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Kentucky Governor Gives Update On Devastating Floods; At Least 25 Killed In "Catastrophic" Kentucky Floods, Many Remain Missing; $1.34 Billion Lottery Jackpot Winner In Illinois; Pelosi Begins Asia Trip With Taiwan Stop Still Unclear; Growing Concerns The U.S. May Be Headed For Recession. Aired 12-1p ET

Aired July 30, 2022 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:55]

FREDRICKA WHITFIELD, CNN HOST (on camera): Hello, everyone, I'm Fredricka Whitfield. Welcome.

We will take you straight to this press conference underway right now with Kentucky Governor Andy Beshear, talking about this devastating floods.

(BEGIN VIDEOTAPE)

GOV. ANDY BESHEAR (D-KY): For 25 fatalities across five counties, that number will continue to grow, and to be refined.

Remember, we don't have cell service in some areas. So, please be patient as we get new information or if it changes. We continue to pray for the families that have suffered an unfathomable loss. Some have been lost almost everyone in their household.

Rescuers at the Kentucky Department of Fish and Wildlife had been at the forefront of these recovery efforts. They've had to ultimately gather the bodies more than just about anybody else. So, please also pray for those first responders.

Their mission has been especially challenging and what they're experiencing firsthand is tremendously stressful and difficult. We thank them for what they're doing.

Deaths include four in Breathitt County, two in Clay, 14 in Knott, two in Letcher, and three and Perry. Again, those will continue to rise. If there's one piece of good news, we now believe there are only four children in this group and not six. The original two children that were reported to us have turned out to be adults.

Now, those are still two people that have been lost and we grieve for them. But wanted to make sure we got our most recent information out. And listen, information is going to change as we get it.

This is still an emergency situation. We are in search and rescue mode. Again, that account is going to continue to go up and we don't lose this many people and flooding, it's just a real tough one.

There are a number of rescues going on though. Now, if -- our Kentucky National Guard and others are doing incredible work and we are grateful. Kentucky National Guard has rescued 404 individuals by aircraft. That's just over the last couple of days. That is incredible.

Tennessee National Guard which is helping us out, 224 additional people. West Virginia National Guard, 36. So, an incredible number of air rescues that have going on.

19 people and two dogs rescued by the National Guard by boat. Kentucky State Police have assisted or assisting in 624 water rescues. Then, the Kentucky Department of Fish and Wildlife has assisted in 125 water rescues.

We are so grateful to all of those responders and a special thank you to the governors and the guard of Tennessee and West Virginia.

Kentucky State Police is responding and actively searching for people, as it is a really hard thing right now with how wide the destruction is. Areas that are impacted to get any firm number on people that are missing. The best thing people can do is report their loved ones to these numbers.

This is how you report a loved one that you can't find, that you can't reach. We need their names, and the Kentucky State Police so go out and find them. And we want to be able to locate your loved one. Here is the list.

You know, Pike, Magoffin, Johnson, Martin, and Floyd have one post number. Breathitt, Leslie, Letcher, and Perry, another. Owsley. Jackson, and Lee, another. Wolfe and Morgan, and then Harlan.

And these correspond to where your loved one is. Because these are the posts that serve those counties.

So, if your loved one is in Pike, you call that first number. 606-433- 7171.

[12:05:02]

If your loved one is in Jackson, you're going to call the 859-623-2404 number. Ask our press to please continue to get out these numbers. Phone lines, again are extremely busy, keep calling.

We also put out an e-mail address that I don't have in front of me right now, yesterday, we will get that by the end of the briefing.

The command staging area has been established in the hazard armory for emergency personnel only. The public should not travel to it. Now, here is the e-mail address, and we will post this online too, that you can e-mail with your loved one's information.

Currently, we have 142 people that are staying in temporary housing at Jenny Wiley State Resort Park. Rooms are fully booked, but the campgrounds are available, and we're sending travel trailers down to increase our capacity, as we speak.

Pine Mountain State Resort Park has six rooms available. We haven't had any displaced folks go there yet. Buckhorn, this is in Perry County. We really need this state park to be open, and we're working really hard at it.

People can't get to it or haven't been able to get to it because of the roads being blocked. Transportation Cabinet knows that this is mission number one in that area for them.

The building is also without power. The park is, we've got electricians that are there, that are figuring out what type of generators we need. We are going to get this up and running. The shelters are overwhelmed in that county, and we know that this will really help people out.

There are 15 emergency shelters that are currently active. They are on our flood resource web site. That is governor.ky.gov/flood-resources. There are -- the addresses there are for Clay County, Floyd, Knott -- Letcher has three. Perry has a bunch, Pike, Wolfe are the ones that we currently have physical addresses for.

We want to direct people to those links, and for those that are looking at sending help. We'll have the addresses that you can send donations up soon.

Red Cross --

(END VIDEOTAPE)

WHITFIELD: You're listening to a remarks from Kentucky Governor Andy Beshear there. You know, admitting that this is particularly hard on everyone there, because the devastation of this flooding, flash flooding is so widespread. It spans so many counties, and thus far, 25 people are dead.

However, they expect the death toll to go even higher because the list is long of those who have been reported missing. And of course, he's giving information of those family members who are looking for other loved ones and friends on how to provide names so that the search can continue.

CNN's Joe Johns is live for us in Hazard Kentucky. And Joe, it is remarkable just how widespread, you know, the devastation is. And, of course, logistically, it's very hard to get to some of the hard-hit areas to try to continue with the rescue operations.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT (on camera): Absolutely. And I wish I had a map to show you. It's just a sprawling area, as you said. In fact, the emergency declaration by President Biden to help the counties in the situation goes to 12-13 counties.

It's just a huge area. So, connected by all these streams and creeks where the problems occurred. The significance of the governor's announcement today is that this is no shock. He said 25 people are confirmed dead. And this was information that was readily available on the public record. Some of the states, counties and localities had issued fatality counts of their own, which had not been sort of brought into the governor's official number.

And the real stunning thing, of course, as you said, Fred, there's a possibility of even more. That's because they still have to get into all of the backwoods areas where people could have been, and check on their welfare.

So, a lot of work to do here in the state of Kentucky. Certainly, an enormous disaster, shocking, compared to just last year when they had another weather event. But it just hasn't reached this level ever before.

[12:10:02]

WHITFIELD: Yes. With like a tornadic activity.

JOHNS: Back to you, Fred.

WHITFIELD: Right. And, of course, I mean we're looking at the picture.

JOHNS: Right.

WHITFIELD: As people have to remember that many of the roads are -- and bridges are impassable, because a lot of it was washed away in many circumstances.

And Joe, we're going to work on a map for you, because now we know with some specificity of all of the counties involved, and I think you're right, it's going to help better illuminate just how widespread the devastation is with the -- with the help of a map to show all of the tributaries that run through so many of these counties. And that's why we've got this situation.

Thank you so much, Joe Johns. Appreciate it. We'll check back with you.

All right. For more information about how you can help victims of the Kentucky flooding, go to cnn.com/impact.

And another potential storm tomorrow could make matters even worse for Eastern Kentucky, CNN meteorologist Allison Chinchar back with us with more on this.

So, help us better understand this system. Another system yet on the way.

ALLISON CHINCHAR, CNN METEOROLOGIST (on camera): Yes, and you have to understand, I mean, this was such any rare events for this area, we had not one, but two one-in-1000-year floods.

We had one earlier in the week that affected the Greater St. Louis area, and then the one just a few days ago that hit Eastern Kentucky. And when we say a one-in-1000-year flood event, we don't mean that these things only happen once every 1000 of years. So, we're talking about a statistical number here. OK?

So, basically, your percentage chance of having a one-in-1000-year flood in any given year comes down to 0.1 percent. And that's kind of hard to compute mentally in your mind and understand what that is.

So, let's try an analogy here. Think of a standard deck of cards. You've got 52 cards inside of it. When you hear someone mentioned, it's a one-in-100-year flood, your cumulative risk over 30 years would be the statistical equivalent of the first card you pick up from that deck being a heart.

OK? Say, a two of hearts, for example. Now, when we talk about a one- in-500-year flood event over the same time period, that would be the same statistical equivalent to the first two cards, you pick up being of the same suit, say a two of hearts and a seven of hearts.

Now, when we talk about a one-in-1000-year flood event, that's what we had this week, both in St. Louis, and also in eastern Kentucky. That's the statistical equivalent of picking up an ace that also happens to be red.

Again, incredibly rare that, that would be the first card that you pick up. And that just kind of goes to show how rare this was not only to have one, but to have two, one and 1000 year events in the same week.

But again, this is one of those things where this is a great component of climate change. It's one of those great connection points that we can make. Because when you have a warmer atmosphere, that atmosphere can hold more moisture.

And if it can hold more moisture, it means as the systems come through, they have the potential to dump much more rain than they normally would be if you did not have climate change involved.

We talk about the forecast going forward, we do have more rain in the forecast. Unfortunately, yes, not only for Kentucky, but areas of Missouri that were also hard hit.

Take a look at this widespread map. It's also other areas though, too. You're talking Tennessee, Arkansas, the Carolinas, they all have the potential to have four, five, even six inches of rain in a short period of time, which is why you have the potential for flash flooding for all of these areas.

So, Fred, of the next few days, today is certainly going to be the driest. The best day that a lot of those folks in Eastern Kentucky have to get in, clean up, trying to find some of those missing people.

Because starting in the next 24 hours, you're really going to see those heavier rain bands start to come back into the forecast.

WHITFIELD: Oh, that is so terrible. All right, Allison Chinchar, thank you so much.

CHINCHAR: Thanks. WHITFIELD: All right. Still ahead, we're live at the very store where one lucky person, or at least the holders of one very lucky ticket, they all became an overnight billionaire. Lottery officials now say the jackpot grew overnight to $1.34 billion.

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[12:18:02]

WHITFIELD: All right, someone or some people with one ticket from Illinois, much richer today.

WHITFIELD (voice-over): The Mega Millions jackpot grew to $1.34 billion last night, and just one -- just one ticket matched all five numbers, plus the gold Mega Ball, the winning numbers, here they are.

So, you know, apparently, no one has claimed it. So, maybe you have the ticket. If you're in Illinois. Take a look. 13, 36, 45, 57, 67, and the gold Mega Ball is 14.

WHITFIELD (on camera): CNN's Omar Jimenez joining us live from where that jackpot ticket was sold, and oh, by the way, that business owner of that Speedway also gets a half million dollars for selling the winning ticket. That's a lot of excitement, Omar.

OMAR JIMENEZ, CNN CORRESPONDENT: Yes, a lot of --

(CROSSTALK)

WHITFIELD: Yes.

JIMENEZ: A lot of excitement to be had this morning.

WHITFIELD: Yes.

And obviously, this gas station has been buzzing with people, people who now know that the winning ticket was sold here and are still trying to buy now new Mega Millions tickets for the next drawing. Of course, way lower than the billion mark that it was.

As you mentioned, it grew to $1.34 billion just about because of last- minute sales. It's the second biggest in Mega Millions history -- third biggest all time for all U.S. lotteries.

And if this person takes the lump sum, that's still $780 million in cash. So, this person's life is changed forever.

As you mentioned, the gas station does not go unappreciated, and they get a cut of it as well.

I want to show you just a little bit, behind me, people have been coming in and out.

JIMENEZ (voice-over): Take a listen to the head of the Illinois lottery, telling us about what this gas station gets.

(BEGIN VIDEO CLIP)

HAROLD MAYS, DIRECTOR, ILLINOIS DEPARTMENT OF THE LOTTERY: That lucky retailer will receive a half a million dollars in the selling bonus for selling the winning ticket.

As far as the winner is concerned, we have not heard from the winner yet. We don't know whether that they even know that they won a prize. So, I encourage everybody to check your ticket.

(END VIDEO CLIP)

[12:20:02]

JIMENEZ: When I hear that, I just imagined someone sitting at their table right now going, oh my God, I won. You never know.

WHITFIELD: Yes, either that or, you know, it's the person who's scrambling. Oh, my God, I know I bought a ticket, and I can't figure out where I put it. And they're checking all you know, their laundry, or all their little stash plays.

JIMENEZ: Yes.

WHITFIELD: Yes, I can envision that too. And then, finally, the moment when they find it, that's a lot of excitement.

All right, Omar. Well, this is really exciting and fun. And I love that people feel like lightning is going to strike twice, and they're coming to that place to buy tickets for the next drawing.

JIMENEZ: Yes, exactly. People are coming back. And by the way, it's not just the jackpot winner. Of course, there are people across the country that took home at least $1 million. 26 people. So, that's obviously nothing to -- I mean, it's a huge amount of money.

WHITFIELD: Yes.

JIMENEZ: And then, six of those people had the two multiplier. So, it's $2 million.

WHITFIELD: Yes, boy.

JIMENEZ: So, lots of winners all around.

WHITFIELD: That's nice.

JIMENEZ: I am not a winner, cash-wise, but I'm a winner for being here --

(CROSSTALK)

WHITFIELD: I was going to say you're always a winner.

JIMENEZ: -- the best (INAUDIBLE).

WHITFIELD: Always a winner, Omar. And it has nothing to do with dollar signs.

All right. Thanks so much. We'll check back with you. Omar Jimenez there.

WHITFIELD (voice-over): All right. Still to come, CNN has learned that the inspector general for the Department of Homeland Security knew of missing Secret Service techs months earlier than previously known. Details straight ahead.

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[12:25:53]

WHITFIELD (on camera): All right. We're following new developments in the January 6 investigation.

WHITFIELD (voice-over): CNN has learned exclusive new details about those missing Secret Service text messages sought by the select committee.

According to multiple sources, the inspector general for Homeland Security knew about the missing messages months earlier than previously believed.

CNN's Katelyn Polantz joins us now.

WHITFIELD (on camera): So, why is this significant?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER (on camera): Well, Fred, these missing text messages around January 6th, 2021, the developments here, it just keep building day by day.

My colleague Whitney Wild and others broke the story yesterday that the Department of Homeland Security's internal watchdog, the Inspector General Joseph Caffari, has known for a year that Secret Service text messages were missing.

And there has been a delay in notifying Congress about this and a discrepancy of what Congress was told about the timing about when they knew. So, let's break this down since there are questions upon questions here.

So, just this week, Congress is learning for the first time that in addition to the Secret Service text messages, there are also missing text messages from the phones of leadership at the Department of Homeland Security that were deleted. So, that's the phones of both Acting Secretary Chad Wolf, and his deputy, Ken Cuccinelli, who were serving until the end of the Trump administration.

The chairman of the House Select Committee Bennie Thompson, called this all extremely troubling this week because this news of the erased leadership text messages was coming just a few weeks after it became clear that the Secret Service agent messages were also lost from around January 6th.

Now, Thompson pointed out that the DHS inspector general has known about this for some time, failed to notify Congress quickly, and that's where this official -- additional firestorm is now coming in.

So, what happened at the DHS that allowed for all these federal records around January 6th to be lost? That's one question Congress has. And then, why has that DHS inspector general, not been more forthcoming about it with Congress?

The Secret Service here has pledged to cooperate. And Wolf has said that he is been following protocol. But Fred, even so, another congressional authority, the Senate Judiciary Committee is asking the Justice Department to look into this as well. So, a lot here.

WHITFIELD: Yes. Yes, a lot there. I mean, the widening mystery of what has happened to all these texts and those who knew about it, why didn't they share?

All right, Katelyn Polantz, thank you so much.

Coming up, House Speaker Nancy Pelosi on a trip to visit U.S. allies in Asia.

WHITFIELD (voice-over): Right now, why Chinese officials are warning that her trip could be playing with fire?

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[12:32:21]

WHITFIELD: House Speaker Nancy Pelosi on a trip to Asia right now visiting U.S. allies including Japan and South Korea. But the big question is whether she will visit Taiwan. That prospect is furthering stoking tensions with China. The Chinese Foreign Ministry says President Xi Jinping has warned the U.S. directly it's playing with fire if Pelosi makes a stop there. CNN's Barbara Starr is at the Pentagon. So Barbara, good to see you. What are the White House and State Department saying about the possibility of this stop?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Fred, they are saying nothing. And neither is Pelosi because of the security issues involved. They simply won't say whether the speaker traveling in Asia already planned to make that stop in Taiwan. Now, of course, the Chinese are completely opposed to it because they believe a visit by someone of the speaker stature is basically the U.S. government.

The equivalent of the U.S. government, challenging Taiwan, challenging what they believe is their ultimate control over Taiwan. The rhetoric has grown from China and one of the chief White House Security National Security Council Spokesman, John Kirby talked about this earlier this week.

(BEGIN VIDEO CLIP)

JOHN KIRBY, NATL. SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: If she decides to go to Taiwan, we know and we have a responsibility and we take that responsibility seriously that she can do so safely. So we've heard these comments, not helpful, not constructive, we have an obligation to make sure if she goes to Taiwan or any other government official, for that matter, Jim, that they can do so safely. We're going to take that responsibility seriously.

(END VIDEO CLIP)

STARR: So the White House is very much trying to tamp down the rhetoric and cool things off. But make no mistake, the Pentagon does have a security plan in place. They have plenty of ships, aircraft in the region, to keep an eye on things. So they will do whatever is necessary, they say, to keep any U.S. government officials safe as they travel in the region.

One of the big concerns is not that China isn't -- kind of engage in hostile action. It doesn't appear that anybody really thinks that that they would directly challenge the United States. But China has its own capabilities, ships and aircraft in the region. And if they start flying them, if they fly a large number of aircraft, if they sail a large number of ships, there could be miscalculation. It could lead to an inadvertent incident. And ultimately, that's what everybody wants to prevent. But we still have to see if Speaker Pelosi decides to stop in Taiwan. Fredricka?

WHITFIELD: All right, so up in the air, so to speak, Barbara Starr, thank you so much. All right, so let's bring in David Sanger, he is a CNN political and national security analysts, he's also a White House and national security correspondent for "The New York Times" so good to see you David.

[12:35:07]

DAVID SANGER, CNN POLITICAL & NATIONAL SECURITY ANALYST: Good to see you Fredricka.

WHITFIELD: All right, so at issue here, you know, Pelosi wants to reassure allies in the region or risk unsettling an authoritarian regime that wants to set the rules. So how does she play this?

SANGER: Well, it's hard. First of all, the White House clearly does not want her to go at this point. They've got plenty issues with China right now.

WHITFIELD: Is it clear? Because I mean it sounds like they're saying, well, it's Pelosi's, you know, choice to make.

SANGER: They are saying it is her choice. She's, you know, represents a different branch of government. They can't stop her. For her, this is something of a legacy thing. But, you know, the President signaled this pretty clearly the other day, when he said, well, the Pentagon doesn't want her to go, any administration go. That said, they think she's going.

So at this point, they're just trying to make the best of it. They want to make sure for personal security. I don't think any of them believe that the Chinese will act against her airplane or do something overtly military. But I think they do believe that there could be cyber or some other kind of reaction from the Chinese against Taiwan or against American interests, to make their point. WHITFIELD: All right, so just a walk down memory lane a little bit, you know, viewers can see we have a picture of, you know, Nancy Pelosi, you know, protesting in Tiananmen Square back in 1991. And, you know, she has remained China's a sharp critic, you know, of China on its human rights record. And she has done so also on Capitol Hill. Do you feel like by going to Taiwan, this is how Speaker Pelosi, you know, sticking another finger in the eye of China, but just in a different way? Or do you see that perhaps she has other goals in mind, if she were to visit Taiwan?

SANGER: I think as I suggested before, this is a legacy issue for her assuming that the Democrats lose the House in the coming elections, which seemed to be a significant likelihood. She would no longer be speaker. She -- this may be her last opportunity to go do this. I think she wants to make the point. There has -- a speaker has gone before, Newt Gingrich went in 1997. But that was a very different China, a very different strategic environment, and none of the escalating tensions that we've seen in recent times.

So it's not really the fact that a speaker is going it -- that she is going at a moment when there are so many irritants in the relationship. And that's what the White House's concern here is, which is do they really need one more.

WHITFIELD: And you wrote earlier in the week in the times that one of the concerns in the Biden administration is that China will block the Taiwan Strait somewhere in the near future. You know, and just as Barbara was just reporting, there are concerns for military installations and personnel in that region, whether it be aircraft or even, you know, in the water. What are the concerns about the vulnerabilities that might be created as a result?

SANGER: Well, Fredricka, the story we wrote earlier this week came out of new U.S. intelligence assessment that basically said that China has looked at what's happened in Ukraine, and may well conclude that they need to move up the timeline of action against Taiwan. That doesn't mean a full amphibious invasion. What it means is that before the United States arms Taiwan with the same kind of armaments that the U.S. has given to Ukraine, that China may decide that it's actually in its military advantage to stage and then say, the next 18 months, that could be cutting off the straits, seeing whether the United States would bear to bring a carrier group flows into Taiwan as we did in 1996.

Because now, China's got carrier killing weapons and the Navy is reluctant to go do so. It could be cutting off communications cables undersea. It could be cyber action. It probably would not be a full scale invasion. And the question is, is there another Taiwan crisis coming? There have been really, this would be the fourth in the long history, but since the Chinese revolution in 1949, and the question is, is the U.S. and is Taiwan prepared for that?

WHITFIELD: And what does this do whether Pelosi has to go to Taiwan or just simply by being in region, what does this journey or how might this journey further impact what has already been strained relations between the U.S. and China? [12:40:14]

SANGER: So to the Chinese, the arrival of somebody who is essentially third in line for the U.S. presidency, the Speaker of the House, in their mind violates the One China Policy, that in other words, we don't send high level delegations that might suggest that Taiwan is an independent entity or even an independent state.

To the United States, this doesn't make any sense. And some U.S. officials have said to me, you know, if I was China, I just wouldn't make a big deal at this, I just kind of ignore it. We've sent congressional delegations who Taiwan all the time. And so I think the question that American officials are saying is Xi Jinping looking for a reason to turn this into an issue, President of China. And of course, he's facing in just a few months, a party congress where he will be re anointed, and he wants to look as tough against the United States between now and then as he can.

WHITFIELD: More flexing of the muscle. All right, David Sanger, good to see you. Thanks so much.

SANGER: Always great to be with you.

WHITFIELD: Thank you.

All right this week on a new episode of Patagonia: Life on the Edge of the World, we ventured to Patagonia's far south which is closer to Antarctica than anywhere else on Earth, a land of extremes but for those that can survive the elements, the potential riches are great.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Exhausted, at home at last. Finally, a chance to rest or maybe not. Her six-week-old chick is ravenous. Growing fast, he has an insatiable appetite. Mom needs to keep some food back for herself. But her chick won't take no for an answer.

(END VIDEO CLIP)

WHITFIELD: Join CNN as we explore the extremes of Patagonia's far south. Patagonia: Life on the Edge of the World tomorrow at 9:00 p.m. for CNN.

All right, still to come, there's growing fear that the U.S. economy is in trouble. Gross domestic product shrank for the second straight quarter this week but the job market remains strong. So are we in a recession or not? We'll discuss after this.

(COMMERCIAL BREAK)

[12:47:35]

WHITFIELD: Is the U.S. economy in a recession? That's the growing question. A week filled with economic data is starting to paint a picture of where the economy is headed. As Rahel Solomon explains. RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Another day another major economic report, it has been a busy week for economic data. Thursday, the Commerce Department released second quarter GDP data which showed the U.S. economy shrank at an annualized rate of nine tenths of a percent. The report showing while U.S. consumers are still spending that slowing. We also learn that business investment is slowing especially in categories like inventories and in the residential space.

Thursday's report will be revised at least two more times but does follow a 1.6 percent decline for the first quarter of the year. U.S. economy has now seen two straight quarters of negative growth. And that is reigniting the debate about whether we're in a recession. Many economists say we're not, at least not yet. The job market is still strong, unemployment is practically at a 50 year low, and demand for workers continue to be strong.

The official arbiter of recessions is a group of eight economists that make up the business cycle dating committee at the nonprofit nonpartisan National Bureau of Economic Research. They operate rather discreetly, but define a recession as a significant decline in economic activity. The Committee considers factors such as personal income, the job market, and consumer spending.

I spoke to Harvard University Professor Jeffrey Frankel, a former member of the Committee on Thursday and asked, might we see a recession call after this GDP print? He told me, the Committee is very unlikely to say a recession happened in the first quarter because a whole host of other indicators were positive. As for his thoughts on today's report, he says the economy is clearly slowing down.

Rahel Solomon, CNN, New York.

WHITFIELD: All right, joining us right now is Diane Swonk. She is the chief economist at KPMG and an adviser to the Federal Reserve. Good to see you. So a recent CNN poll showed 64 percent of Americans think the U.S. is already in a recession. Does it even matter to people, you know, who are struggling whether we are technically in a recession or not?

DIANE SWONK, CHIEF ECONOMIST, KPMG: That is the key question. And I think it doesn't. I mean, even whether or not we hit a technical recession, although that will be much harder because we'll have an increase in unemployment with it. I think the real issue here is when we look at all the data that's come out what we saw is that the inflation burn that we've seen has not only eaten into living standards and eroded living standards, it's taken away on average, all the wage gains we got in reopening, and then some, so it set us back.

So in that way, we've lost ground. So even though we're not losing jobs, if you can afford to make ends meet each week, and pay your bills and feed your family, that really matters.

[12:50:31]

WHITFIELD: Yes, so it really, everyone is feeling the pain, you know, but because there are those couple little high points, people are still working, employment remains high. I mean, even the President said, you know, partly because of this healthy job market, this is not a recession. So what is going to be the tipping point?

SWONK: Sadly, I think we are going to see a tipping point before the end of the year. Not only is the Fed the bulk of the rate hikes that they've already done, the bulk of that tightening in credit markets is still ahead of us. So the effects are there. The economy, domestic economy slowed quite dramatically in the second quarter, we're skating on thin ice, it won't take much to push us through that ice. And the Fed itself is said that unemployment is unsustainably low.

That's another way of saying we need some kind of an increase in unemployment, or something that's commensurate with at least a mild recession, to derail the inflation that we're dealing with. That is very hard to calibrate with monetary policy. Once we go down that road, we're going to see a lot more landmines and that is where we're at right now. I think by the end of the year, we're going to see, unfortunately, economy where inflation is cool, but not enough to be insignificant where unemployment is rising.

WHITFIELD: Oh, boy. And then the Federal Reserve raised interest rates, another three quarters of a percent just this week, so how and where are we going to feel that?

SWONK: Well, we've already seen it quite dramatically in the housing market, which is your canary and the coal mine, you know, for recession, the declines have been quite dramatic. And pending home sales are even worse, which means the worst is yet to come. You layer on top of that, the freezing in the tech sector of hiring. And many of the hubs, the second tier cities that saw boom, are now going to see a bit of a bust in housing. And that is where you really see the effects of those interest rates hit first.

But let's face it, I mean, consumers see higher interest rates initially as higher inflation because it raises the cost of borrowing for them. It does slam down demand. But it really is a challenge. What your -- the Fed is now doing is trying to bring demand in line with a supply constrained world. They're no longer willing to wait for the supply to pick up magically and eradicate us of inflation.

WHITFIELD: Oh, boy. And while so many of us are stretching the dollar, I mean, get this, I mean we saw Exxon report an astronomical a set of profits on Friday, $17.9 billion, just for this latest quarter. And just to really further break it down, that comes out to $2,245.62 every second of every day. So are companies, you know, like Exxon, fueling inflation at the expense of consumers? Or is this just, you know, I guess a fringe benefit for them, because, you know, the prices are so high, and they're making more money?

SWONK: Well, at this moment, at this point in time there, you know, riding the high that, unfortunately, Russia created by invading Ukraine and bringing oil off the global economy. And on the other side of it, they had to suffer enormous losses when home prices actually went negative in March and April of 2020. People forget that we had to pay buyers to actually hold oil because nobody wanted it. This is going to be one of the big issues is the energy transition. These companies are making money now. But they also see the future and the future is renewables and not fossil fuels. And that in and of itself is costly. But the counterfactual is without dealing with these extreme climate events that were suffering, those are hitting our food supplies, causing more supply chain disruptions and adding to inflationary pressures. So unfortunately, it's hard to escape many of the problems that we're facing without a coordinated effort to deal with these issues.

WHITFIELD: Oh, goodness. All right, Diane Swonk, good to see you. Thanks so much.

And for many of us, dogs are our family bringing us so much joy. But for many aging seniors, caring for their dogs and worrying about what will happen when they pass becomes a real challenge. That's where this week's CNN hero comes in. Carie Broecker is on a mission to help seniors of all kinds, the two legged and the four legged kind.

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[12:55:04]

CARIE BROECKER, EXECUTIVE DIRECTOR, PEACE OF MIND DOG RESCUE: Peace of Mind Dog Rescue has a dual mission, we're helping senior dogs and senior people.

We take in dogs from senior citizens who can no longer care for them or who have passed away. And we also take in senior dogs from animal shelters.

Yes, definitely peace of mind dog. We have found homes for almost 3,000 dogs. And we have helped close to 2,000 senior citizens.

UNIDENTIFIED MALE: She looks happy.

BROECKER: In our society, sometimes the elderly, whether that is senior people or senior dogs get ignored and so we really want to cherish all of life.

(END VIDEO CLIP)

WHITFIELD: Oh, go to CNNHeroes.com right now to nominate a hero in your life. And this is the last week to nominate them for 2022. We'll be right back.

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