Than 1 billion a year in expenses. But they wont be cheap, resulting in a billiondollar charge against fourthquarter earnings. Is this gloomy news from citi the beginning of other companies doing the same . Suzanne pratt reports. Reporter 11,000 jobs are a lot of layoffs, even for a bank as huge as citi. And there could be more. Thats because the monster firm is still struggling to recover from the Great Recession even though it has fired a lot of other workers in the last few years. The thing is, citi has a new c. E. O. In michael corbat, and experts say hes anxious to make his mark, even if that includes cutting staff. And the need to slim down is not unique to citi; its industry wide. A financial industry runs into huge problems. It happened in the 30s, and it happened in the last five years. When you go through these periods, you go through a lot of change. That industry is now trying to figure out what is the right size of the industry. Reporter still, economists say citis action today is not the start of a new wave of mass layoffs across corporate america. The nations job market may not be robust, but its not frozen, either. In fact, today, the payroll firm a. D. P. Reported 118,000 new private sector jobs were added in november, fewer than in october. The blame for last months slowdown in hiring falls squarely on Hurricane Sandy, not on any new or widespread weakness in the economy. I would expect that by december, were going to see some bounce back. Much of the disruption from sandy was people simply not being able to get to work or firms not employing people that they ordinarily would have. Reporter friday, the government will report its monthly snapshot of the u. S. Labor market. It, too, is likely to reflect temporary effects related to the aftermath of Hurricane Sandy. Were looking for only a 50,000 gain in jobs in november, well under that 170,000 average weve seen over the past three months. Reporter Hurricane Sandys effects on hiring may be short lived, but experts worry fiscal cliff concerns could result in a new Storm Brewing for workers looking to land a job in the coming weeks. Suzanne pratt, n. B. R. , new york. Tom citi and the financials lead the way higher on wall street, helping the dow top 13,000 again. But a big drop in apple shares kept the nasdaq from gains. By the closing bell, the dow was up 82 points, the nasdaq down 23, the s p added two points. Susie investors were also encouraged by news that American Workers were very productive this past summer, and thats good news for company profits. Productivity increased at its fastest pace in two years, at an annual rate of 2. 9 from july through september. That number blows away the initial estimate of 1. 9 . Erika miller takes a closer look at how technology is helping to boost safety and productivity. Reporter three years ago, this Long Island Hospital had a problem healthcare workers werent cleaning their hands as often as required. 100,000 people die each year in the United States from hospital acquired infections. Thats more than the number of people who die from Breast Cancer and from auto accidents. Its a huge problem, one that we want to make a dent in. Reporter lowering the number of infections is also good for the hospitals financial health. It increases length of stay. It doubles the cost of many operations. Were not reimbursed the same way that we used to for hospitalacquired infections. Reporter so the hospital tried an experiment. It put cameras at the entrance to patient rooms in its intensive care unit and tallied how many times workers followed hand hygiene procedures. The compliance rate was less than 10 . But once the hospital started posting the results for the shift publicly, the rate skyrocketed to over 90 . And there were other benefits the patients family as soon as they see us coming in and out, and when they see the hand. The activity of the hand hygiene in and out they themselves are using the same methodology. Reporter but even if you dont work in healthcare, remote video auditing may be coming to your workplace. The company that makes the Monitoring System predicts that virtually every industry will be using this technology within the next decade. We are now working in europe and starting to get going in the middle east and asia. So theres absolutely no bounds to what this can do. Reporter arrowsights technology is also widely used by the meat industry; in some cases, boosting productivity by more than 10 . The biggest barrier to adoption of the technology is not employee backlash, its money. The most difficult thing about a new technology or new service is getting companies that didnt have this anywhere in their budget to create a budget line for it. Reporter but North Shore Hospital says its investment has more than paid off. It probably costs at least 40,000 to treat every serious m. R. S. A. Infection. If we can eliminate just a handful of those in a year, weve easily paid for it. Reporter already, the hospital is planning to expand its video monitoring to other departments, including improving operating room safety and efficiency. Erika miller, n. B. R. , manhasset, new york. Bob baur is the chief global economist at principle global investors, with 275 billion on management. Bob, the higher productive numbers, will that lead to more hiring, regardless of what happens with the fiscal cliff . I think it will. We have said for some time that businesses have pushed productivity as far as they can. If we continue at a modest, 2. 5 growth rate, that will be enough that businesses will be forced to higher at a faster pace. Tom but were not hearing a lot of confidence coming from the business community. Were seeing it in housing and automotive sales, but in terms of hiring, it is languishing. Why do you think that difference exists . I think business is looking ahead. There is a real dichotomy, as you mentioned, between businesses and costumers. Businesses are looking ahead, and theyre thinking with increased taxes, because of the fiscal cliff, if the worst happens, consumer demand is just going to fall off. They are already taking action today to try to prepare for that eventuality. But the consumer is kind of blankly ignoring this, and confidence is up for really lots of reasons. I mean, the net worth of households has been repaired. About twothirds of it has come back as house prices rise and stock prices are now double what they were at the bottom in march of 09. When you look at state and local budgets, theyre now much better with revenue rising. So the layoffs and budget cuts, we think are waning, if not over. Housing is clearly coming back. Things are improving and Consumer Confidence reflects that. Tom but there is that dark cloud of the fiscal cliff. You mentioned it earlier, businesses planning for Consumer Confidence to go off that cliff if we go off it as a country. Do you not agree with that prospect . Well, no. I believe it will if nothing happens and there is no agreement, i think there will be a mild, kind of technical recession in the first half of next year. Maybe a 1 decline contraction for both the first and second quarter. But i dont think it will do very much fundamental damage underneath that. It will kind of reduce the base from which spending grows, but once that base is down slightly, i think the growth will continue. Tom real quick, is it going to continue for housing and autos, do you think . Yes. Those are the two key things that in the past have really driven recoveries. They havent for the last three years because housing was part of the crisis, and consumers didnt want to borrow to buy cars. But now i think that is coming back. And that is going to drive the recovery, more like what were used to. Tom a little bit of a tail wind. Bob baur along with us, he is with principle global investors. Susie still ahead Freeport Mcmoran copper and gold will soon be mining more than its namesake metals. Well explain. More tough talk today from washington on the fiscal cliff treasury secretary Timothy Geithner said hes willing to go over it if republicans dont agree to tax hikes for the wealthiest americans. President obama said basically the same thing but added one more hard line to the negotiations. If congress in any way suggests that theyre going to tie negotiations to a debt ceiling vote and take us to the brink of default once again, as part of a budget negotiation which, by the way, we have never done in our history until we did it last year i will not play that game. Late today the president spoke by telephone with House Speaker john boehner. No specifics on what they said to each other, but it was their first conversation in a week. Eventually the two sides will get down to bargaining over specifics, including entitlements. One idea may be to change the way the government measures inflation. That may sound like a small change, but, as darren gersh reports, it could have a big impact. Reporter if the price of oranges goes up, consumers will buy apples and other cheaper foods. We know that. Economists call that switching substitution, but that change in behavior doesnt show up in the official inflation rate. So most economists think the current Consumer Price index overstates the actual cost of living. Thats important because the inflation rate is used to set tax brackets and Social Security benefits. Moving to a more accurate inflation measure called the chained c. P. I. Would cut the deficit by 200 billion over ten years. Supporters say the change wouldnt cut benefits. If were making the change to reflect what is the real cost of living, as opposed to a different one, then you are not reducing them; youre just truing up what you should be getting. Not something that i hate to use the term that might be inflated beyond what it should have been. Reporter this socalled technical fix will shave a quarter of a percentage point off Social Securitys annual cost of living increase, and that difference adds up over time. Some worry that will hurt the very old. It cuts real benefits. If somebody is getting fewer dollars in their check, thats real to them. And for people who are sliding progressively farther behind prevailing living standards, which is true of those out of the labor force for a very long time, its about as real as it gets. Reporter but the change to a chained c. P. I. Is easy to do, and that means it could be packaged into a deficit agreement quickly if there is bipartisan agreement to act. Darren gersh, n. B. R. , washington. Down tnvbz . D right . Q slgtc7 susie youre pretty upbeat on the stock market side. Taking look at the forecast for the s p 500, youre calling for a gain of 8 , it will get to the 1575 level to the 1400 level. What is going to give investors confidence to take their money out of cash and invest it in stocks . Again, susie, weve had some significant head winds over the past year or so. We think as we get past the fiscal cliff and job creation continues, i think investors are going to be feeling a little more optmistic. We think with modest earnings growth, were looking for earnings to be up about 5 , and with a little extra improvement and sentiment, investors could push the market up about 8 . Not a big gain, but a decent one, giving the slowgrowing economy were seeing right now. Susie your whole forecast is depending on an agreement on fiscal cliff. If we go over the cliff, what happens to your forecast. What will you be saying at the start of the year about the outlook for the economy and jobs. A lot of people are focused on the january 1st deadline. We dont think if we dont have an agreement by january 1st that everything falls apart. What were watching very closely is if there is still negotiating taking place. If we still see both sides talk, i dont think the january 1st deadline is going to mean that much. We would only worry about the worstcase scenario with the economy contracting if there is a real stalemate and both parties walk away from the talks. We dont expect that. Were beginning to see some signs there is some willingness to compromise on both parties. Susie as we said from the start, youre pretty positive on the outlook. Gary thayer of wells fargo advisor. Susie los angeles and long beach port workers were back at work today, ending a costly eightday strike. The ports were crippled after Clerical Workers went on strike and were supported by the longshoremans union, which refused to cross the picket line. The shutdown cost 1 billion a day. The work stoppage also forced ships to reroute to ports in mexico, panama and northern california. A tentative deal was reached late last night after federal mediators joined negotiations. No details yet on the deal, but workers are expected to get new terms that will prevent jobs from being outsourced. Tom we saw the influence of apple on any stock index which includes it. Without apple, the dow rallied. But the nasdaq and s p 500 were weighed down thanks to apples weakness. The s p 500 hit its lowest level of the session just after a stronger than expected report on the Services Sector before 11 00 a. M. Eastern time. It bounced into positive territory and closed up 0. 2 . Volume picked up a little on the big board with 757 million shares. 1. 8 billion moved on the nasdaq. The Technology Sector was the big drag on the broad market. It fell 1. 3 . The utility sector saw the best gains, up 1. 6 . Apple put the brakes on the broad market, selling off on heavier than usual volume. Apple fell 6. 4 , with the stock closing at a threeweek low. There are plenty of trader theories behind the weakness in apple. They include apple not announcing a special shareholder dividend; reports of traders facing higher margins if they borrowed money to buy apple stock, leading them to cut their positions; and worries about new competition from nokia. Speaking of competition for the iphone, nokia announced a deal with chinamobile to sell its top Lumia Smartphone in china. Shares of nokia jumped 12. 8 . Volume was very heavy as shares sit at a sevenmonth high. Meantime, banking stocks were in focus thanks to the job cuts announced at citigroup. Bank of america joined in the rally with shares closing with a doubledigit handle. With b. Of a. Finishing the session at 10. 46, its the first close over 10 per share since july 2011. Also helping the Financial Sector insurance companies. Two of them released their estimates of how much Hurricane Sandy will cost them. Travelers figures the storm will cost it 650 million. Hartford pegged its storm losses as high as 350 million. Analysts say the companies can absorb the impact. Both stocks were higher. Travelers rallied 4. 9 , closing less than one dollar away from a new 52week high. Hartford added 2. 9 . Drug giant pfizer had encouraging news on an experimental Breast Cancer drug. With up to 6 billion in potential global sales, the stock rallied. Shares jumped 1. 9 on heavier than usual volume. While the Breast Cancer drug tests were positive, any Regulatory Approval wouldnt happen for at least a couple of years. Three of the five most actively traded Exchange Traded products were up. The financial e. T. F. Had the best gains, up 1. 2 . And thats tonights market focus. Susie a tough day for investors in Freeport Mcmoran. The Stock Plunged 16 on news that the Mining Company is buying two oil and gas producers. Its paying 9 billion for plains exploration and Production Company and mcmoran exploration company. Diane eastabrook has details on freeports plans to build a larger, more diversified company. Reporter Freeport Mcmoran tried to assure investors today that getting into the Energy Business doesnt mean the company is turning its back on mining. Under the deal, freeport will pay 6. 9 billion for plains exploration and production and 2. 1 billion for mcmoran exploration, a Sister Company it was separated from a couple of decades ago. The deal would also leave freeport with 20 billion of debt. Freeport executives say getting into oil and natural gas would help diversify the company and keep more of its assets in north america, where theres a huge shale gas boom. They estimate by next year freeport will derive a little more than a quarter of its profits from energy and the rest from mining, versus 100 from mining today. The company says it thinks demand for commodities, especially energy, will continue to grow. That could help offset the increased difficulty Mining Companies are having trying to find new projects in regions outside the u. S. And with Interest Rates currently at historic lows, the timing was right to ink the two deals. Diane eastabrook, n. B. R. , chicago. Tom daniel rohr is a metals and mining analyst from morningstar and joins us from chicago. Dan, how unique of a deal is this in the u. S. To have mining and Energy Drilling all in the same company . It is very unusual, forthe p. Decades, ago, however, we had seen a lot of the oil majors, folks like amco, with exposure to mining as well. This is an animal we havent seen in quite sometime in the u. S. Tom what drove the deal for freport, why did it want to go outside its expertise mining, that was two generations of leaders ago. Why now . Yeah. Im still struggling with the underlying strategic rationale for this deal. Judging by the stock market, i cant see a clear rationale as far as why they did this. What management has said is they see a compelling story for oil and gas demand over the next several decades, and the purchase of plains and m. N. R. , was a good way to bet on that outlook. Tom i suppose one point that is worth exploring here is little bit, mac moran and mines around the world, theyre mostly based here in the u. S. Is that a big change, and why that . Freports mining assets consistent of as you said, copper and gold in indonesia, and theyve got composure to the democratic public of congo, and they have some mining assets in the United States and south america as well. But what the u. S. Oil and natural gas assets bring to the table, in addition to commodities, is well outside freports existing portfolio of business, is a reduced level of country risk, especially compared to what you undertake when you do business in indonesia or the d. R. C. Tom just a half minute left, and i want to ask you about the stock for freport mac moran, how should longterm investors take a look at this . Well, longterm investors that had been sitting in freport original need to ask themselves are you really interested in this oil and gas story. Because you need to remember investors to have undertaken this deal on their own. They didnt need freporto go out and lever up and pay a 39 premium for planes. Tom dan, do you own freport . I do not. Tom daniel rohr with us, he is with morningstar. Reporter im erika miller in new york. Tomorrow, well talk to the c. E. O. Of kitchen chain sur la table and hear his outlook for holiday spending. Susie finally, we want to remind you about a special guest on n. B. R. Tomorrow n. B. R. Founding coanchor paul kangas will join us tomorrow night, december 6. And well talk about the markets, and hell answer some of your questions. Thats tomorrow night. And you can submit your questions on facebook or twitter at bizrpt. Ill be in miami with both of you. Tom weve been straightening up the studio for your visit here, susie. Weve been sweeping up and cleaning up. Susie i was counting on that. Thanks, tom. Tom youve got it. Susie thats nightly Business Report for wednesday, december 5. Have a great evening, everyone. And you, too, tom. Tom good night, susie. Well see you online at www. Nbr. Com and back here tomorrow night. Captioning sponsored by wpbt captioned by Media Access Group at wgbh access. Wgbh. Org join us anytime at nbr. Com. There, youll find full episodes of the program, complete show transcripts and all the market stats. Also follows us on our Facebook Page at bizrpt. And on twitter bizrpt