington we'll talk more about that before we head to break, let's get a check on the markets right now dow indicated down by about 464 points this comes after significant weakness in financial stocks and additional cases of covid building up in the u.k markets overseas in europe down even more than we're looking at here s&p is down by 46. nasdaq off by 15 "squawk box" will be right back. >>> as the economy recovers and activity picks up, some sectors are doing better than others steve liesman joins us right now with a look at the leaders and the laggards steve, good morning. >> reporter: good morning, becky. yes, let's first talk about the top line data which shows that the economy in the third quarter is doing a lot better than economists originally forecast, but there is some slowing going on we'll take a look at those sectors. look at that, we're now at 30% rebound estimated. that's up more than 9 points for the survey we did back in august

steve liesman has it for us. >> thank you very much jerome powell in an interview with public radio saying that jobs report is better than he expected it to be. making a second fed official to comment. but he says it could take years before the economy is fully recovered. he says low interest rates are here for an extended period of time he says that there are enormous economic gains from people wearing masks. i'll give you one quote here from the article that npr wrote about. we think the economy is going to need low interest rates which supports low economic activity for an extended period of time it will be measured in years as you know, we have a bit of a split going on between fed officials that are signalling that something is going to april in terms of qe and outcome based guide anz in september others say it is not needed. he said he wasn't in a particularury to provide any additional assistance. the governor and one other person has also suggested maybe we want it as soon as september. he jind of joined him. powell doesn't seem to be saying i don't know if he was asked we'll be re

speaking of all of this data, steve liesman has some new dita ahead of the friday jobs report and howloyment benefits have factored in. steve, what have you found >> yes, kayla, we got our first indication of that i'll get to that in a second some of the other data we're looking at the first is this kronos time punches. they cover the time management and work shifts for some 3.2 million employees. they make their data available, and it's done a nice job of telling us what's going to happen in the jobs report. unfortunately, this number is up just 0.3%, about, i don't know, a half of what it was or less than half of what it was in the prior month. that's the monthly change in time punches going over chase credit card spending, what kayla was alluding to right there, chase gives us their data on credit cards. they've segregated this into high unemployment states or those with the highest claims to see if they'd be affected by the runoff in the federal unemployment insurance, down 7.7% year on year, compares to better numbers for the lower unemployment states. jeffries does an economic i

frequency data is already telling us something about the august labor market and consumer spending steve liesmant now with his road back barometer steve, how are we fairing? how are things going >> sort of flat to slightly up let's go through the gauges, becky, and i'll show you maybe we can do more explaining on the other side of this. we've been following the kronos time punching. 3.2 million employees. they've done a good job tracking the changes in the payroll numbers. they're up 0.3%. that's a big drop in the growth rate from other months chase card spending. j.p. morgan chase doing interesting work with their credit card data they've segregated it into states with high unemployment. they're down more than others. we'll see that in a second then jeffries, they aggregate a lot of high freesh frequency data the growth rate has eased off at 63.2% of 2019 activity here's a quote we got when i spoke yesterday to annette markowska. she said, given the falloff in fiscal spending, i was expecting a contracture. even though the momentum isn't strong, it's quite impressive that it's still going. here

chairman jerome powell, steve mnuchin will testify before the house financial committee this morning steve liesmanu're at home we are still at the -- we just never know, right? until you get back are we ever coming back, do you know that's a different story. >> i'm waiting for the call, joe. i'm just waiting for the call. i'm doing what i'm told. i'm staying home here i am. i'm going to talk about fed chair jay powell and treasury secretary steve mnuchin. they will take to the hill over growing pessimism that congress ask reach it both will tell the house financial services committee that the economy has improved but they're going to link it to aggressive government spending and trillions of assets from the federal reserve. powell will say, quote, household spending looks to have recovered 3/4 of its earlier decline likely owing in part to federal stimulus payments and expanded unemployment an his testimony says i believe a targeted package is still needed they're ready to meet a bipartisan agreement the hearing takes place a day after the numbers show it will balloon from 190% to 104 by 2021 and

steve liesman has new data points and joins us with his latest road back barometer i don't know if you'reou, baby love you you did. >> i'm doing my best, joe. >> the high frequency data is showing improvement continues but the pace of improvement is kind of stalling take a look at the chase credit card spending. down 6 1/2% year over year that had been a little bit better it came back down a little bit the kronos time punches, up 0.5% unchanged gain from the last month. then the burbio community activity index, libraries, chambers of commerce, recreational activities, that is also at an all-time high instead of moving in whole points it's moving in tenths of points chase card spending, they've divided that into high unemployment states and low unemployment states. the high unemployment states, they lag just a little bit compared to the low unemployment states maybe that's a sign of the lack of the additional federal spending, that difference had been wider it's gotten a little bit closer. it's something that we're going to be watching over the course of second. moving on to look at the kr

steve liesman will explain do it. >> we're moving to a different seasonal adjustments method here, becky to inflate the numbers. many millions actually the continuing claims, not so much it's not like we have no people. a lot of people still filing it should be less. the numbers are not comparable they're not going back and restating it we'll have to go week to week to see what the situation is in the employment market. >> we'll see that in a moment. we have been watching the futures this morning pretty uncharacteristically. dow futures down 25. s&p futures off by 15. nasdaq down by 150 it's been the big under performer which is rare. rick santelli is standing by at the cme in chicago he's got those numbers that are coming up. again, this weekly jobs claims number is pretty important rick >> reporter: yes, it is important. should be coming up momentarily. remember, seasonal adjustments happen with a lot of numbers that are inaccurate. here we go at least the productivity numbers coming through productivity quarterfinal up 10.1%. unit labor costs down a bit. expected to be 12%, 9% followi

. >> rick, appreciate it >>> stay where you are, i want to bring in steve liesman to join us with moreyou concerned >> concerned, but not necessarily surprised, andrew. this is a hit to the economy that's recovering faster than we thought. i'm going to throw out what i think is perhaps the culprit here, which is that $600 benefit from the federal government wore off or expired in the month of august i think what happened is we took a hit to the growth rate of retail sales as a result i'm looking at things like discretionary spending, sporting goods, hobby, musical instruments and bookstores down 57 nonstore retailers which tries to capture the internet, up zero after being very, very strong. rick is correct to point out the control group. that's going to feed into gdp. i think it's also worth pointing out here that what we're looking at here, consumer spending is two-thirds of the economy. the good spending within that is one-third of consumer spending the other side of this, the e s service sector, is the part that's probably been hit the hardest. so what i'm saying, the good sector h