tv Nightly Business Report PBS May 24, 2017 5:00pm-5:31pm PDT
>> announcer: this is "nightly business report" with tyler mathisen and sue herera. new analysis. the number of uninsured could rise and deficits could fall if the republican-backed health care bill becomes law. losing its luster. tiffany reports a surprise slump in sales as it and other retailers fall out of fashion on wall street. role reversal. the rise of goods now made by china in america. those stories and more tonight on "nightly business report" for wednesday, may 24. good evening, everyone. i'm sue herera. tyler mathisen is off tonight. the s&p 500 closed at a record. more on that in just a moment. but we begin with the republican-backed health care
bill. the long-awaited analysis of the newly passed house bill was released tonight by the congressional budget office. in the first calculation of its potential impact, the number of uninsured would increase an estimated 23 million by the year 2026, and federal deficits would fall. kayla tauschy has the details from washington. kayla, what are basically the most important aspects of this particular bill? we do see a slight rise in the number of uninsured compared to past bills. >> reporter: sue, actually the cbo said that there would be a slight improvement in the number of uninsured compared to previous versions. the cbo said there would be 23 million fewer people insured, compared to 24 million in the previous bill. what changed over the course of time was there were two amendments that were put forth, one my congressman macarthur, one by congressman upton. the macarthur amendment sought to give states flexibility while
upholding protections for customers with preexisting conditions or kids who wanted to stay on their parents' plan until age 26. they did that by offering states the ability to opt out of offering certain mandatory benefits. the upton amendment created a funding pool for those preexisting conditions to guarantee that there would be at least a little bit more of a cushion for them. what the cbo found is there were fewer people who would not have insurance but it would come at a cost to the deficit, precisely $30 billion to the deficit, although a positive to the deficit by repealing and replacing obamacare. >> do they have to vote again on this particular piece of legislation? >> reporter: it does not appear they do. the reason why they were potentially going to have to vote again was because house leadership said that it's unpredictable what the cbo can come out with, they don't know the exact methodology the cbo uses, and it needed to show that the deficit would fall by at
least $2 billion to fit into the rule that they are trying to use to actually get this vehicle, get this legislation through the senate. because it is seen as a $119 billion benefit to the deficit, that would appear to fit. but it will all come down to what the senate parliamentarian decides. >> you pointed out there is a slight decrease in the number of people who would be uninsured, 23 million compared to 24 million. nonetheless, that's a lot of people. how do you think this is going to fare on the hill? there was outrage at the 24 million figure the last time around. >> reporter: there was, sue. and of course that is on top of 20-some million uninsured under the affordable care act. predictably, democrats have already come out swinging, saying that it proves what they knew all along, there will be millions upon millions more people uninsured. the white house is saying the cbo estimate is inaccurate. there are already sparks flying.
it's going to be a very raucous debate. >> it is certainly going to be that. kayla, thank you so much. kayla tausche in washington. if you were looking for a diamond in the rough, don't look to tiffany. the iconic jeweler is the latest retailer to get knocked after reporting quarterly results. there was a drop in sales in the americas. tiffany says it's been hurt by some of the same things other retailers are struggling with, like broader concerns about the economy. the stock 8%, making at it worst performer on the s&p 500. then there's chico's, the women's apparel retailer fell short of both profit and sale expectations. the ceo citing what many of her peers have, a challenging environment. the stock fell 11%. and the damage wasn't confined to apparel and jewelry. advanced auto parts reported earnings and sales that missed
estimates. the ceo cited headwinds. but unlike auto zone, the company did not blame the impact on delayed tax refunds. the end result was a stock decline of 5%. and then there is lowe's. expectations were high after rival home depot last week reported a standout quarter. but the home improvement retailer struggled with increased competition and higher cost. as a result, the stock slid. down about 3%. expectations were also high for the housing market's spring selling season. so far, april's reports have been less than stellar. today we learned that sales of previously owned homes fell more than 2%. this follows the sharp decline in new home sales which we told you about yesterday. and as diana olick reports, the culprit is clear. there just aren't enough homes for sale. >> reporter: put a house on the market today, and it will sell in less than a month. average days on market in april, just 29, according to the
national association of realtors. that's the fastest since they began tracking six years ago. >> one thing we added to the real fors confidence index is analyzing data on comments. the two biggest phrases in comments this month were low inventory and multiple offers. >> reporter: the housing supply situation is getting worse. demand is strong but you can't buy a house if you can't find an affordable one. the number of listings nationally dropped 9% in april compared to a year ago, and listings are slimmest at the lower end of the market. that's why sales of homes priced under $100,000 fell 17% year over year, and those under $250,000 dropped over 6%. the median price of an existing home sold in april was $244,800. so half the market is really hurting. and that's the half where the strongest demand is. >> the inventory is reaching historic lows. it's never declined faster than it did last month.
it's freaking us out. it's affecting our business. it's limiting our sales. >> reporter: even a drop in mortgage rates didn't help last week. mortgage applications to buy a home fell as well. why aren't builders just putting up more homes? well, they are, slowly. but not the starter priced homes that this market sorely needs. until they do, today's younger potential homebuyers will continue to rent. for "nightly business report," i'm diana olick in washington. on wall street, the s&p 500 closed at a record as investors brushed off the housing data and the lousy retail results and instead looked to the federal reserve and its possible plan for interest rates. we'll have more on that in just a moment. by the close, the dow jones industrial average had advanced 74 points to 21,012. nasdaq rose 24 and the s&p 500 added nearly six. the white house budget director is warning that the government could run out of cash sooner than expected. mick mulvaney says that tax receipts are coming in slower than expected.
so here's how it works. the government spends more money than it brings in, and it borrows to cover the difference by issuing debt. but there is a limit, which is why the treasury secretary urged lawmakers today to increase that limit. >> i urge you to raise the debt limit before you leave for the summer. it is absolutely critical that where we spent money, that we keep the credit of the united states as the most critical issue. >> in the past, republicans have tried to pare debt limit increases with spending cuts. most federal reserve policymakers say an increase in interest rates is coming soon, perhaps as early as next month. steve liesman has more on the release of the minutes from the central bank's last meeting. >> reporter: minutes of the federal reserve's may meeting affirmed market expectations for a june rate hike with most of the meeting saying a rate hike
would, quote, soon be appropriate if the economy rebounded as expected. there were some concerns, and officials at the meeting say they wanted evidence that the economy was indeed on the mend from a weak first quarter before hiking again. the economy grew less than a percent in the first quarter but it's expected to bounce back to around 3% this quarter. there's also worry about recent soft inflation readings and deep uncertainty over the timing of any fiscal stimulus from the white house and congress. the minutes show a number of participants at the meeting took a general swipe at the high jinx going on in washington. that's the fed telling washington, get on with this fiscal policy stuff. on the other hand, most said the fiscal policies under consideration presented upside risks to their forecasts. others were worried about a labor market that's running too tight and could pose an inflation risk. the minutes show all participants agreed to reduce the fed's $4.4 trillion balance
sheet this year, and they would do so in a gradual way, according to to a plan presented by the staff but not yet approved by the committee members. that plan would reduce the balance sheet a bit every month and increase the amount they reduce it by every three months, until it got back to some normal level. they're not saying yet what that normal level would be. for "nightly business report," i'm steve liesman in washington. still ahead, driving away with a new jodhpur. >> reporter: i'm morgan brennan in new jersey. in the midst of a truck driver shortage, one company is turning to the stock market to attract more workers. we have that story coming up on "nightly
congressional democrats are asking deutsche bank for information on president trump's accounts. that request is part of the investigation into alleged ties between his campaign and russia. democratic lawmakers are trying to determine if loans for the president's real estate business were backed by the russian government. iraq and iran both say that they support extending oil production cuts. at a meeting in vienna, the oil ministers from those countries say they're ready to back a deal through the first quarter of next year. iran and iraq are critical because they are the second and third biggest producers. today the price of domestic crude fell just slightly. china's debt rating was cut by moody's for the first time in nearly three decades. that country's rising debt and slower growth prompted the rating agency's move, which could mean higher borrowing costs for the world's second largest economy. the chinese government called the downgrade inappropriate. for years, as you probably know, there's been talk about
chinese workers taking american jobs. but now there seems to be a new trend that's creating jobs in the u.s. >> reporter: in this man's vision of the future, everything you see produced at his factory in china will be made in america. he founded a textile manufacturer here, but three years ago he started a plant in south carolina, an investment that will total $220 million. "the u.s. has obvious advantages," he says. there's a lot of concern in washington that the u.s. isn't competitive compared to countries like china. but more chinese businessmen believe the opposite, that the u.s. is gaining competitiveness in manufacturing, and they're looking to invest. american john ling makes a living helping choice companies find locations to buy or build factories in the u.s. he introduced him to south
carolina. >> chinese companies are going to the u.s. because they think by doing so, they can lower their costs of production. in certain pockets of the u.s., the land will be much, much cheaper than china. the electricity, natural gas, believe it or not, the logistic costs. >> reporter: in addition, he says his raw material, cotton, is also cheap, bringing his total costs down by 25% compared to china. american workers are more expensive, but he says with wages in china rising 30% a year for most of the past decade, that gap is closing. "in the u.s., the labor cost is just a little over double what we pay in china," he says. he plans to have 500 workers at his u.s. plant by the end of the year. if president trump gets some of his agenda done, chinese manufacturers could find the
states even more attractive. >> if we got our congress or the president to agree to something, we probably would be able to lower our tax rate, corporate tax rate. >> reporter: how big a trend is this right now? >> i don't believe we have scratched the surface yet. >> reporter: for "nightly business repor i'm eunice yun. a thumbs up from an fda panel is where we begin tonight's market focus. an advisory committee voted in favor of the treatment, saying it reduced the risk of the disease recurring. food and drug administration often takes the recommendation of its panel. investors saw it as a win for puma and sent its shares up more than 29% to $74.95. drug maker inovio pharmaceuticals said its hiv vaccine performed well during the trial. it said it plans to continue
testing the medication with its partners and its collaborators. shares of the small cap spiked nearly 22% to $8.68. japan's softbank has reportedly taken a nearly 5% stake in graphics chip maker nvidia. bloomberg news says the position is worth $4 billion. the investment is part of softba softbank's strategy to grow its technology holdings. american eagle and private equity firm cerberus have reportedly teamed up to make a takeover bid for teen apparel temporarily abercrombie and fitch. clothing chain express and other buyout firms could be potentially suitors. american eagle rose 2% to $11.23. abercrombie took off, up 6% to $12.89. williams sonoma beat profit expectations, saying results were helped by improvements in its pottery barn brand.
revenue was in line with estimates, and the company gave an upbeat forecast for the current quarter. shares popped in after-hours trading and ended the regular day up 1% to $49.61. and the clothing retailer guess said strength in its foreign markets helped to post a narrower than expected loss. the company also reported revenue grew and topped estimates. but its quarterly outlook for earnings disappointed the street. even so, shares initially took off in after-hours trading but ended down a fraction to $9.98. a new company is trying to throw a jolt into america's pickup market with a new strategy. it is rolling out an electric truck. phil lebeau takes us for a ride. >> reporter: in the world of pickups, change comes slowly. for years, gm, ford, and chrysler have led the market with heavy duty trucks that take a beating day after day and keep on rolling. so why does work horse think its
new pickup can cut into the big three's dominance? primarily because it's electric. >> we think we'll save an average, over the ten years they might over the pickup truck, 35 to $40,000. fairly conservative, considering the gas. that calculates gas to stay where it is for ten years. >> reporter: for utility operators, construction firms, and other businesses where workers put millions of miles on their company pickups, saving money on gas could be a game changer. workhorse says its pickup will go 80 miles fully charged. with the gas assist motor, it could go over 300 miles before needing more fuel. the price, just over 50 grand. workhorse says it already has orders for more than 5,000 pickups. but cutting into the sales of the most popular trucks like the ford "f" series won't be easy, mainly because pickup buyers, including thousands of companies large and small, are unlikely to drop their trucks unless the replacement is just as capable.
>> i think these new automakers have to prove that there is, you know, payload capacity, there's towing, there's range. those are all things that are very important for pickup truck drivers that are going to be different than the passenger cars. >> reporter: steve burns knows people may be skeptical of his plug-in pickup until they can take it for a test drive. that will happen when the first of the models roll off the line next year. already he's considering extending sales to include retail customers. >> it's a good looking vehicle. you get 75 miles per gallon. you can feel safe in it. it's fast and fun to drive, completely silent when on electric mode. we thought consumers would be a few years out for us, but it might be sooner rather than later. >> reporter: workhorse may be the first plug-in pickup to hit the market. it certainly won't be the last. tesla is also working on an electric pickup truck. you can bet as battery costs drop, the big three will also start looking at developing electric pickup trucks. phil lebeau, "nightly business report," chi.
and if you drive a truck for a living, one company just made the job a little more financially enticing. morgan brennan reports on the new job perks. >> reporter: despite a two-year-long industry downturn, trucking is still struggling to get and keep enough drivers. that's why one company, daske, is rolling out an employee stock program. >> to our knowledge, this is the first time a company, any carrier in the united states, has done this specifically for drivers. >> reporter: ceo and president don daske, who began building a trucking empire in 2008, took the company public earlier this year with a goal of offering his drivers an ownership stake. >> we think in order to grow, we need to do things a bit differently. and a stock plan for drivers is a way to think out of the box, to help our drivers, at the same
time attract the drivers we need in order to grow. >> reporter: daske, which owns many trucking fleets, is the largest operator of flatbed trucks in the u.s. it's a small cap stock, but one with big ambitions, to double in size through acquisitions over the next three years. through the new plan, drivers and other employees will get grants after a full quarter with the company. he does that incrementally over five years. the initial reaction from company drivers? >> it's not normal. for somebody to give us ownership of the company, legitimate ownership, is impressive. >> i think it's a great idea. not a lot of bosses, especially owners of companies, would be willing to give lower truck drivers and all of the other smaller employees, just give them free money, pretty much. >> reporter: for both men, this will mark their first forays into the world of equity investing. it's the latest example of how trucking companies are responding to a tight labor market, responses that also include higher pay, more
benefits like health care, even newer, more comfortable trucks. >> there are so many companies going out there and trying to get a limited pool of truck drivers that they are looking at different ways to attract drivers to their companies. they're constantly looking at, you know, not only raising pay, but what can they do in terms of benefits. >> reporter: the american trucking association estimates the industry is facing a shortfall of 48,000 drivers. although truckers say the work can be grueling, meaning from their perspective it's about getting compensated for a tough job. >> taking care of the driver, that's what causes churn. when you're just a number, you're always looking for the greener pasture. when you find something that's good, you want to stick with it. >> reporter: and receiving stock in a publicly traded company, he says, is one way to make it good. for "nightly business report," i'm morgan brennan in richfield, new jersey. uber admits to underpaying new york city drivers by millions of dollars. the ride hailing company said it
plans to refund the money after miscalculating its commissions for the past 2 1/2 years. it is the second time in two months that uber has acknowledged a mistake with worker pay. coming up, feeling overworked? why american workers are leaving a ton of vacation time on the table. as we approach the holiday weekend, you're probably thinking about your summer vacation. but not everyone is taking vacation. a project time off report found more than half of all americans forfeited paid time off last
year, which adds up to more than $66 billion in lost benefits. so why are so many not taking their vacation? scott dubrowsky, a community expert at glass door, joins us. nice to have you here, welcome. >> nice to be here, thank you. >> in your experience, why do americans, especially versus say the european counterparts, why do we not take vacation? >> according to the new data that glass door put out today, what we really know is that americans are just really bad about it. and when we look at why, the underlying reasons are fear. the number one reason, americans say, is fear of getting behind in their work, and number two, fear that no one else can do their work. >> and also maybe being replaced? and fear of -- >> certainly. >> go ahead. >> yeah, that is certainly among them. fear of being replaced, fear of being a burden to their colleagues. even fear of seeming selfish, and then even some of the
reasons below the ones we just saw are fear of not getting that promotion or fear of not getting a pay raise. so a lot of it tied to fear. >> how do we change that culture? is there a way to change that culture? >> there is. so we've really studied benefits at a variety of companies all over the world at glass door. one thing that we have realized, when it comes to vacation and paid time off, is it's the responsibility of both the employer and the employee to set really clear expectations and have a plan in place when you are going to take off on vacation. so number one overall, employers actually should be encouraging their employees to take time off. there's a ripple effect to benefits. and number two, it's on the employee to make sure there is a backup plan so that he or she can take vacation and actually vacate their job and enjoy that rest and relaxation. >> when people do take vacations, something that i've read happens is that they're
contacted by somebody at work with a question or their boss has a question, so they're not really completely disengaging in getting away. did you find that in your research or not? >> we did. the glass door data out today actually confirms that. we found that when we compared this year's data to three years ago, more americans are actually working when they're on vacation. so it's a little depressing, two or three of us say they're doing work when on vacation, and then nearly one in three of us say we're being contacted by a colleague and/or our boss while on vacation. so there is a problem. >> what about productivity? i would assume if you don't take your vacations and you do get stressed out and do get overworked, productivity goes down. >> absolutely. there have been countless research studies published to date that show that when people are allowed to actually rest and actually vacate their jobs, the root word of vacation, even for a few days, they will come back feeling more productive,
re-energized, more creative. and so if you're a business leader who is really thinking about vacation, there's actually benefits to your bottom line by letting people fully take that rest and relaxation and not contacting them. >> scott, thank you so much, appreciate it. scott dubrowsky with glass door. that will do it tonight for "nightly business report." thanks for joining us. i'm sue herera. have a great evening, and we'll see yo
>> this is bbc "world news america." >> funding of this presentation is made possible by the freeman foundation and kovler foundation, pursuing solutions for america's neglected needs. >> planning a vacation escape that is relaxing, inviting, and exciting is a lot easier than you think. you can find it here in aruba. families, couples, and friends can all find their escape on the island with warm sunny days,