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December Jobs Report is In; White House Reaction to Jobs Report; Who will Fill Cabinet Slots?; No Answer from Wall Street on Jobs Report; CDC Warns: Bad Flu Season Ahead

Aired January 04, 2013 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And be careful in healthcare. Some are good-paying jobs, some jobs are not and they're not ladder jobs in healthcare, but you are seeing healthcare growth there.

They are food services, drinking places. Apparently, people were going out to dinner and celebrating in December, celebrating maybe the coming end of the world, because of the Mayan calendar, but you saw people adding jobs in those areas.

ASHLEIGH BANFIELD, ANCHOR, "CNN NEWSROOM": And don't we normally see that in December? It's the holiday season.

ROMANS: We do. We do and sometimes those are temp. Sometimes those are jobs that go away in the beginning part of the year, as well.

Manufacturing, though, you want to see jobs in areas where you're having better pay. Manufacturing and construction because of Hurricane Sandy, construction jobs grew, as well.

BANFIELD: Wait a minute. The construction for Hurricane Sandy had already begun even though the aid package has to be voted on as we speak?

ROMANS: Well, you know, we've been talking to people, too, who had a little bit of savings who were able to go and start getting work started because they knew they wanted to secure work crews and they wanted to prevent mold.

And, so, yeah, I mean, you had people who were starting to get that work done.

BANFIELD: So, with that kind of an effect actually took hold in December, that package of aid today, it's only $9 billion today, but ultimately, it will end up being $60 billion. That should have an effect on manufacturing, as well.

ROMANS: You would hope so. For construction, you would hope that it would offset ...

BANFIELD: Construction.

ROMANS: You would hope that it would offset the loss of small businesses who would have to close because of all the time, so it starts to -- you know, it can be a push and pull in terms of the Sandy effect for sure.

BANFIELD: And just because I made the nice mistake and said manufacturing, we showed some good pictures of manufacturing.

ROMANS: Manufacturing is interesting, too, because, you know, the White House likes to say that you're seeing a little bit of recovery in manufacturing and they're trying their hardest to make sure that that takes hold.

You hear this anecdotal evidence of companies that are starting to bring home jobs from China and from Asia, but we had a lot of jobs that left. So, on the margin, time will tell whether that's a real trend.

BANFIELD: I know I'm going to get to the long-term unemployed in a second, but not before I hammer away at manufacturing again.

Why do I always hear now, that's critical, we really need to focus on manufacturing, those are the numbers that matter? When I also hear, now, housing, now, that's important.

ROMANS: Well, housing and manufacturing are both important because those are jobs where you're putting people with higher-than-average wages to work and each of the jobs has an attendant kind of like knock-on effect, right? So when you ...

BANFIELD: Trickle effect.

ROMANS: Right. Absolutely. So, these are jobs -- those are jobs that have good economic activity attached to them, quite frankly.

You've heard for years how we're going to be a service-related economy. We don't need to make things anymore in America. Now people are like, maybe we do need to make things and build things in America because those are very good-paying jobs.

BANFIELD: OK, now to the long-term unemployment because those are the numbers that we don't see.

ROMANS: Yeah, long-term unemployed, so you still have kind of a stubbornly high number there. You've got like 4.8 million people who've been out of work for at least six months. That's 39 percent of the overall unemployed.

The new Congress and this president have a very big job ahead of them in terms of getting those people, those statistics, back into the labor market because the longer you're out of the market, even Ben Bernanke, the fed chief, has said the longer you're away the harder it is to get back in and you're very -- you're not very likely of getting back in at the old wages.

And it just -- it really sets you back financially. It sets your family back financially. They've got to figure out how to get opportunities for those people.

BANFIELD: I'm going to ask Dan Lothian who's traveling with the president about that, coming up.

But last one, real quick, and real quick, trend's your friend. You always say that. Have you got the chart for the year?

ROMANS: Yeah. I've got a chart for the year. I want to show you the last six months in particular because you can see that we've been building on.

Look at the -- remember this past spring and summer, we were so worried. Remember, I was pulling my hair about a potential double-dip recession. Look, you've got five months now where just enough to keep the unemployment rate from getting much higher, but not enough to knock it lower.

You want to see better numbers than that, but it's going in the right direction.

BANFIELD: All right, Christine Romans, thank you for that --

ROMANS: You're welcome. Happy weekend.

BANFIELD: -- awesome information. Happy weekend to you, too, my friend.

And, you know with the new Congress in place and more of the financial battles ahead, you just know that the White House is taking a very close look at these latest jobs numbers.

Let's get straight to our White House correspondent. Dan Lothian. I promised to take you to Hawaii to meet up with Dan Lothian, who is not on vacation even though the president is.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: I am not.

BANFIELD: So, obviously, the first question -- no, you are not, my friend. I'm sorry. We were dangling Hawaii out in front of you.

The first question would be the reaction. Has the White House put out public reaction or have you gotten any private reaction to these numbers?

LOTHIAN: They have. And, you know, it essentially mirrors what we've been hearing for the last year that there's a little bit of good news, but that there's still a lot of work to be done.

Alan Krueger, the chairman of the president's Council of Economic Advisers saying in a statement, quote, "While more work remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression."

He also points out that there's a need here to continue the president's policies. But also talked about the fact that now that you have resolution to the fiscal cliff matter, that it provides now some certainty in the marketplace. And then also this word of caution that we always hear from the White House every time these monthly numbers come out that they're often revised, either up or down and that you should not read too much into one month's numbers.

Nonetheless, Republicans hitting back today. The RNC saying that, yes, there's good news here, but that unemployment still remains very high and that this is not really a time to celebrate when you've had so many months of near eight-percent unemployment, Ashleigh.

BANFIELD: And, you know, I was just talking with Christine Romans about the long-term unemployed. I just want to get a few more stats out there.

Five years ago, Dan, we had 2.5 million people who were long-term unemployed, but now that is a much larger number. It's 3.3 million people.

I'm sure that's not lost on the White House. I don't know that they speak separately about the jobs issue and the long-term unemployment issue, but is there any kind of reaction or look ahead to how they're going to try to fix that problem alongside the current problem of unemployment?

LOTHIAN: Right. And that is a big issue for the White House and you hear the president every time when he comments about the unemployment picture and those who have been out of work for quite some time, that he won't rest until everyone who wants to work is able to find a job.

And the solution that they believe will help the problem is to provide some stability or certainty out there in marketplace so that small businesses, which they believe are the engine -- engine, rather, for economic recovery, will start spending money again, will start hiring.

And I think that's where the focus is. If you can get small businesses to get back into the game, if you will, start hiring, and also get big companies out there, who've been sitting on a lot of cash. They wanted to do some research and development, wanted to do some expansion, but because there's been uncertainty, they have not gone out and started hiring.

And those are the areas that the White House believes, if they can provide the climate, if you will, a positive climate, then the hiring will begin.

BANFIELD: So, I can't let you go before I ask you about some of the potential new cabinet members that are being bandied about, because some people are leaving their jobs and they are big, important jobs that need to be filled. What do you hear?

LOTHIAN: You're right. And, you know, the president is on vacation there, playing golf, going out with the first daughters, but he's also mulling over who will fill various positions.

These are all critical, very important positions and we're hearing from sources that he could startle rolling out some of those names as early as next week.

Obviously Defense Department is one that we're watching very closely. Chuck Hagel, who's been under fire even though he has not been formally nominated for this position, has been under fire for comments that he has said in the past about a gay individual, about Israel. He still remains the top of the list, we're told, for that position.

Michele Flournoy, an undersecretary there, also on the short list.

Treasury, you know, Kenneth Chenault, the CEO of American Express, has been whispered about as a possibility there. Yesterday, though, I spoke to a spokesman at American Express who told me that Kenneth Chenault plans to continue at American Express. So, you can essentially scratch him off the list.

Jack Lew, who is the current chief of staff at the White House, is on the list for that job.

And then, finally, the CIA, John Brennan, the president's adviser for homeland security, is on the short list. Michael Morrell who's the acting director of the CIA, also on the list.

So, the president has some important key positions to fill, and, again, we expect that that could start rolling out as early as next week, Ashleigh.

BANFIELD: OK, Dan. I hope you get some sunshine while you're there at least a little bit. Dan Lothian, live for us --

LOTHIAN: I hope so, too.

BANFIELD: -- in Hawaii. Hey, it's a good assignment, you've got to admit.

I want to take everybody to the Big Board. This is cold New York, folks, and the Dow is reading up a wee bit. Perhaps since Christine Romans' report the Dow reacted nicely, but we're at least out of negative territory, albeit by just a fraction. I'm going to take you live to the New York Stock Exchange a little later on in this hour.

So, we've been hearing all along that former Arizona Congresswoman Gabrielle Giffords had made plans to visit Newtown, Connecticut, today. And we're not exactly sure who she's meeting with or why, but we certainly have the idea that she knows a thing or two about the crisis that they faced in that town.

Earlier this week, she and her husband, Mark Kelly, met with New York City Mayor Michael Bloomberg to discuss gun control. And you'll remember that she resigned from Congress last year so that she could focus on her recovery after being shot in the head during an event with voters two years ago.

A 15-year-old Pakistani girl shot in the head by the Taliban has now left a British hospital. The Taliban had targeted Malala Yousufzai because of her crusade to educate girls. She had received frequent death threats because of her work and Malala will continue her rehab in the U.K. before more re-constructive surgery next month.

And a big setback to report for Venezuelan President Hugo Chavez. A top aide says a severe lung infection has led to respiratory failure.

The 58-year-old leader is in a Cuban hospital following his latest cancer surgery and he is supposed to be taking the oath of office for a new six-year term in just a few days, but you're going to have to stay tuned for what happens there.

Director Oliver Stone is best known for his movies, but he's also an open supporter Chavez. He even made a film on the Venezuelan president and his influence on the country and Mr. Stone will be joining Suzanne Malveaux, my colleague, here at CNN, noon Eastern today, to talk about his relationship with the Venezuelan president. That's only on CNN and it's coming at you in 50 minutes.

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BANFIELD: First unemployment report of the year is out, and as we said earlier, 155,000 jobs were added in December with the unemployment rate at 7.8 percent, but will 2013 bring any better numbers?

Our senior managing partner -- senior partner and managing director of the Boston Consulting Group, Hal Sirkin, is live with me now from Chicago.

We like to tap you because I know that you've advised the president before on how to bring jobs back home here to America, jobs that have been expatriated, so let me ask you this.

Since President Obama took office in '08, the jobs numbers have increasingly -- you know, they've improved. But how do we know that we can expect that trend to continue in 2013 or do we just not know?

HAL SIRKIN, SENIOR PARTNER, BOSTON CONSULTING GROUP: Absolutely. Well, we don't know. It's really dependent on a couple things.

They primarily relate to the fiscal cliff, the sequestration and a lot of the other activities, but if you want to go back and say, what was the trend that the U.S. had before all this happened, we saw in the third quarter very strong economic growth, 3.1 percent which is some of the fastest in the world for developed countries.

We saw housing prices and housing starts and sales of homes go up, often by about 10 percent, and we've seen other factors that make the economy stronger, including the increase in the stock market, so we had a good run in the third quarter.

We lost a little bit of momentum because of the uncertainty with the fiscal cliff. If we start hitting the debt ceiling and the other issues, we're going to have some problems.

BANFIELD: I expected that uncertainty because there was a lot of talk about that having a really drastic effect on the jobs numbers, but it didn't. And I'm trying to figure out if that's an offset because of the holidays and all the seasonal hiring and, I mean, you just heard Christine Romans reporting that, you know, healthcare is up and food services and drinking places and construction.

SIRKIN: Right.

BANFIELD: But is that just -- was that a blip?

SIRKIN: Well, I think it's generally good news, right? And there's more good news in the report that I haven't heard talked about much.

We saw wages rise by 0.3 percent month-to-month which is a good thing. That's above what we think inflation should be. And we've also seen the amount of hours worked from 34.4 to 34.5 hours per week and that means we're seeing people getting paid more and working more hours and that is a very helpful sign.

So, there's some good things that are happening. We still have to worry about the other things that Christine talked about like small businesses not hiring as much and maybe even laying off and companies not wanting to spend money because of capital constraints.

These are all issues that could be a problem and, as we still face a set of potential serious problems with the debt ceiling and the sequestration, we're not out of the woods.

Fortunately, the economy seems to want to do some good things and that's a helpful thing for us.

BANFIELD: And since you brought that up, those new fiscal cliffs that we have to argue about, look, everybody, Hal, says there's no indication that our brand-new fancy Congress is going to be any different than our once brand-new, old-now, fancy Congress, so there will be more uncertainty. I mean, it's guaranteed, isn't it?

And isn't that something we have to worry about when it comes to employers who just can't stand not knowing?

SIRKIN: Right. This is why Congress needs to act relatively quickly rather than drag this thing out.

If employers know what the outcomes are, they're going to make good decisions and they'll probably start hiring, but if they're not sure what's going to happen, they're going to wait.

And, so, what we need to do is for Congress not to wait until the last minute each time, not to threaten, not to do these other things, but to work together for the benefit of our country. This is supposed to be doing and ...

BANFIELD: Do you have any ideas how to do that, Hal? Got any good ideas?

SIRKIN: I don't know. I don't know. I'm hoping that maybe some of the new people in Congress we can see some changes. But it is a difficult thing, but this is something that we have to do. We are in essence -- we are basically in control of our own destiny and what we need to do is have Congress take these actions.

You know, I liken this sometimes to the euro crisis that's in Europe, but Europe isn't really in control of what happens. It's very difficult for them to take actions.

In theory, we could take actions in the House, in the Senate and with the president and have all this solved in the next few hours but -- and they were very close to an agreement.

BANFIELD: Yeah, let me ask you about this. Obviously with the debt ceiling, the big problem right in front of us, conservatives will say, look, we need to leverage that, because we can't keep the Democrats from spending unless we have a really, really powerful tool and the debt ceiling's a very powerful tool.

On the other hand, Democrats will say, are you kidding me? That's not the kind of tool you should be using.

And we actually do hear conservatives and business leaders saying the same thing as Democrats, it seems. Don't be using that. It's killing us. I'd love to get your perspective on that.

SIRKIN: It's a very dangerous tool. It's one that I hope people only threaten to never use because if we stop paying our bills, that will have a -- as a country, that will have a massive impact on our economy.

And it basically will remove what is the full faith and credit of the United States. This is something that we have as an asset we are basically the world's reserve currency and this can all change if all of a sudden we stop paying our bills.

So, you know, it is a very dangerous weapon. And, you know, in many ways you can call it the nuclear option.

BANFIELD: The nuclear option. Well, let's end on the nuclear option. Happy new year to you, Hal. Nice to see you.

SIRKIN: Happy new year.

BANFIELD: Hal Sirkin, joining us from Chicago. Always good to talk to you.

If you want more details, by the way, of what went on, all the information in today's jobs report, we have it for you, but it would be a six-hour show to read it, so you can go to CNNMoney.com and read it for yourself.

We're back after this.

(COMMERCIAL BREAK)

BANFIELD: The economy picked up 155,000 jobs pretty much on par with what was expected.

As for the response on Wall Street, let's check in with Alison Kosik who's at the New York Stock Exchange.

So, we saw -- I went into a segment with Christine Romans and we were a little in the red and when we came out of the segment with Christine Romans, we were a little in the black

How's it going now? Has it changed since then?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It really hasn't changed much, and, you know, the reaction from Wall Street is just kind of "eh". One analyst characterized this jobs report as lackluster. Another one says it's OK.

The thing is just not a lot has changed and here's one example for you. You look at how many jobs were added in total for the year for 2012, that was 1.8 million. That's the same number of jobs added in 2011.

So, what you see, Ashleigh, is this job market that's really treading water, not really moving forward much.

Also, you look at any changes that maybe happened between November and December to the December jobs report, the unemployment rate is unchanged. Total number of people unemployed, that didn't change. The number of long-term unemployed, that didn't change.

So, that kind of status quo, that's kind of what's playing out in the markets. You know, it's a jobs market that's not getting any worse. It's just not gaining any real momentum.

You looking for a little bit of optimism? What you can do is you can check out this, the average hourly earnings. It was up more than 2 percent in 2012 and this is good, Ashleigh, because it's usually a precursor before companies hire.

Because what happens here are companies are maxing out the number of hours that each employee is working. You know, too much work for too few people so the demand is there and possibly companies need more people to do that work.

So, yes, we saw that go up 2.1 percent, not a huge move, but up nonetheless, Ashleigh?

BANFIELD: So, this isn't a very long week it seems.

KOSIK: It has been.

BANFIELD: We started the week with a fiscal -- I know, right? And what a difference three days can make.

We started the week with the fiscal cliff deal and people were popping champagne corks for a whole different reason and the markets went bananas and then all of a sudden they didn't. Is it that short-lived? KOSIK: It very well could be, I mean, because what Wall Street sees is what's coming down the pike. We're going to get hit other sort of cliffs on, you know, spending cuts, on the debt ceiling, so that's what's worrying the market here.

But if you look at how the jobs market held up in December, this is actually good because you see the numbers. And one analyst tells me, they've pretty much held up through the fiscal cliff craziness.

You know, they could have taken a dive and they didn't, you know, that's -- although today's report does show stagnation as far as retail jobs go because retail is usually a bright spot in December. We did see the number of jobs in retail fall, and that could be a reflection of what the fiscal cliff did to consumer confidence.

You know, but when you look at the greater -- the broader market, there's no question, Ashleigh, that Washington got in the way in bigger gains for December in the market and this week, as well.

And even though we've had an impressive two-day rally at the beginning of the week and it is all about those looming fights in Congress over those spending cuts and the debt ceiling, they're going to make for a very couple of volatile months for the market in January and February, Ashleigh.

BANFIELD: OK, Alison, thanks very much. Have a good weekend.

KOSIK: You, too.

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BANFIELD: If you have not gone in for the flu shot yet, you might want to step on it because it turns out the CDC's warning about a bad flu season was spot on with an early spike in flu cases right across the country, too.

The southern states are apparently having the worst go at this.

Our senior medical correspondent Elizabeth Cohen joins us from one of the southern states in Atlanta. I hope you are feeling OK to do the segment.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I can't even tell you how many people who I know who were sick with flu or flu-like illness.

BANFIELD: Including me.

COHEN: Oh, no.

BANFIELD: I'm an idiot.

COHEN: And you're up there.

BANFIELD: And I'm up here and I didn't get the flu shot and I don't do it every year. COHEN: Ashleigh, did I teach you nothing?

BANFIELD: Do you know what, you're brilliant and I'm busy.

COHEN: Well, you're very sweet. Next year, I'm flying up there.

BANFIELD: You better administer it yourself.

So, just how bad -- is it any different -- I always say, it's so bad this year. I feel like I say the same story every year.

Is it worse this year? Is there a different strain? Is there something different?

COHEN: No, the strain is nothing weird. What is weird or a little different is that it started early.

So, when you look at the past 10 years, there were only two, maybe three seasons where we saw this much flu this early and it kept growing and growing.

So, the CDC just a couple of hours ago, came out with new numbers I'm going to share with you, Ashleigh.

So, if you look at last week, there were 29 states that had high levels of flu. The week before there were 16 states. So, you can see that's a big jump in one week.

BANFIELD: Yeah. Wow. That's incredible.

So, is this something that's going to be exponential or will it abate after last week and maybe this week?

COHEN: You know, it hasn't peaked yet, so it's been going up, up, up, up, up and, hopefully, it will go down soon, but we don't know when it's going to go down, but it's shaping up overall to be a moderate- to-severe season.

At some point, the numbers will go down, so the peak -- you know, flu is a bell-shaped curve. You know, it kind of goes like this and, so, it peaked early this year. It's going to peak early this year. Hopefully, it will get better soon.

BANFIELD: So, once you enter into the flu season even if you've, you know, had to take a few days off work, can you still get -- and this is obviously a question that is just personal, can you still get a flu shot?

COHEN: You can still get a flu shot because there is still lots of flu out there.

As I said, it hasn't peaked yet. It's still getting worse as far as we know, so go out there and get that flu shot.

It won't hurt you and it works. Not all the time. Not 100 percent of the time. BANFIELD: And you're promising me it's not weird than normal. Like, I'm not going have something else happen or feel differently or ...

COHEN: No, no weird. You know, in 2009, we had H1N1, the swine flu, that was weird, right? That was different.

There's nothing different this year. There's just a lot of it early on.

BANFIELD: Can I ask a very stupid question ...

COHEN: Please.

BANFIELD: ... and I don't know if this is -- honestly, this is going to sound crazy.

How do you know when you have a bad cold or when you have the flu? Is a there is a huge difference between them?

COHEN: There is a difference and only a doctor and a test can tell you for sure, but you can sort of do your amateur doctor thing.

If you have a fever and chills and body aches and what doctors call malaise, which just means you just feel cruddy and can't get out of bed, there is a good chance that's the flu.

If you just have a headache and a stuffy nose and runny nose and a cough and a sore throat, that might just be a cold.

The fever, the body aches, the chills and just the inability to do anything, that's what tells you it could be the flu.

BANFIELD: OK, well, now, I'm not actually sure if I had the flu. Because I had two of those really awful, yucky times where I had a lot of malaise, but I'm not sure if I had fever.

Thank you, Elizabeth.

COHEN: You don't have to have the fever, but most people do.

BANFIELD: OK. All right. Well, I'm expecting my flu shot from you in the next couple days. Come on up.

COHEN: OK, I'll be up.

BANFIELD: Elizabeth Cohen, always good to see you.

And, by the way, Elizabeth always puts phenomenal information on the Web. She's got this great book, "Empowered Patients," and a lot of her information is available at CNN.com/empoweredpatients. I highly encourage that you head on over to the site and take a peek.

Back in a moment.

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