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Omicron Variant Prompts Global Travel Restrictions; Crumbley Associate Could Face Jail Time; Chris Cuomo Terminated From CNN; Biden-Putin Virtual Summit Tuesday; South Africa Reports 16,000-Plus New COVID-19 Cases For Second Straight Day; How Genomic Sequencing May Contain Spread Of Virus; Psychological Scars Of Pandemic And U.S. Economy; Death Toll Rising After Indonesia Volcano Eruption. Aired 5- 6a ET
Aired December 05, 2021 - 05:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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KIM BRUNHUBER, CNN ANCHOR AND CORRESPONDENT (voice-over): Hello and welcome to all of you watching us here in the United States, Canada and all around the world. I'm Kim Brunhuber.
Ahead on CNN NEWSROOM, in custody, behind bars and arraigned: the parents of the Michigan school shooting suspect has been charged but more charges may be ahead.
And the coronavirus variant Omicron moving around the globe with astonishing speed. We're live in London and Johannesburg with the latest.
Plus, the paradox behind the rebounding job market and a public with a negative view of the economy, while millions of Americans are quitting their jobs. We'll dive into the psychology of inflation.
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UNIDENTIFIED MALE (voice-over): Live from CNN Center, this is CNN NEWSROOM with Kim Brunhuber.
BRUNHUBER: The fallout from Tuesday's horrific school shooting in Michigan continues, as police say another person could face charges for helping the parents of the alleged shooter.
James and Jennifer Crumbley are each being held on a $500,000 bond in the same county jail as their 15-year-old son. They have pleaded not guilty to charges of involuntary manslaughter.
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BRUNHUBER (voice-over): Now this exclusive video shows the couple being taken into custody from a warehouse in Detroit after setting off a fugitive manhunt. Police say someone helped the pair get into that building.
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SHERIFF MICHAEL BOUCHARD, OAKLAND COUNTY, MICHIGAN: We believe they were assisted in that location, to get there, to get in. And we're gathering that information. And we're going to have the totality of that done fairly soon and present that to our prosecutor for potential charges, for either aiding and abetting or obstruction of justice.
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BRUNHUBER: Now during the Crumbleys' arraignment, their attorneys claimed they had fully intended to turn themselves in. They also deny their clients' son had unrestricted access to the gun he's accused of using in the shooting, of course. CNN's Athena Jones has more now from Michigan.
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ATHENA JONES, CNN NATIONAL CORRESPONDENT: Hi, there. James and Jennifer Crumbley found hiding in a Detroit warehouse early Saturday morning. They were arraigned later in the morning. Each faces four counts of involuntary manslaughter in the death of the four teens that their son, Ethan Crumbley, is charged with murdering.
Each of these counts of involuntary manslaughter carries up to 15 years in prison and a $7,500 fine and mandatory DNA collection. It is very, very rare to see the parents charged in a high school shooting case. But Oakland County prosecutor Karen McDonald explained why she was making that move, take a listen.
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KAREN MCDONALD, OAKLAND COUNTY PROSECUTOR: Both defendants were aware that he was searching "ammunition" on his phone at school.
Instead of reacting to that as a concerned parent and worried about safety, Ms. Crumbley texted, "LOL, I'm not mad," just next time don't get caught.
And then, obviously on this very tragic day, on the 30th, they were called to the school and -- about their son's drawing, which clearly depicted threats and acts of violence. And instead of disclosing to the school that he had full access to this weapon, they chose not to.
They chose not to take their son home. They chose not to tell anybody that he might be dangerous, when it was clear and they had every likelihood that he was. And instead, they left.
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JONES (voice-over): "And instead they left." The prosecutor saying that these parents, had they acted, could have prevented this tragedy from happening; therefore, they are criminally negligent.
We did hear from the lawyers representing Jennifer and James Crumbley. They insist that even though the Crumbleys did not show up for their arraignment on Friday, they were not, in fact, fleeing. Take a listen to what one of their lawyers had to say.
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SHANNON SMITH, ATTORNEY FOR JENNIFER AND JAMES CRUMBLEY: Last night and throughout the day, we were in contact with our clients. They were scared.
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SMITH: They were terrified. They were not at home. They were figuring out what to do, getting finances in order.
This case is absolutely the saddest, most tragic, worst case imaginable. There is absolutely no doubt. But our clients were absolutely going to turn themselves in. It was just a matter of logistics and all the prosecution had to do was communicate with me about it.
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JONES: They say this was all about miscommunication. But the Oakland County prosecutor and sheriff say, look, the Crumbleys went to a nearby ATM, withdrew $4,000.
They did this at a place that wasn't far from the place they were expected to turn themselves in. That doesn't seem like someone who was trying to turn themselves in.
One more thing I should note, there was a person, a third person, who police say helped them get into the warehouse where they were found hiding. That person could face charges as well, aiding and abetting or obstruction of justice. Those exact charges will be up to the Oakland County prosecutor -- Athena Jones, CNN, Pontiac, Michigan.
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BRUNHUBER: So as we just saw there, the Crumbleys' first court appearance was filled with allegations by both the prosecutor and the defense attorney regarding the handling of this case.
Earlier, CNN legal analyst Joey Jackson shared his thoughts on the arraignment. Here he is.
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JOEY JACKSON, CNN LEGAL ANALYST: The whole purpose of the arraignment is to, number one, apprise the parents of what was they're charged with.
Number two, for the parents to enter a plea, which they did, of not guilty. Number three, for bail to be set, which we know it was set. And ultimately, to have the case come back.
And at that particular arraignment, there were some accusations. The defense pretty much indicating that their clients were never absconding from justice, that there was a miscommunication with the prosecutor and that they -- that is, the defendants, who they represent, the Crumbleys -- at all times had intended to turn themselves in.
The only issue with that is that it pretty much belies the facts as we know them. In the event that you get assistance to get into a warehouse, in the event that you're hiding in the warehouse, in the event that you take out $4,000 the day before, which may be indicative of you pretty much planning to go somewhere, it sort of is contrary to an allegation that they were not really absconding.
So ultimately, everything turns on its facts. We'll see what's factually accurate, what's not. We do know that bail was set. We'll see when they appear in court with regard to their criminality and the prosecutor's case, whether there can be a conviction here moving forward.
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BRUNHUBER: Four young lives taken; the life of their accused killer now hangs in limbo. The attack has become sadly and so uniquely American.
The family of 17-year-old Madisyn Baldwin was supposed to watch her graduate high school this spring. She had already been expected to multiple colleges, some with full scholarships. We're told she was an artist, who loved to read and write. She leaves behind three younger siblings.
Tate Myer was a star football player on the school's varsity team and he helped his team make it to the playoffs this year.
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TATE MYER, CRUMBLEY SHOOTING VICTIM: Oh, man, it feels awesome. I mean, it feels great. In the rain, this is where we live. Rain is just like actual football, tough, muddy. Everything about us is tough.
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BRUNHUBER: Just last month, his family watched him play in what we now know would be his final game. Tate was just 16 years old.
And fellow student, Hana St. Juliana, was just 14 years old. She was on the school's women's basketball team and her teammates describe her as kind and silly. Tuesday night, the day of the shooting, Hana was set to play in her first Oxford High School game.
Justin Shilling was incredibly smart and hard-working. He was part of the school's district's baccalaureate program and a lettered athlete. He was also an organ donor.
And last night a crowd gathered outside the hospital where he'd been kept on life support since the shooting. They were there as Justin's parents told him goodbye and he was wheeled away to surgery. His single life now saving multiple others. Justin was 17.
The latest coronavirus variant, Omicron, is moving around the globe with astonishing speed. It's a wave that may be fueled by a piece of genetic code that Omicron copied from another highly contagious coronavirus, the common cold.
In South Africa, where Omicron was first found, COVID cases have quadrupled since Tuesday. It's now been detected in at least 40 countries and the U.S. is no exception. Cases have now been confirmed in at least 16 states.
But experts insist there's no reason to panic. No deaths have been reported from this strain and, so far, most cases have been mild.
Still, many countries are scrambling to impose new rules and travel restrictions. As of Monday, entering the U.S. from abroad requires a negative COVID test one day before departure. And that includes U.S. citizens. CNN's Salma Abdelaziz has more.
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SALMA ABDELAZIZ, CNN CORRESPONDENT (voice-over): The Omicron variant has put the world on edge, triggering new travel bans and lockdown measures. More than 35 countries have reported cases of the coronavirus variant.
Doctors and scientists are racing to gather data, to determine if it's more transmissible, causes more severe illness and whether it could impact the efficacy of vaccines.
DR. SOUMYA SWAMINATHAN, WHO CHIEF SCIENTIST: The early reports that we have, starting with (INAUDIBLE) province where it was first observed and then across the (INAUDIBLE) provinces of South Africa, we do think that it's quite infectious, quite transmissible.
It is something to worry about. Certainly we didn't want to see another variant emerge and spread around the world at this stage of the pandemic, certainly not what we wanted. But we are not entirely surprised. And I think we're much better prepared to handle it.
ABDELAZIZ (voice-over): But many countries are taking no chances. In Germany, Chancellor Angela Merkel announced a nationwide lockdown for all unvaccinated people.
Italy imposed mask mandates in Rome and Sicily ahead of the holidays.
And Ireland introduced new restrictions, closing night clubs and imposing a 50 percent capacity cap for indoor events.
Rio de Janeiro cancelled New Year's Eve celebrations after Brazil detected its first Omicron cases.
South African scientists first detected Omicron. COVID cases in the country nearly quadrupled between Tuesday and Friday, passing the 3 million mark for the first time since the start of the pandemic; 70 to 75 percent of the cases sequenced in South Africa in November were confirmed to be of the Omicron variant.
Health officials continue to underscore how important it is to get vaccinated and boosted against COVID-19.
In the U.K., prime minister Boris Johnson received his booster and urged residents to do the same as soon as possible.
BORIS JOHNSON, U.K. PRIME MINISTER: The target that we have set ourselves is to offer a booster to everyone eligible by the end of January. And as with the first jabs, we'll be working through people by age group, going down in 5-year bands.
ABDELAZIZ (voice-over): While it may be a few more weeks until scientists know more about Omicron, the world continues to act fast to fight the latest obstacle in the coronavirus pandemic.
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BRUNHUBER: All right. For more on this, let's bring in Salma, who is in London.
So Salma, there's still a lot of doubt as to whether all of these restrictions will actually work.
ABDELAZIZ: Absolutely, Kim. There's a couple of different tools in the tool box right now for governments to apply and use. Key among them is boosting and vaccinating. There's still a huge portion of the region that is unvaccinated.
The president of the European Commission last week saying that one- third of Europeans have yet to get their shot. So you have the push there to get vaccinated.
The other tool is, of course, social restrictions, putting lockdowns in place, putting ruling around the holiday season. But the key here is, Kim, is that these are available to the privileged world, to the developed world, to nations where vaccines are a possibility.
And as we've heard from the World Health Organization, none of us are safe until all of us are safe. This is a variant that developed in a country with a low vaccine rate, where vaccinations are difficult to come by.
And you can only imagine that, if you continue to have pockets of the world that are unvaccinated, unable to access these booster jabs and these other shots, that these types of variants will continue to develop -- Kim.
BRUNHUBER: Thanks so much, Salma Abdelaziz in London.
Chris Cuomo has been terminated by CNN over his role helping his brother in a sexual harassment scandal. We'll look at what the former anchor is saying after losing his job. Plus, Ukraine's future on the line. Going into a U.S.-Russia summit,
what U.S. intel says about the potential for a Kremlin invasion. Stay with us.
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BRUNHUBER: Suspended anchor Chris Cuomo is no longer employed here at CNN. His termination was announced on Saturday, going into effect immediately.
The move comes after documents from the New York attorney general, showing Cuomo effectively worked as an unpaid aid to his brother, then New York governor Andrew Cuomo as he faced sexual harassment allegations. CNN's Brian Stelter has more from New York.
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BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Hey, there. Yes, this is sending shock waves across the television news world. Chris Cuomo was one of the most prominent anchors here on CNN but he has been terminated.
And it all stems from the sexual harassment scandal involving his brother, the former New York governor, Andrew Cuomo.
Here is the statement from CNN Saturday night, announcing the news, saying, "Cuomo was suspended earlier this week pending further evaluation of new information that came to light about his involvement with his brother's defense.
"We retained a respected law firm to conduct the review and have terminated him effective immediately. While in the process of that review, additional information has come to light.
"Despite the termination, we will investigate as appropriate."
So reading between the lines there, CNN management retained a law firm to conduct its own investigation. And whatever that law firm found was apparently enough for CNN boss, Jeff Zucker, to take action on Saturday.
I reached out to Chris Cuomo for comment. Here is what he said in a statement.
He said, "This is not how I want my time at CNN to end. But I've already told you why and how I helped my brother. So let me now say, as disappointing as this is, I could not be more proud of the team at "CUOMO PRIME TIME" and the work we did as CNN's number one show in the most competitive time slot."
Chris Cuomo saying here, "I owe them all and will miss that group of special people, who did really important work."
There are a couple of unknowns here.
Number one, what was the additional information that came to light to CNN management this week?
And the company is not commenting.
Number two, how will viewers react to this news?
There were many Chris Cuomo fans who were frustrated by the suspension and wanted to see him back.
However, at the same time, there were many CNN staffers, who were very angry at Chris Cuomo for the way that he enmeshed his personal and professional lives --
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STELTER: -- the way that he was working with New York governor's aides in order to try to help his brother survive the sexual harassment scandal.
That kind of detail is what came out in the text messages and in the sworn testimony that was released back on Monday. Monday led to Tuesday's suspension and now to Saturday's termination.
Right now, we do know that Cuomo's staff will not be affected. Chris Cuomo's team will remain in place at CNN. And there will be a new 9:00 pm show at some point in the future.
But ultimately the most important detail here is about journalistic ethics and standards, about having standards and practices and making sure that the CNN brand is not affected by any single person's conflict of interest -- Brian Stelter, CNN, New York.
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BRUNHUBER: A group widely considered to be white nationalists marched through the streets of Washington, D.C., on Saturday.
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BRUNHUBER (voice-over): The group is called Patriot Front and marched across the Washington Mall and on the steps of the Lincoln Memorial before gathering near the Capitol. They wore masks and arm patches and some members carried shields.
They also carried American flags, some upside down, and a banner reading, "Reclaim America."
There were conflicting reports as to whether they had permission to march. They were seen being followed by police. A sergeant with U.S. Parks Police said that, Saturday night, there had been no arrests.
(END VIDEO CLIP) BRUNHUBER: For a country that says that it isn't invading its neighbor, Russia has a lot of explaining to do. Kremlin forces are converging near Ukraine in the tens of thousands. And U.S. intelligence says, at this rate, they could launch an invasion within months. All of this ahead of a virtual summit between U.S. and Russian leaders.
CNN's Matthew Chance has details from Kiev.
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MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Russia is planning an imminent invasion of Ukraine. Diplomacy is being urgently stepped up with the U.S. and Russian leaders agreeing to direct talks via the link.
The Kremlin says a virtual summit between President Biden and Vladimir Putin will take place on Tuesday evening, Moscow time.
Russia, which U.S. and Ukraine officials say has deployed tens of thousands of troops, is demanding new security guarantees from the U.S. to stop any further expansion of NATO to the east.
President Putin told incoming ambassadors to Russia he would press his U.S. counterpart for a written legally binding commitment.
Take a listen.
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VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): We propose to start meaningful talks. I would underline that we need legal and political guarantees as our Western colleagues didn't fulfill their verbal promises they gave.
In particular, it is well-known that NATO promised on words not to expand to the east but did the opposite. Russia's legitimate worries were ignored and are still being ignored.
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CHANCE: Amid further U.S. intelligence reports of more Russian military deployments near the Ukrainian border. One report estimates Russian troop levels could reach 175,000 before any military offensive. Moscow denies it's planning another invasion.
President Biden says the U.S. is putting together a, quote, "comprehensive and meaningful set of initiatives" to, in his words, "make it very, very difficult for Mr. Putin to go ahead and do what people are worried he's going to do."
U.S. officials have warned that more severe economic sanctions against Russia would be on the table if a Russian attack on Ukraine takes place -- Matthew Chance, CNN, Kiev.
(END VIDEOTAPE) BRUNHUBER: The last surviving officer of the legendary World War II regiment, immortalized in the HBO series, "Band of Brothers," has died. Army Col. Edward Shames was a member of Easy Company, part of the 506th Parachute Infantry Regiment of the 121st Airborne. From D- Day onwards, Shames fought in nearly every famous battle of Europe.
He was among the first American soldiers to enter Hitler's mountain retreat, Eagle's Nest, where he took a few bottles of cognac from Hitler's personal collection. Shames later used them to toast his oldest son's bar mitzvah. Army Col. Edward Shames was 99 years old.
We'll be right back.
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BRUNHUBER: Welcome back to all of you watching us here in the United States, Canada and all around the world. I'm Kim Brunhuber. This is CNN NEWSROOM.
Travelers arriving in the U.S. on Monday will face strict new rules that aim to keep the new Omicron variant from triggering a new wave of infections. It's already been found in at least 16 states.
Now all of this as airlines get ready for the busy holiday travel season. Many of the new restrictions target passengers from southern Africa, where Omicron was first detected last month.
The country of South Africa has seen an enormous surge of COVID cases in the past week, more than 16,000 just on Saturday. President Cyril Ramaphosa accused wealthy nations of hoarding vaccines, making it difficult for his country to get enough doses. CNN's Larry Madowo is in Johannesburg.
Larry, the numbers are concerning, to say the least. But top authorities seem to be trying to tamp down fears here.
LARRY MADOWO, CNN CORRESPONDENT: That's what they're trying to do, Kim, right, to encourage people to get vaccinated. But the early figures indicate, according to Cyril Ramaphosa, that this Omicron variant does not lead to serious hospitalization.
The rate of hospitalization, the president says, is not increasing at an alarming rate. He did say that there's still more research and testing necessary to be able to say that definitively. But this could be a promising sign in an otherwise grim situation.
We're coming to you from Johannesburg. This is in Gauteng center, which is the epicenter of the new surge in South Africa. At the beginning of the week, South Africa was averaging about 4,000 cases daily. Now it's over 16,000. And the positivity rate is somewhere about 23.8 percent yesterday;
24.3 percent, the day before. So quite a significant figure.
And the concern here from health authorities is that many of those people were not vaccinated and that could increase, because some of them have just not been exposed yet. And if they're exposed because they're unvaccinated, they're likely to turn positive.
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BRUNHUBER: So Larry, in the intro, I mentioned that the president said that he was accusing the West, basically, of hoarding vaccines. But in South Africa, at least, the vaccine shortage doesn't seem to be the real problem. It's vaccine hesitancy. And you were mentioning a bit earlier that the U.S. actually has a role to play, even in that.
MADOWO: That is correct. There is some significant amount of misinformation that has spread in this pandemic here in South Africa and across Africa, to be clear. I spoke to one pharmacist who told me, over the last 1.5 years, misinformation and conspiracy theories won and science lost.
And you see this growing crowd of anti-vaxers, who believe what they hear from conservative U.S. commentators, right-wing opinion hosts. And they have a following here. You hear people like Joe Rogen and his very influential podcast, who has got a following here.
And that's leading to some people not to get vaccinated. I spoke to one 29-year-old South African woman, who said the only reason I have now signed up to get vaccinated is because I need that vaccine to travel. But otherwise, don't come at me with five articles, telling me why I should get vaccinated.
I can also do my own research and find counterevidence. So that is not going to work for me.
And that is the people the government is trying to reach, encouraging them to get vaccinated and now even considering a vaccine mandate, to make it mandatory for people to get that protection, because that is the only way to achieve herd immunity and make sure that, when new variants pop up, they're not as dangerous or they don't even come up at all.
BRUNHUBER: Let's hope that attitudes can change quickly there in South Africa. Larry Madowo in Johannesburg, thank you so much.
Last hour, I spoke to research professor Glenda Gray about what led to the discovery of the Omicron variant in South Africa and here's what she had to say.
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GLENDA GRAY, PRESIDENT AND CEO, SOUTH AFRICAN MEDICAL RESEARCH COUNCIL: So we set up a network of genomic surveillance in South Africa. And this came off the knowledge and expertise from HIV and TB. And this surveillance network is throughout the country. And this surveillance network does routine genome analysis.
And a private laboratory in Johannesburg started to notice what we call S-gene knockouts and alerted this network to it and sent samples to them. They saw this S-gene target failure, which is a sign that something was different.
And so the virologists were able to sequence this S-gene target failure and find a new variant. This new variant, when it was sequenced, was found to have many immunoassay changes, multiple immunoassay changes and with some deletions, showing that there was a new variant that was emerging in South Africa.
And very rapidly, became the dominant variant, particularly in the Johannesburg, Pretoria, area in South Africa.
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BRUNHUBER: That was research professor Glenda Gray.
The Omicron variant is once again highlighting the need for more genomic sequencing. This scientific process identifies COVID-19 variants that may be emerging and is a key weapon in containing the spread of the virus. As CNN's Scott McLean reports, many countries lack the resources to properly conduct this type of research.
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SCOTT MCLEAN, CNN CORRESPONDENT (voice-over): In the past few months, the Philippines has seen record COVID case numbers. And, as officials try to contain the virus on the streets, inside this lab in Davao City, they're fighting on a different front.
KAHLIL CORAZO, ACCESSIBLE GENOMICS: The first rule in war is that you have to know your enemy. And for us to know our enemy in this pandemic, we have to sequence it.
MCLEAN (voice-over): In the battle against COVID, the lab has the artillery it needs to sequence the virus, this tiny machine. The problem is that it can barely afford the ammunition, the chemicals that make it work.
They cost about $900 for just a couple hundred test samples. In a given month, they say thousands are needed to fully track the virus.
CORAZO: Recently we've started a crowdfunding campaign. And so far we've raised around 400 euros. A thousand dollars is like two people's monthly salary so it's not significant here.
MCLEAN (voice-over): That relatively small funding gap is a big reason why developing countries are lagging so far behind in identifying COVID-19 variants that might be more deadly or transmissible.
In the West, labs like the U.K.'s Sanger Institute are sequencing the virus on a huge scale, using multimillion dollar machines like these. According to GISAID, the COVID-19 variant database, the biggest contributions are coming from the richest countries. Some countries haven't sequenced any genomes at all, which means none
of us know which variants are circulating there, ready to potentially spread across borders.
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LYRE MURAO, DIRECTOR, PHILIPPINE GENOME CENTER MINDINAO: We don't get to do sequencing in many parts of the world. Then definitely we're missing out on possible variants that are, you know, emerging.
MCLEAN (voice-over): We know how rapidly new variants can take hold. The Delta variant first emerged in India in April and was the dominant variant worldwide by mid-July.
Omicron, the new variant first spotted in South Africa, was declared a variant of concern in record time and is predicted by some experts to become the dominant strain in the days ahead. Its emergence highlighting again the importance of real-time virus surveillance.
Getting the necessary technology out to all corners of the globe is part of the challenge and this company, an hour north of London, thinks they have an answer.
MCLEAN: The technology to sequence the virus in remote labs around the world is being manufactured here on an industrial scale. It's small and relatively inexpensive. The challenge has been getting governments to actually use it.
GORDON SANGHERA, CEO, OXFORD NANOPORE: These systems are plug and play. If you're a 16-year-old high school student, you can run the platform. It's that easy to use.
MCLEAN: I just wonder why more countries aren't using it.
SANGHERA: It's a confluence of regulation, governments, lack of awareness. We've been slow to fully understand that we need to look at the variants. But if we got a vaccine escape variant, things could change dramatically overnight.
MCLEAN (voice-over): Back in the Philippines, this lab won't be doing large-scale surveillance anytime soon without a massive influx of cash. But they have proven, with a tiny piece of technology, that even small-scale operations can contribute to COVID sequencing, helping us all stay one step ahead of the virus -- Scott McLean, CNN, Oxford, England.
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BRUNHUBER: We're seeing COVID-related protests all over the world this weekend. Have a look.
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BRUNHUBER: In Austria, tens of thousands of people demonstrated over the current lockdown and the government's plan to make vaccinations mandatory next year. Now on Saturday meantime, thousands protested in Australia. Have a
look there, on both sides with demonstrators for and against vaccine mandates filling the streets of Melbourne.
And in Brazil protesters in Sao Paulo are demanding the ouster of the president, Jair Bolsonaro, unhappy with his handling of the pandemic. Remember here, more than 615,000 people in Brazil have died from COVID so far.
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BRUNHUBER: Ahead on CNN, how the psychological scars of the pandemic may be tied to inflation here in the U.S.
Plus, rescue operations are underway in Indonesia following a deadly volcano eruption. We'll have the latest, coming up. Stay with us.
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BRUNHUBER: Many people living here in the United States are getting mixed signals about the economy. We're hearing how things overall are getting better, even going well. Yet we can see that we're paying more at the store and maybe it's clear that the raise we hoped for isn't happening just yet.
That disconnect leaves us insecure at a time when we just want things to be the way they were. Here are some examples.
The U.S. created far fewer jobs than expected in November and it's raising new questions about where the economy is headed. U.S. employers added just 210,000 jobs last month, less than half of what economists expected.
The November jobs report did have some promising numbers. The unemployment rate has inched down to 4.2 percent. It's now the lowest since the start of the pandemic. The average U.S. wage is now about $31 an hour. That's up 4.2 percent over the last year.
That being said, in just the last month of August, 4.3 million Americans or nearly 3 percent of the entire workforce quit their jobs. That's the highest number in one month ever recorded by the Bureau of Labor Statistics.
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BRUNHUBER: Joining me now is Ulrike Malmendier, a professor of finance and economics at the University of California at Berkeley.
Thanks so much for being here with us. So if you go through a number of economic indicators, whether it be the low unemployment rate, how much people are spending and saving, how much people are -- you know, how many people are deciding to quit their jobs, you would say, you know, Americans are doing great economically.
But then, if you ask them, they tell you a completely different story. I want to pop up a recent poll here.
It found that 70 percent of Americans have a negative view of the economy. Consumer confidence seems to be at a 10-year low. So the perception is the economy is bad and getting worse.
Why is that?
ULRIKE MALMENDIER, UNIVERSITY OF CALIFORNIA/BERKELEY: I would point to two reasons that come to mind.
One thing is that we have to be careful to distinguish where the economic indicators are putting us right now, in terms of GDP, in terms of different indicators. And those might look good.
And yet, the reality around you, what you see to your own family, happening to your own family and happening to people who live in your community, they still look very different.
And that is just a result of our usual economic inequalities, that maybe a smaller number of people is heavily benefiting from the upsides while a large number of people are still negatively affected.
Now the second aspect, which is closer to my type of research, is the insight that we've observed now for not only the current COVID-19 pandemic crisis but also for previous crises, like the financial crisis before that; that, going through the crisis, experiencing a downturn, experiencing job loss stays with people longer than the actual economic reality.
Their lingering effects, we tend to still look negatively at the world, even when things are going better. And we have observed a crisis before that, for example, indicators of consumer optimism remain quite depressed, even when the job numbers and the GDP numbers, et cetera, point to the opposite.
And I think that's what we are also seeing here.
BRUNHUBER: So people seem to have an in-built pessimism, whenever there is some sort of economic trauma going on, I guess, looking at the pandemic.
But then, you know, sort of contradicting that, the number of people quitting their jobs, I mean, that's confusing me. Typically, you don't do that when you think the economy is tanking. You hold on to what you have for dear life. So it's kind of a paradox.
MALMENDIER: Yes, this is a super interesting paradox. And that is really new and specific to this crisis and different from, say, financial crisis.
I want to point out two things here, as well. One is the boring standard economic viewpoint, the EBITDA, which I think has a lot of merit; namely that the pandemic has lots of readjustments.
[05:45:00]
MALMENDIER: Readjustment of your work life, family life; things were impossible, particularly for women. Many employment situations were unsustainable anymore and partly, we're just seeing the aftermath of that.
There are frictions which are not easily measurable. People can't just kind of hop to a partial job and adjust, given their new circumstances as easily. And these frictions just have to be overcome.
And we have to really just settle into the ultimate numbers, which we'll see maybe six months down the line, I would think.
But there is also a second aspect, namely that living through an experience like the pandemic crisis right now, are just people (ph). That's something economists often ignore. We often think, oh, once we've reestablished everything, as you said earlier, the indicators look good again, my workplace is open.
Let's say in a perfect world, everything is exactly as it used to be before the crisis. Then we tend to assume people will act again as they did before the crisis. But the experiences out of them, they look at their values, what's important to them differently.
And I do suspect that some of this is going on here as well, that we realize that, even without having realized new information about our job, that just having had this experience of a different life makes people make different choices. And that may last for a while.
BRUNHUBER: Yes, and on the idea of things lasting for a while, things aren't just psychological; there are some potential bad news in terms of inflation. And people, certainly, when you ask them in polls, have real concerns about that.
The Biden administration initially downplayed all the fears about inflation. Now they seem to be taking it more seriously. Fed chairman Jerome Powell recently changed his tune, admitting inflation isn't transitory. He wanted to get away from that word.
And it seems to be less short-term. We'll play a clip from him talking to lawmakers earlier this week. Have a listen.
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JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: The recent rise in COVID-19 cases and the emergence of the Omicron variant posed downside risks to the employment and economic activity and increased uncertainty for inflation.
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BRUNHUBER: All right.
So how will inflation, the pandemic and then possible fears about this new variant affect the way consumers feel and spend their money going forward?
MALMENDIER: Yes, it's a really interesting time for inflation to kick in again. There are younger generations, the Gen Zers and even earlier generations, that haven't basically seen inflation, all of a sudden, well, have to live in a world in which inflation is a factor again, which we not only know from the history textbooks but from actual real experiences.
And I think those people, for whom this experience is new, will be quite shocked in their views of the world, like seeing prices increase in a manner they haven't observed before will (AUDIO GAP) just about what may happen in the future.
The other generation, I think, which will be heavily affected by inflation creeping up, are those who have had some prior experience, people who did live through the late '70s, early '80s and experienced that prior peak in inflation in the U.S.
And we have a lot of evidence from psychology and neuroscience how multiple experiences of stressors or shocks have a more than proportional effect. And I expect them to have memory flashbacks and maybe become particularly worried about where the inflation is going.
BRUNHUBER: Appreciate your insights into all of this, Ulrike Malmendier, thank you so much.
MALMENDIER: My pleasure. Great to talk to you.
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BRUNHUBER: Coming up on CNN NEWSROOM, more than a dozen people are killed in a volcano eruption in Indonesia and rescue workers are looking for those who are trapped.
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BRUNHUBER (voice-over): Now these images just came to us a few moments ago. We'll share more with you coming up after the break. Stay with us.
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BRUNHUBER (voice-over): Have a look at this, aerial images from Java, Indonesia, where a volcano erupted Saturday. At least 13 people have been killed and scores more injured. Thousands have been displaced. Pilots are warned to be alert, with ash clouds towering up to 50,000 feet in the air.
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BRUNHUBER: Search and rescue operations are underway. Local officials say blocked roads are hindering efforts and evacuation shelters have been set out for those lucky enough to escape. Paula Newton has the latest.
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PAULA NEWTON, CNN ANCHOR AND CORRESPONDENT (voice-over): A towering ash cloud engulfs the sky in Indonesia. Panicked villagers run for safety with the giant plumes of smoke from Mount Semeru looming behind them.
Authorities say the volcano, which is the tallest mountain on the island of Java, erupted Saturday afternoon. Some people say it was an eerie scene, with the smell of sulfur in the air and the sky looking like it had turned from day to night.
One woman says, "There was a cloud raining down hot ashes. Then the sky went totally dark."
Thousands of people have fled the area. Authorities say they are unable to reach some villages, because roads are blocked by debris and mud. Heavy rains have further complicated rescue attempts.
UNIDENTIFIED MALE (through translator): There are families, parents and children, who are not found yet. But considering the hot lava, the hot temperatures, the field is tough. So what we can do is get to the locations that we know we can reach.
NEWTON (voice-over): Officials say dozens have been wounded and suffered severe burns. A restricted zone has been set up within five kilometers of the crater. Many weary families are taking shelter in evacuation centers in village halls and mosques, where they await word on missing loved ones, unsure themselves of when they can return home.
Mount Semeru is one of Indonesia's most active volcanoes. It had a previous major eruption about a year ago. The Volcanic Ash Advisory Center has issued a warning to airlines that one part of the ash cloud could reach as high as 15,000 meters.
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[05:55:00]
BRUNHUBER: Well, have a look at Venice's famous St. Mark's Square here.
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BRUNHUBER (voice-over): Tourists had to wade through water after the sinking city flooded once again. Now it's common this time of year, when high tide raises the water level on the Adriatic Sea. Saturday's high tide wasn't high enough to activate the city's flood
barriers. But people used elevated walkways around the square to keep their feet dry.
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BRUNHUBER: Parts of a tropical paradise aren't so sultry right now. Look here.
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BRUNHUBER (voice-over): This is a blinding blizzard on the mountain peaks of Hawaii's big island. Up to a foot of snow is expected in those areas.
The U.S. National Weather Service issued the first blizzard warning for the island in more than three years as wind gusts on the summit are expected to hit 100 miles per hour. However, many Hawaiians will just see heavy rain.
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BRUNHUBER: It started as an attempt to get rid of snakes and ended with an entire house going up in flames.
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BRUNHUBER (voice-over): Officials say this 10,000 square foot home near Baltimore burned down late last month after the homeowner tried to smoke out the snakes on his property. He apparently used coals as the heat source for the smoke. They were placed too close to combustible materials, eventually setting the house on fire.
Luckily, no one was injured but the fate of the snakes is unknown.
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BRUNHUBER: I'm Kim Brunhuber. Thanks so much for watching. For viewers here in the U.S. and Canada, "NEW DAY" is next. For the rest of the world, it's "CONNECTING AFRICA."
