<Show: NIGHTLY BUSINESS REPORT> <Date: March 7, 2013> <Time: 18:30:00> <Tran: 030701cb.

118> <Type: SHOW> <Head: NIGHTLY BUSINESS REPORT for March 7, 2013, PBS> <Sect: News; International> <Byline: Susie Gharib, Tyler Mathisen, Hampton Pearson, Jane Wells, Courtney Reagan, Jon Fortt, Scott Cohn> <Guest: Diane Swonk, Dan Akerson> <Spec: Business; Dow Jones Industrial Average; Stock Markets; Consumers; Economy; Retail Industry; Crime; Internet> <Time: 18:30:00>

ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Susie Gharib. TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Make it three straight all-time highs for the Dow, fuelled today by optimism in the job market. SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: How`s the consumer feeling these days? We`ll find out as we go in focus on the American recovery. And I`ll ask the CEO of General Motors (NYSE:GM) if people are still in the mood to buy. MATHISEN: And the threat of hackers is endangering a critical part of America`s economic engine, small business, and that could lead to even bigger problems. Hello, everyone. And we welcome public television viewers from all across the country to NIGHTLY BUSINESS REPORT. Thank you very much for joining us. Susie, today it was all about jobs. GHARIB: It sure was, Tyler.

And that`s where we begin tonight, with encouraging news about jobs. That news gave a boost to the market and led the Dow to another alltime high. The blue chips rose 33 points. The NASDAQ added nine. And by gaining nearly three points, the S&P 500 is now within 20 points of its all-time closing high. One day ahead of the Labor Department`s February job report, we learned that first-time jobless claims fell last week, dipping to a sixweek low, and surprising economists who expected a jump in claims. This comes a day after payroll firm ADP reported a much better than expected gain in private sector payrolls in the month of February, an increase of 198,000 jobs. Here`s Hampton Pearson with a closer look at whether that encouraging data points to a better jobs market. (BEGIN VIDEOTAPE) HAMPTON PEARSON, NIGHTLY BUSINESS REPORT CORRESPONDENT (voiceover): In the nation`s capital today, a sure sign of spring and perhaps an improving job market. A sightseeing tour company looking to fill 150 vacancies hosted a jobs fair, with lots of eager applicants. JOHN ST. ONGE, JOB APPLICANT: I have a lot of experience. I`m well qualified for this line of work. I`ve got a good set of references, too. PEARSON (on camera): While the drop in weekly jobless claims and increased private sector job growth is encouraging, it`s those higher taxes and deeper spending cuts from Washington that could slow down the job growth momentum. (voice-over): Health care has been the biggest job growth engine up 320,000 in the last year. Construction is on the rebound, adding 28,000 workers in January, the fourth straight month of big gains. In contrast, government workers continue to lose jobs, particularly at the state and local level, down by 24,000 just in the last three months. And layoffs are on the rise. Up 55,000 last month, according to consultants at Challenger, Gray and Christmas, the second straight monthly increase. The trade deficit topped $44 billion in January, due to more imports,

$6 billion higher than December and a possible drag on economic growth in the first quarter, with a downside ripple effect, economists say, on job growth in the coming months. STEVEN RICCHIUTO, MIZUHO SECURITIES CHIEF ECONOMIST: We`re going to have a second-quarter dip in employment, not a decline in employment, just a slowdown in the pace of employment in the second quarter, bring it back down below 150,000 workers per month. PEARSON (on camera): So, tomorrow when we get the jobs report here at the Labor Department, economists predict we probably added about 160,000 jobs to payrolls last month, just enough to keep the unemployment rate around 7.9 percent. For NIGHTLY BUSINESS REPORT, I`m Hampton Pearson. (END VIDEOTAPE) MATHISEN: We`re going to dig a little deeper into the labor market as we look ahead to tomorrow`s number with Diane Swonk, chief economist and senior managing director at Mesirow Financial. Diane, always good to see you. DIANE SWONK, MESIROW FINANCIAL ECONOMIC ECONOMIST: You, too. MATHISEN: You just heard Hampton put his numbers on what the probability is for tomorrow, about 160,000, 165,000 jobs and about a 7.9 percent unemployment rate. Where are you? What`s your forecast? SWONK: Well, certainly, I was there in the beginning of the week, but I think what preliminary job numbers we saw from ADP and consumer numbers we`ve seen come out, the consumer confidence numbers, which across the board are showing people more optimistic about the month of February. I think we could get closer to 200,000 and be surprised pleasantly on the upside for a change, which would be welcome news at this stage of the game. GHARIB: But, Diane, there`s still a lot of pain in this job market. There are 12 million Americans who are out of work. These are the longterm unemployed. And if you look at that measure of U6, I think they call it, 15 percent is the unemployment rate, teen unemployment higher than that. CEOs we talked to really not in the mood to hire. So, what can you tell Americans about the health of the job market? SWONK: Well, what we`re seeing is it improved, although the threshold

is easy to clear because it`s been so lousy for so long. And what we`re talking about is still a very long slug going forward. I think the intro is really important, because what we`re looking at is what could be a turning point in the job market where we see more measurable increases in employment and a wiggling away of the unemployment rate. That could, though, be derailed by what`s going on in Washington right now, particularly the second quarter. Much of the furloughs and layoffs are likely to hit in the month of April, which we won`t see in the jobs numbers until reported in early May. MATHISEN: And yet, government payrolls are going down, even as private payrolls are going up. One area I`d like to hear your thoughts are incomes. You know, we`ve got some job growth in the economy, but we have very, very tepid income growth. Why isn`t anybody getting a raise? SWONK: You know, it`s because one of the ongoing slack in labor market, you got a lot of competition for jobs out there, you`ve got a lot of people willing to take any job you`ve got. But also, there`s been a shift in the composition of where we hire. We`re seeing in the health care industry, for instance, although hiring is still very robust, they are cutting nurses wages and substituting in many cases high-paid nurses for lower-paid tech personnel who had an 18month degree. They are paid better than other people with an 18-month degree but much lower, of course, than nurses. And so, you`re seeing a lot of shifting going on where high-paid personnel are often traded off for lower-paid personnel. Even in the health care sector, which has been the job generator and one of the bright spots in the overall labor market for some time. The good news is we do have construction coming back. Those are high-paid jobs and manufacturing, but not in the volumes we saw, of course, during the height of the housing market boom or the manufacturing sector of what we saw in the past. GHARIB: All right. Any -- anything that you can say about small business versus big business? We did see in the ADP report that small businesses continue to hire, but what about bigger companies? SWONK: You know, that`s really important, small business in the ADP report, because it`s a payroll service company, tends to catch new business formations well, which isn`t always captured in the government survey until later. So, that is actually encouraging news there might be more business formation out there than we`re actually capturing in the official data and

we`ll get it on later revision. So, that`s good news. The bad news is what you`ve heard in the Challenger report, that not all big companies are hiring. And that`s where the hesitancy has been, at the large corporations. MATHISEN: Diane Swonk of Mesirow, we`ll find out the numbers tomorrow. Thanks for being with us. SWONK: Thanks, Tyler. GHARIB: Well, one area that continues to higher still is health care, despite what Diane just told us. And as Jane an Wells tells us, one unique sliver of that sector is really booming. (BEGIN VIDEOTAPE) JANE WELLS, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Eighty-eight-year-old Laurie Irvine (ph) has been able to age gracefully in her own home with help from caregiver Victoria Lomili (ph). UNIDENTIFIED FEMALE: I couldn`t live without her. WELLS: Ninety-two-year-old Dorothy Sable (ph) has hired so-called "granny nanny" Cydney Kaplan to take her on errands. UNIDENTIFIED FEMALE: She`s so likeable. WELLS: As America grows older, a growing trend is senior home care, a service not covered by Medicare but one that more Americans are able to pay for out of pocket or with long term care insurance. Business is booming. JAKE FACKRELL, ALTA HOME CARE CEO: This year, we`ll do about $15 million. We service currently between Louisiana and California about 600 clients every day. WELLS (on camera): Are you hiring? FACKRELL: We`re hiring every day. It`s our biggest challenge. WELLS (voice-over): Jake Fackrell started Alta Home Care and is hiring as many as 20 people a week, though most applicants are rejected. This is hard work.

UNIDENTIFIED FEMALE: It`s very important to watch your attitude when you`re changing (INAUDIBLE). WELLS: The average pay is $10 an hour. (on camera): And it`s estimated that 4,000 caregivers and certified nursing assistants are being hired every month in this country. UNIDENTIFIED FEMALE: The senior care industry just for senior home care has grown by more than 40 percent in the last five years. CYDNEY KAPLAN, GRANNY NANNY: I love being with the seniors, learning from them, being around them. I love their energy, even when they`re cantankerous. WELLS (voice-over): Granny nanny Cydney Kaplan charges $60 an hour. She`s a former reality producer with a degree in therapeutic recreation who saw a need at the high end. KAPLAN: They want to be seen with someone that`s a professional and that looks like a member of the family. WELLS: And with 40 million Americans at least 65 years old, as they grow older, business will grow with them. For NIGHTLY BUSINESS REPORT, Jane Wells, Los Angeles. (END VIDEOTAPE) MATHISEN: Another positive on the economic front, a lot more of us are seeing growth in our net worths. The Federal Reserve reports as of the final quarter last year, Americans had gained back just about all of the $16 trillion in household wealth -- yes, T, trillion -- lost in the Great Recession. Americans` net worth now totals $66 trillion, and it rose $1.2 trillion from the third quarter of 2012, with much of the rise coming from higher stock prices. GHARIB: Well, one stock contributing to that wealth effect for American households, Google (NASDAQ:GOOG). Shares of the search giant have now overtaken tech rival Apple (NASDAQ:AAPL) to become the most-owned stock by the 50 biggest U.S. stock mutual funds. And it`s not hard to see why. When we look at both companies over the past year, in sync most of the way, then juts around December, Google (NASDAQ:GOOG) takes off and Apple (NASDAQ:AAPL) heads south. For the year,

Google (NASDAQ:GOOG) is up 37 percent, while Apple (NASDAQ:AAPL) is off almost 19 percent. MATHISEN: Well, with the S&P 500 index approaching an all-time high, we kick off our market focus tonight with another S&P milestone. Standard and Poor`s reports dividend rate for its S&P 500 listed companies has reached $300 billion for the first time ever. Last year, S&P 500 companies paid out $281.5 billion in dividends, 406 of the S&P 500 are paying dividends. And that is the greatest number since 1999. Well, adding to that dividend pop, Colgate-Palmolive`s board upped its dividend 10 percent today and set a two-for-one stock split set to take effect April 23rd. Shares are up 24 percent over the past year. GHARIB: Here`s the latest on that Macy`s/J.C. Penney tug of war. The judge ordered mediation for Macy`s (NYSE:M) and J.C. Penney over the highstakes lawsuit over Martha Stewart`s contract, with both companies telling both sides, we live in a free market society and the business people involved need to work out a solution. He gave the parties until April 8th to settle. And Kroger (NYSE:KR) shares moving higher today, thanks to betterthan-expected quarterly earnings the supermarket chain, up 22 percent in the fourth quarter to 86 cents a share. That`s way above the 70 cents that Wall Street expected. The company`s forecast for its fiscal year also came in above estimates. Kroger (NYSE:KR) shares rose 3 percent, and touched a new 52-week high during the day. MATHISEN: Susie, Boeing (NYSE:BA) 787 Dreamliners are going to remain on the ground, at least several weeks longer. Federal aviation investigators say they have reached no conclusions about the cause of a battery fire on one of the jets in Boston. That was back in January, as I recalled (ph). The NTSB now plans to hold both a public forum and an investigative hearing in April to focus on the design of that troubled lithium ion battery system. Despite that, shares of Boeing (NYSE:BA) were the biggest gainers in the Dow today, touching a new 52-week high for that company and closing up more than 2 percent. GHARIB: Another financial blow to BP in the wake of that massive oil spill in the Gulf of Mexico back in 2010. A federal court in New Orleans ordered the oil giant to pay out even more money to more parties than the $20 billion in compensation and cleanup that it was expecting to spend. BP

says it will appeal the ruling. MATHISEN: And coming up, we`re going to talk to GM`s CEO about who`s buying cars today and the company`s commitment to helping Detroit get back on its feet. But, first, let`s see how the overseas markets closed today. (MUSIC) MATHISEN: The nation`s biggest retailers reported modest gains last month, which rose by an average of 1.7 percent. And that brings us to the fourth in our special week-long series called "In Focus: The American Recovery." Tonight, we look at consumer spending and the pressures keeping a lid on it. (BEGIN VIDEOTAPE) COURTNEY REAGAN, NIGHTLY BUSINESS REPORT CORRESPONDENT (voiceover): Higher payroll taxes and rising gasoline prices continue to streak across the headlines with good reason. These head winds appear at the very least to be impacting how much consumers are buying. ROBERT SUMMERS: These things will take dollars out of consumer`s pockets. It`s disproportionate for low earners, and I think it`s reasonable to expect some moderation in that consumer demographic going forward. REAGAN: Walmart is certainly feeling the pressure. The world`s largest retailer catering largely to lower-income consumers blamed a delay in tax refunds for its slow February sales start. BOB DRBUL, BARCLAY`S RETAIL ANALYST: It does put a lot more pressure on March. You know, February`s a smaller spending month than March from a U.S. consumer`s perspective. It`s something that we`ll be watching that very, very closely. REAGAN (on camera): Well, consumer confidence rebounded in February, executives from Target (NYSE:TGT), Abercrombie & Fitch (NYSE:ANF) and Lowe`s are also expressing concern about continued consumer uncertainty, though not everyone thinks retailers should worry too much. DOUG HART, BDO USA CONSUMER PRACTICE PARTNER: I don`t think there`s

this new normal. Obviously, if paychecks are lower, there is going to be some reduction, but I believe over time, if that`s the only factor, I think consumers are going to adjust and I think that consumer spending is going to stabilize. REAGAN (voice-over): But higher payroll taxes aren`t the only head wind. The average price for regular unleaded gasoline has increased 40 cents per gallon or 12 percent in just three months. According to Barclay`s analyst Bob Drbul, a 10-cent increase at prices at the pump takes away an additional $100 to $110 from consumers` disposable income, or as much as a $13.8 billion drain on total consumer spending in other areas. Because of the current pressures, it appears lower-income Americans are on the sidelines of the American recovery, but then again, American consumerism often prevails, even in times of economic hardship. For NIGHTLY BUSINESS REPORT, I`m Courtney Reagan. (END VIDEOTAPE) GHARIB: The spending habits of the American consumer is also important for U.S. auto makers. I talked recently with General Motors (NYSE:GM) CEO Dan Akerson and asked if consumers are still in the mood to buy cars. (BEGIN VIDEOTAPE) DANIEL F. AKERSON, GM CHAIRMAN & CEO: If you go back to the bottom of the economic crisis when consumer confidence was at decade-low levels, today, consumer confidence is up, and, in fact, the average rate of purchase of cars, automobiles, crossovers, and trucks, in the U.S. in the `08-`09 time frame dropped down to 9 million and 10 million units. It`s currently at 15, 15 1/2, which is indicative, I think, of greater confidence. GHARIB: But, Mr. Akerson, as you know very well, consumers are coping with a lot of issues, skimpier paychecks, high prices at the pump, all that dysfunction in Washington. At what point how much is too much before consumers just close up their wallets? AKERSON: The dysfunction that you described, the inability to come to

common ground and articulate a vision of how to proceed in our country, I think, creates a certain degree of uncertainty that if it continues, if we have these every 60 to 90-day crises, I think that will -- that will erode confidence. GHARIB: Well, dealing with what`s going on in Washington is not much you can have control over, but looking at GM`s own situation, I see that market share has slipped a bit in the U.S. What can you do about that? AKERSON: To give you an idea, 70 percent of our four brands, 70 percent of the models this year will either be refreshed or brand new, and that`s representative of the fourth year since bankruptcy and investment on the order of $8 billion a year in new product development. And the launching of new models this year will completely revamp. We`re going to go from having the oldest portfolio in the industry to having one of the freshest portfolios in the industry by the end of this year. GHARIB: And we know China is a massive market for General Motors (NYSE:GM). Is that where you see most of your growth is going to come from? AKERSON: We are the market share leader in China. But quite frankly, we are seeing similar growth patterns between both the U.S. and China, two largest automotive markets in the world. So, we have the greatest market share in both markets. So, we`re indexed into the right market. We`re also doing well in emerging markets like Brazil, Russia, and the Middle East. So, it`s not all gloom and doom. Our biggest -- our biggest challenge is in Europe, as many of our competition are experiencing the same difficulties we are. GHARIB: A little closer to home -- we know that Detroit is going through a financial emergency. What impact is that having on General Motors (NYSE:GM) and is there anything you can do to fix it? AKERSON: Well, we try to be the good corporate citizen, but in a perverse sort of way, I think what`s happening in Detroit is kind of inevitable and it`s almost as healthy and difficult as it will be, not dissimilar to what General Motors (NYSE:GM) and Chrysler had to go through. The city needs to restructure in order to kind of hit the reset button. I think the political leadership with Dave Bing, who I think is a great mayor, is -- understands the challenges and are addressing the issues.

(END VIDEOTAPE) GHARIB: Akerson spoke to us from an energy conference in Houston, and he says he expects GM to have half a million electric-type vehicles, cars, and trucks, on the road by 2017. MATHISEN: And coming up, the threat to your cyber security. We`re going to take a look at who`s the most vulnerable to potential hacking. But, first, let`s look where energy prices in treasuries finished today. (MUSIC) MATHISEN: Yesterday, Time Warner (NYSE:TWX) took the Time of the media conglomerate. It announced that it`s spinning off the world`s largest magazine publisher, a place where both Susie and I used to work. And I don`t know about you, but I like holding a magazine or newspaper when I read one, no knock on tablets. But in an age of smartphones and tablets, can old-fashioned papers and periodicals make money or even survive? Jon Fortt has more now on the future of the printed word. (BEGIN VIDEOTAPE) JOPN FORTT, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s been rough going for print lately. Media companies that once looked at combing newspapers and TV networks to the secret of growth and profitability have lately reversed course. The big new idea: carve off the print operations and let them fight for survival on their own. That`s the plan at News Corp (NASDAQ:NWS)., where Rupert Murdoch plans to separate the publishing business from the TV and movie studios. And now, that`s the plan at Time Warner (NYSE:TWX), which plans to spinoff the iconic Time Inc., home to titles like "People", "Real Simple", "Fortune", "Sports Illustrated", and, of course, "Time" magazine. All of this raises an important question: can good, old printed publication survive in a digital age where read on tablets and smartphones? Or are independent publishers, like Time Inc., simply doomed. MICHAEL CORTY, MORNING STAR: They can survive. My question is, you

know, what are they going to be worth? The industry really needs to figure out how the economics are going to work? FORTT: The numbers aren`t pretty. Revenue at the Time Inc. unit was down 7 percent in the last fiscal year, to $3.5 billion. It`s a similar story at News Corp (NASDAQ:NWS).`s publishing unit and at the New York Times (NYSE:NYT) Company, where revenues have been stagnant. There are some signs of hope, however, readers are paying for digital subscriptions at the "New York Times (NYSE:NYT)", a trend that helped keep the company`s revenues from slipping in 2012. Financial publications like "The Wall Street Journal" and "Financial Times" also charge for content. And the Oracle (NASDAQ:ORCL) of Omaha himself, Warren Buffett, bullish on local newspapers, at least. WARREN BUFFETT, BERKSHIRE HATHAWAY CEO: The local community paper that really is indispensable to the people of the community, or many of the people in the community, and that has a sensible Internet strategy, I think has a much better future than the big metropolitan paper. FORTT: On the national stage, the biggest danger for print publications these days might be Facebook (NASDAQ:FB). Since the social network opened up its ad network last year, it dramatically expanded supply of digital pages for replacing ads and squashed ad prices in the process. And just today, Facebook (NASDAQ:FB) CEO Mark Zuckerberg pitched the redesign news feed as a personalized newspaper, something newspapers never quite figured out how to deliver. That means even as these newly independent publishing companies struggle to make the switch to digital, they`re going to have to be battling for eyeballs and ad dollars against the titans of tech. For NIGHTLY BUSINESS REPORT, I`m Jon Fortt. (END VIDEOTAPE) GHARIB: On Capitol Hill today, the issue of cyber security in the spotlight. Homeland Security Secretary Janet Napolitano testifying today at a Senate hearing on the growing threat of Web-based government and corporate espionage -- trade secrets, power grids, infrastructure, and even defense systems are all at high risk of being hacked.

And security experts warned that another critical part of the U.S. economy is in danger of being overlooked, small businesses. As Scott Cohn explains, no one is immune. (BEGIN VIDEOTAPE) SCOTT COHN, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): At New York City`s Lincoln Center, the focus is on stage. But behind the scenes, a network of computers controls everything -- from the Web site, to the escalators, even the electronic signs on the plaza. Chief technology officer Robert Tarleton is in charge. ROBERT TARLETON, LINCOLN CENTER CHIEF TECHNOLOGY OFFICER: A network that spans 60 makers is very difficult to manage, because some of the network is outside. Some of it is inside, which means it`s open to the public. COHN: Which is why Tarleton spends much of his time dealing with security. TARLETON: Everybody gets hacked. Anybody who tells you they haven`t been hacked either isn`t looking or they are lying to you. COHN: Hackers have never managed to do any damage here, never actually penetrating the network. Tarleton says keeping it that way is no simpler for Lincoln Center than it is for a multinational corporation. (on camera): Lincoln Center only has about 500 employees and it`s a non-profit organization, but for a hacker, it would be a rich target. Very rich. (voice-over): Millions of credit card transactions every year, wealthy patrons donating millions of dollars from their bank accounts. No wonder they take security so seriously. But hackers also look at small businesses as a gateway. CHIRANJEEV BORDOLOI, TOPPATCH CEO: Hacker can penetrate the systems and applications of a small business that does business with the large business and use that small business to penetrate the larger business. COHN: Why try to hack a big bank directly when you can get in through

the ad agency trying to win the bank`s business? The question is keeping security officials up at night at businesses big and small. For NIGHTLY BUSINESS REPORT, I`m Scott Cohn. (END VIDEOTAPE) GHARIB: It`s an important issue. And, you know, Tyler, one of the issues of resolving it is that a lot of companies that have been hacked, there`s a stigma about staying you`ve been hacked. MATHISEN: They`re very shy to say that. I was speaking to the chairman of Duke Power not long ago and he said the one thing that keeps him awake at night above any other is the danger of a risk. GHARIB: Serious problem. Well, that`s it for NIGHTLY BUSINESS REPORT. And we want to remind you this is the time of year your public television station seeks your support. MATHISEN: Have a great night. We`ll see you back here tomorrow night. END Nightly Business Report transcripts and video are available on-line post broadcast at http://nbr.com. The program is transcribed by CQRC Transcriptions, LLC. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Nightly Business Report, or CNBC, Inc. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c) 2013 CNBC, Inc. <Copy: Content and programming copyright 2013 CNBC, Inc. Copyright 2013 CQRoll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.>