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January Jobs Report Crushes Expectations Despite Omicron Surge; Putin Gets China's Support as World Fears Russian Invasion of Ukraine; Beijing Winter Games Begin With COVID, Putin-Xi Meeting in Spotlight. Aired 10-10:30a ET

Aired February 04, 2022 - 10:00   ET

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

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[10:00:00]

JIM SCIUTTO, CNN NEWSROOM: A very good Friday morning to you. I'm Jim Sciutto.

BIANNA GOLODRYGA, CNN NEWSROOM: And I'm Bianna Golodryga.

We are following several major stories at this hour. Opening ceremonies wrapped up just moments ago, officially kicking off the 2022 Winter Olympics in Beijing. China's zero COVID policy forcing a much scaled down version, a notable absence of diplomats from the U.S. and its western allies all boycotting the games because of China's human rights record.

SCIUTTO: This morning, in an apparent a show of solidarity between America's two rivals, Russia's Vladimir Putin met with Chinese President Xi Jinping just before the Olympic opening ceremonies. The two issued a joint statement calling for interestingly a halt to NATO expansion. Of course, that's one of Russia's top security demands, as it continues to threaten Ukraine.

And the breaking news we're following this hour, the U.S. economy added nearly half a million new jobs in January. That's a much stronger report than expected.

CNN's Chief Business Correspondent Christine Romans with more. And I got to tell you, I was talking to the White House yesterday, they were concerned about a negative report and this surprise is on the upside. What happened?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, I was talking to them too. They were bracing for something that was going to show maybe even a negative job creation picture but it shows you that the economy is resilient, the job market overcame the omicron problem in the second week and the third week in January, and created almost half a million new jobs.

And you guys, December, 510,000 net new jobs, that is far and away bigger than the original reading we had of 199. So, when you look at the fall, November, December, big upward revisions, January, a very strong number. It shows you that the end of the year, the beginning of this year, even with the omicron variant, you have the economy powering ahead. 4 percent, the unemployment rate ticking up a little bit, but still down dramatically from the beginning of this crisis.

And when you look at the sectors, leisure and hospitality, this really surprised me and surprised a lot of economists too here, because leisure and hospitality, you think that would be where a lot of people would be stepping back because of the absenteeism we saw during the omicron variant, but they added 151,000 jobs there. Professional business services, retail, all kinds of different stores were adding jobs in the month. And transportation warehousing, to me, that could be a sign that those supply chain woes are starting to, you know, to cool off there, and so maybe you're seeing some improvement there. But, overall, with all of these revisions, a much stronger picture than we thought.

The Fed chief last week had said that the job market was tremendously strong. And I think these numbers bear that out. This is why the Fed will start raising interest rates this year.

GOLODRYGA: And you're still hearing employers out there desperate to hire more people.

ROMANS: That's right. This is a story of too many jobs and not enough workers, and that's exactly what we have been hearing. There are more open jobs today than there are people looking for those jobs. We would like to get people off the sidelines, you've got a lot of women still sidelined, taking care of family. We still have the health crisis running the show overall, but this is remarkable resilience, I think, in the face of what we saw in the January.

SCIUTTO: And wages going up as well, which you noted, but still at this point behind the pace of inflation.

ROMANS: Except for leisure and hospitality, they are beating inflation in that category for wages.

SCIUTTO: Interesting, remarkable. Okay, thanks so much for breaking down the numbers, Christine Romans.

And we should note, we're going to speak to Labor Secretary Marty Walsh in a few moments. We're going to get his and the administration's reaction, so please do stay with us for that.

GOLODRYGA: The other big story we are following this morning, Chinese President Xi Jinping hosting Russian Leader Vladimir Putin for talks on the sidelines of the Olympics as the west fears Russia could invade Ukraine at any moment.

[10:05:04]

SCIUTTO: CNN Correspondent Selina Wang, she's in Beijing, CNN International Diplomatic Editor Nic Robertson, he is in Moscow.

Selina, if we could get to you in just a moment, Nic, I do want to beginning with you, this meeting of the minds, as it were, between China and Russia, we have seen a lot of signs of this in recent months, joint military exercises, other statements and meetings, tell us the significance and what came out of this meeting at the Olympics between the two.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, what a great platform for propaganda for the pair of them. President Putin coming into this needing a sort of big international backer, getting it from the Chinese president, Xi, Xi apparently buying into Russia's current narrative that NATO should not expand further eastwards from its current areas, in fact, should roll back. Both of them in the joint statements indicating that it's the United States, they say, that is responsible for creating tensions in the region at the moment, so big buy-in from President Xi, for Putin on the security issue.

And on the economic front, you know, two tracks there, the immediate concerns of Putin that he might face massive sanctions, finding some business and economic relief there. Some deals, hundred million tons of oil sales to China from Russia. That's what maybe $50 billion worth there. You can say that's a good one for Putin to have in the bag as he faces those sanctions but also the indications from both of them that they're kind of looking at tying up, you know, a better way of them trading, both these countries trading outside of the influence of the U.S. dollar. The deeper strategic coordination, something that's going to affect the world essentially is what they were both saying. And on that front, they're talking about high-tech engagement, green tech engagement.

So, this is really a platform for both of them, but Putin is getting it when he needs it the most.

GOLODRYGA: Yes. And both of these authoritarian leaders really also share something else, and that is a passion for Olympic Games, and all the pomp that surrounds them.

Selina, these opening ceremonies, however, look different. Several world leaders are boycotting over human rights abuses in China. What is it like there on the ground, much more muted?

SELINA WANG, CNN CORRESPONDENT: Yes, Bianna. There are notable absences at these games, as you had the U.S. and some of its allies, including the U.K., Canada and Australia, staging a diplomatic boycott as a statement against allegations of genocide in China's Xinjiang Region, which are allegations China has continued to strongly deny. In fact, at the Olympic opening ceremony, one of the athletes who lit the Olympic cauldron is a cross country skier from Xinjiang.

And, Bianna, what a difference 14 years makes, compare these games to 2008 Summer Olympics that China held, such a difference. Back then you had George W. Bush sitting shoulder to shoulder with Chinese leaders, sitting there cheering on the team. This time, the guest of honor is Vladimir Putin. And he was joined by other strong men and autocratic leaders. It was a VIP list of just over 24 dignitaries, included leaders like Saudi's crown prince, Mohammed bin Salman, the leaders of Egypt, Turkmenistan, Tajikistan. It's so hugely symbolic to have these autocratic leaders gathering at the Olympic opening ceremony. And it was really a moment for Beijing to showcase a China that is more wealthy, that's more powerful, and under Xi Jinping, more authoritarian and increasingly at odds with the west.

And what we saw at the opening ceremony is really reflective of the broader change in posture in China to the world. Back in 2008, they had 15,000 performers, this extravagant performance covering four hours and thousands of history, of Chinese history. This time, it was much more simpler, much more subdued because China is no longer trying to prove anything. Back then, they were trying to meet the world's terms. This time, China is telling the world to accept theirs. Bianna?

SCIUTTO: Well, we should note that the abuses in Xinjiang are well- documented by journalists. It's also found credible by governments, a number of governments around the world, including this one.

Selina Wang in Beijing, Nic Robertson as well.

As the athletes compete in Beijing, the world is still grappling with how to approach this Olympics given China's disturbing record on human rights.

GOLODRYGA: White House Press Secretary Jen Psaki underscored the U.S. diplomatic boycott, saying, any diplomatic or official representation would treat these games as business as usual in the face of PRC's egregious human rights abuses and atrocities in Xinjiang, and we simply can't do that.

Joining us now to discuss is the former U.S. ambassador to China, Max. Ambassador, thank you for being here.

So, as you see the image of these two autocrats, Putin and Xi, there in Beijing, notably missing western leaders, other authoritarians though are present, what does that tell you about the global state of discord, really, as we're continuing to see escalation on the Ukraine border with Russia and America sending a dire warning here?

[10:10:06]

MAX BAUCUS, FORMER U.S. AMBASSADOR TO CHINA: Well, first, it's back to the games. Unfortunately, the tension over there in the presence of, say, Putin and Not President Biden, is due to the continuing deterioration and relationship between the U.S. and China. It's plummeting. It's just going south. At some point, it's going to reach bottom, and we're going to have to be realistic, both U.S. and China, how we manage the relationship.

Right now, unfortunately, much of the country is driven by domestic politics. In the United States, it's nobody, the Congress or the White House dare say anything constructive about China for fear of having his or her head taken off, the charge being he or she being is soft on China. And the same is true over in China. There's strong Chinese nationalism. The people in China like what President Xi is doing. They done care much about the human rights allegations that the United States makes.

So, the big fundamental question we're going to have to ask ourselves down the road is what do we do as the United States and westerners when all of our allegations about human rights abuses in China really have no effect on the Chinese government. It does not change their behavior. What are we going to do about that? We're at a point right now, we're upset about the human rights abuses, but China doesn't seem to care very much about our charges, so we're going to have to deal with that issue going down the road.

SCIUTTO: And, Ambassador, as you know, the administration made a decision to have a diplomatic boycott of the games, not a full boycott. So, in other words, you don't send the diplomats, government officials, the athletes are playing. Do you think that was the right decision, in you view? And does it -- to your point just then, does it make that difference? Does it have influence, meaning?

BAUCUS: Well, it has no influence on the Chinese, none whatsoever. But President Biden was caught in the middle. There's a very strong human rights lobby in the United States and I understand that. We should clearly espouse human rights worldwide. But he's facing that in the United States. Some wanted him to boycott the Olympics entirely, that is not send athletes, as was the case back in 1980, when we didn't send athletes to the games because Russia invaded Afghanistan.

So, President Biden found a compromise. It was a diplomatic boycott. He did what he had to do as president of the United States given all the pressures that he's facing.

GOLODRYGA: As the U.S. is continuing to put more pressure on Russia as the relationship with Vladimir Putin is deteriorating, we are seeing closer ties between Russia and China notably between these two leaders who call each other best friends. I'm just curious to get your perspective on the future of this relationship. Because at least when it comes to the issue with Ukraine, look, China didn't recognize Russia annexing Crimea in 2014. China and Ukraine are strong trading partners with each other. Where do you see this dynamic going?

BAUCUS: I think President Putin will push as much as he can to extend Russian influence and taking Crimea and pushing them in Ukraine. To a large degree, much of this, that is President Putin, President Xi, either separately together, their efforts depend somewhat on their perception of the strength of the United States. Both think that maybe the United States relatively is declining a little bit. If that's the case, maybe President Putin and President Xi could be more successful and any pressure they put on the United States or any efforts they're trying to undertake.

So, much of this comes down to the perception of strength. If we Americans reject strength, that is economic strength, political strength, national strength, unified strength, we're together as a country, that's going to make it more difficult for President Putin, more difficult for President Xi.

SCIUTTO: So, to that point, is the U.S. projecting sufficient strength to China and to Russia for that matter?

BAUCUS: Well, the proof's in the pudding. We did pass the infrastructure bill. It would help if we can get some compromise on the Build Back Better. It also helps very much if we could reduce or deal with some of the excessive partisanship in our country. And because we're not working together, Republicans and Democrats, we're actually hurting ourselves.

So, my answer to your question, Jim, very much depends on what happens in the next several months this year. We've got an opportunity. And both parties have got to work together because it sounds a little corny, but to the future, and living standards of our kids and our grandkids very much dependent on how well (INAUDIBLE) together.

[10:15:00]

GOLODRYGA: The two areas of bipartisan we are seeing in the U.S. is vis-a-vis Russia and China, so an interesting trajectory there. Ambassador Max Baucus, thank you, we appreciate it. Have a good weekend.

BAUCUS: You bet. Thank you.

SCIUTTO: Still to come this hour, the January jobs report just blew past expectations, despite the surge of the omicron variant. We're going to speak with the labor secretary, Marty Walsh, next, also going to be asking him about inflation. We're also waiting for President Biden to speak this hour. We'll bring you comments live.

GOLODRYGA: Plus, the Georgia district attorney investigating former President Trump's attempt to overturn the 2020 election results outlines the next steps in the probe and reveals the pressure and racist attacks coming down on her and her office.

And later, disturbing new police body camera footage from Minneapolis where officers shot and killed a man after entering an apartment on a no-knock warrant. That man had been asleep just moments before:

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[10:20:00]

SCIUTTO: In just moments, President Biden is expected to address unexpectedly good economic news that the U.S. added some 467,000 new jobs in JANUARY. Last month's job growth blowing expectations just out of the water despite the omicron variant sidelining 12 million workers before the surge then tapered off.

Joining us to discuss this and other economic issues, Labor Secretary Marty Walsh. Secretary, thanks for taking the time this morning.

MARTY WALSH, LABOR SECRETARY: Thank you for having me today, Jim.

SCIUTTO: So, frankly, this -- it's a good number but it's not the number the White House was concerned about. I was speaking to folks in the White House yesterday who clearly were concerned it might be a negative figure. How do you explain that and what does it mean for the economy?

WALSH: Well, first, it is a good number, you're right, and it's good for our economy. I think what we're seeing here is we're seeing businesses learning to live with their employees during a pandemic, and I think that we're in a very different position when you think about the workplace today as compared to March, April, June of 2020. And I think a lot of that -- that's one of the things we saw.

One thing we did see in this report, we saw a little more at-home work from the previous month, which I think is why a lot of people were able to be still work during the pandemic. A lot of businesses made the decision to keep people on the payrolls moving forward. I think that's a good thing. And I think that we --but we still have work to do.

The other numbers as well, the revisions for 2021, that's a number when I heard that this morning, I was kind of taken aback by it, and I asked the BLS commissioner about that number. And what he explained was that these are very transparent numbers and these are regular seasonal adjustments that we have seen over the last ten years. So, again, BLS is the gold standard, when it comes to receiving data and deciphering data and putting data out there. So, certainly, it's a lot of good signs here for our economy, and most importantly good signs form American workers.

SCIUTTO: Okay. There is a disconnect though, right, because most recent Gallup polling shows that only 33 percent of Americans are satisfied with the economic situation right now, and a big piece of that is inflation, because, yes, it's easy to find a job, wages are going up, but wages are going up at a slower rate than prices are going up, and people see it every day, from milk, gas, food, cars, you name it.

What do you say to Americans who are feeling the squeeze from inflation?

WALSH: Well, I think it's inflation, but I also think it's the times we're living in. I think it has to do with also not just what the poll numbers say but I think we have to read deeper into those poll numbers and see people are upset, unhappy, scared, concerned about where we are with the pandemic. I think a lot of people had hoped that the pandemic would be far beyond this point.

But to go back to inflation really quickly, the president laid out a whole bunch of plans on how we're going to tackle inflation. One area that I'm involved in is supply chain, creating opportunities, relieving the burden, relieving the demand. There's no question about it that we have work to do when it comes to inflation and looking at the different pieces of inflation, and addressing those issues, as you just said, no threat, gas, oil, all of those different sectors.

SCIUTTO: People feel it every day.

On the issue of the supply chain, my colleague, Bianna, last hour, spoke to the CEO of Ford. She asked him about chip shortage, which is a big part of the supply chain issue now. And he said he does not expect to see relief until the second half of this year. What is the administration doing that's working to address the supply chain crisis?

WALSH: Well, I think in the short-term, we're working to get more of these ships into shore. A lot of supply chain with the chips was not just an American issue. It was a manufacturing issue where, in the beginning of the pandemic, many manufacturers shut down. Long-term, the president announced -- Intel announced the other day of building more chips in America and doing more manufacturing in America.

I think going forward, we have to be less dependent on foreign imports here into our country and we have to be more dependent upon American made products. And I think chips is one of the areas. We're building the trucks. We're building the new energy-efficient trucks. Ford is doing a ton of them. Thank you, Ford. But we need to make sure we're building the entire truck in the United States of America, and I think that is something the president has put forth and there is legislation up on Capitol Hill that also deals with the issue around chips.

SCIUTTO: As labor secretary, of course, you have been dealing with the pandemic, right, and what that means for the workplace. We are beginning to see places, Denver, Colorado, one of them now lifting mask mandates. Is it time, in your view, for local governments, state governments and for businesses as well to lift those mandates, to lift a lot of those restrictions we have been living under for a couple of years now?

[10:25:06]

WALSH: Well, if you remember, a lot of restrictions were lifted as the summer went on. Then we had a delta variant, where some restrictions went back into place, and then they were lifted again, and then the omicron variant really raised a lot concern around the country. So, I think that there're opportunities for us as we move forward to lift certain restrictions.

Now, in saying that, there might be a need or a time where we have to put some restrictions back in place. We have to stay in constant contact with the hospitals and the emergency rooms to make sure they're not overloaded. We need to watch the virus. We need to test people. We need to keep track of it. So, again, if it was a one and done, I guess, I could say, as a pandemic, then we could lift restrictions, but it's not a one and done. We don't know what the next variant coming down the road, is if there is one, and what it could mean.

So, I think a lot of cities and towns, we're already hearing restrictions are being lifted in the East Coast, and restrictions will start to be lifted on the West Coast. Permanently, you can't say that. You just don't know what the virus is going to do.

SCIUTTO: We'll be watching closely. Labor Secretary Marty Walsh, good to have you on the program this morning.

WALSH: Thanks for having me.

GOLODRYGA: Certainly telling, Jim, that he's not the only one who's scratching his head about these numbers, right? You've got the labor secretary. You've got many economists.

SCIUTTO: They're clearly having trouble measuring this job market. They are.

GOLODRYGA: It is changing all the time.

Well, still ahead, an RNC vote expected soon to censure Lawmakers Liz Cheney and Adam Kinzinger for their roles on the January 6th committee. Well, now, some Republicans are objecting.

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