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U.S. Economy Added 151,000 Jobs in February, Fewer Than Expected; Trump Backtracks, Suspends Tariffs on Canada & Mexico; Trump Threatens New Sanctions on Russia. Aired 9:30-10 am ET

Aired March 07, 2025 - 09:30   ET

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

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: -- spending in the future.

[09:30:01]

And then overall, government jobs increased, but at the federal government level, decreased by 10,000. And then when you break it out a little bit, U.S. Postal Service, those are where the declines happen. 6,700 jobs there, and other federal workers, losses of about 3,500 jobs.

Wages, though, important. Wages rose 4% year over year. That's good because that's keeping up with inflation, even better than inflation, which is about 3%. And I think we are just about open here, but futures were up, mixed, and here we go.

JOHN BERMAN, CNN ANCHOR: This is yesterday. This is yesterday.

YURKEVICH: This is not live. OK.

BERMAN: Just to be clear, we will see the numbers from today cycle in, in a minute or two.

YURKEVICH: OK, there they go.

BERMAN: Yeah, I still think this is yesterday right now.

YURKEVICH: But we know that markets all week, John, were reacting to so much news. They were reacting to tariffs coming on, going off, and they were presumably going to start reacting this morning to this jobs report, which is the first under the second Trump administration. Folks are going to be paying attention to this.

This could be a precursor of what's to come. Still a solid number this morning. But investors are definitely going to be parsing through this report to try to figure out what it means for the future and what it means in comparison to what the Trump administration is trying to do with the economy and some of their moves on tariffs. Are these the right numbers?

BERMAN: These are real numbers.

YURKEVICH: OK.

BERMAN: You can see the wrong numbers right now. You don't see percentages. What you see is the markets down a very little bit, relatively speaking, in terms of percent turning negative over the last 20 or 30 minutes or so.

YURKEVICH: Yeah.

BERMAN: But flattish certainly compared to the last few days.

YURKEVICH: Definitely a moderation compared to what we've seen in the past couple of days, but a bit down on this news.

BERMAN: All right. Vanessa Yurkevich, thank you --

YURKEVICH: Thank you.

BERMAN: -- for sharing this live moment with us.

Kate?

KATE BOLDUAN, CNN ANCHOR: All happening live, people. We'll continue to track how the markets are reacting, but let's get the latest right now. Joining us from the White House is the Director of the White House National Economic Council, Kevin Hassett.

Kevin, thank you so much for coming back in.

KEVIN HASSETT, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: Hi Kate. Good to be with you.

BOLDUAN: Let's start with the jobs report. What do you see in this jobs report?

HASSETT: Yeah, I think it's -- I'm much more positively surprised by the numbers than the market. The bottom line is that the Biden administration created a lot of jobs and they tended to be government jobs. About 25% of the job creation was government jobs. And we actually, as President Trump intended, reduced government jobs by about 10,000, as you guys just mentioned.

And then the other thing we're trying to do is increase manufacturing jobs and manufacturing jobs, which you didn't mention, were up about 10,000, with about 9,000 of those being new jobs for autoworkers, which, as you know, are very sticky and high-paying jobs. And so I think it's a fantastic report. It's showing exactly what President Trump intends to do. He intends to reduce government spending, to get rid of wasteful government jobs and to create manufacturing jobs. And that's what you see.

Finally, there are a bunch of signs that the flu was going to have a big impact on this job report. And that's what I think the travel and leisure thing that you guys just mentioned came from, is that people were homesick and they weren't going out and going to hotels and so on. And so I expect that that's going to reverse in the next month. And it's another reason why I was positively surprised about this. The people who account for flu in the jobs data were saying this number was going to be maybe even about 100,000 lower than what we saw.

BOLDUAN: I saw economists saying that because only the job cuts that were included that were lost by February 15th are included, that they believe that kind of the full scope of the cuts that we've seen within the federal workforce are not going to be reflected in this -- in this report.

HASSETT: Right.

BOLDUAN: Do you agree with that? Is that going to be more reflected in next month?

HASSETT: Right. Yeah, the way to think about how it works is that they have a survey week. And the survey week is like around the 12th of February. And so whatever happens through then, that's what's in the monthly report. So you don't have the stuff after that.

So government workers will probably have a bigger decline next month. And I expect that manufacturing jobs will go up even more as we get closer and closer to the April deadline where people need to onshore production if they want to avoid tariffs.

BOLDUAN: Let's talk about the tariffs. What happened between Tuesday and Thursday, Tuesday and today that changed things? If it wasn't market reaction that changed the president's mind, what was it?

HASSETT: No, it was not. Yeah, this is a drug war, not a trade war. And the bottom line is it's a negotiation. It's an ongoing negotiation. I can tell you that I've been in the Situation Room looking at photos of places that we think are producing fentanyl. And so President Trump has adjusted the parameters over time as he's seen progress because we need to have some progress. Tens of thousands of Americans are dying of fentanyl.

And we've seen the Canadians and the Mexicans crackdown in a good way. As you saw, the Mexicans sent us I think it was 29 of their hardest criminals to help us round up the people who are dealing fentanyl. And so as we get progress with them, then we adjust the parameters. And that's what's going on. So it's what happens when there's a negotiation.

BOLDUAN: So you actually think that the fentanyl problem became less of a cross-border problem in a matter of days?

[09:35:05]

HASSETT: We've seen progress like they're sending criminals here. They're cracking down on cartels. We've seen pictures of facilities that are being shut down.

And so President Trump has been impressed by some of the progress. Like, obviously, in the end, what's going to matter is are there fewer deaths from fentanyl in America? That's the thing that we're going to care the most about. And frankly, we've been very disappointed in what China's doing, where they're basically producing all this stuff and even subsidizing it in order to, you know, harm Americans. And so that's why the China tariffs are even more than they were before.

BOLDUAN: As part of the conversation, and you've expressed very clearly to me that this, you know, when it comes to especially Mexico and Canada, that this is about being a drug war. But at the same time, the president has also insisted that it is other things, that it's about a trade deficit. It's about, as was said from the podium in the White House briefing room, that it was to bring auto manufacturing back to the United States.

So it also comes with -- he calls himself a, you know, the tariff -- a tariff president. If he believes in tariffs so much, why would he remove them? Why would he not just keep them in place?

HASSETT: There are two phases to what we're doing right now. The first phase is to go after the border and fentanyl. And there's been a huge amount of progress on the border and quite a bit of progress on fentanyl. That phase ends on April 1st. On April 2nd, then we begin the reciprocal trade phase. And at the reciprocal trade phase, then we're going to look at things like, you know, what's going on with the trade deficit and adjust parameters accordingly.

If Canada and Mexico make a heck of a lot of progress between now and then, then whatever happens with reciprocal actions will be what happens to Canada and Mexico. But if we think that the progress on fentanyl hasn't been that impressive, then what's going on right now will be in addition to what happens in April. And that's something that the president's been very clear about from the beginning.

BOLDUAN: One of the things that we have seen is market reaction to the uncertainty of the whiplash or the back and forth, whatever you want to call it, in terms of tariffs on, tariffs off, one day. The President had said, you know, and it was said from the White House, there were going to be no exemptions with these tariffs as they were put on. And now we've seen how this has gone back and forth in the just recent days.

When it comes to April 2nd, when he says the big one, when the reciprocal tariffs are going to be coming into place, why should anyone believe that April 2nd is actually going to happen, given what we've seen in the last week?

HASSETT: Well, all we've seen is tariffs put on everything and then tariffs put on the things that have a lot of U.S. content. That's what the USMCA products are. And so if you've got a whole bunch of car parts that are in the U.S. and they're assembled in Mexico and then shipped back into the U.S., then we're not putting a tariff on the U.S. parts. And that's the thing that was changed in part because, or mostly because, all because of the progress we made on fentanyl.

The Reciprocal Trade Act will be something where the president pushes a policy that says whatever your tariffs are on us, then that's what we're going to put on you. And that's what Americans believe is fair. And then I've got to say is the final thing is that when that tariff revenue comes in, that's revenue that doesn't have to be raised from taxes. It's revenue that can be used to cut people's taxes on overtime and on Social Security benefits and so on. And it's not the end of the story.

So it's not like there's going to be a tariff over here and then the money's just going to disappear. It's a tariff that's going to help us reduce income taxes and balance the budget.

BOLDUAN: Let us see what happens between now and then. It seems like quite a lot. Kevin, thank you very much for coming on.

Sara?

HASSETT: Thanks, Kate. Thanks.

SARA SIDNER, CNN ANCHOR: All right, a new report from the Associated Press this morning. Pictures of the Enola Gay, the aircraft used to drop an atomic bomb in World War II, may have been deleted by the Pentagon seemingly because those images had the word gay in the name. More on that ahead.

Plus, no one is answering. I'm freaking out. Terrifying text messages shed light on the night four Idaho college students were murdered in their home.

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[09:43:37]

BERMAN: All right, breaking news. President Trump just threatened new sanctions on Russia in response to Moscow's bombardment of Ukraine overnight. This is what the President wrote, quite -- quote, "Based on the fact that Russia is absolutely pounding Ukraine on the battlefield right now, I am strongly considering large-scale banking sanctions, sanctions and tariffs on Russia until a ceasefire and final settlement agreement on peace is reached."

All right, the threat obviously is notable, given the weeks of conciliatory statements toward Russia and Vladimir Putin.

With us now is Congressman John Garamendi, a Democrat from California, a Senior Ranking Member of the Armed Services Committee.

Congressman, your reaction to that threat from President Trump, and how seriously do you think Vladimir Putin will take it after, as we said, the conciliatory gestures of the last few weeks?

REP. JOHN GARAMENDI (D-CA): Well, if you consider what Trump's position has been since the inaugural, I'm sure Putin is going, oh, yeah, right, not going to happen. Because, really, what Trump has done is switched sides. We've been supporting Ukraine for the last, actually, 15 years, really seriously in the last three years since the Russian invasion. And all of the talk from Trump is that Ukraine was responsible for the war. I'm sure that Putin is going, yeah, right. The reality is that Trump switched sides here.

[09:45:00]

You take a look what happened at the U.N. with the various resolutions that were put forth. United States switched sides from working with our European allies, and now in those working with and voting with, what, North Korea and Russia and China. It's incredible.

We've got to see what's absolutely necessary is for the United States to continue to support Ukraine in its efforts to remain an independent country and to push back on Russia's invasion.

Unfortunately, what's happened is that Trump gave it all away, and now maybe he can regain something here. I hope so. But it's going to be, the proof will be in if he actually does it.

BERMAN: We'll see if he follows through on this new threat of new sanctions against Russia. Look, the U.S. has a delegation that will sit down with a Ukrainian delegation in Saudi Arabia next week. What's your expectation from what will come with that?

GARAMENDI: Well, the good news is that the Trump administration finally decided that, hey, maybe we ought to be working with Ukraine on what the future of Ukraine is going to be. Unfortunately, the initial message was that the United States would not involve Ukraine, but rather Trump would work directly with Putin, trying to, the two of them figuring out what would happen to Ukraine.

This is the good news. This is actually good. This is about Ukraine, about the future of Ukraine, and certainly, as Zelenskyy says, nothing about Ukraine without Ukraine being involved in it. So it's a good step. Hopefully it'll be useful.

BERMAN: All right, you sit, as I said, on the Armed Services Committee. I want to ask you a question about a report that does concern the Pentagon. It comes from the Associated Press and the efforts led by Secretary of Defense Pete Hegseth to purge the Department of Defense of all references to diversity, equity, and inclusion.

The AP writes that in the efforts to do this, there have been some unintended consequences. Quote, "In some cases, photos seem to be flagged for removal simply because their file included the word gay, including service members with that last name and an image of the B-29 aircraft Enola Gay, which dropped the first atomic bomb on Hiroshima, Japan, during World War II." Your reaction to that?

GARAMENDI: Well, that particular thing, it's just you can get a good laugh out of it. But the reality is what they are doing is really seriously harming the ability of the military to have people that are capable of providing the necessary work, the necessary services. And they're people of all kinds, of every ethnic group, women, maybe transgender, gay, all of those.

Those are people that have served with distinction in the military, and this purge that's going on is very, very disruptive. And the men and women in the military, whether they are gay or transgender or ethnic, they are concerned. They don't know what their future is.

And you take a look at the purge that's taken place at the top of the military, at the very, very top. Women have been fired. Women -- the CNO, the top person in the Navy was a woman, fired. The top person in the Coast Guard, a woman, fired. And we're seeing this across the Chairman of the Joint Chiefs of Staff, an African American, fired. What's the message here?

The message is if you happen to be a woman, if you happen to be a gay, if you happen to be of ethnic minority, the military is not for you. And that is extraordinarily damaging. We need to have every kind of American serving in the military, and unfortunately the message is just the opposite.

BERMAN: Congressman John Garamendi from California, we appreciate your time this morning.

Sara?

GARAMENDI: Thank you.

SIDNER: Thank you, John.

Newly released text messages give a chilling account from the college students in a home where one by one their roommates were being murdered. The new details emerging in the Idaho student murder case. That story and more.

(COMMERCIAL BREAK)

[09:53:42]

SIDNER: New this morning, quotes from students inside a home where their students were being killed. Saying things like, "No one's answering, I'm freaking out." Those are the words from newly unsealed text messages and 911 calls in the case against the man accused of murdering four Idaho college students. The new details come from the two roommates who survived the night of those murders.

CNN's Jean Casarez is here to explain what the text messages reveal about the timeline of that night. This is some chilling stuff, Jean.

JEAN CASAREZ, CNN CORRESPONDENT: And we never knew this. We have waited for this because it's shrouded in mystery, these surviving roommates. But here's what we do know. First of all, to establish this, law enforcement believes the murders took place from 4 a.m. to 4:25 a.m. That's the timeframe right there.

So, first off, about 4:04, a white car is driving in front of the home. Now, this white car had gone back and forth since 3:30, but that's a pivotal moment of that white, turned out to be Elantra, was driving in front. And then at 4:12, DoorDash delivers. Knock on the door. Xana Kernodle answers it. She gets the food she ordered. She goes to her bedroom. So it's believed that she was very alive during this time period, eating that DoorDash. At 4:17, there was a security camera 50 feet away from the residence. It had audio. So what we hear is, first of all, whimpering, and then a loud thud, and then you hear barking. And Kaylee had a dog.

[09:55:07]

And then at 4:22 to 4:24, the two surviving roommates in their own separate bedrooms are texting back and forth. Here's a little bit of what they said. "No one is answering." They were trying to get a hold of the -- all of the victims. "I'm really confused." "Xana was wearing black." I'm freaking out. It was like a ski mask almost. I'm not kidding."

And Sara, we had known that one of the surviving roommates in the probable cause affidavit that she opened up her door during this time period. There was a man in black. He had a mask. It covered his nose. He was not athletic but a bit muscular with bushy eyebrows. That's what she's talking about right there.

Now it goes on that at 10:45 a.m. they text Kaylee and Maddie, wake up, get back to us. No response. Finally, at 11:58 noon, they call 911 and say, we have an unconscious person. And it was Xana Kernodle is who they were talking about. And she was found on the floor of her bedroom near the bathroom.

SIDNER: Wow. The timeline is confusing, but those texts are chilling. Thank you.

CASAREZ: And the judge will rule on this, but I don't want to tell you what the judge is going to do, but it's coming in.

SIDNER: OK. Jean Casarez, thank you so much. I really appreciate it. That is a tease.

BOLDUAN: You want to do it?

BERMAN: Yeah. Thank you all so much for being with us.

BOLDUAN: Oh it's in my name. Sorry about that.

SIDNER: Sorry.

BERMAN: It's all right. I guess --

(CROSSTALK)

SIDNER: Always make --

BERMAN: -- sometimes also.

BOLDUAN: I need you too.

BERMAN: This has been CNN News Central. It's been a wonderful week and a wonderful day. We'd like you to have a terrific weekend. Situation Room is up next.

SIDNER: Who are you? Like, who is this guy?

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