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Economy Adds 263,000 Jobs In April; Unemployment Rate Falls To 3.6 Percent; Trump Says McGahn Should Not Testify Before Congress. Aired 10-10:30a ET
Aired May 3, 2019 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JIM SCIUTTO, CNN NEWSROOM: A very good Friday morning to you. I'm Jim Sciutto in New York.
POPPY HARLOW, CNN NEWSROOM: And I'm Poppy Harlow. And we begin this hour with really a historic jobs report. 263,000 jobs added last month. The unemployment rate is now 3.6 percent. That is a 49-year low.
SCIUTTO: April is now the 103rd straight consecutive month where the U.S. has added jobs going back to the crash in 2008. Let's bring in Christine Romans.
So, Christine, this is a big number, its shows that job growth is still chugging along.
CHRISTINE ROMANS, CNN CHIEF CORRESPONDENT: It shows you all those concerns that economists had about what was happening in the first quarter were unwarranted because companies are hiring and hiring pretty briskly. 263,000 net new jobs, that the most since January.
But you're looking at an average of well over 200,000 net new jobs every month over the past year, the unemployment rate down to 3.6 percent. You got it a whole way back to Woodstock days for any kind of numbers that are that low. And this is an economy that's changed dramatically since then, right? Now, you have women in the labor market, you have much more diversity in the labor market.
When you look at where you see the job growth, its business information, 76,000 there, construction, 33,000. Manufacturing, we'll continue to watch this one, only 4,000. That's below average for the Trump administration. This has been a centerpiece of his economic policy. And now, interestingly, tariffs seem to be adding costs that might be biting in to the business bottom line for the manufacturing sector, so watching that.
Also watching wages, 3.2 percent year-over-year wage growth. When you've got overall inflation running about 2 percent, that means your paycheck -- you can tell that your paycheck is a little bit fatter. So that's a number we're watching there as well. One thing, when I look at this number and then I look at the GDP number from last week, a quarter of 3.2 percent GDP growth, I think this idea that from the White House that you should be cutting interest rates, this is a strong economy. I don't see any need for stimulus here. In fact, maybe the opposite, I don't know. I mean, this is a strong economy right now.
HARLOW: Right. And it was just last week that the President Tweeted, maybe the Fed should cut rates an entire percentage point, which has not happened since the depths of the crisis in 2008.
ROMANS: And remember that when we were in the depths of the crisis, people, like the President and others, were complaining that rates were low and that that was helping the Obama administration. They said that wasn't fair and then that was a stimulus that was going to cause a bubble, right? So that didn't happen, but you can see that's why you've got to take the politics out of these decisions and have it --
SCIUTTO: 2020 election is coming. We'd like to keep the economic numbers strong going into New Year.
HARLOW: All right. So stay with us, Romans. Let's also bring in Diane Swonk. She is the Chief Economist at Grant Thornton, one of the world's largest accounting networks. Nice to be with you. Thanks for joining us.
What's your read on this number?
DIANE SWONK, CHIEF ECONOMIST, GRANT THORNTON: Terrific number. Certainly a welcome, an upside surprise of 263,000. Got a little tiny bump from some hiring for the census. We're going to watch that going forward because those temporary hires for the 2020 census will be adding a lot of jobs as we go forward and then come off again in 2020. But that will be an extra boost.
We also saw, as Christine pointed out, those professional services jobs. This really is a transformation of the U.S. economy and underscores the increase in technology, the application of A.I. in innovation, that's going through professional services. You're seeing it in computer programming jobs, computer services job, information technology jobs. It's increased the demand for workers but distorted the demand for workers as well. So it's moving up the food chain in hiring more workers that are higher skilled, more tech savvy.
But also interesting in this report, as great as it was, part of the reason for the decline in the unemployment rate was a reduction in participation in labor force and the biggest losses were in people with a high school degree or less and those with only some education. You see the mismatch in the labor force and our inability to really train workers. We have fallen short on investing with workers to fill these jobs that were generating in a more tech savvy economy.
SCIUTTO: Diane, let me ask you a question. The Trump administration talking about cutting rates into a boom, fantastically making that demand when it really just doesn't happen. Let me ask you -- and the Vice President just a moment ago speaking to CNBC repeating the President's demand there for a rate cut.
Have a listen.
(BEGIN VIDEO CLIP)
MIKE PENCE, U.S. VICE PRESIDENT: So I think the President suggested the opposite. This might be a time for us to consider lowering interest rates. But, look, we just don't see any inflation in this economy.
(END VIDEO CLIP)
SCIUTTO: Let me ask you this. The fact that there's an argument for raising rates in a boom, right, that's typically the way Fed policy works, not just to control wage inflation but to manage the economic boom, to lessen the chance of that boom, that bubble bursting here. I wonder, do you think that this administration has successfully cowed the Fed from a rate rise at least?
SWONK: No. I think J. Powell actually feels very vindicated right now. He did exactly what he was supposed to do in his press conference. He came out and he said, this is what the statement says. It sounded a little more dovish because he admitted that inflation is not meeting their expectations. But he said, hey, we think that's transitory and we think the underlying economy is strong.
So right now, we're on the sidelines. We've already raised rates and we're on the sidelines and waiting and seeing. And that's exactly where they should be. They're wearing noise canceling headphones when it comes to the administration. And I think the failure of two of the nominees in part because of their challenge to the independence of the Fed, wanting to carry out the President's agenda rather than the economic agenda of the American people on the Federal Reserve was very important.
HARLOW: I'm picturing J. Powell with some Beats headphones on. I mean, it's a picture that makes me smile.
SWONK: Believe me, he's very good at it.
ROMANS: Is this full employment here? I mean, there's a big debate about whether we're going to run out of workers.
SWONK: That is a debate right now. We are running out of some kinds of workers. What I always love about this kind of economy is how it gives people a second chance at these low rates of unemployment. It did disappoint me that the participation rate fell a bit. What I like to see is people throwing their hats in the ring. Now, that could just be a one-month aberration.
But we are seeing a lot of reports of people who are former convicts finally getting a second chance. And that's really important. We've got a lot of people that maybe were wrongly incarcerated or do deserve a second chance in society, and they're finally getting a second look now because the labor market is so tight.
We have yet to really pull in that half million workers of prime age men, 25 to 54 years old, that have disappeared. And we need to get them back in. And that's one of the advantages -- the Fed has very few tools, a long expansion, extending the expansion, allowing things to run when inflation isn't overheating. That's what pulls people in to the race in America and have an expansion.
HARLOW: Remember, the Fed Chair said part of the problem there for those men you mentioned is the opioid crisis. So something also to keep a close eye on.
SCIUTTO: They can't get jobs because they can't pass the drug test. It happens to a lot of communities.
HARLOW: We appreciate your brains this morning. Christine Romans, Diane Swonk, thank you very much.
And coming up, we're going to speak this hour with Kevin Hassett, the Chairman of the White House Cuncil of Economic Advisers. It's taking just about 20 minutes.
As far as the President is concerned, switching gears here, his former White House Attorney, Don McGahn, has said enough, more than enough. The former White House Counsel who spoke to Mueller team at length, who said among other things that the President ordered him to have Mueller removed and then to lie about it will not be talking to the House Judiciary Committee, subpoena or no, if the President has his druthers.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: I've had him testifying already for 30 hours.
CATHERINE HERRIDGE, FOX NEWS CHIEF INTELLIGENCE CORRESPONDENT: So is the answer no?
TRUMP: And it's really -- so I don't think I can let him and then tell everybody else you can't.
I would say, it's done, we've been through this nobody has ever done what I've done. I've given total transparency. It's never happened before like this.
(END VIDEO CLIP)
SCIUTTO: It turns out that while the President was cheering the Special Counsel's final report, falsely claiming total exoneration, a White House lawyer was firing off a blistering complaint to the Justice Department in a newly revealed letter from April 19th. Emmet Flood says that Robert Mueller failed in his mission, exceeded his authority and produced no better, in his words, than a law school exam paper.
J.W. Verret is a former Trump transition staffer who wrote in The Atlantic just a short time ago. According here, the Mueller report was my tipping point. It is time for impeachment. He joins us now live from Washington. He is also an Associate Professor of Law at George Mason University. J.W., we appreciate you taking the time this morning.
J.W. VERRET, ASSOCIATE PROFESSOR OF LAW, GEORGE MASON UNIVERSITY: Thank you.
SCIUTTO: So on the headline point here. You have been on GOP presidential transition teams for a number of republican administrations. You say the Mueller report was really, I suppose, the straw that broke the camel's back for you. Why do you feel compelled to take this public stance in favor of impeaching this president?
VERRET: Well, let me first say, as a law school professor, there's nothing wrong with law school exams. Law school exam is where we learn black letter law and they are where students learn legal ethics. Two things I think a lot of lawyers in the administration maybe need a little bit of a refresher on, particularly the Attorney General. I think it's time because the Mueller report revealed up to potentially 12 instances of obstruction of justice. I have a problem with that.
And I think it falls squarely into Congress' impeachment power at this point.
SCIUTTO: You criticize in your piece other GOP members. You write of them, ones who stayed on with this administration despite similar misgivings with the president, you say that what they're acting out of is from a mix of loyalty and pragmatism turning into something more sinister, a blind devotion that serves to enable criminal conduct. Why do you believe more republicans who you say think like you are not willing to stand up?
VERRET: Well, I think because the public opinion isn't there yet. That's usually what drives the Congress. I think as it shifts over the course of oversight hearings that will continue, I think that, eventually, republicans will speak up. I think that we've seen a tactic from the Attorney General to attempt to shape that public opinion.
And I really think what the Attorney General did with the initial summary was effectively a form of jury tampering where the prosecutor goes out, gives a press conference with misleading information. They have gotten in trouble with that before. It's like that. That's essentially what he was trying to achieve. Mueller was sort of hamstrung, frustrated about it, tried to get the truth out. I think we'll eventually see it through these hearings of Mueller and Don McGahn, who I don't think the President will be able to stop.
SCIUTTO: In your piece, you made a comparison to the Nixon administration and Watergate proceedings, and a smart one, I think. And you note that during that time, republicans were with the President, but that changed over time and eventually a number of them decided to support impeachment, which led to his resignation. But that was with the tapes. The tapes were the turning point for many of them there.
You have the Mueller report now. It is documented, as you said, a dozen instances or evidence of obstruction of justice, and yet both public support and Hill support for this president among republicans has not changed. What is going to change that in this case, in your view?
VERRET: I think the President and Attorney General's spin campaign about the Mueller report was initially successful. And I think that that success will fade over time with repeated drum beat of public hearings. And I think also we'll get something from -- I think the first penny to flip here will be the House's subpoenas for the President's financial records through Deutsche Bank. I don't think he can stop Deutsche Bank from complying with that subpoena.
SCIUTTO: We'll see. His new strategy seems to be to fight every subpoena. But, J.W. Verret, we appreciate the piece you wrote and thanks very much for joining our broadcast this morning.
VERRET: Thank you.
HARLOW: That was an interesting conversation.
All right, so still to come, much more on the surprisingly strong month of hiring, the jobs report. We'll discuss with the White House Chief Economic Adviser, Kevin Hassett.
Plus, a cruise ship heading back to its home port after being quarantined because of measles, but what happens next for the hundreds of people onboard?
SCIUTTO: Someone onboard didn't get their vaccination.
And from the cover of Time Magazine to a profile in The Washington Post, the profile of Mayor Pete Buttigieg's husband is rising. We'll discuss.
SCIUTTO: Right now after a wild week on Capitol Hill, democrats are trying to figure out their next move after the Attorney General Bill Barr's refusal to testify before the House Judiciary Committee yesterday.
HARLOW: And -- right. And it's also coming as House Speaker Nancy Pelosi says that Barr lied to congress during his April 10th testimony, a charge the Department of Justice calls, quote, reckless, irresponsible and false. Let's talk about the politics of all this, where do we go from here?
Rachael Bade, Congressional Reporter for The Washington Post is with us this morning, along with Julie Hirschfield Davis, Congressional Correspondent for The New York Times.
You guys can get along even though you work for competing publications, not so much for the folks that we pay in Washington to get things done. Rachel, to you first, I mean, your point here is republicans may have won short-term here because they've got Barr on their side. It's made very clear that he'll go to the mat for the President, but is this a long-term strategy that is a winning one for republicans in the long run?
RACHAEL BADE, CNN POLITICAL ANALYST: Yes. I think the President is very pleased with Barr. And if there was one immediate winner from Barr's hearings this week, it was Trump himself. You know, he had wanted Jeff Sessions to take a stronger stance in defending him to almost be his personal attorney. And Barr showed this week that he is right there with the President in hitting back at Democrats, questioning Mueller's logic, and the President, from what we're hearing, couldn't have been more pleased.
In the long-term, though, I think Barr's bid not to show up to his testimony in the House and his bid to move and to ignore two congressional subpoenas over the past week, this really sort of makes the case that democrats have been trying to sort of make publicly, which is that the White House is stonewalling them and they are going to need to take more aggressive action. And I think that that could have an influence on the polls on this question of impeachment, and it sort of -- it just uplifts that argument in terms of them saying that Trump is trying to curb the separation of powers.
SCIUTTO: So, Julie, Ted Lieu, a member of the House Judiciary Committee, said something interesting yesterday. He said that the democratic caucus might pursue impeachment proceedings despite the fact the democratic leadership, Nancy Pelosi and others publicly saying, without republican support, this makes no sense, but the caucus may do it anyway. What do you hear about the chances for that? Are they going to put their leadership in a tight corner here by pursuing something that also the polling shows there's not a great deal of public appetite for?
JULIE HIRSCHFIELD DAVIS, CNN POLITICAL ANALYST: Well, I don't think we're there yet. But I certainly think that the release of the report, the revelation of this written communication that went back and forth between the Special Counsel and the Attorney General about how Barr had characterized the report and how Mueller felt he had inaccurately or misleadingly characterized it. And all of the stonewalling has only built up the drum beat within the democratic caucus for considering impeachment. And there were people who were there well before any of these developments came out.
But I think it's fair to say there are many more people who have gotten there just in the past couple weeks, as we have seen this all unfold, and the pressure really is building on Nancy Pelosi and on the leadership to really consider whether this is the wise course of action.
I don't think that we're going to see in the short-term democrats starting to defect on this, although, of course, they'll be outspoken about their own views. I don't know they're going to go out on their own and start to pursue this.
But I do think sooner rather than later and I think sooner than they probably expected, democrats are going to have to have a more serious conversation about what they're willing to do and what they're not. Because if they want to build a case just even for investigating this President, short of impeachment, they are going to need to use some of the powers that you only have when you're in an impeachment proceeding. And so they're going to have to kind of balance that out.
SCIUTTO: Good point.
HARLOW: Yes, that's a great point. Rachael, the President's approval rating, it's not over 50 percent, but it's the best it's been in two years. Is this stonewall, stonewall, stonewall strategy working politically for him?
BADE: I think it's too early to say, because if you think about it, it was just last week that the President came out and said we are going to fight all the subpoenas. He had sort of been laying the groundwork to, of course, fight all these congressional investigations before. But there's a difference between sort of dragging out your answers to document requests that Congress are making and saying we're going to shut everything down.
And I think there was a notable change with some democrats who were skeptical of impeachment last week, but then after he made those comments are now starting to question whether they're going to have to go there. And I think that that's why we saw Nancy Pelosi's tone this week shift. It definitely escalated. She is using a lot more sharper rhetoric. Yesterday, she said that Trump is worse than President Nixon. And she talked about the third article of impeachment against Nixon, which was that he was ignoring all the subpoenas.
So I think that it's too early to say how much of an effect it might have on the polls of the President's approval and also this notion of whether the American support impeachment, right now, democrats do, but a majority of Americans do not. And so we'll just have to see.
HARLOW: That's true.
SCIUTTO: Very low on the list. Julie, I want to ask you about another investigation. Because Barr should not be missed during the hearings, talked about his own investigation that he is leading now into how the counterintelligence investigation began during the 2016 campaign. The Office of the Inspector General of the Justice -- of the FBI rather already has an investigation. Barr also talked about investigating leaks from inside the National Security Community. How significant are those investigations and should members of the former administration and others be concerned about their liability now?
DAVIS: Well, I don't know that members of the Obama administration are concerned about that, but certainly the investigations themselves are significant and the fact that Barr is willing to go there and willing to devote Justice Department resources to looking into those things is a big development.
I mean, this is -- we have heard President Trump for two years, more than two years, talk about how the real wrongdoing was on the other side, that this was a hoax of an investigation, that the whole predicate essentially for this Special Counsel's investigation was somehow crooked. And what we're hearing from the Attorney General now is that he wants to actually look into that in a pretty thorough way. And so we'll see what comes of that.
But there have been revelations even today, my colleagues reported another investigator that the FBI had sent to London to investigate the Trump campaign's links to Russia, you know, there's -- clearly, there was a very sophisticated effort under way to look into this. And I think we can expect to see the Attorney General really go at that aggressively and try to cast aspersions essentially on the predicate of this investigation.
HARLOW: Ladies, thank you both. Have a great weekend. Rachael Bade, Julie Hirschfield Davis, we always appreciate it.
Ahead for us, another blockbuster jobs report, unemployment at its lowest level in nearly 50 years. How long can this thing last? We'll ask the President's Chief Economist next.
HARLOW: All right. Welcome back. So blockbuster jobs report this morning. U.S. economy added 263,000 jobs in April, the unemployment rate 3.6 percent. That is the lowest, folks, since 1969.
With me now, Kevin Hassett, Chairman of the White House Council of Economic Advisers. Good morning. And, Kevin, my reporting is that you danced a jig when you saw these numbers. Is that a fact?
KEVIN HASSETT, CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: It is actually a fact. The fact is that this job report is one of the best things I have ever seen in all of the history of labor economics. And to put it in perspective, the last time the unemployment rate was this low, we were about to land on the moon for the first time. The last time the unemployment rate was this low for women, it was 1953. So Larry Kudlow still had his baby teeth the last time the unemployment rate was this low for women.
And so I think that this idea that we're going to have a new normal with low growth and low job creation, it's, I think, being disproven by the data.