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Unemployment Falls in July Jobs Report; Trump Slams Russian Hoax After Intel Chiefs Warn of Real Threat. Aired 9-9:30a ET
Aired August 3, 2018 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is CNN breaking news.
[09:00:15] ERICA HILL, CNN ANCHOR: Good Friday morning to you, I'm Erica Hill, in this morning for Poppy Harlow.
Two big breaking stories this morning. The July jobs report, missing expectations. Still though painting a strong overall picture. The market adding $157,000 new jobs. Unemployment falling to 3.9 percent. Plus China retaliates, announcing it will slap tariffs of some $60 billion worth on American goods. Wide-ranging tariffs.
CNN's Christina Alesci joins me now. I want to start first with this jobs report. So a little lower than expectations but still overall strong.
CRISTINA ALESCI, CNN MONEY AND POLITICS CORRESPONDENT: Very strong. One number I want to highlight is wage growth. 2.7 percent. I mean, it's not terrible but you have to look at the environment. You have to look at the context here. Right? In this stage in the cycle where we're at near or full employment, meaning that every American who is either willing or able to get a job has one, we've usually seen wage growth between 3 percent and 4 percent. We have 2.7 percent, this is a persistent problem for the administration because this speaks to how people feel. Right? They want a raise. Overall, though, to your point, a very strong -- a relatively strong report.
ALESCI: Missing expectations, 157,000. The market is not loving it because it's below the trend that we've been seeing for quite some time so that's why the market isn't liking it. But 3.9 percent. It's solid for two main reasons. Then this goes back to my point about context. One is that in this point in the cycle you would think that hiring would slow very significantly because we are at near full -- we're near full employment so you would think that actually you would expect this kind of pullback. Right?
The other thing is it doesn't seem like the tariff worries up until this morning anyway, right? These numbers don't reflect what just happened but up until this morning it doesn't seem like businesses are so nervous that they're pulling back on hiring so far. Again, everything can change because it's a fluid situation.
When you look at where the gains are, business services, 51,000, manufacturing again to my point on tariffs, 37,000. Health care $34,000 -- sorry, 34,000 jobs added. You know, I mean, the main point here is you and I talk about this all the time, right? These are the numbers. What matters politically is how people feel. Are they getting a raise? Yes, they may have a job but are they happy in their job? Are they progressing?
HILL: Well, there's that and also how do they feel when they see these numbers and they see that we're near full employment even if they're not happy. Does that make them feel good? So all this comes into account.
I do want to touch on these tariffs because everybody was looking so closely as to whether or not tariffs would have an impact on this jobs report. They don't seem to as you pointed out. But now this morning China announcing that it plans to retaliate and these are wide-ranging tariffs anywhere from 5 percent to 25 percent on more than 5,000 different products.
ALESCI: Yes. The actual headline number, 5,000 products worth $60 billion worth of goods. That is a tremendous amount. Look, I don't think anybody is surprised that China is retaliating. Right? When I speak to sources inside the administration, they tell me China probably -- you know, there are two camps, China will change, China won't change. The China won't change camp is very strong so I don't think anybody in the administration is surprised by the fierce retaliation here.
But here is the thing. The U.S. economy is strong and administration officials believe that the U.S. can inflict more pain on China than China can retaliate on us with. Right? So technically there is some truth to that because we have -- we buy more good from China that we sell to China. But China can retaliate in other ways so it's not just the $60 billion, it could make it more difficult for U.S. companies to do business there. You know, it could do a number of different things that can make it really difficult.
HILL: And even potentially try to lure other companies who may have been considering the U.S. to go to China instead. Automakers, a big one there so we'll continue to follow that.
Cristina, thank you as always.
ALESCI: Absolutely .
HILL: Joining me now, CNN senior economic analyst, former Trump economic adviser Stephen Moore and CNN political commentator Catherine Rampell.
Good to have both of you with us. I think fist just overall we have this jobs report that came out a little lower obviously than what the expectations were but still strong as Cristina just laid out for us, and this comes just as China says guess what, we're going retaliate.
Stephen, I'm guessing that that does not give you pause at all?
STEPHEN MOORE, CNN SENIOR ECONOMICS ANALYST: Well, let me just say something about the jobs report. You know, I think this is another blockbuster report. It is true that the numbers were a little lower than expected for July but I just wanted to alert your viewers that there was about a 60,000 revision upward in the previous month so it's more like 200,000. That's a really, really solid number. And you know, these numbers would probably be stronger in terms of job growth if there were more workers available. I mean, that's really the biggest problem in terms of restraining growth right now is that there just aren't enough workers, which is kind of a good problem to have.
[09:05:08] But look, this is a report. There is something radically right going on with the U.S. economy, it kind of makes you proud to be an American. And with respect to China that's very disappointing news. I think China is acting belligerent. I think they are -- this is exactly the wrong response. China is going to have to come to the United States. They're going to have to make some major concessions. I think the country is sort of behind Trump on this. And, you know, this idea of -- look, we have the strong economy right now.
What's not being reported by the media is the Chinese economy is in big trouble right now. Their stock market is down 20 percent this year. You're seeing a lot of disinvestment in China. This could plunge China into a recession.
HILL: Well, in terms of plunging into a recession there are other concerns but I want to speak to those in just a second here in the U.S. But first, and Catherine, I just want to go on and get your take on this. We hear Stephen touting how strong the economy is, no doubting that, there aren't even enough workers. We're basically at full employment. You said if you didn't think the economy is booming under Obama, you don't get to say it's booming under Trump.
CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: Yes, exactly. If you look at the overall trend -- and what matter is not any one month but the overall trend -- we've been adding about 200,000 jobs a month for the first 19 months of Trump's presidency. We added about 200,000 jobs a month for the last 19 months of Obama's presidency. On average it's basically the same economy. You know, it is a steady improvement so the level at which we are today is higher than it was at the end of Obama's presidency but the rate of improvement is roughly the same.
The same thing with unemployment. You showed the chart earlier showing that unemployment has been falling in basically a straight line since about 2010 so yes, we're basically seeing the exact same trends. I think presidents in general get too much credit when the economy is doing well and too much blame when the economy is doing poorly. There are a lot of factors beyond a president's control.
There are of course some levers that they have at their disposal including having a trade war, which would be very destructive to the economy but generally we are having this sort of slow but steady improvement in the economy, in hiring, and on a number of other factors.
HILL: You know, Stephen, you brought up the concerns or -- I mean, the questions about a possible recession in China. The "New Yorker" points out -- I'm quoting here -- that there's some concern among economists with respect to all the good news that we're seeing here in the United States writing, "This could well be paving the way for a significant slowdown and quite possibly," the big R word, "a recession in 2020 as a boost from tax cuts and higher government spending fades, noting it is at least conceivable that Trump could fall victim to a boom-bust cycle of his own making."
As we just heard from Catherine, presidents get a little more credit and a little bit more blame on both sides when we see things happening. But is this a concern? When you're talking to your contacts, when you're talking to those folks in the administration, is there a concern about a possible recession, especially if you look at things like stagnant wage growth and housing prices?
MOORE: Well, first of all, let me just say it's a little rich to say that this is a continuation of the economic trend under Obama. Actually, you know, we inherited an economy that was radically slowing down. In fact in the last year of the Obama administration the economy grew at 1.5 percent, which is barely staying out of recession. And I've got to say, I mean --
RAMPELL: That is not barely staying out of recession. That is bogus.
MOORE: Wait -- 1.5 percent is pretty slow. But here's the point. I mean --
RAMPELL: Recession means you're declining, you're shrinking.
MOORE: Let me just finish the point, Catherine. It was your newspaper who said --
RAMPELL: A 1.5 percent is pretty close to the long-term growth rate that the CBO, the Fed, the IMF all --
MOORE: Well, we got out -- we have 4 percent now.
RAMPELL: Yes. One quarter 4 percent growth.
MOORE: No, no, no.
RAMPELL: Obama has --
HILL: Just go ahead and finish. And then Catherine, you'll get a quick word before we all get in trouble for going over time.
MOORE: Five quarters of 3 percent growth. But my point is, Catherine, it's your newspaper who said a week before the election that if Donald Trump was elected, we would have, you know, a second great depression and now we have this booming economy. Maybe you guys should just say you were wrong.
RAMPELL: You know what, you always cite this. I have no idea what you're referring to. I have never said that.
MOORE: I'll show you the clip. The editorial page did.
RAMPELL: OK. Please send it to me. Please send it to me.
MOORE: I will.
RAMPELL: Look, I think what you're probably referring to is the fact that a lot of people, basically the mainstream of the economics profession has been very critical.
MOORE: I know, but they were wrong. They were wrong.
RAMPELL: And has been very -- let me finish. That's been very critical of the economic policies that this president has pursued including a global trade war, including a fixation on trade deficits to the exclusion of everything else. You know, including a fixation with bailouts and bringing back dying industries that have been displaced by technological gains.
Those kinds of things are not good for the economy in the long term. The things that would help the economy in the long term would be investments in human capital which would be investments in the industries of the future and so on.
MOORE: And that's happened.
RAMPELL: So if you look at the overall direction of the policies that Trump has been interested in, in the long term they probably will have some sort of drag on growth, particularly the $2 trillion of debt that he has added to the federal government's balance sheet.
[09:10:12] All of that crowds out capital formation and it's that long-term growth.
HILL: We're going to have to leave it there. Whoa, whoa, whoa.
MOORE: So wait a minute --
HILL: Out of time, guys. No, no. We're out of time.
MOORE: What happened under Obama, that didn't --
HILL: We're going to save all of that for the next time that you two are here. I have to cut you both off before we all get in trouble.
Stephen Moore, Catherine Rampell --
MOORE: Thank you.
HILL: Appreciate the enthusiasm this morning. Thank you both.
President Trump starting his working vacation at his golf course in New Jersey this morning while once again undermining his own government officials over the Russian threat to the U.S. election system.
(BEGIN VIDEO CLIP)
TRUMP: I had a great meeting with Putin. We discussed everything. Now we're being hindered by the Russian hoax. It's a hoax. OK.
(END VIDEO CLIP)
HILL: The president saying that at a rally last night in Pennsylvania. This of course, remember, came just after his intel chiefs made a rare appearance to together in the White House briefing room to warn that Russia is still targeting the midterms in November and elections beyond that.
White House correspondent Kaitlan Collins is in Berkley Heights, New Jersey, near the president's golf course.
So, Kaitlan, the president's comments of course directly at odds once again with his top national security officials
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Erica, it is such a stark contrast that you can't miss it. The president last night as you just showed talking about Russia but making no mention of their meddling in our election, or any of those efforts to prevent it, only in feds saying that the investigation into Russian interference in the election is a hoax. Compare that with what the president's intelligence officials came out to that briefing offering a very blunt candid assessment that yes, Russia is still a threat in very, very certain terms.
Listen to what the Department of Homeland Security secretary, the president's chief intelligence officer and even FBI director all had to say about this just yesterday.
(BEGIN VIDEO CLIP)
DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: We continue to see a pervasive messaging campaign by Russia to try to weaken and divide the United States.
KIRSTJEN NIELSEN, HOMELAND SECURITY SECRETARY: Our democracy itself is in the crosshairs.
CHRISTOPHER WRAY, FBI DIRECTOR: Russia attempted to interfere with the last election and continues to engage in malign influence operations to this day.
(END VIDEO CLIP)
COLLINS: Now, the White House insists it was President Trump's idea that those officials come up to the briefing, talk to reporters about the threat from Russia, but it just doesn't mirror with what the president told his reporters in a speech that went on for more than an hour, a speech where he also said that Vladimir Putin did not want them to win despite, Erica, just a few weeks ago Vladimir Putin saying he very much did want Donald Trump to win the election when they were standing right next to each other.
HILL: Kaitlan Collins, with the latest for us. Kaitlan, thank you.
For more now on this, CNN intelligence and security analyst and former CIA operative Bob Baer joins me now.
Listen, the disconnect is sadly nothing new. We've had this conversation before, Bob, but it does beg the question as Americans are watching this and as we are seeing two conflicting messages here, who do they trust? Who do they believe? Especially when they're told that securing elections in this country is a top priority. They're hearing that from DNI Dan Coats. Can they believe that they will be secure?
ROBERT BAER, CNN INTELLIGENCE AND SECURITY ANALYST: Well, I don't think we're going to be secure, Erica. I mean, it's very clear the Russians are meddling. They're getting more sophisticated, they're using VPNs. They're using a lot of different servers. It's harder to detect but Facebook has detected it, the National Security Agency has detected it, Dan Coats came out very clearly yesterday and said look, they're meddling, they're going to continue to meddle, and we can count on them picking up the pace.
I mean, you have to believe the intelligence community. And frankly the president is sounding deranged at these rallies. I don't know what he really believes but this is not a hoax, the Russians are coming after us again and Americans better pay attention and they are managing, by the way, to divide us and they will continue to unless there's a strong reaction from this administration.
HILL: The security officials, the five we heard from yesterday, in some ways I think you could make the case that they are becoming more blunt and more forthright in their assessments. We are hearing stronger language from Secretary Nielsen than we had in just a few weeks ago. She's ramped that up a little bit in the last couple of weeks. Don Coats very clear on where he stands on all of this.
How much do you think that could influence the president's thinking on this even if it's only behind doors?
BAER: Well, look, the evidence is already good enough on Russia. You look at the Mueller investigation, you don't get better intelligence than that, and clearly the National security establishment is in full revolt against the president. There's entirely different messages here. And they're just going to stand up for the facts. Everyone of them from the FBI to the CIA, everybody else.
So I've never seen, frankly, a revolt like this inside the federal government against a president. It's never occurred.
HILL: Will it be effective? Just to sort of piggyback on that, do you believe it will be effective? I mean, will they be able to hold their jobs? Can they band together and make sure that this does remain a top security priority in this country as we were told it would be yesterday?
BAER: When you have the president's national security adviser, recently appointed, Bolton, coming out and say this is not a hoax, he'd have to fire everybody. Is he going to put the QAnon people, the conspiracy theory, in his cabinet? Who knows where this is all going to go, but it's worrisome.
HILL: Real quickly, before we let you go, what are you going to be watching for in the next couple of months?
BAER: I'm going to be watch for the Russians picking up on congressional elections. Look, the Russians support Trump. They don't want Republicans to lose the Senate. There's always the possibility of impeachment. So, I think what we're going to see is them coming after senate candidates, Claire McCaskill for one and others, see if they can affect this election. And this plays well in Russia. Putin is doing this for a reason and he will continue to do it.
HILL: Bob Baer, always appreciate your insight. Thank you.
Just moments from now, day four of the Paul Manafort trial will get underway. The big question - will the prosecution's star witness, former Manafort deputy Rick Gates testify?
And right now, Iran is holding a massive military exercise in the Persian Gulf. What really has the US concerned about the show of force? We are live in the Strait of Hormuz.
[09:21:01] HILL: The nation's top security officials coming together to warn Americans, Russia is still trying to interfere with our elections.
Then just hours later, President Trump weakening the message and also talking about what he calls the Russian hoax at a campaign rally. Let's discuss with our senior political analyst Ron Brownstein, political analyst Molly Ball.
So, as we look at this - listen, we know there's this disconnect. It's not new perhaps, but to see it play out in such a public way yesterday where you have five of these top officials in the White House briefing room and then hours later we're hearing a different message from the president.
Ron, this continued disconnect, these confusing mixed messages for folks, is there a chance that we're going to see an end to it or is this the reality for the foreseeable future?
RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: I think this is the reality for the foreseeable future because the president has consistently shown himself incapable of separating the national security threat to the US from the questions about his own legitimacy tied up in the Russia investigation. And it's more than just kind of a little cognitive dissonance. In fact, it amounts to undermining what is one of our greatest weapons in this struggle, which is the opportunity to publicly shame and confront the Russians and Putin.
The president, far from doing that, far from in Helsinki saying, look, we know what you have been doing, we are aware of it, we will respond not only with sanctions, but with our own measures, he goes out of his way to say, well, he denied it and therefore I have no way to solve the truth of this.
And so, we give away, unilaterally surrender one of our greatest weapons, which is the opportunity to simply call out what is being done and to confront the president of Russia about these activities.
HILL: There's also the question about another important institution, of course, and that is just the democratic process here in the United States.
So, we've hearing from DNI Coats that this is going to be a top priority in terms of the security of the process. But, Molly, will these mixed messages out there, is it destined to be undermined?
MOLLY BALL, CNN POLITICAL ANALYST: Well, as you said, the disconnect isn't new, but there is a couple of things that are new about this message.
I think, first of all, the volume of the warnings from numerous officials in the administration, clearly, they have stopped waiting around for the president to show leadership on this issue and they really want to send this message both to the American people and to the Russians that if the president isn't doing something about it, there are still American officials who are concerned and who do plan to do something about it.
And the other thing that I think is new is the level of the threat. These officials and officials in the Congress and others, and even local election officials, are saying this is intensifying, this is happening now, this is affecting - potentially affecting an election that is going to happen just a few months from now. So, this is no longer an abstraction or sort of an ambient threat. This is coming that is coming to bear right now and we need to watch out for it.
So, they would love to have the president back them up on this, but they clearly have stopped waiting around for that to happen.
HILL: In terms of getting a little bit more bold, being blunt, Dan Coats definitely - and this is not the first time in the last couple of weeks you've seen this, but yesterday saying, look, he still doesn't know what happened, he can't weigh in on what happened in that meeting in Helsinki.
What does this do in terms of setting the stage for any future meetings, Ron, whether it be another meeting with Vladimir Putin, another meeting with Kim Jong-un?
BROWNSTEIN: It's extraordinary.
HILL: How does it affect those moments? Yes.
BROWNSTEIN: It's extraordinary. First of all, one last button up to the Russia point. During the Cold War, we did put money into defenses at point, the ABM in the 60s and star wars in the 80s.
But the heart of our deterrence was the idea of mutually assured destruction, and that was the nuclear weapons, of course. If we were attacked, destruction would be the response.
[09:25:00] I remember under Obama, when the president talked about our offensive capacities, we don't know - there certainly has been no indication that Russia has faced the threat of not only - we're going to harden our defenses, but that we would impose consequences for their continued meddling in our election.
And that's the sort of thing that we are surrendering with the president in public failing to confront him and, in fact, seeming to accept his explanations for their unacceptable behavior.
So, we are in this situation where certainly all of the elements of the government are trying their best to respond to this, but they are being undercut from above.
And I would just point to Congress on this as well. So, many members of Congress said that it was unacceptable to have no one in the meeting and to not really know what was agreed to or discussed, and yet they have blinked at providing real oversight.
I mean, there was one hearing in the Senate Foreign Relations Committee, but, again, there have been no consequences for the behavior imposed from Congress and, I think, the president reads that as, ultimately, they will accept whatever he dishes out.
HILL: It's fascinating too because we did hear - I wouldn't call it pushback, but John Bolton trying to clarify after Dan Coats said I really can't say anything.
Well, meddling was the first thing that the president brought up in that meeting, but, obviously, didn't expand on that. We still don't know what that really means. Was it, hey, this happened, was it something forceful?
Molly, is there a chance that maybe there was something really forceful that happened behind the scenes, that maybe, just maybe, the president has figured out the best way to deal with Vladimir Putin is perhaps not be forceful in public, but he thinks he's playing him well behind the scenes and that maybe we're all just reading this wrong?
BALL: We have no indication that that's the case. Obviously, nobody knows what went on in that meeting. But given what we were told in the press conference afterward notoriously and given the many, many public statements that the president has made since then, President Trump, over and over emphasizing the friendly nature of this meeting, emphasizing the idea that we should be friends with Russia. Now, is there a master plan? Is there a strategic blueprint in his mind where he thinks that if Russia is an adversary, maybe if we're nice to them, there's less chance that they'll attack us?
Well, first of all, the cyberattack is continuing to happen. So, no. But given how unintentionally transparent this administration usually is, how porous it is, how much tends to leak out, we have not gotten any indication from reporting inside the White House or the agencies that, in fact, this is all some kind of three dimensional chess, some kind of master plan.
What you see is what you get. And what you see is a president who is telling us as overtly as he possibly can that he wants to be friends with Vladimir Putin, that indeed he in some ways admires Vladimir Putin and except in a very nominal sense, he's not very interested in confronting Putin on this particular issue.
HILL: Molly Ball, Ron Brownstein, always appreciate it. Thank you both.
Still to come this hour, that ostrich jacket. Yes. But a sweatshirt kind of budget. How do you square the two? Team Mueller claiming Paul Manafort turned to fraud when he ran out of millions, also he could hide it from the IRS.