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Quest Means Business
Best Three-Month Job Growth in US Since 1997; US Stocks tumble; US Jobs Report Boosts Rate Hike Chances; European Markets Down; S&P Downgrades Greece; Merkel and Hollande Meet Putin; Russian Stocks Near Four-Year Highs Despite Facing New Sanctions; Economic Challenges for Nigeria
Aired February 06, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Well, there you are, you don't see that every day at the Stock Exchange, a bevy of beauties on the balcony. Let's watch
and enjoy the lady with the gavel as she decides to bring trading to an end.
(GAVEL HITS)
QUEST: Three hits of the gavel. They are the models from the swimsuit edition of "Sports Illustrated," which of course for 2015 has just
come out, and they've decided to invite them onto the podium of the Stock Exchange.
I've decided to just ramble on a bit longer so you can enjoy the pictures from there until, of course, the shot changes, and I tell you that
today is Friday, it's the 6th of February.
Tonight, another stunning figure. Ooh hoo! Three months and a million new jobs. It all adds up to the best quarter this century for the
US job machine.
Preaching peace to Putin. The French and German leaders have met with Vladimir Putin in Moscow.
And when you get a new job and this is the reaction you get, you pretty much know you have a struggle on your hands. The new boss of
Petrobras seems to be rather persona non grata.
We have a busy hour together. I'm Richard Quest. I mean business.
Good evening. We start with economics tonight, and the world's largest economy, which has begun 2015 with a true bang. It's worthy of a
bell.
(RINGS BELL)
QUEST: American companies are on a true hiring spree. Look at the number on the screen. More than a quarter of a million jobs were added in
January. And if you join me at the super screen, you'll understand.
There were dramatically large revisions for November and December. January's numbers was a barn-burner. And the Labor Department says hiring
in the last two months of 2014 was much stronger than believed.
The unemployment rate rose just a tad to 5.7. That in itself, some would say, is good news, because the unemployment rate rose as more people
went back into the labor market to look for work. Strong job growth is driving an increase in spending, good for the economy, obviously.
The latest numbers cap the strongest three months since 1997. 1997 is the last time that the US had three good months like this in a row. In
1997, it was boom time as well. Adjusted for inflation, oil was half the price it was at the moment, $28 a barrel.
And on the silver screen in 97, Leonardo and Kate were standing on the front of the Titanic. Luckily, the market seemed to have done a little bit
better with these numbers than perhaps the Titanic did at sea. I spoke to the head of the President's Council of Economic Advisors, Jason Furman, and
I asked him, when you look at the jobs numbers and you put it into context, what icebergs are ahead?
(BEGIN VIDEOTAPE)
JASON FURMAN, CHAIRMAN, PRESIDENT'S COUNCIL OF ECONOMIC ADVISORS: There's no reason why we can't continue to have strength in the US economy.
If you're asking about risks, there's no doubt that the rest of the world has seen their growth rates downgraded.
That presents a headwind for the US economy and a risk for the US economy. That's one of the reasons why we're so actively engaging with
leaders around the world to strengthen them.
The other is to make sure that we're not doing the types of brinkmanship and mindless austerity that had hurt our economy in the past,
but instead are working together to make the types of investments that would strengthen growth and continue to lock in this momentum in 2015.
QUEST: The Labor Secretary said the US dollar at its current high rate wasn't hurting the US economy. Do you agree with him?
FURMAN: You know, what I'd say is it's certainly the case that the slowdown in growth in the rest of the world is a headwind to US exports.
But it's important to understand, we also have a tailwind in the form of lower gas prices.
And 87 percent of the US economy is domestic, so it's really our domestic demand, what's going on with our consumers, what's going on with
our business investment, that's most important to our economic future.
QUEST: The rest of the world looking at the US economy says OK, fine, but now, the US is about to go into a very difficult political era. Not
only because of a split administration -- a split government with Congress and the executive, but also the election. So, Mr. Furman, realistically --
realistically -- what can the president get done between now and then?
FURMAN: I can tell you the president keeps telling all of us on his staff that we're entering the fourth quarter, that the fourth quarter, big
things can really happen. Like investments in America's infrastructure. The president's put out a plan that would be a 40 percent increase in
investments in infrastructure.
There's a lot of Republicans that in the past have supported ideas like that as well, come together, take a step like that. Expanding trade,
reforming our business tax code, making two years of community college free, raising the minimum wage.
All of these are ideas that have had support from Republican governors, mayors, members of Congress, a variety of different areas. All
of them would be great for our economy. I'm optimistic. I really think there's no reason why we can't find common ground on a lot of these issues
to move our economy forward.
(END VIDEOTAPE)
QUEST: Jason Furman at the White House. And this is how the market's trading. There was a blip at the morning, just after trading began, but on
the back of that jobs news, the market was positive in the green.
And then, just at about quarter past 1:00, it turned turtle. The market went absolutely opposite direction. It was off the lows of the day,
but it shows you, the market was seriously unhappy as the day went on.
Can't really find -- I can give you a lot of rumor, gossip, and speculation as to why this happened. Some people say it was because of a
downgrade in Greece. Other people say it's this Friday feeling where people don't want to leave risk on the table. There really, frankly,
honestly, truthfully is no good reason why the market suddenly went down as it did in the afternoon.
This is how the broader markets performed. The S&P 500, which followed the same sort of track -- look at that, it did come fall late into
the afternoon. And the NASDAQ composite did the same.
The strong jobs number coupled with the healthy wage growth makes it all the more likely the Fed will hike interest rates this year. Diane
Swonk's the chief economist at Mesirow Financial. She joins me now.
It's one of those funny interviews that I was doing with Jason Furman, and also, later you'll hear on the program with the Labor Secretary, there
really isn't a bad point to the day's jobs number.
DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: It is a very good jobs number, and that's good news. That said, it's in the context of an
economy that still has a lot of labor slack.
Like you said earlier, the rise in the unemployment was welcome news - - unemployment rate was welcome news, because more people threw their hat in the ring, and people who had been sidelined earlier in the recovery
actually felt like they could rejoin the labor force and find a job. So, it shows that the labor market's hot enough that people are -- it's pulling
people back into the labor market.
QUEST: Right.
SWONK: We hope that's a trend that will continue. That said, it also illustrates the Fed is actually right about their concerns that there is
still substantial slack in the US economy and a shadow supply of labor out there.
And although wages bounced back after dipping down in the month of December, overall wage growth is still only 2.2 percent, and that's well
below what the Fed would like to see to be able to do liftoff on rates.
QUEST: OK. So, if we take the US economy at the moment, we've got the job numbers getting much better, you have a budget deficit number of
2.8. It's under Maastricht criteria at the moment. Growth 2 to 3 percent --
(LAUGHTER)
QUEST: -- maybe a little bit more. So, where is the downside at the moment as you see it, Diane, in the US economy?
SWONK: Well, of course, we live in a global sea with tremors abroad risking hitting our own shores. What we hope is that we're now at the
position where our shores are shored up enough so that when they hit, it's just waves hitting us and we can endure whatever tremors come from abroad.
We certainly don't want a tsunami from abroad which, say, something like a Greek exit might trigger, certainly for Greece and any contagion
effects. But I think we're really at the stage now where we are much more buffered than we once were to endure the headwinds from abroad, because we
now have a tailwind at home.
QUEST: Right, that tailwind at home. But I'm looking at the market just at the moment, and as I look at the Dow Jones, which is -- we had that
very nasty blip at the back end or middle of October. But the market's recovered resiliently and is now quite high. What's this market telling
you about the Fed and about the underlying strength of the economy here?
SWONK: Well, I think there's been -- this market's been awfully volatile, so you ask me in a day and the market will tell you something
else. Our message has been consistent that the US economy is improving, we are getting on firmer footing.
But the Federal Reserve will continue to tread as if it's on thin ice, even as we are on that firmer footing, because they're still hedging the
downside risk of something that could disrupt us from abroad.
And the strong dollar we have seen has hurt profits already in some companies, and that is a headwind going forward for pricing power and
inflation in the US, which right now is running a little cool and too tepid for the Federal Reserve.
QUEST: All right. When I look at this jobs number, when -- what do you see as being liftoff for the Fed? The date?
SWONK: I have it at September. I think it's still a late third quarter move, because I think the Fed is going to be patient.
QUEST: Right.
SWONK: I don't think it's mid-year. You know, it's really splitting hairs whether its mid-year or September. I think it is this year. There
are some in the Fed that even with today's data would like to hold off until 2016.
QUEST: Good to see you. At least the numbers are better than we've seen in the past. Thank you very much, Diane. Have a lovely weekend.
SWONK: Welcome news.
QUEST: Thank you.
SWONK: Thank you.
QUEST: The strong US job numbers, now, it wasn't enough to push European stocks into the green, largely because by the time they came out,
Europe had just about almost finished for the Friday. The major indices were up for the week.
The Athens composite actually gained about 5.6 percent over the course of the whole week. London -- but the markets were down. Let's ignore that
down, it was just a blip on the day. But the Greek fall in the market was after the sovereign debt was downgraded by S&P, which is warning on the
restraints on the bank's limits with the government negotiations and the creditors.
This is all about the ECB, it's about the emergency lending. And that's one of the strong reasons, as we were discussing, why the market may
have been negative in New York.
Angela Merkel, Francois Hollande, and Vladimir Putin. The three of them left their aides at the door. They had a face-to-face conversation
about Ukraine. The talks have ended, and we will be in Moscow to bring you the latest details. This is QUEST MEANS BUSINESS, it's a Friday, and
you're most welcome.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: According to reports, President Hollande of France and Chancellor Merkel of Germany are now on their way back to the airport
tonight, having held talks with Vladimir Putin about a peace plan for Ukraine. The two leaders, Merkel and Hollande, they went from Kiev, where
they'd been with the Ukrainian leaders.
Now, in separate meetings this week, EU nations drew up a list of names to add to their sanctions blacklist. All this new burst of
diplomatic activity comes as the violence in eastern Ukraine, particularly around Donetsk and the airport, it intensifies, and the civilians caught in
the crossfire and the misery is quite breathtaking.
Our senior international correspondent Matthew Chance is with us in Moscow. Sir Matthew, correct me if I'm wrong, please do, but I see the
report suggesting the meetings have ended, that the leaders are now on their way back to their planes at the airport. What realistically comes
out of this meeting?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: I'm -- well, it's difficult to say. First of all, I've spoken to the Kremlin within the
past few minutes. They confirm that, indeed, the talks have come to an end. What they haven't managed to tell me at this point is what, if
anything, has come out of the talks.
I don't know about the actual location of Hollande and Merkel at the moment. But they came to Moscow with what was billed as a new peace
initiative to try and bring to an end that terrible violence that is causing so much bloodshed, particularly among civilians in eastern Ukraine.
It's not clear yet whether they've left with any result or whether this -- they're leaving empty-handed. What we do know is that attempts
have been made in the past to forge a truce in eastern Ukraine. Indeed, truces have been signed by Vladimir Putin, by the Russians, the Ukrainians,
the rebels as well, but they haven't been stuck to.
And so, optimism was not very strong that these talks could produce anything. Now, as I say, I haven't really got a briefing yet --
QUEST: Right.
CHANCE: -- from the Kremlin as to what has come out of these talks, but we'll be able to update you on that as soon as we can.
QUEST: The interesting thing about this, of course, is there is an existing agreement, the Minsk Agreement, that's on the table. So, one
wonders -- speculation, I realize -- where the room is to either sort of push back to enforce Minsk or to change its terms, which would be almost
unthinkable, one would think.
CHANCE: Yes. And I think the Minsk Agreement was pretty comprehensive. It took on the concerns of the Russians. The Russians,
remember, publicly, at least, their priority is to protect the ethnic Russians and the ethnic Russian speakers in eastern Ukraine. And it's --
it encompassed the concerns of the Ukrainians as well, that their territorial integrity would be protected.
It's not clear what apart from that can really be discussed. It all comes down to political will, though. The reason the Minsk Agreement has
failed is because there has not been the political will on any of the sides, quite frankly, including the Ukrainian government, to enforce it.
Now, whether that's changing now, whether this renewed diplomatic push is changing the matrix a little bit, whether Vladimir Putin now wants to
get out of this situation, or whether he wants to just buy time, it's not clear.
But there are growing pressures from the West. The United States is talking about arming the Ukrainians. These Europeans are pushing this
diplomatic initiative. Growing pressure for something to change.
QUEST: Right.
CHANCE: It's whether or not Vladimir Putin, I think, wants this to change. Whether he's prepared to take that round down, or whether he wants
to continue on with this.
QUEST: Matthew, it's late in Moscow. You have more work to do tonight, I suspect, as you analyze what's been happening, but we're
grateful that you've stayed up for us late tonight. Thank you. Matthew Chance, our correspondent in Moscow.
With more European sanctions on the way, President Putin's facing the prospect of further economic hurdles. There are some signs the Russian
companies are weathering this onslaught. If you take a look at the markets, the MICEX stock index rose to its highest point in nearly four
years. Energy shares are rebounding.
Now, that's really, some might argue, perverse, because the falling oil prices is decimating large parts of the industry and the economy. On
the question of finance, recently downgraded to junk by S&P, in terms of the overnight lending rate has doubled since December. The ruble has lost
40 percent against the dollar.
But look at the fundamentals and it is a grim picture. The IMF says that GDP is going to fall by about 3 percent this year. And if you take
that at the same time, inflation's over 10 percent, 15 percent by many barometers.
So, you've not just got stagflation, you've got worse than stagflation, you've got recession plus inflation and high interest rates,
and none of the economic or military levers seem to be working at the moment.
Andrey Illarionov is a former chief economic advisor to Vladimir Putin, now a senior fellow at the Cato Institute, a US think tank. He
joins me now from Washington. By any definition, sir, the economics of this are complex, and there's now obvious or easy solutions, are there?
ANDREY ILLARIONOV, FORMER ECONOMIC ADVISOR TO VLADIMIR PUTIN: Yes. There is not a very great situation right now, but it's probably not so bad
that is explained in this crisis right now.
Actually, industrial output is growing for the fourth month in a row, since September until December. And December actually demonstrated one of
the highest growth rates of the last couple of years.
There is a very substantial rebound in some light industry, food industry, chemical industry, even machine-building industry.
QUEST: Right.
ILLARIONOV: On the other hand that is quite clearly seen, some decline in service output. So, that is why the picture is much more mixed.
QUEST: OK. With that mixed picture, how significant or how important do you think it is from an economic -- never mind the military or
diplomatic or for what's happening in Ukraine -- from an economic point of view, how significant is it that the two sides do a deal and those
sanctions are lifted?
ILLARIONOV: I think there is no easy outcome from this situation, but what is not good that those conversations are happening in Moscow right
now, happening without Ukraine. And that's actually a wrong sign and wrong signal for anyone.
And actually, Moscow is probably not the best place to have this conversation about Ukraine with out Ukrainian participation and with
actually Mr. Putin's plan that was regional. Even Mr. Hollande and Mrs. Merkel have added something.
I think we still did not see any substantial will on Mr. Putin's side to implement any peaceful solution to this crisis. So, that is why I don't
think that today or tomorrow we'll see a real breakthrough.
QUEST: Right.
ILLARIONOV: At least long-standing peace.
QUEST: If you're not going to get a break through now, and the economy is suffering and the ruble is under pressure and oil prices are not
going to recover anytime soon, or at least not to a satisfactory level, for the rest of the year.
Do you think that IMF forecast of 3 percent contraction in the Russian economy, do you think that is too pessimistic, or do you think actually
it's probably about right, Russia will contract 3 percent this year?
ILLARIONOV: It's hard to say right now. It's really rather hard to say, because it's clearly that probably industrial outputs would grow
sometime, but services will go down. What will be in balance is rather hard to say right now.
QUEST: Sir, we're grateful that you have come in to talk to us this evening and put the perspective on this Friday. We thank you for taking
time and joining us.
Now, one economy that is in trouble, of course, as a result of the falling oil prices, Russia. Another one is Nigeria, where the finance
minister, Ngozi Iweala has had to completely revise her budget numbers. You'll hear her after the break.
(COMMERCIAL BREAK)
QUEST: The Nigerian currency, the naira, today sank to a record low against the dollar. Low oil prices, they have been hammering the Nigerian
economy, and with that, the currency. The central bank's tried to prop it up, but to no avail. It's a somewhat fruitless exercise that's likely to
waste a great deal of money.
It's one of the economic challenges, and the big one for the country, just one week before a presidential election in Nigeria. Let's also look
at the economic numbers.
The country has a poverty rate of 33 percent. It needs to create 1.8 million jobs a year just to keep up with people coming into the workforce.
On top of that, as we heard last night, Boko Haram is a terrorist organization that's causing mayhem, misery, and death in the northeast.
I spoke to the finance minister of Nigeria, Ngozi Okonjo-Iweala, and I asked Ngozi if her -- if the government is equipped to handle such economic
problems.
(BEGIN VIDEOTAPE)
NGOZI OKONJO-IWEALA, NIGERIAN FINANCE MINISTER: On the issues that you raise of why should people elect the government, let me just tell you
two or three very straightforward things.
On the broad side, this government has created on average 1.4 million of the 1.8 million jobs that we need to create each year. But we have an
unemployment problem, that is serious. It has accumulated over the years.
And this is actually the first government to lay it out, measure how much we need to do to close the gap, and then create more jobs to take
those who have been long-term unemployed off the unemployment rolls. And that's an achievement. We've done it in very unique ways. We have an
entrepreneurial program, for instance --
QUEST: Right.
OKONJO-IWEALA: -- called You Win, that supports young entrepreneurs to create jobs for themselves. Secondly, this government has built roads,
it's revived the railways. Rail in the country was moribund for 20 years, and this government revived it.
And the Lagos-Kano line, the Port Harcourt-Maiduguri line, the Abuja- Kaduna line. These were non-functional and nonexistent. That is very concrete, and people can see it work.
This government has worked on agriculture, this is really a critical point. We have managed to reduce our food imports considerably. And we've
done it by growing more rice --
QUEST: All right.
OKONJO-IWEALA: -- more cassava. The food prices are low and inflation has been held at single digits for the first time in many years.
QUEST: But has it done enough?
OKONJO-IWEALA: Richard, let me tell you something. You can never do enough. As long as there's one unemployed person who hasn't got a job,
they're going to feel you're doing enough. As long as there are some people who are still below the poverty line and whose lives have not been
changed, they will feel you've not done enough. No.
So, we haven't done enough. We can do more. But we've done a whole lot more. And the attempt at this time to politicize it, to say the
government has not achieved the many, many achievements we've made.
Look, this country has been growing at an average of 7 percent per annum. That is what you need in order to cut poverty.
QUEST: Right.
OKONJO-IWEALA: One of the fastest growth rates in the world. This country has been growing from the non-oil sector, which is very important.
It means that the economy --
QUEST: Right.
OKONJO-IWEALA: -- is very diverse. And when we rebase the economy, we found that this largest economy in Africa now, $510 billion in GDP, has
services at 51 percent, industry at 26, agriculture at 22. It created industries. The film industry is now 1.4 percent of GDP --
QUEST: All right.
OKONJO-IWEALA: -- and telecoms has grown from 0.7 to 8 percent.
QUEST: I --
OKONJO-IWEALA: So, we have the base on which to make lives better for poor people.
QUEST: What number have you done your calculations for the price of oil for your budget for the next 12 months outwards?
OKONJO-IWEALA: Yes, Richard. We have a bit of an issue because we have a constitutional requirement to submit our budget before the end of
the fiscal year, which would be December. At that time, oil prices had fallen to $70, and we did use the benchmark price of $65 a barrel.
But we immediately announced to the country that -- and to the parliament that we expected oil prices to fall further, and we would make
adjustments by doing scenarios at $60, at $55, $50, and $45, and we would outline measures that would help us make up for the extra loss in revenues.
That's exactly what we've done, and we are waiting for the price to bottom out and for the National Assembly to come back in session to look at
the budget. Because you know, they are campaigning now.
And then we will take the appropriate benchmark price. We've looked at cutting the cost of governance in order to make us more efficient and
save money. And also raising revenues.
Richard, I want to say that look, for Nigeria, it's going to be a difficult year. But you know what? This is the biggest opportunity for us
to become that non-oil economy that we want to be. We already have a diversified economic base, but our revenue source is not diversified. And
that's what we want to focus on, and we are focusing on right now.
(END VIDEOTAPE)
QUEST: The finance minister of Nigeria, Ngozi Iweala, talking to me on the economy. A reminder: the election takes place on the 14th of
February, Valentine's Day.
The world's largest economy saw strong job growth in January. The US Labor Secretary will tell me how long he thinks it will last. And
unusually, he tells us the dollar is not -- the strong dollar is not hurting the US economy. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in a moment when we'll hear about protesters gathering outside Petrobras'
headquarters. It's all after the new CEO was chosen and he wasn't well received.
Also, you're going to hear tonight the Unilever chief exec is telling me how he's going to persuade his peers to cut emissions.
Before any of that, this is CNN and on this network the news always comes first.
Islamic State terrorists have claimed that a 26-year-old American hostage was killed during an attack by Jordanian war planes in Syria.
Kayla Mueller pictured here was captured a year and a half ago in Syria. CNN cannot verify the claim by ISIS and Jordan's casting doubts on it,
calling it a PR stunt.
Talks between the German Chancellor Angela Merkel, the French President Francois Mitterrand -- Francois Hollande - and the Russian
President Vladimir Putin have now ended. Mrs. Merkel and Mr. Hollande flew to Moscow to discuss a peace proposal crafted in Ukraine on Thursday.
Sixty-one bodies have been discovered in an abandoned crematorium near the Mexican city of Acapulco. Police were called in after local people
complained about the odor. The crematorium had been abandoned for months. Police believe it's a case of negligence and it is not linked to the drug
violence that's plagued the region.
The rebels who have taken control of Yemen's government have now begun to assert control by dissolving parliament and installing a presidential
council. In a television address, the Shia Houthi Militia said it will choose a five-person council to lead the country during a two-year
transition
Morocco has been banned from the next two Africa Cup of Nations Tournaments after it pulled out of hosting this year's event. The Moroccan
Football Federation has also been fined $1 million in order to pay $10 million in damages to the Confederation of African Football. Moroccan
officials decided to back out due to the break out of Ebola virus in West Africa.
Barack Obama says a recovering economy means the U.S. has more freedom to decide its future than any other country on earth. Mr. Obama was
speaking in Indianapolis after this morning's very strong jobs report. The President joked the benefits of cheap oil may not be around forever.
(BEGIN VIDEOCLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A lot of families are saving a lot of money at the gas pump which is putting some smiles on
folks' faces and -
(INAUDIBLE COMMENT FROM AUDIENCE MEMBER)
(AUDIENCE LAUGHTER)
OBAMA: No, you're welcome --
(AUDIENCE LAUGHTER AND APPLAUSE)
OBAMA: -- Although I was telling somebody the other day at some point they're going to go back up, so don't start, --
(AUDIENCE LAUGHTER)
OBAMA: -- you know, going out there and ignoring, you know, the mileage on - when you're buying a new car. You know, so you've got to keep
looking for those savings.
(END VIDEOCLIP)
QUEST: Whichever way you look at it, the numbers were good. I spoke to the U.S. Labor Secretary Tom Perez. He told me he's not worried about
cheap oil and a strong dollar, which some see as being negatives for the U.S. economy. When he looks forward, he's confident.
(BEGIN VIDEOCLIP)
THOMAS PEREZ, U.S. LABOR SECRETARY: This was a very solid report. We see solid, steady and sustained growth. We see (ski/key) sectors like
business and professional services, construction, auto manufacturing, things of that nature that are real bellwethers of a confident economy
continue to move in the right direction.
QUEST: The nuance of the report is of course this very small uptick in the level of unemployment because of the number of people coming into
the workforce, the number of long-term unemployed which is also rising -
PEREZ: Right.
QUEST: -- and the number of underemployed. And that nuance is much trickier to solve.
PEREZ: I look at that number and I look at it in the context of labor force participation which also ticked upward and really has been steady
when you look at it over the last 12 months or so. It's been within a very narrow band and that's a good sign. What that tells me is that the
precipitous drop in the unemployment rate over the last 12 months has been a function of the fact that more people got jobs.
QUEST: I can see two clouds on the horizon, the first of course is the falling price of oil which is having an effect on a large and
significant oil sector in the United States, and the second is the dollar - the strong dollar - which will suck in imports but will make it more
difficult for U.S. exporters.
PEREZ: Well, you know, on the issue of the falling price of oil we're certainly monitoring that. At the same time, what that has amounted to
here in the United States is effectively, you know, a $700 break for families. And that's great. You know, people have money in their pockets.
And when you combine that with some evidence of wage growth and then gas prices are lower and inflation is very, very low, what that amounts to is,
again, added confidence for consumers.
QUEST: And the dollar?
PEREZ: Oh sure, I mean, I look at our exports, you know. The President set a goal of doubling exports over a four or six-year period,
and that goal has been largely met. And you look at the things that are being sold overseas, you see, you know, places like Boeing which is one of
the nation's largest exporters and they're continuing to do well. You look at the automotive sector. In the manufacturing job report last month the
key sector driving that growth is autos. And we're still seeing robust sales of cars here and abroad. So we'll certainly look at that carefully
but at the moment, I think we're doing - we're doing quite well and I don't see the dollar as, you know, a significant challenge at the moment in terms
of our ability to sustain this progress.
(END VIDEOCLIP)
QUEST: That's the U.S. labor secretary Tom Perez talking to me earlier. So, should it be the rather nice blue or perhaps the pinstripe?
The purple or the mottled? When it comes to finding a job, first impressions matter. I can't decide. Anyway, a teenager who went shopping
to get suitably dressed for an interview, well he ended up getting more than he expected. Anna Laurel from WTVD has the story.
(BEGIN VIDEOCLIP)
ANNA LAUREL, NEWS CORRESPONDENT FOR WTVD: It was a day like any other at this northeast Raleigh Target when Cathy Scott saw a teenage customer
looking for something.
CATHY SCOTT, TARGET EMPLOYEE: I asked him if he needed help when he told me he was looking for clip-on ties. And so we didn't have any.
LAUREL: So she went to her co-workers
Male, TARGET CO-WORKER: Cathy says, "Can you tie a tie?" and I said "Sure."
LAUREL: So the team bought a tie and brought it to Dennis.
Male: We took the wrapping off of it and I tied it on my neck and fit it over his head, and we - I - adjusted it and tightened it.
LAUREL: But the Target team did more than just fig his tie, they prepped him for the interview.
Male: Make sure you look them in the eye and I'm saying make sure you have a stern handshake and she showed him. And, you know, he tucked his
shirt in and tied his shoes.
SCOTT: He was saying 'yes, ma'am,' and I he just soaking it all in.
LAUREL: Audrey Mark saw all of this going on and snapped the picture.
AUDREY MARK, POSTED PICTURE ON FACEBOOK: I hear you pampered him with this wonderful, warm calming advice about interview skills and handshakes
and then I finally figured it out. At first I thought well maybe he must be a neighbor or like a very close friend because you were just so sweet
with him.
LAUREL: But these were strangers in a Super Target.
MARK: He goes to leave and all those Target employees start screaming, "Bye! Good luck! Come back and tell us how it went.
LAUREL: And as everyone cheered, Dennis was proud.
Male: We were just here to help a young man get a job and, you know, forward his future.
LAUREL: Cathy cried. It touched your heart.
SCOTT: It still does.
(END VIDEOCLIP)
QUEST: The young man was going to an interview at the Chick-Fil-A fast food restaurant. Now the manager there told me he made a memorable
impression and he's being invited back for a second interview. I guess he went for the pinstripes. Or maybe it was the blue.
There's a new chief exec of Brazil's largest company today. When he arrived, he got a volley of abuse for protesters and a kicking from
investors. It's not the sort of thing you want on the first day on the job. "Quest Means Business" (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: Before the break we met a man - or heard of a man - who was going for a new job. Now meet a man who's only been in the job a few hours
and investors have already turned on him. He's the new chief executive of Petrobras in Brazil.
The name is Aldemir Bendine and he was previously the head of Banc of Brasil. It's an institution with close ties to Petrobras, and that might
be part of the problem. The stock of the oil company fell sharply - over 8 percent - because Bendine is not seen as a figure with enough independence
to clean up the company. Down 8 percent.
We talked about this the other day with Shasta Darlington who made the points about how deep the corruption's believed to be within Petrobras.
While protesters gathered outside the company's headquarters in Rio, one of them summed up how they feel when they see the ruling elite.
(BEGIN VIDEOCLIP)
Male, VIA INTERPRETER: It's way too late. Unfortunately at one of the largest companies in Brazil, professionalism means nothing.
Unfortunately people who work there - colleagues - are extremely hurt by this band of criminals that are our politicians.
(END VIDEOCLIP)
QUEST: Problems in Brazil of course as a result of low oil prices. Well in this program, you've heard us talk about the problems in Russia
from low oil prices. Nigeria, Brazil and now to Venezuela where the economic troubles are impacting people in some extraordinary and deeply-
unexpected ways. Supplies of certain important goods are running short. As Raphael Romo reports, of all the things that have now become extremely
expensive - it includes birth control - if you can find condoms at all.
(BEGIN VIDEOCLIP)
RAFAEL ROMO, CNN CORRESPONDENT, MEXICO CITY: Shortages in Venezuela now reaching the bedroom. Venezuelan consumers complain condoms and birth
control pills are nowhere to be found. CNN visited eight different pharmacies in Caracas, the Venezuelan capital. Four have no condoms at all
and the other four had limited availability. This pharmacy worker says they used to sell several brands, now there's only one available and the
price has more than doubled since November.
Female, PHARMACY MANAGER, INTERPRETED BY ROMO: "The availability of condoms," this pharmacy manager says "went down in early January. They
haven't received any supplies in the last two weeks."
ROMO: Venezuelans are turning to Mercado Libre or free market, a website similar to eBay where consumers can buy or sell all kinds of
products. A subscriber is selling a box of 36 condoms for 4,760 bolivars, the Venezuelan national currency. That's a whopping $755 at the official
exchange rate. It's also 85 percent of the Venezuelan monthly minimum wage.
President Maduro announced last year the construction of a condom factory to supply the domestic market. But quality and production levels
are not meeting goals. Public health experts worry the scarcity of contraception methods may have long-term consequences.
MAGDYMAR LEON, REPRODUCTIVE HEALTH EXPERT, VIA INTERPRETER: What are the implications? One is that the individual doesn't have the means to
control the decision to have children or not. That right is lost. On the one hand, the ability to protect one's self from sexually-transmitted
diseases is also lost.
ROMO: A World Bank study shows Venezuela has the fifth highest teen pregnancy rate out of 21 Latin American countries. The HIV infection rate
is also a serious concern for public health analysts, a risk that can only increase unless the Venezuelan authorities take measures to address
shortages. Raphael Romo, CNN Atlanta.
(END VIDEOCLIP)
QUEST: The high-profile chief execs this week pressured world leaders to cut greenhouse gas emissions to virtually zero over the next 35 years.
It comes in the lead-up to a global climate change summit that takes place in Paris at the end of the year. One of the leaders of this B-Team as it's
known is Paul Polman. He's the chief executive of Unilever. He told me environmentally-friendly technology is more affordable and necessary.
(BEGIN VIDEOCLIP)
PAUL POLMAN, CEO, UNILEVER: The technology has developed and is developing extremely fast. Cost of solar coming down enormously, cost of
wind power coming down enormously, we're seeing more and more companies and regions where the costs of green (inaudible) energy already today is
cheaper than the cost of carbon-based energy. So if we can put the right frameworks in place, the right incentives in place with investments we need
to make anyway to manage the enormous growth in population and urbanization, I think we have a shot at it.
QUEST: The reality though is you still - this whole issue and whether we talk about Net Zero or this climate change issue - it still has to
capture the imagination, the approval and, if you like, the willingness of ordinary people. I always get the feeling we have the government's
negotiating, we have the climate changers trying to lobby, we have CEOs like yourself warning and the rest of the population wonders what on earth.
POLMAN: Well, with any major change of this magnitude is not going to be easy, otherwise we would not have had the problem in the first place.
So I agree with you that it is a challenge and there are many other issues that people are facing on a daily basis that might distract from it. But
what we're trying to do now is just to build on the momentum that is taking place.
QUEST: But the average CEO, where is it in their list of priorities?
POLMAN: Well, Richard, it's not only on the top of our company as a CEO agenda, it's on the top of a human development agenda. We are at a
crucial time in the - in this world where have to create more inclusive economies. And actually when we talk about climate change, we're actually
talking about human development. It is especially the poor that are suffering from this. When we see this increasing, incidents of climate
change disasters newly occurring on a weekly basis and sometimes it feels on a daily basis, it is true that business incurs a lot of costs and is
becoming aware of it -
QUEST: Right.
POLMAN: -- but it is especially the poor that suffer.
QUEST: In this era of globalization where so many other traditional structures have collapsed or are no longer relevant, social network is now
a much more powerful force - you study these things much more than I do. But does the corporation and does the CEO have more power to affect change
on this issue than they've ever had before?
POLMAN: Well, I think this is the age of transparency and it's not surprising that 4,000 companies already, Richard, are reporting their
carbon footprint and are actively mitigating themselves. We have the top 500 companies have carbon reduction plans well above the 6 percent
reduction per year you need to stay within the 2 percent. I think the citizens of this world are increasingly exercising their access to
information, their ability to connect themselves to demand a higher level of accountability - of governments, of business people as well.
(END VIDEOCLIP)
QUEST: That's Paul Polman. He's the chief executive of Unilever. And in just a moment the chief executive of BAFTA - that's the British Film
Academy - is on the challenges facing this year's awards.
(COMMERCIAL BREAK)
QUEST: Talks between Chancellor Merkel and Francois Hollande and Vladimir Putin - they've all ended in Moscow. Russia, Germany and France
worked on implementation of the Minsk agreement. There are new proposals - or there are proposals - from the president of Ukraine and from the Russian
president. And apparently all these talks will now take place under the Normandy format which I know you'll be familiar with closely. It's just
where you have Ukraine, Russia, France and Germany all involved. And the format of course originally designed in June of 2014 when the leaders all
met following the 70th anniversary of the Normandy landings.
The annual BAFTA Awards are handed out in London this weekend. It is of course award season - whether it's the Directors' Awards, the Golden
Globes or indeed the BAFTAs. This year's BAFTA's billed as the biggest and yet to come. Without high-quality content of course, the BAFTAs would just
be a load of old nonsense on the awards calendar. Nina dos Santos now describes why the U.K.'s performing so well on the big screen.
(BEGIN VIDEOCLIP)
NINA DOS SANTOS, NEWS ANCHOR AND CORRESPONDENT BASED IN LONDON FOR CNN INTERNATIONAL: James Bond, Harry Potter - all films with a quintessential
British storyline. But increasingly it's behind the camera that big blockbusters have a British feel. With more and more movies being made in
the U.K.
Male Actor: You have to go to London.
DOS SANTOS: A Night at the Museum, Gods of the Galaxy and Star Wars - Episode VII, just some of the most recent and upcoming box office hits to
be shot on British shores.
But why film in Britain?
AMANDA NEVILL, CEO, BRITISH FILM INSTITUTE: We've got fantastic infrastructure. We've got a fantastic financial environment, we've got
wonderful, wonderful skills. But I always argue also we've got magic dust those other countries haven't got. If you're going to shoot a film and you
need a road closed or a helicopter or a castle - this is complicated stuff. We can make it really, really easy for you to do what you need to do.
DOS SANTOS: Access to experienced crews and world class studios like Pinewood has made the U.K. hot property for Hollywood producers. The wide
range of locations is also a significant attraction, making streets like this one - home to Paddington Bear - a must-see for movie-goers and
tourists alike.
But money is perhaps the main driver. The U.K. government offers lucrative tax breaks to production companies if they film most of their
picture in the country and hire European staff. It's a scheme that has produced impressive results. Latest research shows the creative industries
brought in $13 million an hour in 2013 - that's 5.6 percent of the entire British workforce.
Male: All the films that have been made herein the last three years have built up some amazing skills space people can use -
(END VIDEOCLIP)
(BREAKING NEWS)
QUEST: And to hear what happened in the talks.
Male, VIA INTERPRETER: -- yes my possible joint document about the implementation of the Minsk Agreement, the documents which would include
proposals by the president of Ukraine and proposals formulated through the day (inaudible) by the president of the Russian Federation and then
naturally (inaudible) a text (ph) to be submitted to all relevant parties.
The work will be continued and preliminary results will be discussed on Sunday during the telephone discussion in the Normand format. At the
present time the talks have ended. Thank you.
QUEST: They're not showing there too much more than we already knew from that, but the gist of it was of course that there will be more talks
this Sunday, a telephone conference in the Normandy format which will include Ukraine, Russia, Germany and France and they will be looking at the
proposals from Chancellor Merkel from President Putin but the goal remains the same - the full implementation of the Normandy - the full
implementation of the Minsk Agreement. Of course Chancellor Merkel and Francois Hollande having had talks in Kiev then went to Moscow and now of
course returning home where they will take advice and consultations. "Quest Means Business."
(COMMERCIAL BREAK)
QUEST: And that's "Quest Means Business" for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's
profitable. I'll see you next week.
END
