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Job Growth Slows, But Jobless Rate Falls; Target Breach Expands to 70 Million; Thousands Scramble to Find Water in West Virginia; Chris Christie's Bridge Woes Continues; Light Sentence in Sexual Assault Case Criticized; Business Owner: Traffic Jam Hurt Business

Aired January 10, 2014 - 09:00   ET

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

CHRIS CUOMO, CNN ANCHOR: All right. A lot of news this morning as you're well aware so let's get you to the NEWSROOM.

MICHAELA PEREIRA, CNN ANCHOR: Baking at (INAUDIBLE).

CUOMO: And Miss Carol Costello is in.

(LAUGHTER)

CAROL COSTELLO, CNN ANCHOR: All right. Have a great weekend. Thanks so much.

NEWSROOM starts right now.

ANNOUNCER: This is CNN breaking news.

COSTELLO: And good morning to you, I'm Carol Costello. Thank you so much for joining me.

We begin this hour with two big breaking news stories on America's economy and our recovery. First just minutes ago we learned that U.S. employers added 74,000 new jobs last month. 74,000. That is the weakest monthly gain in two years and far less than expected. Yet it pushes down the overall unemployment rate. The unemployment rate falls from 7 percent to 6.7 percent.

So what does it all mean?

Let's break down the numbers. Christine Romans is our chief business correspondent. I'm also joined by David Wessel, he's a contributing correspondent to the "Wall Street Journal," as well as the director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, and Rana Foroohar is a CNN global economics analyst and "TIME" magazine's assistant managing editor.

I'm out of breath now.

(LAUGHTER)

Christine, let's start with you to break down the numbers for us.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It's really a big shocker because so many economists have been sharpening their pencils all week, Carol, and saying hey, the numbers look good for the end of the year, a strong way to end out 2013. We think it could be the strongest jobs growth since 2005. And that did not happen.

When you look -- I mean, I don't know if you can my chart, but when you look, Carol, you can see it was just a tiny bit of job creation in the end of the year. Really bucking the trend. The weakest month to end the year since 2011.

Here's what happened. The Labor Department says weather played a factor here, kept some people home. When you look at the household survey, we look another part of this number, you can see that a lot of people dropped out. They stopped looking for work. That's a big part of the story of why the jobless rate fell to 6.7 percent.

That's when we say the jobless rates fall into the wrong reason. People simply gave up. So that's why you're seeing sort of these two different messages from the -- 74,000 jobs created and a drop in the unemployment rate.

It's a really messy report because of the weather, because of the end of the year. Something that economists are telling me right now. They're saying Christine go back to November. Look at November, 241,000 jobs created in November.

We know things were strong heading into the holiday season and now it looks murky about how we finish the year -- Carol.

COSTELLO: I was just going to ask David that question. How worried should we be?

DAVID WESSEL, WALL STREET JOURNAL CONTRIBUTING CORRESPONDENT: Well, it's really disappointing. I mean, I think there was a great deal of hope that we had finally turned the corner and a big number in job creation in December would have reinforced that.

Now we're back to this really frustrating situation where the economy does seem to be picking up momentum but it's not leading to a lot of job creation. So I think it's a warning sign. You know, there's the usual caveats, one month stay, that doesn't make a trend and all that, but it's definitely not good news.

COSTELLO: So, Rana, what do lawmakers and the president need to do?

RANA FOROOHAR, CNN GLOBAL ECONOMICS ANALYST: Well, it's really interesting. I had an interview this week in "TIME" magazine, the first interview with the Fed chief, incoming Fed chief Janet Yellen, and she's going to be looking carefully at that workforce participation number that Christine was talking about earlier because it is as low as it has been since the 1980s before women really entered the workforce en masse.

As long as it remains this low I think that you're going to see the Fed, which has been doing a big money dump into the economy to try and keep things going continue to pare that back very, very slowly. You're going to hear a lot of talk about trying to get wages up. The president has made inequality a big topic of the next couple of years. And I think that you'll see all policymakers really thinking about how can we get that unemployment number lower so wages can get up and consumers can start spending which is what really generates job growth in this economy.

COSTELLO: David Wessel, Rana Foroohar, thank you very much.

Christine, I want you to stay right there because I know you're following another breaking story. One that will rattle the nerves of millions of Americans.

Just minutes ago, retail giant Target revealed that it vastly under estimated the number of shoppers caught up in that security breach over the holidays. We are now learning 70 million people may have had their information stolen in that recent data breach. That's almost double the number previously reported.

Christine, how did Target get the numbers so wrong?

ROMANS: Because they are in the middle of a forensic accounting investigation. They knew that they had a breach of some 40 million people, right, that we'd already reported to you. As they are unwinding that, as their experts, their cyber experts, accounting experts are going through, they're saying now they found more.

They have found 70 million customers had information like their name, their name, addresses, phone numbers, and e-mail addresses were in this breach. That is on top of the payments, the card payment information we told you about. PIN numbers that we're told were encrypted but PIN numbers, credit card numbers, the CCV number that's on the back of your card.

Carol, this is a massive, massive breach of your information. Much bigger than we thought. Now much bigger breadth.

Target is saying it's very sorry for this. Target is saying you will not be held responsible for anyone fraudulently charging on your card. They say they're going to give free credit monitoring to everyone who wants it. You have to apply for the next three weeks -- within the next three months, rather.

But, Carol, it's interesting, they're not -- information is forthcoming about how you're going to be able to get that credit monitoring. They don't have that all set up yet it looks like -- Carol.

COSTELLO: I mean, these people -- whoever stole this information has information, you could steal my identity, possibly. And speaking of the investigation, are they any closer to knowing who did this?

ROMANS: They are still -- the investigation is still under way. They are letting customers and Wall Street frankly know the size and scope of this. They are adjusting financial guidance to Wall Street based on what the cost will be to them, the cost to their reputation, the cost to their business. No question there. As for a conclusion they are not there yet. But, Carol, this is very difficult here. We know that cyber crime is huge. We know that there are server farms all over the world where organized crime and frankly governments that are not necessarily all that friendly to us are looking for information to try to, you know, you don't even know whether it's organized crime, whether -- it's all very, very murky and dangerous when so much of your information is just so readily available from something that's a household name like Target.

COSTELLO: Christine Romans, many thanks to you.

In other news this morning an environmental disaster at West Virginia. 200,000 people are scrambling to find water to drink after a massive chemical spill. It happened in Charleston, West Virginia, which is the capital, after a leak at a chemical storage facility owned by a company called Freedom Industries. That chemical a form of methanol drained into the Elk River which then made its way into the water treatment facility.

The governor of West Virginia now urging people not to drink their tap water.

(BEGIN VIDEO CLIP)

GOV. EARL RAY TOMBLIN, WEST VIRGINIA: Do not use any of the water with the exception of using it to flush the commodes or for fire protection. Do not drink it, do not cook with it, do not wash clothes in it, do not take a bath in it.

(END VIDEO CLIP)

COSTELLO: Pretty scary, right? If you drink this tainted water, the West Virginia Health Department says you might experience severe burning in your throat, severe eye irritation, nonstop vomiting, severe skin irritation like blistering or you might have difficulty breathing. Emergency rooms are packed and stores are running out of bottled water.

This morning West Virginia State University is cancelling classes due to a state of emergency. Other schools and hotels are closing as well. The water company says it is conducting water tests every hour to figure out the contamination level.

Joining me on the phone right now is Greg Lay, he is the director of the Boone County, West Virginia, Emergency Management Agency.

Welcome, sir.

GREG LAY, BOONE COUNTY, WEST VIRGINIA EMA: Good morning.

COSTELLO: You have your hands full this morning. Bring us up to date. What's the latest?

LAY: Well, as far as I know, they will start testing water this morning out in different areas of each community and different counties, testing to see if the product is still in the water. We have already set up plans for water distribution over the next day or so to handle the drinking water for the public.

COSTELLO: And the difficulty in getting rid of this chemical is you can't just suck it out of the water because the chemical sort of floats on top and don't you just have to wait until it dissipates in some way?

LAY: I would imagine there will be some purging of the lines and things like that. On the outset, it was thought to be a bigger spill than what it actually was. It's my understanding that worst case scenario is there was just 5,000 gallons released. So in the grand scheme of things that's not a big spill.

COSTELLO: Well, but still 200,000 people are -- can't drink their tap water this morning and they're looking for bottled water. I mean, the stores have run out.

LAY: Yes. Most of the retail places are out of water. Like I said, the state has already made arrangements to ship water in, we're expecting a shipment this morning. Then we will distribute it out through our local volunteer fire departments throughout the county and, of course, the hospital and nursing homes will get -- they will get the first shipment.

COSTELLO: Thank you so much for joining us this morning, Greg Lay.

If there was one point Chris Christie wanted to drive home during yesterday's big press conference it was that members of his inner circle went rogue when they targeted a political rival and he had absolutely no knowledge of their plan.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I had no knowledge or involvement in this issue. There's no way that anybody would think that I know about everything that's going on -- I don't know what else to say except to tell them that I had no knowledge of this.

All I know is I don't know. I am humiliated by the fact that I did not know this. The answer as of right now is I don't know.

(END VIDEO CLIP)

COSTELLO: Well, this morning we could learn even more about how the situation unfolded as the New Jersey State Assembly is set to release online more than 900 pages of documents related to Bridgegate.

Our chief national correspondent John King is in Washington this morning.

So, John, these documents are going to be released sometime later today. What do we expect to find?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Carol, I talked to the chairman of the New Jersey legislative committee that's releasing these documents. I talked to him last night up in Trenton. And he says it will give people a better sense of the tick-tock, a better sense of the details.

I'm not expecting at least from that conversation with them to have any earth shattering new headlines out of the documents. But they should give us a better picture he told me of how top Christie aide at the state house was coordinating with Christie's campaign manager and these documents are from David Wildstein, the gentleman who took the Fifth Amendment, refused to testify before the New Jersey legislature yesterday.

He was a key official at the Port Authority and a person who actually pulled the levers if you will to cause the now infamous traffic jams in Fort Lee and that was done as a vendetta, some form of retribution against the mayor up there.

So the challenge for Chris Christie is as these documents come out today, as the legislature calls more witnesses in the weeks and months ahead as the U.S. attorney's office looks at this is, does anything come out in the public eye that calls into question what you just played.

The governor saying, I did not know, I had nothing to do with this. I did not authorize this. I do not like this. Politically for Chris Christie what has to happen for him, what happened yesterday to stand up is nothing new. No new information no smoking gun in any document or any testimony pointing to him.

COSTELLO: Now you know what I might be really worried about? He fired his deputy chief of staff. Right? She's gone. He said she's a liar. He didn't know what she was doing. She was at fault for this. She hasn't spoken out as of yet.

Perhaps I would worry about hearing her side of the story. Have we heard anything from her at all?

KING: Nothing. A couple of friends who have been quoted in local media accounts said they feel -- she feels she's being scapegoated. We have not heard from her directly.

That's one of the challenges, obviously. These people are going to be called before investigations, whether it's the oversight of the legislature, whether it's prosecutors trying to figure out whether there is criminal activity here, the thing they're looking at is whether government people, government resources, government money were used to conduct a political vendetta.

That potentially could violate the law. And again you raise -- yes, you raised the question, will these people turn on the governor? Well, if there's nothing to prove he was involved then he's OK even though it's embarrassing and it can get messy when you have this kind of testimony. That certainly -- look I want can get messy when you have this kind of testimony. Look, think of it this way.

A couple of weeks ago every conversation about Chris Christie was a guy coming fresh out of a landslide election victory. He was on offense. He was -- he thought he had a mandate for a second term in New Jersey. He was on the national stage as a potential presidential candidate.

Well, Carol, this morning as you asked these questions, he's on defense. That's a very different place to be.

COSTELLO: All right, chief national correspondent John King. Many thanks to you.

Still to come in the NEWSROOM deluge in the Sunshine State. South Florida hit with a foot of rain.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories at 16 minutes past the hour.

New pictures showing the chaos of a plane crash near Hawaii last month. Ferdinand Puentes and eight other people were on board when the plane's engine failed shortly after takeoff. Puentes says as soon as the plane hit, he felt like he was dreaming. But he did know that he had to get out of the plane.

(BEGIN VIDEO CLIP)

FERDINAND PUENTES, CRASH SURVIVOR: As the sirens and bells of the airplane was going and we -- it was quiet. Everyone knew what was going on. Just, you know, so many variations that could have happened and for the worse.

(END VIDEO CLIP)

COSTELLO: Kudos to the pilot who landed the plane on the water upright. One person did die in crash and the NTSB is looking into what caused the plane's engines to fail.

South Florida streets turn into rivers. Some schools closed after torrential rains triggered widespread flooding. Up to a foot of rain fell in the area. One woman was stuck in her car for four hours by high water, when she finally reached home, she found her house was flooded, too.

The diplomat at the center of a spat between United States and India is heading home to India this morning.

You might remember, her arrest and strip search over allegations of visa fraud ignited outrage in India. In a deal meant to ease those international tensions, she was indicted yesterday and effectively expelled from the United States.

(BEGIN VIDEO CLIP)

UTTAM KHOBRAGADE, DIPLOMAT'S FATHER: Devyani has not made any, any wrong. She was innocent. The case is false. And in that light, who cares what charges remain in the U.S.?

(END VIDEO CLIP)

COSTELLO: The diplomat leaves behind a legal mess but her children. They will stay with her husband who is an American. The State Department says she risks arrest if she returns to the United States.

Nine flu deaths now confirmed for the San Francisco Bay Area during the current flu season. Hospitals have set up triage tents to handle the overflow of patients with flu related symptoms. H1N1 appears to be the main flu strain affecting people. The current vaccine does protect against H1N1. Please get your flu shot.

The Saints take on the Seahawks tomorrow in the NFL playoffs, and the last time two times New Orleans visited Seattle, CenturyLink Field was rocking, not just noisy but loud enough to register earthquakes.

Equipment is in place to see if it happens again. The Pacific Northwest seismic network installed two portable size knick monitors, one in the maintenance room and one in the stands. They are being called hawk one and hawk two.

It was a case grabbed national headlines. Fourteen-year-old Daisy Coleman and her mother claim they were run out of town after they accused two classmates of sexually assaulting Daisy at a party. Matthew Barnett pleaded guilty to a lesser charge of child endangerment. But now, some are asking, has he got off too easy?

More now from CNN's Kyung Lah?

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT: Is there anything you or your client wants to say?

UNIDENTIFIED MALE: No, not at this time.

LAH (voice-over): Maryville was quiet as the 19-year-old Matthew Barnett left the courthouse a free man. Reaction on social media was loud and swift about his plea deal, #justicefordaisy, "the system has failed," and "sickening."

Barnett faces no jail time, and two years probation for pleading guilty to misdemeanor child endangerment. He admits he left then 14- year-old Daisy Coleman drunk, freezing and not wearing a jacket outside of her mother's house in January.

JAY R. HOBBS, MATTHEW BARNETT'S ATTORNEY: The misdemeanor charge which Mr. Barnett pled guilty accurately reflects the conduct for which he should be held accountable.

LAH: What Barnett did not face: charges of raping the young victim. Daisy Coleman alleged she and a 13-year-old friend Page Parkhurst were raped by Barnett and another high school boy after a night of drinking. Case of the other boy who was 15 at the time was handled in juvenile court. Charges against Barnett who was 17 were dismissed.

Daisy's family claimed the real reason was Barnett's political ties. His grandfather was a popular four term state representative. Daisy and her family were run out of Maryville, a stark example they say of victim blaming.

A national outcry followed and special prosecutor Jean Baker was appointed to re-examine the case who says the justice system worked.

JEAN PETERS BAKER, JACKSON COUNTY PROSECUTOR: My job is to analyze evidence. In this case, there was insufficient evidence to go forward on a sexual assault.

LAH: Daisy's mother tells CNN she expected this outcome from the prosecutor saying considering all the evidence that had been lost, destroyed, tampered with or returned there wasn't a lot she could do. Baker read a statement from Daisy Coleman.

BAKER: "Today, I am grateful that the defendant took responsibility by pleading guilty to the charges. I am ready to move forward."

LAH (on camera): It has been difficult for Daisy Coleman to move on. Over the weekend, this last weekend her mother says that her daughter tried to take her own life ever being bullied on Facebook. Her mother says that instead of coming to the courthouse, she chose to stay by her daughter's bedside. Daisy's mother said she felt the prosecutor did the best she could but maintains political power was at play here in the original investigation.

Kyung Lah, CNN, Maryville, Missouri.

(END VIDEOTAPE)

COSTELLO: The mother of the 2-year-old seen swearing and making obscene gestures in a viral video is now speaking out. She said she's a good mother. Her son and three other kids were put in child protective custody after this video went viral.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You a ho, (EXPLETIVE DELETED)

UNIDENTIFIED TODDLER: You a ho, bitch.

UNIDENTIFIED MALE: What's up then?

Say, "I need some (EXPLETIVE DELETED) today, I'm throwing a fit right now.

UNIDENTIFIED TODDLER: Huh?

(LAUGHTER)

UNIDENTIFIED MALE: You a bitch (EXPLETIVE DELETED)

(END VIDEO CLIP)

COSTELLO: Authorities say the child is in protective custody because the toddler's relatives allowed known gang members into the home. The child's mother is 16. She doesn't live with her son. Actually, a 19- year-old woman was caring for the boy at the time. But the boy's mother says she was in another room when someone else shot this video. We're concealing her identity because she's 16.

(BEGIN VIDEO CLIP)

TEEN MOM: They were worried about the video because he had a clean diaper. The house is clean. And like they say, kids cuss. Every kid does it. He's a smart little boy.

All the cussing he did, he doesn't do that. The person that saw him do that, my son doesn't cuss like that. I don't allow it.

For people to think I'm a bad mother I'm not. I'm a good mother to my son. And I teach him a lot. And he's very smart.

(END VIDEO CLIP)

COSTELLO: The video was posted online by an Omaha police union to highlight what they called the thug cycle. The ACLU filed a lawsuit against the police for excessive force. We'll be talking a lot more about this in the next hour of NEWSROOM.

Still to come this hour, he's apologized and he's fired trusted aides. But do the voters really believe Chris Christie's mea culpa?

(COMMERCIAL BREAK)

COSTELLO: You've heard a lot about how allies of Chris Christie deliberately caused huge traffic jams on the George Washington Bridge in an act of political retaliation. Some say, yes, what went down is wrong, but come on it's not that bad. It was a traffic jam.

Well, is it that bad? Let's talk to one person who experienced it like the owner of Dog On It Doggie Daycare, which is right next to George Washington Bridge in Fort Lee, New Jersey.

Bridgette Pursley says she's never seen anything like the, quote, "madness" over those four days in September last year. And the epic jam caused huge problems for her business.

Bridgette Pursley joins us live now from Fort Lee.

Good morning, Bridgette.

BRIDGETTE PURSLEY, OWNER, DOG ON IT DOGGIE DAYCARE: Good morning. How are you?

COSTELLO: Thank you so much for standing out in the cold for us. We really appreciate it.

PURSLEY: Thank you for having me.

COSTELLO: So tell us how are you experience -- there were those huge traffic jams in September, how did it affect your business?

PURSLEY: Well, to say the least, my employee had to walk, you know, across the bridge because he felt that taking a bus which the traffic was stagnant.

I've been here in the area for over 17 years and I've never seen anything like it. So my business, Dog On It, it looks out on the bridge. So, I see the tolls, I see the traffic going to and from, and it was just at a standstill.

There were cars every where. I had never seen anything like it. I felt like the traffic controller because people were calling me, customers along with -- you know, people I know who work in the city to ask me what is the traffic looking like, and I had to tell them it was at a standstill, nothing is moving. So, a lot of my customers --

COSTELLO: Did you lose money?

PURSLEY: Absolutely. I was going say a lot of my customers -- they usually drive up, drop the dogs off and then they head across the bridge. But because of the -- all the traffic and they decided to take the bus instead of dropping off because they just couldn't get, you know, past it. And that lasted for days with people not being able to drive into work as they normally do and then sitting on the bus and then too they had to leave like three hours, two, three hours ahead of time depending on where they worked in the city.

And it did affect my business a lot. We only had a few customers.

COSTELLO: Right. Bridgette, six people have filed a class action lawsuit against Chris Christie and his aides for lost wages because they were late to work. Are you considering suing too?

PURSLEY: Well, I heard that and, you know, I don't know if it was Chris Christie. He seems sincere in his apology and that he didn't know. A lot of times people, you know, abuse their power in which it seems as if Miss Bridget, the young lady who was fired did as such.

I -- you know, I guess it's a good idea because a lot of times people abuse their powers and mean girls grow up to be mean women, and they don't really understand, you know, the ratification or the impact they made on someone until they are caught and she's probably not sorry she did it, she's probably sorry she actually got caught, you know, doing it.

COSTELLO: So some people say that the whole thing that went down in New Jersey was not a big deal. How would you characterize it?

PURSLEY: It absolutely was a big deal. I've been here over 17 years and I've never seen anything like it.