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Economy Adds 4.8 Million Jobs in June, Unemployment Falls to 11.1 Percent; VP Pence Visits Florida as New Cases Surge; Texas Reports Record Highs in New Cases, Hospitalizations; Arizona State Fairgrounds Testing Site Overwhelmed; California Governor Orders 72 Percent of State back to Near-Shutdown; Trump claims Coronavirus will "Disappear" As U.S. Tops 50k in One Day; Trump Officials Plan to Create New Pandemic Response Team; U.S. Futures Jump After Report Shows 4.8 Million Jobs were Added in June. Aired 9-9:30a ET

Aired July 02, 2020 - 09:00   ET

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

[09:00:29]

JIM SCIUTTO, CNN ANCHOR: Very good Thursday morning to you. I'm Jim Sciutto.

The nation tops 50,000 coronavirus cases for the first time in a single day. Does that sound like the outbreak is disappearing? The president thinks this pandemic will go away. Tell that, however, to the 23 states now pausing plans to reopen, or the more than 800,000 Americans who are infected just in the month of June.

One top doctor warning that states such as Texas, Arizona and Florida are on the brink of apocalyptic levels in his views. Still, the president who should be leading in this pandemic continues his pattern of deliberately downplaying it. A recap.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Looks like by April, you know, in theory when it gets a little warmer, miraculously it goes away. It's going to disappear, one day it's like a miracle, it will disappear. It's going to go away. This is going to go away. Eventually, it's going to be gone. Then it's going to be gone. It's going away and I think we're going to be very good with the coronavirus. I think that at some point that's going to sort of just disappear, I hope.

(END VIDEO CLIP)

SCIUTTO: Well, inside the White House, top aides are now debating whether the president should shift back to focusing on this pandemic or stay focused on his hopes for the economy.

Just this morning, some good news for the country. We learned that the economy added 4.8 million jobs in June.

Let's go straight to Christine Romans. Christine, these are good numbers. They are somewhat backward looking.

Put it all into context for us.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, really important, Jim. This is a rearview mirror picture of about the middle of June. And what it shows is those reopenings were bringing people back to work. You had 4.8 million jobs added in the economy in June and the unemployment rate fell to 11.1 percent.

Now, the government very clearly focusing here on a misclassification problem said that it would be more like 12.1 percent for the unemployment rate if people were classified properly, so keep that in mind. 12 percent unemployment rate, 11 percent or 12 percent, either one, still higher than we had in the Great Recession or in the worst recession that we had in the 1980s.

So where were the sectors? It was in leisure and hospitality. It was in retail. Health services there. Those are doctor's offices, dentists, all of those elective procedures that were put on hold, they started back up in June. And that meant people were going back to work in doctor's offices. Also some added in construction there.

But when you go beneath these numbers you can still see some of the inequalities that this recession has laid bare. For some categories here, you've got really stubbornly high unemployment rates. 15.4 percent for black Americans. So some of these sectors have been hurt really bad by this particular recession.

One other quick number I want to give to you, jobless claims. It is Thursday, usually we look at these weekly jobless claims, and, you know, look, another 1.4 million people filed for first time for unemployment benefits, Jim, in the most recent week.

And so that tells you, even as people are being brought back on the job in some of the leisure and hospitality and the like, there are still 1.4 million Americans filing for unemployment benefits for the first time. So we've got a long way to go here to recover.

SCIUTTO: Christine Romans, thanks for breaking it down.

Now to Florida where Vice President Pence is visiting today, meeting as well with Governor Ron DeSantis as new coronavirus cases continue to surge there.

Let's go to Boris Sanchez, he is in Sarasota, Florida, with more.

Boris, how do the numbers look? And I'm just curious, every day is it changing the response of state leaders there?

BORIS SANCHEZ, CNN CORRESPONDENT: Not exactly, Jim. In June, the state of Florida saw more than 100,000 new coronavirus cases. The deaths are here up to more than 3500. Governor Ron DeSantis yesterday effectively saying that he does not think that the state of Florida is going to reimpose that statewide stay-at-home order that effectively shut down the state a few months ago. He's essentially leaving that chain of decisions to local officials to

impose their own restrictions and we're seeing some areas do that. Miami-Dade County, for example, they've shut down beaches for the Fourth of July holiday weekend. They've also expanded their mask mandate, so that if you're out in public you have to be wearing a mask in public areas.

Further, they've also imposed a curfew now on bars and restaurants. Notably, though, one of the biggest health hospital systems in the state, Jackson Health System, based in Miami, they're announcing that they're actually very close to running out of Remdesivir, that critical antiviral drug, the only one that's been approved by the FDA to treat coronavirus.

[09:05:10]

They are hoping that people will heed the warnings during the weekend -- Jim.

SCIUTTO: Boris Sanchez in Florida there, thanks very much.

To Texas now, one of the first states to ease social distancing, is now seeing its single highest increase of new cases.

Let's go to CNN's Lucy Kafanov. She is in Houston, Texas.

Lucy, Houston's mayor, he is warning that at least two hospitals pretty much at maximum capacity. That's a real concern there, right, because that's folks sick enough to be hospitalized.

LUCY KAFANOV, CNN CORRESPONDENT: It's a major concern, Jim. You know, this is starting to feel like some sort of a dark version of Groundhog Day. Every time you and I have spoken this week it's about Texas shattering yet some other record. Today is no exception. More than 8,000 new cases. More than 6,500 people in Texas hospitals sick with coronavirus.

This is taking an incredible toll on the medical facilities here. Some hospitals in Houston for example have started to transfer patients out to other areas just to make room. Other hospitals preparing for a surge and it's not just Houston. We're seeing this echoed across the state. You know, we had another CNN team in San Antonio which has been hit incredibly hard by coronavirus.

They have been filming at a hospital there and doctors say they have more patients than they know what to do with. Those patients are getting younger and it's also taking an emotional toll on these doctors who are in this position of making life and death decisions. Take a listen.

(BEGIN VIDEO CLIP)

DR. JEFFREY DELLAVOLPE, SAN ANTONIO METHODIST HOSPITAL: Yesterday was probably one of my worst days that I've ever had.

UNIDENTIFIED REPORTER: Why? DELLAVOLPE: I got 10 calls, all of whom young people who otherwise

would be excellent candidates to be able to put on ECMO. They're so sick that if they don't get put on, they don't get that support, they're probably going to die. I had three beds. And just -- and making that decision, being able to figure out who really is going to benefit it is a level of decision making that I don't think a lot of us are prepared for.

(END VIDEO CLIP)

KAFANOV: And this is something that doctors across the state, frankly, across the country are dealing with. And all of this as we head into the Fourth of July weekend, I just want to show you the headline from the "Houston Chronicle," stay at home this Fourth of July weekend. There are concerns that these numbers could go up.

And just anecdotally my producer went out for a run at a local park here in Houston the other day. There weren't folks wearing masks even though there were signs to do that and there's still no statewide mandate to do so. We still haven't heard from the governor this week on any new statewide measures to try to keep people safe -- Jim.

SCIUTTO: Hearing from yet one more doctor talking about having to make life or death decisions, it's disturbing.

Lucy Kafanov in Houston, thanks very much.

Let's go now to CNN's Evan McMorris-Santoro. He's at a drive-thru testing site in Phoenix where appointments are being filled to the max in a matter of minutes each day.

Evan, you know, we've seen a lot of these testing sites around the country overwhelmed. Tell us what it looks like there. I mean, is there capacity to test the people who want to get tested?

EVAN MCMORRIS-SANTORO, CNN CORRESPONDENT: Well, hi, Jim. Yes, the situation in Arizona is increasingly dire with another, you know, reporting record cases in deaths and that overwhelmed system that you're mentioning.

I'm at the State Fairgrounds in Phoenix. Behind me is the agricultural buildings that are used as the largest consistent testing site here that can do about 1,000 tests a day. It's run by Banner Health. Now it's about 6:00 a.m. in Phoenix and in a couple hours people will start to come through here. And what you'll see is a pretty orderly process, driving through, going to the buildings, getting the tests and driving out.

But what that hides is an absolutely overwhelmed system because what happens is about an hour from now in Arizona time, 7:00, the phone lines open up to book 1,000 slots at this testing site. And officials here tell us that that fills up in less than seven minutes. So as you can see, people are wanting to get tests and maybe not able to get them when they want them -- Jim.

SCIUTTO: Evan McMorris-Santoro, it's a real problem in more than one community. Thanks very much.

In California now, Governor Gavin Newsom, he's ordering a majority of the state back into a partial shutdown.

CNN's Dan Simon joins me now from Los Angeles.

Dan, tell us how they're toggling things up there again particularly because the reopening was left to counties so now are these state mandated measures that are coming into place again?

DAN SIMON, CNN CORRESPONDENT: Right. The governor really backtracking here. This marks a major reversal for the state of California. The governor halting indoor operations across a whole bunch of different sectors impacting 19 different counties.

[09:10:01]

So no indoor operations for the following -- restaurants, bars, wineries, museums, zoos, movie theaters and family entertainment. And he says this order will last at least three weeks.

Now, we're talking about 19 different counties. This impacts nearly three-fourths of the entire population for the state of California. So this is going to be a major economic loss for a whole lot of people and beyond. You know, people who work in those industries and beyond.

Meantime, the number of hospitalizations, Jim, in California is really surging up. 56 percent in the past couple of weeks so that's why the governor says it's necessary to impose these restrictions once again -- Jim.

SCIUTTO: Dan Simon, shows how difficult it is to get a handle on this, thanks very much.

As everyone tries to prevent the spread of this virus, hard to imagine some people are doing what they can to catch it. A city council member in Tuscaloosa, Alabama, says she was furious to learn that young people in her town are throwing parties with the intention of catching COVID.

(BEGIN VIDEO CLIP)

SONYA MCKINSTRY, TUSCALOOSA, ALABAMA CITY COUNCIL: First, I can't believe it that these kids are having parties and they're putting money in a pot and they're purposely trying to get COVID from the person who has COVID, and apparently whoever gets COVID first gets the pot.

(END VIDEO CLIP)

SCIUTTO: Well, that's just dumb. She says there has been a number of parties in the area over the last several weeks. That the city is now working to break up any other parties they hear about. The city of Tuscaloosa unanimously passed a mask ordinance on Tuesday night which goes into effect this coming Monday. Still to come, President Trump yet again says he thinks the virus will

magically disappear as the U.S. hits its highest number of cases in a single day so far. Can the president deal with this problem effectively if he refuses to see it?

And we're learning more about why the president may not have been briefed on a Russian plot to kill U.S. troops. My reporting on why his intelligence briefers are wary of raising anything about Russia with the president.

And schools around the country preparing for a back-to-school season like no one has seen before. What will classes actually look like this fall?

(COMMERCIAL BREAK)

[09:15:00]

SCIUTTO: Record deaths reported in two states, record hospitalizations in several more, and the president says he still thinks the country will end up very good as the virus quote, he says, "disappears". But now as the infection numbers rise and his poll numbers fall, sources inside the White House say there's an internal split over the president's approach moving forward. Let's bring in CNN White House correspondent John Harwood.

So some, I imagine encouraging the president to recognize the reality of an expanding outbreak here. Who has the upper hand?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, I think the upper hand is with people who want the president to talk about the economy and the president is going to demonstrate that in a few minutes when he has a news briefing to celebrate these new jobs numbers we got today. Unequivocally good news for the economy, 4.8 million jobs added, unemployment rate down to 11 percent from 13 percent last month.

However, this is a push-and-pull because these are really different sides of the same issue. The -- getting on top of the coronavirus is critical to sustaining the economic progress that was measured in this report, and that report measured progress through the middle of June, before the resurgence of the virus started burning through the sunbelt and throwing some of the reopenings into reverse.

So it is a very difficult situation for a White House that is struggling to grab on to immediate good news. They've been in such a deep political hole, the problem is you grab on to that good news and avoid the virus. You run the risk of eroding what you're celebrating right now which is good economic news.

SCIUTTO: And that's what the economists and the health experts say, right? Is that controlling the virus goes hand-in-hand with rebuilding the economy. John Harwood at the White House, thanks very much. A U.S.-based rapid response team that swings into action or is intended to whenever a potential pandemic appears anywhere in the world. If the Trump administration's latest plan sounds familiar, it's because it is.

A similar unit was disbanded by the Trump administration back in 2018. Now today, months into this outbreak with millions infected, thousands dead, the virus expanding -- officials will discuss, putting a new pandemic response team together.

Joining me now is CNN national security correspondent Kylie Atwood and CNN senior national security analyst Lisa Monaco. Kylie, if I could just get you to detail your reporting here, so here's a team disbanded by Trump two years ago. Now coming back in a different form, but several months into a pandemic.

KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Yes, that's right, Jim, so similar motivation, different building, if you will. So the Obama administration stood up a directorate at the National Security Council at the White House that focused on a response to pandemics.

That office as you said was disbanded in 2018. And now retrospective to the coronavirus pandemic and the inability of the Trump administration to really handle it well, they are having conversations -- follow-up conversations today at the White House about standing up an office focused on pandemic response at the State Department.

Now, a senior administration official who I spoke to about this said that there's a reason they're putting it out -- the State Department. They want to focus not only on public health, but also on diplomacy because as we saw during the pandemic in the early stages, one of the key issues was where are the materials, where is the health materials that other countries have that the U.S. could use. So relationships and diplomacy matter is the point that they're making.

[09:20:00]

But the bottom line is that there was indeed an office to do just this thing at the National Security Council that the Trump administration got rid of. And former officials who worked in that office said it would have absolutely helped the Trump administration in expediting and making more efficient its response to the coronavirus pandemic.

SCIUTTO: Lisa Monaco, you have to be shaking your head a little bit to hear this administration say, you know, preparation, advanced warning, early action diplomacy matters here. That was in place and disbanded. I mean, is it a little too late now?

LISA MONACO, CNN SENIOR NATIONAL SECURITY ANALYST: Well, it's certainly a deja vu all over again, Jim. I mean, look, this unit as you said was in place in -- after the Ebola epidemic together with the national security adviser, I as the Homeland Security adviser at the time at the president's direction set up this unit.

It was a global health security and pandemic response unit in the National Security Council, and we put it there very specifically because in an epidemic like Ebola, in a pandemic like COVID-19, what you need is a whole of government's response and you need swift action and you need swift decisions from the president, and you need at that policy coordinated across the entire government. Look, this move now to set this unit -- reset this unit up although in

a different building, on the one hand is a recognition that you do indeed need a specific identified place to constantly be focusing on the pandemic preparedness. That's good. On the other hand, really, what we're seeing here unfortunately is a risk of repeating the same mistakes all over again.

And 2018, the Trump administration issued a national bio-defense strategy. That strategy after having disbanded the unit that the Obama-Biden administration set up, after having disbanded my old job, the Homeland Security adviser job that was responsible for pandemic preparedness, after they got rid of that unit, they said, OK, we're going to set up a new unit, we're going to set up a new taskforce for pandemic response and bio-defense, although we're going to put it at the Department of Health and Human Services.

When the COVID-19 struck, they started off with that taskforce, people will recall under Secretary Azar's direction. That didn't work. They said, nope, that's not working, we're going to bring it back to the White House. We're going to put Vice President Pence in charge. Now, that was his temporary structure, and now --

SCIUTTO: Yes --

MONACO: They're trying yet another effort and putting it outside in the State Department. It doesn't make sense. You need swift response. The last thing I'd say, Jim, you know, this recognition that you need diplomacy, absolutely, you need diplomacy in a pandemic response --

SCIUTTO: Yes --

MONACO: That's one of the reasons we shouldn't be pulling out of the World Health Organization --

SCIUTTO: Yes --

MONACO: And the most effective diplomacy in a crisis gets done by the president and the vice president.

SCIUTTO: Kylie, when you press the administration officials on why now, is there any acceptance that, yes, we got it wrong the first time around on this?

ATWOOD: I would say behind closed doors there is, Jim. You know, they admit, folks at the State Department look at what has happened in the United States in comparison to the countries where U.S. diplomats are serving. And they say, you know, my gosh, it really demonstrates just the failure in terms of the administration in handling this pandemic.

And I think we saw that come to fruition earlier this week. You saw the EU let in travelers from 14 countries just this week. The United States wasn't on that list of accepted travelers.

SCIUTTO: Yes --

ATWOOD: So State Department officials are definitely cognizant of the failure. But they're trying to say, look, let's put our heads together and let's -- you know, create some positive momentum towards something going forward --

SCIUTTO: Yes --

ATWOOD: To fix something like this because they think it could happen again and maybe not a 100 years from now. Jim?

SCIUTTO: Yes, already concerns about a new virus out there. Lisa Monaco, I just want to show to our viewers where the U.S. stands in relation to Europe in terms of new infections. Europe acted, got it under control. The U.S. delayed and -- well, it's the opposite of under control, right? It's going in the opposite direction. Whatever the consequences for the U.S. to be trailing the world in outbreak response right now?

MONACO: Well, it's unacceptable, and it's unconscionable, right? Our slow, halting, chaotic and uneven response to this pandemic has put us on the graph that you showed in exactly the place that, that graph reflects. And that's unacceptable. And frankly, it means now our citizens as Kylie just mentioned are alongside Russia and Brazil in being excluded from travel to the EU. You know, that is -- that is a very unusual and really unfortunate and unacceptable place for the U.S. to be.

[09:25:00]

SCIUTTO: Yes, it's not a club you want to be a member of. Lisa Monaco served in the administration in a role designed to respond to this kind of thing. Kylie Atwood, thanks to both of you. Happening overnight, "The New York Times" reports that an Afghan businessman was the middle man in a Russian bounty scheme to kill U.S. and coalition soldiers. Much more on this ahead.

And we're just moments away from the opening bell on Wall Street, U.S. futures up this morning, this after a new jobs report shows the economy created 4.8 million jobs in June, unemployment rate falling to just over 11 percent, real figure may be closer to 12 percent. There's more to this story and we'll have much more on this ahead.

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