tv Nightly Business Report PBS February 22, 2017 4:59pm-5:29pm PST
>> sewing the seeds. there's one that could feel the impact impact. >> made in the usa. why that's easier said than done for some retailers. those stories and more for february 22. good evening. i'm contessa brewer. we begin at the intersection of wall street. he said his team was assembling a budget would bring down deficit, support infrastructure projects and hey the ground work for tax cuts. that budget could be sent to capitol hill as early as mid-march. in the meantime there's a lot of work to be done. >> it requires to us make our government leaner and more accountable.
they must do a lot more with less and we must stop the improper payments and the abuses, negotiate better prices, and look for every last there are a of saving. >> vorts are working on the budget. today dow jones industrial average closed at its ninth straight record high. rising 32 points to 20,775. in addition ago did went the other way. off a scandal 5. and the s&p basically flat. it lost 2.5. >> the potential for lower taxes and increased spending was discussed at length by policy makers at the federal reserve last meeting. that is leading to speculation that president trump's proposed policies could lead to an interest rate like sooner than many thought. >> the minutes from the first fed meeting of the year, they didn't bury the lead.
most monetary policy makers, according to them, it might be appropriate to raise the fed funds rate again fairly soon. if incoming information on the labor market and inflation was in line or stronger than expected. some participant went on to say that they were worried that communication about a gradual pace of rate likes might be misunderstood as committing the policy makers to only one or two rate likes. a if you said continuing on raise rates at an upcoming meeting would give the committee a lot more next fwoilt respond to economic conditions. the overarching concern about the future of the economy centered on considerable uncertainty in the minds of the policy make betters prospects for changes in fiscal is that other government policies. in other words, trump-onomics. several expressing concerns about what more expansion
orifice cal policy would do as far as increasing the upside risk to, the forecast going forward. a bit of relief. policy makers again, very concerned that the additional appreciation of the dollar could impact the foreign economies. we saw from janet yell glen two days of congressional testimony, she didn't really tim her hand as to how many and how soon the fed may be raising rates going forward. >> today's existing home sales extends the economic points. sale hate ten-year high despite higher prices and rising mortgage rates. an improving labor market and an increase in confidence
contributed to the better than expected results. a persist tent shortage of listings has helped. >> new rules were issued yesterday that and fanld government's ability to detain and deport millions of undocumented immigrants. one of the industries that could be hardest hit is agriculture because it relies so heavily on those workers. >> president trump's new policy could have a big impact. at least 50 to 70% of farm laborers are undocumented. some stay trump administration policy which cracks down on undocumented work letters strer their businesses. >> we're in ventura copy. we have a lot of high labor crops and we're looking at huge increases in the cost of labor and that's with the current
situation. if it becomes even more scarce, it will be tough to do business here. california is dependen on migrant labor. >> the fourth generation thinks he won't be able to final enough workers to harvest his crops. >> outlined by homeland security, the government will prioritize undocumented immigrants charged with crimes, even if the chime are minor twhifl group target may be a small subset of all farm workers, many who work in agriculture are concerned. the american farm worker did a study on the impact of an enforcement only impact. one that focuses on cracking down without expanding programs for guest workers. the group found its agriculture were to lose access to all undocumented workers which would be an extreme scenario. the agricultural output would fall by $30 to $60 billion.
the organization found that as enforcement only approached, would it increase food prices by 5% to 6%. and the study by the national mick producers organization found even a 50% reduction in the deary workers would increase the price of milk by 45%. the foods that could be most affected are ones most dependent on labor for harvesting. they include strawberries, black berries, cherries and asparagus. farmers are worried that the policy will prevent all workers from crossing the border. >> it is a big part of our labor force. there hasn't been a legal way for immigrants to come into the country since the 80s. so a big part of our labor force is undocumented. >> some offer as a solution but not all crops are conducive to
it. bell peopppers are delicate and can be easily bruised. the price they would have to pay to automate their harvesting are simply too high. >> it's not just agriculture changing policy. it can be tightly intertwined with the broader economy. one estimate says for every 1 million fewer workers, overall growth would be reduce bid about a half%. dana, thank you for being with us. this is an extremely complex issue. there are reportedly undocumented 11 million workers. how much do you think economic growth would decline and how much would consumer prices go up if you took that 8 million out
of the work force tomorrow? something we all agree isn't going to happen. >> let's say you took out numbers of $26,000 per year for a person who has, does not have a high school degree. and you apply that by 8 million. that's about 200 billion not going into the economy that can be spent on goods and services and firms having to find replacement workers or spend on automation. absolutely. they will pass the costs on. >> and not just the increase in prices but you're looking at unemployment at 4.8%. that's considered, if you take 8 million undocumented workers out, that's about 5%. where do you find the replacement workers? >> that's a great question.
arguably undocumented workers are not counted in that number. those are the people we actually can't count. but i think businesses would have to find workers but they would have to pay for it. more or less offsetting the gain that they might get otherwise. >> there are some people who say that undocumented workers strain the social services of cities and states in the nation. saying they cost more than they do to produce. >> well, there was a great stoit craw the country. it shows that they don'tly put a long term strain. they like to become jobs and become active members of the society. >> is there a chance we'll see
undocument workers deported, and there by we would see the impact at any rate? >> certainly you could see some people who were going to leave the u.s. i would imagine that many people come to the u.s. looking for better economic opportunities that they could not find in their home country. and they're trying on leave their home country in the pursuit of life, liberty and the pursuit of happiness. >> thank you for your insight. >> a global trade agreement worth $1 trillion took effect today. the first multilateral trade agreement reached under the world trade organization. the aim is to streamline cross border trade. it is at a time when most are under going scrutiny. >> it creates opportunities.
there is no reason why we should be negative at all. it is perfect for the time we live in. >> they said it would reduce costs globally and said the utah is the first country to ratify agreement. >> we'll take you inside the ft. worth facility where lockheed martin makes the most expensive weapons system ever built. we'll show you the high-tech ways lockheed martin has been driving down the much 35 when we return.
lockheed martin is ramping up the fight per president trump said is too expensive. morgan brennan took our cameras inside the mile long ft. worth facility where the jets are built. >> this is most expensive weapons program in history and it is at a critical point. >> the number of air planes in the field is growing exponent l exponentially. up to 200 now and many, many
more. at the same time we're wrapping a bow around development. that continues to allow them to expand. >> it is falling and falling faster than before. it just slimmed below $95 million in the most recent pentagon contract. the you have per deal. a 50% decline. lockheed currently has about 140 planes in production right now around the world. but over the next several years, that will ramp up to about 180 at any given time. lockheed martin is turning out f-35s over the next month. to do that they're using automation. >> we want an $80 million jet wefl to take labor out of
aircraft build process and make that process more fernt without any reduction in quality. we do that from very technological advances like this robot which can do the work faster. >> machines auto drill parts five times faster than done by hand. 3d models are used throughout as well. digits that project on to part of the plane which has always been the plan. it will be at a rate that allows them to be more profitable while still delivering each one. >> the pentagon is looking to get price of the f-35 a as low as $80 million by 2020.
but for pilots of the plane, a fighter that disproportionately stacks the odds in america's favor -- >> i cannot put a price tag on bringing back men and women every single time in an f-35. that's what matters to the mothers and fathers. >> i'm morgan brennan in ft. worth texas. >> a i had we're than expected quarterly loss. that's where we begin the market focus. despite receiving a record number of orders for its model s. revenue for the quarter increased and the company said it plans to beginning. they finished the regular day down to 273.51. luxury home builder said an
increased profits topped estimations. it lifted the low end of its outlook for the year. shares popped 56. garmin, the company also issued upbeat guidance for the year. the shares rose 7%. to 54.15. >> t >> the cruise line operator is saying it is above estimates. shares up 7% at 51.64. the health insurer he thinkna said it would buy back more than $3 billion worth of its shares through accelerated repurchase agreements. the company said it will fund the deals with affordable cash.
and the retailer tjs said solid consumer traffic list said it planned to like its dividend by 20% and buy back more than a billion worth of shares. they managed to own a line that she said will be complimentary to my wife. this is great news for my wife. shares up 11%. 11.50. >> president trump, buy american agenda, is putting on some real pressure to ramp up production. so what does it mean for a product to be made in america in. >> a careful sum rags of the sull of its parts. origi
origins. >> the federal trade commission said in order to label a product made in the usa, all or virtually all of those factors must originate here at home. though there's no true quantity tative measure of what virtually all is. so in terms of what consumers and businesses buy, just a little over half of the value of those goods are made domestically. nearly 80% of food, beverage and tobacco products bought in america are made in the usa. under a quarter of computer and electronics products line t. >> knowing what it meems to be made in america, she found two manufacture here's make their products here. but they are the exception. not the rule. the next part of her story takes to us new bedford, mass.
>> building set brackets is 100% made in the usa. from manufacturing to assembly to packaging. the toy industry association says it is the brains behind most u.s. made toys. that's just a small sliver of the $25 billion spoenl toys annually. while it is attractive to toy retailers -- >> everyone says wow, you're made in the u.s. that's incredible. how did you do it? we support you. the conversation turns to, is it cost competitive on my store shelf? >> a classic conundrum for any manufacturer. it comes at a higher cost. there are other challenges to making toys in the u.s. each part of process is done by different specialized partners. adding to the costs. overseas manufacturers are more likely to take care of it all. and that is the same with
apparel where made in the usa is rare. but the 400,000 factory in new bedford, massachusetts, has 740 workers. they make about 1,100 suits every day. but it is a rare example. most of the shoes made in the u.s. are made abroad. there are a lot fewer u.s. textile mills and factories than in years past. skilled labor at low cost is also extremely hard to find. >> a near record number of manufacturing positions. we just don't have the workers with the skills. >> with years of falling apparel prices and you have a difficult set-up for american manufacturers to make the economics work. but joseph has made it work. manufacturing suits here in massachusetts for 30 years. >> we're really proud to be made in america. i think our distinction is we make it well in america and that's an important part. the customer is so smart today.
so i think you can't give the customers something that isn't worth the price. >> the problem for many retailers is the problem behind the label. it may be just too high. for nightly business report. new bedford, massachusetts. coming up, to the next big tech ipo. >> in venice, california, a block away from snap inc. headquarters. we'll tell you why it could be a game changer for the l.a. tech community.
the initial public offering of snap chat is expected to be the largest ipo in years. it is likely to come to market next week. not only will investors be watching closely but entrepreneurs as well. it could change land scape of the entire industry. julia reports from snap headquarters in venice, california. >> snap inc.'s ipo could be a game changer. not just for the other start-ups in the los angeles area but also for unicorns, companies valued at over a billion dollars around the country. last year it was rough. the nearly 40% decline in ipos
from 2015 ask a roughly 60% decline from 2014 according to renaissance capital. others will be watching to see how snap fares, including spotify and pinlt rest. >> i think the table is set for ipos for the rest of 2017. and so many others are beginning to talk about doing it. and you see it with snap versus facebook. >> the biggest ever for the company base. the headquarters behind me are steps from venice beach. it could drive a wave of start-ups as dozens of snap millionaires. >> while southern california has had a number of companies that have sold for billions, mayor garcetti said this puts last's tech scene on the global map. >> folks who can spin off snap
and their own companies. but also be that anchor that shows for long time to buzz about l.a. you start a company here. get acquired. instead of starting a company that will be a pillar and become that lynchpin for future activity. that will be an amazing day. >> los angeles ranks third on the start-up activity measuring ahead of san francisco. and as soon as snap employees 150-day lockup period expires, we can see them give this nabl of silicon beach another boost. venice, california. >> that's a good place to work. to read more about what the snap ipo could may not for the tech scene in l.a., head to our website. nbr.com. >> that's "nightly business report." thank you. so for watching. >> thanks for me as well. have a good evening. see you back here tomorrow night. >> "nightly business report" has been funded in part by -- >> all it takes is a spark.
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