Nightly Business Report for wednesday, november 30th. Good evening, everyone. And welcome. President elect Donald Trumps Economic Team is taking shape. Former Goldman Sachs banker, Steven Mnuchin tapped to be the next treasury secretary and r s ross. Tackling some of the most contentious issues. The agenda is long and includes overhauling the tax code, renegotiating trade policies, bringing jobs back to theize and increasing Overall Economic growth. Today investors heard their action plan. And Steve Liesman has the details. Reporter wall street appears to have heard a lot of what it wanted to hear in cnbc interviews with the new leaders of the Economic Team, president elect donald trump named today. Treasury secretary, designate, steve municipal mnuchin and wilbur ross walking back. Our most important priority is sustained Economic Growth. And i think we can absolutely get to sustained 3 to 4 gdp. And that is absolutely critical for the country. To get there, our number one priority is tax reform. This will be the largest tax change since reagan. We have talked about this during the campaign. Wilbur and i have worked very closely together on the campaign. Were going to cut corporate taxes. Reporter mnuchin added parts of the Regulatory Reform bill, dodd frank to reduce scrapping of the bill. And ross said the tariffs were a last resort and said trumps trade policy would remove tariff and nonbarriers to u. S. Exports. The two praised fed chair, janet yellen. I think she did a reasonably good job. She may serve out her term. Will she be renominated . Thats a question for her and the president. Not a question for us. But i will say, we have two governor spots to fill and that will be high on the priority list. Reporter the details are yet to come and the key will be the actual policies proposed and those that can pass into law through congress. But for the moment, president elect Donald Trumps designees on the economy are closer to the center than candidate trump did. For nightly Business Report, im Steve Liesman. The president elects Economic Team led by mr. Trump himself predicts a kind of golden era of american growth. Our next guest has a more restrained view. Co founder of Economic Cycle, research institute. Welcome. Good to have you back again. Its not uncommon for Incoming Administrations to have very sunny predictions about what theyre going to be able to do economically. But you see Economic Growth at 1 longterm, not 3 to 4 . What do you see team trump not understanding about the fundamentals . Well, look. Some of the things theyre talking about doing are probably good things. But the fundamental Building Blocks of growth are just not there to get us to 3 or 4 growth. Lets call it 3. 5 growth to split the difference. When you look at how you get potential longterm gdp growth, what is it made of, its made of potential labor force growth, how many people are there growing in the economy to work. And productivity growth. Where is that running . You add those two together, and you what comes out is the potential gdp growth. Thats just the simple math that any administration is fighting against here. And when you look at demographic growth, thats under just half a percent for the next five or more years. And when you look at productivity growth, Labor Productivity growth, for the last six years, thats been running at about half a percent. And so i have to do the math. You add a half percent, plus a half percent, and you get around 1 . That is a far cry from 3. 5 . Were just not going to be able to get there, given everything that we have seen. We have to have extremely strong productivity growth. And just to put it in perspective, about six times more productivity growth than we have now, and i know mr. Mnuchin was relating the tax cuts, the biggest since reagan. And thats all good. And that will likely help. Right. However, we would be looking for twice the productivity growth that president reagans administration had. Lets talk about manufacturing, because thats another part of the stool, if you will, the threepronged stool that the Incoming Administration has talked about. And they say, yes, manufacturing certainly has changed over the years. But we still need to bring back more manufacturing jobs. And that will be part of the Economic Growth engine. Well, certainly. That is again, thats going to help. Its not that this is a bad thing. That is a good thing. But to close the gap between 1 growth and 3. 5 growth, im not sure that thats going to be able to do it, certainly on the job front. When we think about whats happening with jobs, we certainly, as china and other emerging markets have come on to the world stage, we have lost a lot of jobs to their lower cost workers abroad. Thats a fact. To bring those whats happening right now, to look at whats happening there, those lowcost jobs arent lowcost any more. The prices have risen in wages in china, so much so, that everybody is going to automated factories. I think if a business was going to bring production back to the united states, a good deal of the production will be automated. There may be some higherpaying supervisory jobs. But, again, probably not in the numbers that we need. Quick thought on tax cuts, and whether they can materially change that very elegant equation you had. Can fiscal stimulus change . Quick answer, please. As long as it impacts productivity growth. That is key. Tax cuts, other fiscal spending and infrastructure, what does it do for productivity growth . If we can figure out how to raise productivity growth, we can Start Talking about shifting longterm trend growth up. But i just dont see it yet. All right. Thanks very much. With the Economic Cycle research institute. There are also reports tonight that Goldman Sachs president is being considered for a top finance position. Gary cohen met with the president elect, and could possibly be tapped as director of the office of management and budget. A separate report said mr. Cohen is considering leaving Goldman Sachs after 25 years. The president elect also said he will leave his business to focus on the presidency as concerns grow about how a global businessman can quarantine his personal interests from the nations. Robert frank now with what we know about the incoming president s evolving personal business plan. Donald trump tweeting this morning that on december 15th, he will announce hes officially stepping away from the Trump Organization. Quote, while i am not mandated to do this under the law, i feel it is visually important as president to in no way have a conflict of interest with my various businesses. Hence legal documents are being created, which take me completely out of business operations. Now trump is referring to the fact that ethics rules that apply to cabinet members and other government officials do not apply to the president. But there has been a wave of publicity in the last week about his meetings after the election with Business Partners overseas and talks with politicians in countries where he or his company does business. Now the Trump Organization has operations or deals in more than 20 countries, and at least with the federal government on the Old Post Office building in washington, d. C. , which is now a trump hotel. There were no details in the tweets about exactly how he plans to step away, but there are three possibilities. First, he could sell the business. Second, he could turn it over to a truly independent board and ceo. Or he could put his stake into a trust and turn all the management over to his kids. The fact that his children will be at the press event and he uses the word, quote, operations in the tweet, not ownership, that implies he may stick to his original plan of doing the trust and turning the whole thing over to ivanka, eric and donald jr. To run the company. Given that ivanka has already been sitting in on trumps meteorologistsings with foreign officials and her husband, Jared Kushner will be a trump adviser, the questions about trumps conflicts of interest will likely continue well after december 15th, and indeed well after his inauguration. For nightly Business Report, im robert frank. And as robert frank just reported, the president elect made that announcement in a tweet. Later in the program, we will look at mr. Trumps use of twitter and what that could mean if it continues when hes in the white house. What a month. It started out slow, but then stocks took off after the election. On bets that the new administration might loosen regulation, cut taxes and ramp up fiscal spending. The dow even saw its first close above 19,000. But on the final day of november, there was a bit of a giveback. The Dow Jones Industrial average rose just about 2 points to 19,123. The nasdaq lost 56. The smun was off five. For the month, the dow logged the biggest gains of more than 5 as treasury saw their worst month since 2009. Bob pisani has more on the recordset mock. Reporter it was a quiet and tumultuous month. The s p 500 and the small cap russell it,000, the best onemonthshow in five years. Financials bestshowing in five years. Industrials also had a great month up 8 . Materials up 7 . Its all about hopes for an improving economy and lower taxes and infrastructure spending. But that improvement in financials, industrials and materials has come to the expense of Interest Ratesensitive groups like real estate and utilities, as well as consumer staples. So colgate, kraft, pepsi all down on the month. The biggest drag from bigcap names. Facebook, qualcomm, cisco, alphabet and even apple, all tech makes down on the month. The problem traders believe theyre using Technology Stocks as sources of funds to buy more attractive sectors like industrials and banks and energy stocks. As for december, historically, heres the problem. Its expensive now. Stocks are expensive because 2017 will see higher earnings partly because of the economy and they believe trumps agenda of lower taxes, fiscal stimulus, will be a powerful engine to rev up revenue growth. Well, maybe. But right now, no one is changing the 2017 earnings estimates, at least not until they see more details. For nightly Business Report, im bob pisani at the new york stock exchange. Private employers hired more workers than expected. Adp said the private sector added 216,000 new jobs this month. And the report showed job growth across the board among small, medium and large businesses. Americans personal income rose in october. At the fastest pace in six months. And as incomes rose, so did spending, though not as much as expected. But the rise could bode well for the upcoming Holiday Season and the economy more broadly. Since spending accounts for about 70 of economic activity. Federal reserve says the economy continued to grow across much of the country, according to its latest and aptly named beige book, which is an an dotial look at regional conditions. The central Bank Reported moderate to modest growth from early october through mid november. In some areas, however, the report found continued uncertainty following the president ial election. A fed official is backing an Interest Rate hike, echoing comments made by other policymakers. Dallas fed president , robert kaplan, said the labor market and inflation are making progress. But he also said the central bank would keep an eye on the new economic policies out of washington. I believe that were moving toward meeting our 2 inflation objective. Well see how the new policies evolve and develop, but and well be analyzing them. If they help accelerate that, then that will give the fed more operating room and well have to adjust our stance and our path to future rates accordingly. Mr. Kaplan is not a Voting Member of the Central Banks policy committee this year, but he will be next year. Oil prices, of course, can have a huge effect on the economy and today those prices soared. Opec, a cartel of 13 major exporters, agreed to cut output, ratcheting down production by more than 1 Million Barrels per day in an effort to end the record cluck of crude. That sent the price of domestic oil up 9 . Steve sedgewick was in the room where it happened in vienna. Reporter an absolutely huge day in vienna, a huge day for world oil markets and opec has done something that many people thought was absolutely impossible. They have come together to form a deal to kutsche production not only in the group but also nonopec, as well. I so he can to the Saudi Oil Minister to see what he thought of that deal. We are extremely happy. It brings stability back to the market. And it will give an impetus for investments to come to a happy level into the market. Reporter they have managed to take 1. 2 Million Barrels off the table within the opec grouping. So cuts across the board and a holding of production levels from iran, which was a very thorny issue. Also, the added achievement, they believe theyve got a deal with nonopec to cut another 600,000 barrels from world oil markets. And that nonopec cut will be left by russia as a big meeting next week on the 9th of december to thrash out the deals. There are questions that remain. Questions about compliant, questions about what happens if one or two members backtrack. What does that mean for the others. How long will this deal last and will it bring balance back to a market which many say is oversupplied, as well. So Big Questions remain. But for now, oil markets absolutely rallying very aggressively with wtm brink going around the 50 a barrel on what is a momentous day in vienna for opec and the oil markets. Steve sedgewick in vienna for nightly Business Report. Still ahead, how donald trump sealed the deal to keep carrier from moving jobs from the u. S. To mexico. President elect donald trump has reached a deal with carry yar, their air conditioning mafr that said it would move jobs from its plant in indianapolis to mexico. The agreement fulfills one of mr. Trumps campaign promises. Phil lebeau is covering the story for us. Hes in chicago. Good to see you, phil, as always. So how does this deal get done, and is it unusual for a president elect to do Something Like this . Reporter it is unusual. How many times have you seen people running for office, whether its president , governor, senator, whatever it might be, and they say, were going to keep your jobs here and in the end they really dont keep the jobs there . We dont know the specific details or at least we dont know many of them regarding why the Trump Administration was able to convince carrier to keep that plant in indiana. But if you read between the lines, its pretty clear that united technology, the parent of carrier, which has 6. 5 billion in federal contracts, mostly with the defense department, they didnt want to start off the new administration, start off a relationship on the wrong foot. So thats part of this. A Statement Issued today by carrier, you know, they dont get into details, but they issue some platitudes in terms of how theyre able to see things eyetoeye with the Trump Administration. The Incoming Trump Pence Administration has emphasized to us its commitment to create and improve more competitive u. S. Business climate, the incentives ord offered by the state were an important motivation. Its reported to be 700,000 but thats a drop in the bucket to a company like united technology. The bottom line is this, guys. You do not want to see a new administration starting and having an attitude of about a particular company if youre the ceo of united technologies, and thats why i think they ultimately said, lets make a deal to keep this plant own. Big event tomorrow at carriers headquarters. What can we expect . Reporter a lot of congratulations. A lot of handshakes and smiles. And a lot of workers. And well be there talking with them. A lot of workers saying, thank you, donald trump, for keeping this plant here. What about other companies that perhaps had considered moving some of their plants to mexico . He was very the president elect was very critical of ford. Right. Do you expect a change in attitude on a broader corporate level, phil . Reporter i think it depends on the company. We reached out to six Different Companies that have either started the process of moving plants down to mexico or going to be moving some jobs in production there. The companies we reached out to all said the same thing. We havent been contacted by the Trump Administration. Now some of these are smaller manufacturers. Is it likely that the Trump Administration is going to call every Single Company and say, what are you doing moving this plant down there . A big company like united technologies, which was a big target during the campaign, thats a different story. I think its going to depend on the company. Phil thanks so much. We appreciate it. Phil lebeau chicago. American eagle outfitters, where we begin tonights market focus. Issued a weak Holiday Quarter profit forecast, citing insistent foot traffic. The company did post a rise in samestore sales in its latest quarter but not at the clip analyst expected. Down to 1656. Go pro will cut about 15 of its work force as it tries to achieve profitability. The decision affects 200 employees, and all open job positions. The maker of cameras and wearable devices also plans on closing its entertainment business, and said its president will step down. By the end of the year. Shares up 1 to 9. 98. Valiant will reportedly maintain ownership of its stomach Drug Division after it failed to reach a deal with at that indicateda pharmaceuticals. Several reports said the drug makers couldnt settle on a price. Shares off nearly 8 to 15. 79. And disney raised its dividend by 10 to 78 cents a share. That puts the yield at more than 1. 5 . Disney shares off 59 cents to 9 the 9. 12. President elect donald trump is a prolific tweert. Have you heard about that . And that is raising questions as he prepares to be sworn in. The government is on track to forgive more than 100 billion in student debt in the coming years, according to the Government Accountability office, the obama administrations plan to help borrowers is more costly than first thought. The report also said the department of educations accounting methods understated the costs by tens of billions of dollars. A growing number of subprime auto loans are delinquent according to new data from the new york fed, Third Quarter figures show the number at its highest level since 2010. New auto loans to borrowers with Credit Scores below 660 have nearly tripled since the end of 2009. Twitter is, of course, not a new social media platform. President obama established some protocols for sitting president s. But the incoming president is, if nothing else, his own man with his own way of employing twitter. Julia boorstin takes a look. Reporter president elect donald trump has a massive following on twitter, with 16. 4 million followers. 2 million more than president obama. Trumps twitter following has grown by 13. 5 million since he announced his candidacy. And hes tweeted around 8,000 times since then at all hours, and on a range of topics. From his opinions on saturday night live to alleged voter fraud to his political nominations. Venture investor says trumps tweeting style is Uncharted Waters after president obama established certain protocols for twitter. He established the rules. We dont know what president elect trump will do with those rules. I suspect hes going to want to continue to tweet, simply because its so popular. Reporter popular and under scrutiny by investors as well as world leaders. Which is why there are questions about the security of trumps account. Jack dorsey and Mark Zuckerberg have both seen their accounts hacked, as were jeep and burger kings accounts back in 2013. And when the a. P. s twitter account was hacked in 2013, alleging an attack on the white house, it moved the stock market by 136 billion. Twitter tells me it has protocols in place for verified accounts, such as trumps, working to make sure the tweerts implement account safety. Encouraging them to embrace best practices, like twofactor authentication. The companys role is simply to take steps and provide an open platform. I think we have to look at it not as information, but as, you know, what this man is saying, and people are going to have to decide for themselves, based on educating themselves in a lot of different ways. Reporter and well see mr. Trump changes his approach on twitter once inaugurated. Im Julia Boorstin in leanings. Heres another look at the markets november gains. The dow with the biggest pririsf more than 5 . That does it for nightly Business Report tonight. Im sue herera. Thanks for watching. We want to remind you, this is the time of year your Public Television station seeks your support. And im tyler mathisen. Have a great evening, everybody. Well see you back here tomorrow night. This program is brorought to u in part by a passion for better understanding our world. Thoughtful travel can engage our minds, challenge our assumptions, broaden our perspectives, and completely surprise us, just like Public Television. And by. Bread for the world, an Advocacy Organization working to end hunger and poverty at home and abroad. Hi, im rick steves back with more of the best of europe. This time im surrounded by slavic culture. Its bulgaria thanks for joining us
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