nightly business report - friday april 5 2013

7/28/2019 Nightly Business Report - Friday April 5 2013

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ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen andSusie Gharib, brought to you by --

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SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Jobs jolt. Anunexpectedly weak employment report raises doubts about the economy`s health and sendsstocks and bond yields lower.


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As investors piled into bonds, the yield on the 10-year treasury closed at 1.71 percent.That`s its lowest close this year.

Hampton Pearson has our report.

(BEGIN VIDEOTAPE)

HAMPTON PEARSON, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over):

The downturn in the retail sector was one of the biggest drags on job growth. In March, 24,000jobs were lost and in an industry that had seen job growth average 32,000 per month for the pastsix months. Leading economists point to the payroll tax hike and bad weather.

DIANE SWONK, MESIROW FINANCIAL CHIEF: We know same-store retail saleswere very weak during the month of March with 20 to 30 degree below normal averagetemperatures. And where you saw the job losses in clothing and apparel, many retailers havingto discount now spring apparel because they couldn`t sell that spring apparel.

PEARSON: In addition to the retail sector shedding 24,000 jobs, manufacturers cut3,000, after adding 19,000 jobs in February. The financial services lost 2,000 workers.

The unemployment rate went down to 7.6 percent. But that`s because at least half amillion people simply gave up looking for work. People like Debbie Graham -- she went back toschool and got a degree in human development. But one year later, she`s not landed full-timeemployment, just lots of frustrating job interviews. >

DEBBIE GRAHAM, LOOKING FOR FULL TIME WORK: I called it a waiting game,because you go on interviews and you wait for them to call you. No call.


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MATHISEN: How, Michelle, could so many of the analysts have gotten it so wrong?The consensus was 200,000 jobs.

GIRARD: My own forecast --

(LAUGHTER)

MATHISEN: You guys weren`t even halfway close.

GIRARD: My own forecast included, unfortunately, Tyler.

I`ll tell you, there was -- and this is what makes that March puzzling. And this is why Ithink you have to probably take it with a grain of salt and like what we like to do, look at thetrends. The truth is Q1 average, the average jobs we saw in first quarter are not that muchdifferent that what we had seen over in the fourth quarter. I think that`s probably again moresignal of the things being the same than different.

But I`ll tell you, like I was saying the number of people filing for unemployment benefitswas down. We had some anecdotal evidence that firms are really hiring in March. I mean, therewas reason to think that the labor market was as strong in March as it was in February. That`swhy we had the numbers forecasting.

GHARIB: You know -- but, you know, Michelle, this headline is going to impact people.I`m talking about Americans because there`s been this perception that everything is coming uproses. Jobs have been up. Home prices have been up. Stocks have been up.

So what does this do to the feeling that wealth effect we talk about?

Does this undermine confidence?


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So, that`s a name that we think is not well-understood. We want to own it in here on anykind of a dip.

GHARIB: The other name you`re talking about is General Electric (NYSE:GE). Thestock has been stuck in the $20 range for quite a while.

Why do you like it?

SORRENTINO: One, they finished the divestitures that they talked about doing. Theirbalance sheet is in great shape.

They have right-sized G.E. Capital. We think that`s a potential upside in the health caresector now that we sort of have the Affordable Care Act in place. We`re grinding through that.

And you get a 3 percent plus dividend. So, you`re paid to wait, while this thing playsitself out. So, we like that story.

GHARIB: You have a tech stock on your list. We know tech stocks have not done wellin this whole market rally, Cisco (NASDAQ:CSCO) Systems. And it got hit hard today. It was

down 2 percent.

What is the attraction with Cisco (NASDAQ:CSCO)?

SORRENTINO: Well, really, Cisco (NASDAQ:CSCO) has been refining their business.They have been getting out of their slow-growing business lines.

They`ve been buying businesses that have growth potential. And if you talk to any businessesthese days about where they`re spending, they`re spending for productivity gains and Cisco(NASDAQ:CSCO) has really continued to position itself in the forefront there.

So, as things move wireless, as more goes over the Internet, Cisco


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SHACTMAN (voice-over): Sharp wit and sharp pencils have been very good to DavidRees.

REES: I made $20,000 sharpening pencils last year.

SHACTMAN: Lucrative hobby, part time job, run like a business. Sound crazy? Listenclosely, there are methods and a little bit of madness.

REES: I was a professional cartoonist, which is like an amazing job, and I was really

lucky to have it. But once it became my actual job it couldn`t become fun and then I kind of stopliking it and that`s why I quit it.

SHACTMAN: In 2010, he took a temp job knocking on doors for the U.S.

Census Bureaus. His kit included a pencil and a little pink sharpener.

(on camera): You don`t use this anymore?

REES: No. That`s kind of like there for historical purposes.

SHACTMAN (voice-over): When Rees realized he liked sharpening pencils, he had anidea.

REESE: I thought that people would send me their pencils, I would sharpen them andthey would use them and they would get dull again, and they`d send them back to me, I wouldre-sharpen them. You know, over the life of the pencil, I made like $200, $300.

SHACTMAN: Soon after, he launched Artisanalpencilsharpening.com.


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Fifteen dollars per pencil, including shipping, the shavings, and a signed certificate.

But it wasn`t long before Rees had to erase his business plan.

(on camera): Don`t you find it oddly I guess ironic that most people buy these and don`tuse them?

REES: Yes. I mean, frankly, it has been a -- it was a complete refutation of my originalbusiness model. They just keep them in the display tube as like a novelty item or a little strangelittle art work.

SHACTMAN (voice-over): But he sold about 1,600 pencils in three years.

(on camera): Is it disappointing that that`s the case?

REES: It`s just a shift and it made sense to me. It wasn`t I did a good job withsharpening the pencil or I made it really sharp. The real value that I added was, I was the guy

that people paid to sharpen a pencil.

It becomes like very conceptual. It`s like a snake eating its own tail.

You can see the scalloped edges.

SHACTMAN (voice-over): Rees is even particular about his pencils.

Remember these? Rees says Generals are the last number 2s made in America, Jersey City, NewJersey.

He`ll overanalyze the simple act of sharpening a pencil. A point he makes in his bookand in his teachings.


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nightly business report - friday april 5 2013

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