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20.5 Million Jobs Lost in April, Worst Jobs Report in U.S. History; Trump Reacts to Jobs Report Ahead of Visit to WWII Memorial; Mark Zandi, Chief Economist, Moody's Analytics, Discusses April Jobs Report; 1000+ Employees Test Positive for COVID-19 at Iowa Tyson Plant; Mayor Steve Adler (D-Austin) Discusses Why It's too Soon to Open His City as Texas Reopens Amid Pandemic. Aired 11-11:30a ET
Aired May 8, 2020 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thank you so much for joining us today this hour.
Today is the day a lot of folks were dreading, the day it became crystal clear how devastating the pandemic has been on the U.S. economy. With the April jobs report just released, it shows unemployment is hitting the highest level since the Great Depression.
Look at the numbers and recognize these aren't just numbers, these are people. And 20.5 million people lost their jobs last month. The unemployment rate jumping from 4.4 percent to 14.7 percent in a month's time.
The speed of the job loss is breath-taking. Ten years of job gains gone in a month.
And as bad as those numbers are, President Trump senior economic adviser told CNN this morning he expects it to get worse still.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: The next one should be around 20. I was thinking this one might be as much as 20 but we had a big decline in the labor force as well. So the numbers are going to be probably going to be best to look at, as you said, the U-6. So that's the 22 percent. And it will probably be 25 percent in the next report.
POPPY HARLOW, CNN ANCHOR: Wow.
(END VIDEO CLIP)
BOLDUAN: And the country hits another grim milestone this morning. The coronavirus has now killed more than 75,000 Americans, well over 1.2 million people have been infected. Still a vast majority, 47 states will be at least partially reopened
We have a lot going on this hour. Let's get started with CNN's Julia Chatterley.
Julia, great to see you again.
On the jobs numbers, give us perspective here. How bad is this?
JULIA CHATTERLEY, CNN INTERNATIONAL BUSINESS ANCHOR & CORRESPONDENT: This is really bad, Kate. What can I say? This past month has been the worst month for families than any year during the great depression. That's the scale that we're talking about.
And to go to what Kevin Hassett was just saying there, the Labor Department have already said this rate that you're looking at here would have been 5 percentage points higher if people had classed themselves as unemployed rather than just absent from work.
Yet, for all of that, there's a level of optimism from people in this report, too. Over 18 million people said they are temporarily out of work. They hope to come back quickly. We hope that it's the same that these jobs can be added back quickly as states reopen. We also know that's going to be a huge challenge.
But in the interim, also, the details in this worry me in terms of what sectors. As you can see, it's broad-based but over 40 percent of job losses came from leisure and hospitality. These are among some of the lowest paid jobs in the United States, too.
And this means workers and families least able to bear two months of lost income and still pay the bills. And that's going to be important for the recovery, too.
BOLDUAN: Yes. Digging into the numbers, even into the sectors, who has been most affected by these layoffs?
CHATTERLEY: You're talking about demographics. Everybody has been impacted by what we've seen in terms of job losses but minorities have been hit hardest.
Just take a look at some of these statistics, unemployment rate of more than 16.5 percent for black people, just under 19 percent for Hispanics.
Young people as well, if we take a look at that. Teenagers now, we've got almost 32 percent of teenagers also saying they're unemployed.
This matters because we have to assess the ability of the safety net that's been created to tackle these segments of society as well.
A lot of this is going to come down to the success of programs like the PPE. Does that bring jobs back in the coming months? But also as we were discussing yesterday, the interplay between
unemployment benefits being paid and the relatively lower, on average, wages that people earn in jobs.
We don't know what this looks like next month, but for today, it's a tragedy.
BOLDUAN: And looks like next month could look very similar.
BOLDUAN: Julia, thank you. Thank you so much. I appreciate it.
We're also standing by for President Trump right now. He's going to be heading to the World War II Memorial in Washington to mark the 75th anniversary of Victory in Europe Day. We're going to bring you those moments when we see them. When they begin live, we'll bring them to you.
Let's get to CNN White House correspondent, John Harwood.
John, the ceremony begins shortly but the president is already speaking out about this jobs report this morning. What is he saying?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Kate, this is the kind of jobs report no president ever wants to face, no politician of any kind ever wants to face.
But what the president is saying is two-fold. The first is, it's not my fault. We deliberately turned off the economy because of the coronavirus. And he said, even Democrats are not blaming me for these unemployment numbers.
And the second thing he said was we're reopening the economy on the way to a rapid comeback. Take a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES (voice-over): It's fully expected. There's no surprise.
Everybody knows this. Those jobs will all be back and they'll be back very soon. And next year, we're going to have a phenomenal year.
People are ready to go. We have to get it open, and safely. People are ready to go.
(END VIDEO CLIP)
HARWOOD: Now, of course, the economy is only going to rebound if people feel the confidence to go out, buy products, stores to open, workers to show up, and that is still ahead of us.
It involves getting control of the coronavirus sufficiently that we can have that robust recovery in the second half of the year that the administration is hoping for and Congressional Budget Office predicted -- Kate?
BOLDUAN: Thanks, John. Good to see you.
Joining me right now, Mark Zandi. He's the chief economist at Moody's Analytics.
Mark, thank you as always for coming in. I really appreciate it.
These are horrific numbers. What do you see in them?
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, they're ugly, Kate. Over 20 million in lost jobs, very broad based.
The thing that was so stunning to me was the Bureau of Labor statistics lists employment gains/losses by detailed industry. And if you look down that list, there's probably 100 industries they've got listed there. I saw one or two industries that didn't have layoffs. Every other industry had negative numbers next to it. It was just incredible. I've never seen anything like it.
The other thing that I found disturbing was that almost one million jobs are lost in state and local government, and that's a problem. I had thought state and local governments, if they don't get more help from the federal government to meet their budget shortfalls, which start laying off, but I didn't think it was going to happen so fast.
This puts pressure on Congress and the administration to come together and pass a piece of legislation to help out the state and local governments. Otherwise, we'll see millions more lost jobs in that part of the economy.
And those are key jobs in a crisis. They're police, they're fire, they're emergency responders, they're people who provide social services, they're teachers. We need those folks. And they're middle- paying jobs so that I found also quite disconcerting.
It's just hard to describe, Kate. It was just a very, very disconcerting report.
BOLDUAN: And you heard Kevin Hassett tell Poppy Harlow he thinks next month is going to be worse. Do you agree?
ZANDI: We'll have more job loss in May. We can already see that. There's been more claims for unemployment insurance, so that's folks being laid off or furloughed.
And next week is the week that the BLS will run the survey for May, and we'll certainly see some job loss there. It won't be nearly as bad. I expect another one million to 1.5 million.
It's odd for me to say that. At any other time, that would be crazy to be saying that. But you know, relative to 20 million lost jobs, that feels pretty good. I will say on an optimistic note, sort of, with businesses starting to
reopen, by June, I would expect to see the job losses turn into job gains. And at least for a temporary period, as businesses reopen June, July, August, September, we should see job growth.
I disagree with the president. We are not going to get a lot of these jobs back fast. We may get half of them back. We might, you know, get 10 million back. But the unemployment rate is still around 10 percent come Election Day.
And I don't see this economy going anywhere fast until we have some solution to this virus, a vaccine.
And the fact that we're reopening so quickly just raises the risks we have a second wave and right back into this mess later in the year.
BOLDUAN: I remember you saying last week it say huge gamble they are making with how quick they are reopening.
BOLDUAN: When you look at public health as well as when you look at the economic impact.
I find it really interesting, because I was going to ask you to respond to the president that he thought it was going to come back quickly. What is jobs coming back quickly in your mind? What do you see?
ZANDI: Well, you know, what I think is going to happen is, say we're going to lose 25 million jobs all in, you know, March, April, May. We'll get half those back maybe by October/November as businesses reopen.
That means the unemployment rate will go from being close to 20 percent back down to 10 percent. And then we are there. Not moving. We'll be in quicksand until there's some resolution to the virus.
And we're going to be very vulnerable. If we have more infections, the second wave, the job losses will intensify. Unemployment will begin to rise.
And by the way, Kate, this is -- I would consider this still a recession. But if we had a second wave and we go back with more job loss and higher unemployment, this will then be called a depression.
So we're taking a really big gamble here opening up as quickly as we are.
BOLDUAN: Mark, even short of it turning into a depression, as states are opening up, science has made it very clear the virus isn't going away. That creates and that leads to uncertainty when it comes to many Americans, also known as consumers.
What does that mean for kind of the longer-term impact on U.S. economy and the global economy?
ZANDI: You got it. I mean, you're absolutely right.
Anyone goes back to anything resembling normal, you know, with this virus hanging around, particularly it's re-intensifying, I can't see any business -- I'm a businessperson. I have to make decisions about hiring and investing. I can't imagine making a big investment decision in the context of all this, particularly when infections are starting to rise. Because, who knows? We may have to shut down businesses again.
By the way, this is happening across the globe, right? So you know, if you're dealing with businesses overseas, and global economies remain closed because of the uncertainty, that's going to impair activity here.
So I just don't see this economy kicking back into any gear until the virus is gone, until we feel comfortable that we're not going to get sick.
BOLDUAN: And that means a vaccine.
Mark, thank you. Thanks for your even hand on this always. Appreciate it.
ZANDI: Sure thing, Kate.
BOLDUAN: Coming up for us, a meat plant in Iowa is reopening, just as the number of coronavirus cases at that plant doubles. What is behind that spike? We're going to get into it.
And Texas is reopening but the mayor of Austin says it is too soon. Why is he so concerned? That's coming up.
BOLDUAN: A terrifying illustration how hard the coronavirus is hitting one industry in particular. On the same day that the Tyson's meat plant in Waterloo, Iowa, was reopening, the number of workers who tested positive for the virus doubled, over a thousand employees at one plant.
CNN national correspondent, Dianne Gallagher, is tracking this for us.
Dianne, why did this number jump? And why are they still open?
DIANNE GALLAGHER, CNN NATIONAL CORRESPONDENT: They're reopening because they're doing it at 50 percent compacity, is what Tyson said. They're not opening with anybody who has not been tested already for the virus.
But the reason why the numbers doubled is a little bit more complicated here. So according to Blackhawk County, Iowa, officials, 1,031 of the
roughly 2,800 employees at the Tyson pork processing Waterloo plant have tested positive for COVID-19.
Just, the day before the county made that announcement, Iowa Governor Kim Reynolds said only 444 employees tested positive. And according to the Health Department, the disparity lies in the numbers that the governor chose to use. She is only using the number of positive tests that occurred on site at the plant testing site.
The county, on the other hand, is using those on-site tests as well as those from local health providers and these serology antibody tests to confirm positive cases. And so the county is using all of those.
According to Blackhawk County, roughly 90 percent of the county's cases are employees from that plant here.
Now, Tyson went and made some changes inside attempting to adhere to those CDC guidelines. Tyson says it has not just met but exceeded those guidelines.
But we spoke with employees who are, Kate, understandably really nervous about this. One man we spoke to before the plant initially closed back in mid-April, who told us he was concerned. He had tested positive for COVID-19. His name is Donald. He goes back to work today.
And Kate, here's what he told us. He said, "I don't have a choice to go back to work. I can't beat Donald Trump and Tyson. Both of them are billionaires. I'm not a billionaire. I'm broke. I just work for a living."
Of course, he's referring to the president using the DPA to try and keep these plants open, even as so many of the employees continue to get sick in these outbreaks with the coronavirus.
One more thing, Kate. To illustrate this racial disparity that we've been seeing when it comes to COVID-19, and how it is particularly impacting these meat packing plants, because two-thirds of the workers in these plants across the country are people of color.
In Blackhawk County, Iowa, 5 percent of the ethnic minorities in that county are COVID-19 positive, compared with just 0.8 percent of the white residents.
BOLDUAN: Wow. Wow.
Dianne, thank you so much for your reporting. Really appreciate it.
So from Iowa, let's focus on Texas right now. The number of new cases there now about a thousand a day, in terms of coronavirus cases. Despite that, the governor is moving ahead with plans to continue opening more parts of the state's economy.
Today, that includes salons and barber shops joining the list. That is actually sooner in opening those types of businesses than the governor had originally planned. As that happens, the mayor of one of the state's biggest cities says
he's now concerned about a second wave of the virus.
Joining me right now is the mayor of Austin, Texas, Steve Adler.
Mayor, thank you for coming in.
What has you so concerned?
STEVE ADLER, (D), MAYOR OF AUSTIN, TEXAS: Well it's good to be with you this morning.
You know, what's concerning here is that this is an experiment. No one knows what's going to happen. As we begin to reopen the economy here, no one knows exactly the full extent of the virus transfer, the infection we're going to see. So we have to be prepared. We're going to do our best to avoid our hospitals from getting overrun. We don't have any choice now.
But I'm going to try my best to make this successful for the governor as I can, which means we're going to really push on behaviors, more than he is and what he's talking about. But also with testing and tracing.
But we also have to prepare for a failsafe. We have to identify what the trigger is that we see, if we see it, of rising hospitalizations that then cause us to do something to get back to where we are now.
BOLDUAN: Do you know what that trigger is? It's interesting. I've asked that of more than one governor of what that line is that they'll see and know that they need to reverse course. I haven't gotten a clear answer from really anybody yet.
ADLER: Well, we're real close to being able to identify that trigger. It's not hard.
What we have learned and earned from the last six to eight weeks in our community here is, with our modelers, University of Texas, we can predict now, based on the number of hospitalizations we are seeing, where we're going to be in two weeks.
So we figure out what is the capacity, and the comfortable surge capacity in our hospitals. And we say where is it that we are -- because remember, when you hit the trigger, there's a two-week lag.
So we should have that number today, within the next couple days. We're going to introduce you to the community. And all be watching that same number. Hopefully, we won't get to that trigger. But if we do, we're going to have to act.
So it's using the models that have been really accurate and spot-on in terms of predicting and assessing what we've been seeing in our community. BOLDUAN: On the simple, yet, for some reason it's become controversial
issue of face masks, why do you think the governor is not requiring the use of face masks in public?
ADLER: It's beyond me. And you know, our governor says you should do it. Our lieutenant governor says you should do it. But they won't let us have -- I was going to say they won't let us make it mandatory but that's not true. The governor's orders said we weren't allowed to put any civil or criminal penalties against it.
So here in Austin, we've kept face masks mandatory with the understanding that the penalty for not wearing a face mask in Austin is that more people are going to get sick and some of them are going to die. And our hope is that will be penalty enough. That's the real penalty associated with not wearing face coverings.
We're pushing it real hard because we recognize that that's what we have to do. Even for the governor's plan to be successful, we have to have universal adoption of the face coverings.
BOLDUAN: We've learned that the CDC has recommendations for how to open up safely. They presented that to the White House. But we also have seen another report of the White House shelved the guidelines because they thought the guidance was too specific. The task force coordinator now, since last night, says they are going to put out guidance, it's just being edited.
From your perch, do you want to see federal recommendations on how to open up safely for schools and for businesses, and what that should look like? Would that be helpful to you?
ADLER: I think it would be real helpful. I mean, we're trying to be guided as much by the science and data as you can. So experts coming in and saying if you're going to do this, this is how it should be done.
That doesn't tell us that that's what we should be doing. But certainly, we have our best guesses at this point as to, if you're going to open up, what are the things that can make it most successful.
We won't know until we do this whether or not these things actually can prevent a surge or not. We have to watch the numbers and pay attention to the triggers.
BOLDUAN: And before I let you go, everyone -- and I'll show it for viewers again -- saw this video from your city of a park ranger getting shoved into a lake by a 25-year-old simply because the ranger had tried to tell people to respect social distancing requirements and recommendations. There's the video for everybody to see. A lot of people had reactions, strong reactions to this.
When you saw this, Mayor, what did you think?
ADLER: Obviously, outrageous behavior and against the law. And there needs to be a sanction and there is against that individual. But my first thought was that we're beginning to lose control, that
somehow or another, through the actions to reopen the economy, we are beginning to reinforce the message that somehow or another we're on top of this, that somehow or another this is not as infectious as it was a month ago, which is not true.
But it also -- my thought was, that's an isolated incident and it is so far in this city. We have a community here in Austin that is not running out to take advantage of a reopening business. A lot of businesses that aren't doing that. I think that the overwhelming view in this community is to take this slowly.
The governor said that things could open. He didn't say they had to open. And as I look around, a lot are not, which I think is good. We have to see the data.
And again, there's a trailing indicator here. What we're doing today is not going to show up in hospitalizations for another two or three weeks. So we just have to really take this slowly, watch the numbers, and be prepared to act.
BOLDUAN: Well, Mayor, it's a beautiful city, Austin, Texas.
Thanks for coming in. I appreciate it.
ADLER: It's a magical place. Thanks for inviting me.
BOLDUAN: Thank you.
Still ahead, Remdesivir is the only drug shown to be effective against the coronavirus. And right now, there's a limited supply. Doctors are saying that they're not getting answers from the federal government on who is going to get the drug, and when.