>> paul: another 263,0 americans lostheir livelihoods last month that has the jobless rate edng closer to 10%. now, concerns are growinthat the economic rovery could be layed. >> susie: with inflation bary rising, the nation's senrs won't be getting any era cash in their socl security checks this year. but so lawmakers want to change that. >> paul: with the fepledging to keep ras low, tonight's "market monitor" guest think bonds will stay tractive. he's eric takaha, rtfolio manager franklin templeton's strategic income fund. >> susie: then, so mucfor chicago. e 2016 olympics go to rio! it becomes t first south erican city to host the international sportingvent. >> paul: i'm paul ngas. >> susie: and i'm susie ghib. this is "nightly business report" for frid, october 2. "nightly business report is made possle by: thisrogram is made possible by contributns to your pbs station from viewe like you. thk you. captioningponsored by wpbt >> susie: good evening everyone. the job market ns today-- not go. the unemplment rate is now at 9.8% after american sinesses cut 263,000 jo in september, re than economists expected. when you do the math on yoffs, more than seven million peop have lost their jo since the recession began in decembe 2007. today'gloomy report raises fresh ncerns about the outlook r consumer spending and the economic recovery. scott gurvey reports. >> reporter: there is no sugar coatg the september employment report. job lossesere greater than expected, grear than in august, and thunemployment rate is now greater th it has been sin 1983. yrolls declined in constructi, in manacturing, in gernment, and inetail, where consume buying continues to weak. economist dominic konstam at credit ssse says, until consums return to the stores, we can expect more ble news in the months ahead. >> i wou think unemployment will continue to creepp towards 11% or 1, something ke that. i dot see any particular reason that is going to tu around. coanies are not going to go on somenvestment binge, and thefore they're not going to need to rehirell these people that they're getting rid of. >>eporter: fed watchers say today'news should quiet speculatiothe central bank is eparing to raise interest rates. julia coronado of bnp pariba says the fed might even encoage an extension of the new hoowner's tax credit, now heduled to expire at the end of november. >> i think the fed is gog to look at the landsce and say th this is not the time to start pulling back their programs, and they're ing to keep the accommotive policy in place for a pretty extded period. they'vsaid that. the fed haalways been more skeptical of thereen shoot than maybe the fancial markets ha been. >> reporte still, most experts lieve the economy grew in th third quarter and ll continue to grow in the quarts ahead. but they say it is unlikelthe job market will cover until wellnto next year. >> what we're dog is we're getting ed to the new kind of outlook for growth that'pretty anemic and it's verylow progress and, you know, nancial assets are going to ha to kind of price accordingly. >> reporte one more sobering note-- a lot opeople gave up onheir job search last month. you consider the people so discouraged they've stopped looking and the who want to workull time but can only find part-timjobs, the unemployment rate would be 17%. scott gurv, "nightly business report," new york. >> sie: but not every company is cutting jobs. many businesses are still ring and, ironically, some are ving trble finding qualified job candidates. as diane eastaook reports, some compaes are finding the st job candidates are alrey working for th competition. >> reporr: erin scharf is looking for a few od men and women. >> are you still interestein the clm's specialist position? >> repter: scharf and other recruiters at icago-based aon service corporation artrying to fl 500 job openings at aon offices across the u.s. the reinsurance and sk management firneeds everyone from adminisative assistants to consultants cruiter scott st. clair is trling social networking sites for ndidates currently working at aon competirs. >> even if they might t be a fi they may know someone who is a fit. >> reporte neela seenandan, aon's vice president oglobal talent managemen says, in any econy, the company prefers candides who are working over those who aren't. >> i think the is a perception that tends to be tt people who are ill employed tend to be the stronger employees we have hired both, buwe tend toire more people who are currently ployed. >> reporter:ith millions of americanout of work, this should be a yer's market for ployers. but many compani that are hiring s the jobless candidat they're seeing don't necessary have the skill sets they want. cion is a public relatio and soware service company. itonitors the media for p.r. firm so they can help their clients better market themselves. the company is n looking for a dozen saleand research profsionals. cision recruer meredith schaumburg says the compywants a experience and specifisales skills. >> walso want people who have exrience in sales, selling different types of sofare, also intellectual operty, perhaps. >> it'probably selling to similar ients that you're reaching out to now. >> reporr: professional head hunters e also having a tough time matching job caidates with compaes. creative sourcinoften gets up to 6 resumes for one job opening, but typicly only a fracti of the candidates are right for the sition. recruiting manager detri georgiadis says,f a candidate already haa job, he or she may nowant to make a move. to go to a new corporation, now you're the n person. you may be t first in d the first one go. so, en you're ingrained in a company, it's hard to ta that jump. >> reporter: many compans are also reluctant to hi over- alified candidates, fearing thosemployees will look for better opportunities when the econy does improve. diane eastabrook, "nightly business report," chicag >> paul: altugh yesterday's steep sellff on wall street may have been caed by the expectatioof today's worse- than-feared jobs report, stos continued to fall toy, with the w off 68 points a half ur into trading, with the nasdaq down 10 point bargn hunters got the market into slightly positive gund in early afternoo but persistent concerns thathe market has gone too far too fasquashed the rally attempt, resultingn modest closing lses across the board. the dow dustrial average ended down 21.61 at 9,487.67. it rose only once this wee and ll 177.52 points overall. the nasdaq fell 9.37 t2,048.11 today, and it also gained ly once ts week and lost 42.81 ints overall. the s&p 500 drped 4.64 to 1,025.21 today, and for th week, dropped 19.17 points. in the bond market, e ten-year note fell 112 to 103 13/32, puing the yield at 3.22%. susie: why didn't regulator spot bernard madf's massive ponzi schemend allen stanford's alleged $7 biion fraud? answer-- a lack ofraining by the brokerage industry main regulato so ss the financial industry regulatory ahority or "finra". the repo released today also says there were no proceres in ple for employees to bring fraud claims to managers. it mak several recommendations to revp internal policies, including a nedepartment which will focus on frd detection. meantime, four members of rnard madoff's family were sued today for nearly 00 million. mado's brother, sons and a niece woed at madoff investnt securities for years as senior executives. thsuit claims they should have known what was goi on under their own noses and done someing to stop it. the family members s they knew nothing abt the ponzi scheme and the allegaons are basess. >> paul: october 15 is an important da for the nation's senis. it the day the next reading on consumer prices cos out. that is the final ece of information the governmentses to calculate the cost living adjustment or "ca" for social security. darren gersh reports, this year's adjustment will almos certainly be zero. >> rorter: a funny tng happenedhile so much of wall street wasorrying about ination: consumer prices actually fel overhe last 12 months. for social securit beneficiarie that means there will most kely be no annual costf living adjustment or "cola." lawmers like vermont's bernie sanders say that's uair, because niors pay a higher percentage of their income f health ce, and those costs are rising. >> it would be wro, it would be immoral, in theidst of this economic crisis to turn our backs senior citizens. >>eporter: so sanders and others want to increase soal security payroll tax on those making between a qrter of a million and $350,000 aear. oregon's peter defazio wan to use that money to make ufor the lack of a cola incree. >> this modest $250 ontime payment to seniors would b bacally equivalent to a 2% st of living adjustment. it would help themeet some of those bare-necsity costs. >> reporter: b even with their higher spendg on health care, overl, the cost of living is falling foseniors, too. e government calculates an experiment index of inflation for the elderly. from august of lt year to august othis year, the cpi-e has actually fallen 1.3%. analyst vid john says no cola is no crisis. >> so you coulmake the argument that benefits suld be cut rather than gop at this time. >> reporter: of course, soci security benefits are t cut when prices fallthough medicare premiums-- whicare also tied inflation-- will not be increasin add it all up and john saya one-time social security paynt will do morearm than good. >> what's going toappen with that $250 is tt it's coming out of social security, whh, a year ago, we expected to he an $80 biion cash surplus, and now it's got a $10 billion ch deficit. >> reporter: fling prices will also affect the yroll taxes someorkers pay. the cap on wag subject to social secury taxes is indexed to price changes, and is expect to remain unchanged next yeaat just under $107,000 dollars. darren gersh, "nightly busins report," washiton. >> susie: c.i.t. group could finally have a plan place to rescue i struggling business. the 101-year-old comrcial lender has ce up with two options r its creditors: plan a-- issuing unsecuredebt lders new debt and nearly al the eqty in the company. plan-- a pre-packaged bankruptcy. c.i.t. ss the goal is to get bondholders help slash its $31 llion debt load by nearly $6 billion. the deal could save i.t. from bankruptcy if works out, paul >> susie: susi c.i.t. shares were among the mt actives. we'll see them in just a momt as we ke a look at our stocks in the news tonight. >>usie: paul, rio de janeiro is celebrang tonight. in a sprising decision, the city was chosen to host the 16 summer olympics. in rio, a ve of euphoria swept a crowd of more th 50,000 peoples they learned the news. it will be the fir ever olympic games in south arica. rio beatadrid in the last round ofoting. in a huge upset, chigo was eliminated in thfirst round of voting by the international olympic committedespite a last plea by president obama. monday, dallas fedal reserve bank president rhard fisher joins us live toalk about employment, interest ratesnd an exit strategy for theed. >> sus: private equity firm blackstone group is reported osing in on a deal to buy anheus busch in-bev's theme parks. the parks include seaworld and buh gardens. "the wall stre journal" reports e deal could be worth as much as $3 billion. neither company is commeing. blackstone ialready in the amusement business-- it ns both madame tussaud's wax seum and lego-land. >> pl: chrysler is temporarily shutng down production of its pular jeep wrangler s.u.v. the auto mer doesn't have the parts to me it, due to a shortagerom one of its suppliers. chryer's toledo, ohio, plant will clo for a week, leaving 535 hourly employees out o work. the wrangl is one of the few vehicles to oid a steep sales decline this year. >> susie: here's a looat what's happeningext week: our friday "market monitor" guest is dr. hans blk, chairman of intenvest. onhe economic calendar: wednesday, consumer cred for august, and the week report on crude l and gasoline inventories, and alcoa kic off third quarter earnings seaso thursday, 's september chain store sales, august whesale trade and weekly jobss claims; anfriday, thaugust trade balance. >> paul: my gut market monitor thiseek is eric takaha, portfolio manager of the franklin strategicncome fund, anwelcome back to "nightly business report", eric. >> thanks for having me ain. >> paul: oyour last visit with us i february, t bond markets whicare yourpecialty, wer ing very well, while scks, as we know, were in terrible shape. ha the sharp rebound in stocks since then undermined bond pric and takenbuyers elsewhere? >> ireally hasn't. overl, s know, short-term interest rate rez main very low because of the federal resve's policyo people have been lookg for yield. en you lookcross the fixed markets, emeing market bonds, they've all had a very strong run. me of those maets, suchs high-yield bonds, are up over th 45%. it's been a verygood run, even with equits moving higr over the past several months. >> paul: well, the fed, of course, hasaid it wants to keep interest rates w for some time t come or a least until the revery gains traction and then raise rates aggressively. how do you as abond fund manager prepare for a strategy for that scenario? >> the good news sen though the d has to come out with that statement to make sure ey are veryigilant with inflation in geral the overall onomy still has a lot of slack. unemployme, as you know is still very high. so we don't s a lot of inflationary pressures ovethe near ter whenit does retur, we have a lot of other are to investn, so wre not just investing in governme bonds. we're investing in non-u.s. securities wee investing in some of the corporate sector which offer yield above treasury securities. even if you see a rise in rates over the next several years we have places to invest whe we think wean add value even with that type of scenario with intere rates movi higher. >> paul: do you dl much with converble bonds? >> we ve a little bit of exposu to convertible butur portfolios is trational fixed inco security. >> paul: of the three tes of bonds, rporate, tax-free, a gornment, what perceages do they make up in your fund? >> right now, corporate i the majority of the portfoo. over hf of the fund is in rporate tax securities, whether higyield, investment grarkd or bank loan. we have a sma percentagen tafree securities. and then in general government bonds representhe remainder, although many of the governmt bonds are tsidehe u.s. theye not just u.s government securies but other foreign countries. >> paul: so a lot of diveification there >> that's right. it's really muisector funds trying to provid a lot of exsure across the globe to fixed incomeecurities. >> pl: t's have a ok at a one-ye chart of your strategic income fund and woe can see it'sone very well, especial since february. give us sometatistics on it. >> certainly. the total return, including dividends, since that period o time is up aut 20 percentage points. the yield, although it doe float on monthly basis, provide basis 4%, 4.5% yields to investors. it is a fund at's benefitted from the significant rally we've seeb, particularly inhe corporate sect, and that's driven to performance over t past several months. >> paul: it's certainly eg we, and i expect it wl continue that way. let's hopeo. do you personall own artz nds or have othe discloses to make abou it? i do own shares in this fund. >> paul: very od, indeed. i'm afraid time has run ou for us. t i want to thank you for beg with us once again and sharing your thghts >> thanks, again, i appreciate it. >> paul: my guest eric takaha of the franklin stregic income fund >> susie: tonight's mmentator ighs in on the need for financial regulatory rorm. columbia univeity's graduate school of businessnd former chairm of the council of economic advisors unde president george. bush. >> earer this month, president obama livered tough words in new york's feder hall on the ne for financial regulatory reform. e president is right that shington and wall street are complacentbout changes that are needed to safegud our financial systemnd protect taxpays. anwe need change. en a systemically important instition is in danger of failure, and its failu could trigger chain reaction of other failes, there may be no ternative other than to inje public funds. but the need amount of these inctions has been significany increased by weaknesses in our cuent regulatory stem. capital requements are our principal bulwark agait bank failur a key trigger of systemicisk, but they can be improved. larger banks should ha higher capital ratios, and more information should be provid to investors. we also need a better procs than bankruptcy for solving the insolvency of financia institutions. our framework for nks needs to be extended to other fancial instutions and their holding companies. this process, unlike banuptcy, putshe resolution of institions in the hands of gulators rather than bankruptcy judges, and perts more flexible approaches to keeping systemical important institions afloat. thpresident's own proposals uld increase regulatory complexity and keehigh the riskf financial crisis, but he is right to ca for thoughtful tion. lets hope waington and wall reet were listening. i'm glenn hubbard. >> susie: that's "nightl business report" for friy, october 2. i'm sue gharib. good night, everyone, and ha a great weekend. you, too, paul. >> paul: gd night, susie. m paul kangas, wishing all o you the best of od buys. 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