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President Biden Touts Jobs Numbers, Inflation Reduction Act; China Continues Response to Taiwan Visit; Huge July Jobs Report. Aired 1-1:30p ET
Aired August 05, 2022 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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Erica Hill picks up our coverage right now.
ERICA HILL, CNN HOST: Good Friday afternoon. I'm Erica Hill in New York. Ana Cabrera is off today.
We begin this hour with another blowout jobs report, one that really caught the experts off guard, the U.S. economy adding 528,000 jobs in July. It's the 19th consecutive month of job growth and more than double what economists were expecting. The country has now regained all the jobs lost during the pandemic.
The jobs report also capping off a week of major wins for President Biden following this stretch of brutal summer headlines. We expect him to comment on the jobs report any minute now at a bill signing.
As we wait for that, though, let's take a closer look at some of these numbers.
Joining us, CNN business correspondent Rahel Solomon and CNN White House correspondent Jeremy Diamond.
Rahel, let's first look at these gains, I mean, the fact that this was more than twice what experts were expecting.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: And so some experts have said that this was an uncomfortably hot jobs report. At the very least, it was surprising.
So, when you look at the report and look at sort of where the jobs were, line after line, industry after industry, it was growth, growth, growth, with some of the largest gainers being in industries like leisure and hospitality, professional services, health care.
We even saw 57,000 jobs being added in the month of July for government. And when you take a look at month over month, sort of what we're seeing in the labor market, look, I mean, we are still on an upswing. You would have expected, with some of the reports that we have been hearing, that maybe we would start to see some cooling in the labor market, that this number, the July number, would actually be declining.
But that's not what we're seeing, which leads me to, when you look at all of these months, we're actually -- as you pointed out, Erica, we have regained all of the jobs lost at the height of the pandemic, and not just that, but we are back at a 50-year low for unemployment.
HILL: That is amazing, right? We have been looking at 3.6 percent. Now it's down to 3.5 percent.
HILL: But even with all this robust growth, we know inflation is still there. We see it every time we go to the grocery store, right? Are wages keeping up.
SOLOMON: So wages is a really interesting point, because that's what the Fed is watching very closely.
Wages, in a word are not, simply, right? I mean, this is inflation. This is CPI. Last report had it at 9.1 percent. Wages are lower than 6 percent, on average. There are a few industries where this is reversed, where wages have actually outpaced inflation.
But, by and large, even if you're seeing a wage increase, it's being outstripped by inflation, and that's the problem for the Fed -- Erica.
HILL: Something to watch. Wow. It is something. Good to see. Appreciate you breaking it down for us, Rahel. Thank you.
Also with us, Jeremy Diamond, who is at the White House.
The White House, I'm guessing, embracing this bit of good news today, Jeremy.
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Yes, no doubt about it, Erica.
I mean, last week, when we saw that second consecutive negative quarter of GDP job growth, you still heard President Biden insisting that the U.S. economy is not in a recession. And, certainly, today's jobs numbers bolster the president's case by -- when we see this kind of strong jobs growth from last month.
Now, President Biden hailing this jobs report in a statement, saying that it is -- quote -- "the result of my economic plan to build the economy from the bottom up and the middle out. I ran for president to rebuild the middle class. There's more work to do, but today's jobs report shows we are making significant progress for working families." Now, interestingly enough, despite the fact that the president was insisting that we're not heading towards a recession, not in a recession because of the strong jobs market, today's jobs numbers certainly surpassed even the White House's expectations.
They had been thinking that the economy -- that the jobs market was going to start to slow and preparing reporters for exactly that, but certainly welcome news. And it is just the latest in a string of good news headlines that President Biden has been enjoying over the last week or so.
We -- he began the week with the successful operation that killed al Qaeda's leader, Ayman al-Zawahiri. Then we saw over the last week this deal coming together, first Joe Manchin getting on board and now Kyrsten Sinema getting on board with this bill that will represent the largest investment in fighting climate change in history and also significant drug pricing reform.
And we're also seeing, of course, the jobs market up, gas prices coming down very steadily, very consistently over the last month, so certainly a lot of winds for this White House to be celebrating right now. And I'm sure you will hear President Biden talk about just that, as we expect him to be addressing cameras in just a few minutes from now -- Erica.
HILL: Yes, expecting to hear about that at that separate bill signing. Definitely. I think we will hear some, especially after those numbers. Jeremy, appreciate it.
To dive in a little deeper, we're joined now by CNN commentator and "Washington Post" columnist Catherine Rampell.
Catherine, good to see you today.
So, for weeks, right, we have been talking about these signs of an economics slowdown. What was going to happen? Is it a recession? Is it not?
Labor Secretary Marty Walsh weighing in this morning earlier on CNN. Take a listen.
(BEGIN VIDEO CLIP)
MARTY WALSH, U.S. SECRETARY OF LABOR: If we were in a recession, companies would be laying people off, rather than hiring them. We saw people hiring at record numbers -- not record numbers, but at big numbers, obviously.
I think that a lot of companies are still growing. A lot of companies are still adding people on.
(END VIDEO CLIP) HILL: Is it really that simple?
CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: I think the economy is still giving us really mixed messages.
Yes, in this jobs report, there was very little evidence of recession. You see big, gangbusters numbers and acceleration in hiring, in fact, when people were expecting the slowdown, acceleration in wage growth, at least in nominal terms. So that in and of itself does not suggest that the economy is about to collapse.
But there are other things in the economy that are a little murkier. And at the very least, the fact that the economy is so hot right now, that the job market is strong enough may encourage the Fed to slam on the brakes a little bit more quickly than they might otherwise.
HILL: Well, so speaking of the Fed, right, I think that's what a lot of people concerned, right?
So, the Fed has said, look, we can tame inflation without sparking recession. But do numbers like this actually make that harder?
RAMPELL: I think it is likely that this will embolden the Fed to continue its pace of rate hikes to try to get inflation under control.
And, again, that, in and of itself, increases the risk of recession if they have to raise interest rates faster, because they're worried about inflation. But there does -- this report does suggest that there's some underlying strength in the economy, that maybe it is possible to tame inflation without throwing a lot of workers out of work, given that there's still so much demand for workers already.
There are too few workers, in fact, to fill the number of jobs available. So I think the optimistic gloss on all of this is that, if we do have a recession -- and, knock on wood, I hope we won't -- that this economy will be strong enough to endure it, and that it'll be relatively mild.
I mean, we don't know whether it's going to happen either way.
RAMPELL: But if it does happen, maybe it won't. But we shouldn't expect necessarily something as painful as the last couple of recessions we have endured.
HILL: OK, which is -- I will take that. I will take that bright light.
HILL: I will take that glass half full.
When we look at, though, the fact that we have now recovered all the jobs that were lost early in the pandemic, that's something, right, to be at that moment. RAMPELL: Yes.
HILL: As Rahel noted, though, right, and as you and I are talking, there's some nominal wage increases, as you noted, but inflation, right, inflation is right there.
And it's -- for the most part, it's outpacing wages. We are not seeing wages keep up. So, for many Americans, even if we're seeing signs of recoveries and maybe a strong economy, whether it's underlying or not, if it doesn't feel that way, it's hard.
RAMPELL: Yes, again, the good news is we have recovered all of the jobs lost, at least on net, much more quickly than we had thought. And that's great, great that people can get jobs, great that they can job- hop if they want to, that there are plenty of opportunities out there.
The bad news is, if the wages being offered aren't keeping up with the cost of living, that's kind of cold comfort, right? I mean, people are able to get a job, but they're seeing their grocery bill go up, they're seeing their rent go up, they're seeing almost everything that they spend money on get a lot more expensive.
So, yes, I understand why people still are pretty pessimistic when they talk about economic conditions right now.
HILL: How tough is it too from your perspective, from an economist's perspective? Because everything that we're seeing, it just doesn't follow the traditional model.
So, I mean, look, the last thing I'm going to do is ask you to get out your crystal ball. That's hard enough when things are sort of following a model that we know.
HILL: But, at this point, that makes it hard too.
RAMPELL: Yes, there's so much uncertainty.
I mean, that has been the case, obviously, since the pandemic began. But especially right now, because you're getting all of these mixed messages, there's so much noise, it's hard to kind of cut through all of that noise and figure out, well, which is the number we should be paying attention to? Should it be the wage number? Should it be the job growth number? Should it be the GDP number, consumer spending?
Because they're all kind of telling different stories. And as a result, it's hard to know, if you're the Fed, for example, how to act upon that information if you get this kind of cacophonous message, because, if you think that the economy is really hot, as the job market suggests, then that suggests maybe you, if you're the Fed, you raise interest rates faster, you slam on the brakes.
If you're paying attention to the GDP numbers, you think maybe the economy is kind of weak, maybe we shouldn't do that. So, because it is so hard to interpret the current state of affairs, it's very difficult to know the right course of action in terms of a response to all of that.
RAMPELL: So I do not envy the Fed their jobs?
HILL: Right. No, definitely not.
RAMPELL: It's really difficult. I'm sure a year from now everybody's going to be playing Monday morning quarterback and saying they got this wrong and that wrong.
But, in the present, it's really hard to make sense of what's going on.
HILL: Yes, it is.
But you do help make a lot of it more understandable.
RAMPELL: I'm trying. I'm trying the best I can.
HILL: So, thank you, my friend. Nice to see you. Thanks, Catherine.
Well, let's stick with the economy for a moment here. Senator Sinema is in, meaning Democrats have now cleared their last major hurdle in terms of numbers for votes on a bill aimed at taking some of the sting out of inflation, along with some sweeping energy and health care reforms.
CNN's Melanie Zanona is on the Hill.
So, Melanie, this is not a done deal yet. But getting Sinema on board was essential here. It also seems to, especially for Washington timing, have come together fairly quickly. Give us a sense, how did that happen? And, also, what's next?
MELANIE ZANONA, CNN CAPITOL HILL REPORTER: Yes, fairly quickly. Or if you look at it the other way is, it did take them 19 months to get here, but they finally got the breakthrough when Kyrsten Sinema, the last remaining Democratic holdout, got on board with the package.
And they did that by offering her a number of concessions, including removing the carried interest provision and adding some drought funding. Democrats also added a 1 percent excise tax on stock buybacks.
Take a listen to Senate Majority Leader Chuck Schumer talking about how this all came together, particularly when it comes to the carried interest provision that they dropped.
(BEGIN VIDEO CLIP)
SEN. CHUCK SCHUMER (D-NY): But I pushed for it to be in this bill. Senator Sinema said she would not vote for the bill, not even move to proceed, unless we took it out. So we had no choice.
But what we added is something that excites me and I think excites all Democrats, and particularly progressives. We're adding in an excise tax on stock buybacks that will bring in $74 billion.
(END VIDEO CLIP)
ZANONA: Now, there is one last remaining puzzle piece that needs to fall into place. And that is the Senate parliamentarian, who is going to make a determination potentially as early today about whether this package complies with special budget rules that are required to pass this bill along party lines.
But, regardless, the voting process is going to kick off tomorrow, followed by an unlimited amendment process, and then they move to final passage. Of course, the House still needs to come back and vote on this. But if all goes according to plan, this could be on President Joe Biden's desk by the end of next week, Erica.
HILL: Wow. That is moving quickly, if we're only looking at the time period from when we got the deal, right, if we look at it that way.
HILL: Melanie Zanona, good to see you. Thank you.
More backlash today over House Speaker Nancy Pelosi's visit to Taiwan. The self-governing democracy, which Beijing considers to be Chinese territory, is reporting a large number of incidents from Chinese warplanes like these that you see here.
This video is from earlier today. And in a diplomatic blow, China is suspending cooperation with the U.S. on a range of issues, even going so far as to cancel phone calls.
CNN's Selina Wang joining us now from Beijing.
So, Selina, what is the impact here?
SELINA WANG, CNN CORRESPONDENT: Well, Erica, this is a very big deal.
We are seeing already strained U.S.-China ties now sink to new lows, with Beijing announcing that it's suspending cooperation with the U.S. on a whole range of important issues. We're talking about talks on defense, anti-drugs, illegal immigration, and, perhaps most importantly, on climate change.
The U.S. and China, these are the world's top climate polluters. And climate change has been one of the only areas where the two sides have been talking, despite recent tensions. And now even that window for dialogue is being cut off. China is also sanctioning Nancy Pelosi and her immediate family in a highly symbolic move.
They have not announced any details on what that might entail. Now, it's very concerning, Erica, that precisely at the moment we are entering this crisis over the Taiwan Straits, the two sides are now cutting off these ties. That increases the risk of miscalculations or accidents.
And, right now, we are seeing a war of words play out as well. The U.S. and China are both trying to paint the other as the instigator of all of this. China is accusing the U.S. of provoking this crisis by failing to stop Pelosi from going to Taiwan. China claims their actions are justified to defend their sovereignty.
Meanwhile, Secretary of State Antony Blinken says China has chosen to overreact to Pelosi's trip and is using it as an excuse to carry out the provocative military activity we have been seeing. As you mentioned, China continues to fly a large number of warplanes into Taiwan's self-declared air defense zone.
State media also reported that, for the first time, China flew ballistic missiles over Taiwan, not around it, but over it.
HILL: Selina, I'm going to interrupt you for a second, because we are just about at President Biden speaking now from the White House ahead of a bill signing. Let's take a listen.
(JOINED IN PROGRESS)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: Almost at 10 million jobs since I took office.
That's the fastest job growth in history. Today, we also matched the lowest unemployment rate in America in the last 50 years, 3.5 percent, yes, 3.5 percent.
Today, there are more people working in America than before the pandemic began. In fact, there are more people working in America than at any point in American history.
You know, what we're also seeing something that, just a few years ago, many experts said was literally impossible, the revitalization of American manufacturing. Since I took office, we have created 642,000 American manufacturing jobs in America.
We have seen the biggest and the fastest job recovery in American manufacturing history since the '50s. And some people may have given up on American manufacturing, but the American people didn't. And I know I never did. That's why I made it, make it in America, that phrase, make it in America, the cornerstone of my economic plan.
And today's report proves make it in America isn't just a slogan. It's my administration. It's a reality.
I have also made it a priority to bring down the federal deficit. After watching my predecessor every single year increase the debt, the federal deficit, every year for the four years he was in office, I said no more. The days of exploding federal deficits are over. And I have kept my word. Just take a look at the facts. The deficit is
down a record of $1.7 trillion this year. That's right, $1.7 trillion, with a T. And that's on top of $350 billion reduction in the deficit my first year in office.
Now, I know people will hear today's extraordinary jobs report and say, they don't see it, they don't feel it their own lives. I know how hard it is. I know it's hard to feel good about job creation, when you already have a job and you're dealing with rising prices, food and gas and so much more. I get it.
I literally can remember sitting in my mom and dad's dining room table and watching them choose which bills they were going to pay this next -- that month, because there wasn't enough money to pay all the bills. I get it.
That's why I'm doing everything in my power to lower the cost for families. We have seen some progress. Gas prices are coming down. They're down almost $1 a gallon where -- from where they were just a month ago. And we're making progress.
We've now heard more than 50 straight days of falling gas prices in this country. The price of the pump is now less than $3.99 a gallon in more than half of the gas stations in America. In fact, $3.79 a gallon is now the most common price paid at the pump in the country, $3.79.
While we're not there yet, we're on the cusp of passing the most important step we can pass to take -- help Congress to help us lower inflation, the Inflation Reduction Act. That bill will lower prescription drug costs by giving Medicare the power to negotiate for lower drug prices, lower drug prices.
That's something the American people have been promised for years, for decades. And we're on the verge of finally getting that done. The bill also keep down health care insurance costs by keeping health care premiums for those on the Affordable Care Act down $2,400 a year. It will make historic investments in clean energy.
Clean energy security -- the security the country is at stake. And we're going to save American families hundreds of dollars a year on paying their energy bills by allowing them to have money to invest by getting -- allowing them to put in new windows and doors and solar panels and the like and get tax credits for that, but also to restore some fairness to the tax code by imposing a corporate minimum tax of 15 percent on billion-dollar companies.
That will put an end to what we have seen in recent years, where 55 of the largest companies in America of the Fortune 500 paid zero federal taxes on income over $40 billion combined in profit.
This bill is going to reduce the deficit by another $300 billion. And one more point. This bill will not -- let me repeat -- this bill will not, will not raise taxes on anybody making less than $400,000 a year. When it comes to the benefits of this bill, you don't have to take my word for it. Nearly 130 economists, seven Nobel laureates in the economists -- on
the economists -- in the economics, I should say, former secretaries of Treasury, Federal Reserve, former Federal Reserve vice chair, former director of the Congressional Budget Office wrote that this bill will -- quote -- combined, they signed, will -- quote -- "fight inflation and lower costs for American families, while setting the stage for strong, stable and broadly shared long-term economic growth."
In short, this bill is a game-changer for working families and our economy. I look forward to the Senate taking up this legislation and passing it as soon as possible.
I know most families are focused on just putting three meals on the table, taking care of their kids and paying their bills. Helping you do that is my job. That's a president's job as well.
I have one more job, which is not only to focus on getting America through the economic challenge that we're facing, but to look to the future, to make sure we're building an economy that meets the needs of American families to be able to succeed and for America to win the future.
When you step back, today's jobs report is part of a broader story. For decades, the American economy has been struggling even before the pandemic. Middle-class Americans were working harder, but they were falling further behind.
All the rewards of the economy seemed to be going to those at the very top. When I came to office, I was determined to change that. I ran for president saying I was going to restore the backbone of America, the middle class, and grow the economy from the bottom up and the middle out, not from the top down, because, when the middle class does well, everybody does well, everybody.
The wealthy do very well, and the poor have a way up. My economic plan rests on five pillars. Get America back to work at a record pace, all Americans, all Americans, leaving no one behind. And we're doing just that. In the process, for the first time in a long time, workers are being empowered.
Instead of workers begging employers for work, we're seeing employers have to compete for American workers. And we're seeing the resurgence of working organizations and unionization. When I -- where I come from, that's a good thing. And it's long overdue.
Two, we're literally rebuilding this nation, our roads, our bridges, our ports, our airports, clean water, high-speed Internet, for all Americans. For too long, America's failed to invest in itself. We changed that this year with the biggest investment in America since Eisenhower's Interstate Highway System.
We're now committing to rebuild America, not just for tomorrow, but for the next decade. And that includes not only investments in things like roads and bridges, but investments in research and development, the next-generation technologies, from artificial intelligence to quantum computing, to semiconductors.
They are all going to remake the world. As I said earlier, we're going to build in America, build it here in America. Let me be clear. We're going to invest it in America. We're going to make it in America. We're going to win the economic competition of the 21st century in America.
Three, give working people in the middle class a fighting chance, more than just a little breathing room, a real chance to get ahead, by making their everyday things more affordable and accessible, like health care, prescription drug costs, energy, childcare, education, housing, and so much more, because, when we lower those costs of all the necessary things, we improve their standard of living.
Four, make your economy more competitive and less concentrated, when too few companies dominate a market, that that reduces competition, drives up the cost for American consumers. That's been going on for too long.
We need to give small businesses and entrepreneurs more opportunities and consumers more choices at the -- at affordable prices.
The fifth thing, five -- the fifth pillar, we're going to reward work, not just wealth, in America, so that everyone pays their fair share in taxes. I'm a capitalist. I'm not trying to punish anybody. But I'm saying everyone, everyone should pay their fair share, just their fair share.
America is a nation that was built on work. We can never lose sight of that. That's why the strength and pace of our job recovery is so important. In the past, it's taken years for Americans to recover from an economic crisis that we inherited.
And when that's happened, millions of people suffered for years and years just trying to get back to where they were before, just trying to get back on their feet. Well, that didn't happen this time.
My dad used to say that a job is about a lot more than a paycheck. It's about your dignity. It's about respect. It's about your place in the community. It's about being able to look your child in the eye and say, honey, it's going to be OK and mean it.
That's the economy I'm determined to build today. That's the economy I'm looking at.
Now, part of changing the way things have been done in the past is by restoring the faith of the American people in their government. Today, I'm going to be signing very shortly two bipartisan bills, bipartisan bills, that begin to restore that faith.
HILL: The president there making comments about this latest very strong jobs report that came in, more than twice what experts had been expecting, some, more than 500,000 jobs added in the month of July.
The president saying more people are now working in this country than pre-pandemic, touting that 3.5 percent unemployment rate, and also calling this the fastest job growth in the country's history.
He also took that moment to talk about the infrastructure reduction act. That's what the Senate is going to be working on, of course, this weekend. The House will have to weigh in too. He calls this a game- changer for working families and the economy.
We will keep you updated on those on those developments over the weekend, as the Senate gets down to brass tacks with that.
Meantime, more of what we're covering here today on the show. Just how much will conspiracy theorist Alex Jones have to pay for his lies? On the heels of a $4 million judgment for the parents of a 6-year-old killed in Sandy Hook, the jury in Texas now deciding what Jones will owe in punitive damages, today's testimony revealing plenty of new details about Jones' wealth.
Plus:the race to contain monkeypox. The White House just declared it a public health emergency as cases surge. But why did it take so long? Dr. Anthony Fauci joins us.
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