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First Move with Julia Chatterley
U.S. Economy adds 263,000 Jobs in November; Heavy Police Presence Halts Protests in Many Cities; U.S. Unemployment Rate Holds Steady at 3.7 Percent; Reid Hoffman on the Future of Facebook; Air Company is Turning Recaptured CO2 into Alcohols. Aired 9-10a ET
Aired December 02, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
RAHEL SOLOMON, CNN HOST, FIRST MOVE: A warm welcome to all of our first movers around the globe. I'm Rahel Solomon sitting in today for Julia
Chatterley. Great to have you with us this Friday. It's another all- important jobs Friday in the U.S.
U.S. reporting within the past hour that much stronger than expected 263,000 jobs were added to the economy last month for context, we were
looking for rise of only 200,000 the unemployment rate meantime holding steady at 3.7 percent but a big jump higher in hourly wages up more than
half a percent well that was double what was expected and this is exactly the opposite of what the inflation fighting Fed wants to see.
Industries adding jobs last month included construction, leisure and hospitality and healthcare that helped offset some job losses in retail.
U.S. investors meantime, not liking today's number one bit red arrows across the screen. And that's because of its inflationary impacts. We're
going to have much more to discuss on that.
But all the major averages as you can see set to fall more than 1 percent Europe mostly lower as well. We'll get to the jobs report in just a moment.
But we begin with China easing COVID restrictions in some cities, that's after protests across the country against the lockdowns.
Now, at the same time, authorities are using cell phone data to track down protesters. Ivan Watson joins us from Hong Kong with the latest. Ivan
helped me understand how significant are these new measures for COVID? Are they small improvements? Or are they enough to say that they are actually
relaxing zero COVID?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Look, we're not hearing the Chinese government say that it is abandoning its controversial
zero COVID policy. Instead we're hearing signals that it's making incremental changes that it's tweaking it.
In the meantime, we're still seeing signs, for example, of frustrated residents in at least three different cities on Thursday, just breaking
down some of the barriers that are put up around their communities. This is the kind of thing that Chinese people have been living with, for years now
as part of these onerous restrictions that have taken such a toll on people, images like this that we've seen in at least two other cities on
the same day.
And as a result we are hearing authority say, hey, we shouldn't be putting so much pressure on ordinary people. The lockdown shouldn't last for quite
as long. It is a fascinating moment where ordinary people are saying enough is enough.
(BEGIN VIDEOTAPE)
WATSON (voice over): This was the week people across China said they're mad as hell and they're not going to take it anymore. The most widespread
display of dissent the country has seen in a generation. Protesters are pushing back against the crushing lockdowns and restrictions of the
government's zero COVID policy.
But Chinese state media never showed any of these images instead on Thursday offering scenes of very different crowds, somber people lining the
streets of Shanghai honoring Former Chinese leader Jiang Zemin. He died Wednesday at the age of 96.
Jiang is being given the country's highest honors. His open casket met at the airport in Beijing by current Chinese Leader Xi Jinping. Jiang was
President of China from 1993 to 2003 famous for his trademark spectacles and for periodically bursting into song.
His death is triggered a wave of nostalgia on the heavily censored Chinese internet, who would have thought that movies, books and even World Cup live
streams have all been censored. One person wrote in a post that appears to have since been deleted by sensors. I miss the old man that just passed
away. I missed the old times that were open, lively, embracing and Renaissance like.
MATTIE BEKINK, CHINA DIRECTOR, ECONOMIST INTELLIGENCE CORPORATE NETWORK OF SHANGHAI: Maybe this is a challenge for the leadership in Beijing is
allowing that outpouring of grief that kind of histology that memory without having it turned into or feed criticism of the current leader and
the current administration.
WATSON (voice over): In 1989 the death of another Senior Communist Party official was the catalyst for the Tiananmen Square protests. They were
ultimately crushed in a deadly military crackdown. Analysts say Chinese officials will be careful not to let Jiang's death become a flashpoint at
another time of national tension.
DALI YANG, PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF CHICAGO: This is exactly why the authorities also timed - we actually sort of the easing of
the zero COVID measures yesterday, partly in response to some of the protests and probably the news also actually the occasional Mr. Jiang's
death.
[09:05:00]
WATSON (voice over): Authorities lifted some lockdowns in some cities on Wednesday, while also cracking down in other areas with police arresting
and intimidating protesters. Jiang's upcoming state funeral may present an additional challenge for authorities. Will Xi Jinping's predecessor -
attend last chaired a stage with Xi at October's tightly scripted Communist Party Congress. He was ushered out of the hall, seemingly against his will,
a strange, apparently unscripted moment for a government that prioritizes control above all else.
(END VIDEOTAPE)
WATSON: Now Rahel, let me give you an anecdotal example of that emphasis on control. CNN has spoken with one of the people that participated in protest
Sunday night in Beijing, the Capital, who told CNN and then played audio of a phone call they received from a police officer several days later asking,
why were you in the vicinity of this protest near the riverbank?
We saw your cell phone there, and then demanding that that person turn them into a police station for questioning. And that anecdotal testimony follows
up several accounts that we got from other demonstrators in the commercial capital, Shanghai, who say that police were stopping passers-by on streets
near where protests had taken place, and in subway stations, demanding to look at phones and look at photos and phones and apps to see whether people
could try to use VPN to circumvent the great Chinese firewall of Internet censorship.
Just a few examples of the lengths the security forces will go to try to control people from voicing their dissent Rahel.
SOLOMON: It's been incredible Ivan I mean, to be honest, reading the details, it's just been quite chilling. And other news today, we also
learned that Formula One says that it is canceling the 2023 Chinese Grand Prix due to COVID difficulties, what more are we learning about that?
WATSON: I mean, it's a pretty terse statement, just about two sentences where they say, hey, due to COVID, difficulties, we're not going to hold
the 2023 Grand Prix in China, and we're going to be looking for an alternative place.
But what that tells you is that going into 2023, China is continuing to lose public events, opportunities to attract crowds and to generate
revenue. It is just one of the many costs that are very difficult to quantify, of what this policy is incurring on Chinese society.
It's not just the emotional psychological well-being of ordinary Chinese citizens who've seen their lives up ended been confined to their apartments
for maybe two months at a time, you know, rationing food, not able to have their children go to school. It's businesses, too.
And we've gotten some numbers from the Chinese Ministry of Finance, that say that the health costs for local governments have soared in the first 9,
10 months of this year, with health care spending jumping 13 percent, in the first 10 months of 2022, and that they're falling behind on payments
that the 15 biggest Chinese virus testing providers, they're reporting that they haven't been paid the equivalent of more than $6 billion for work that
they're doing.
All of this is costing China money, and perhaps that's why we're starting to hear a shift in tone from Chinese authorities. They're not scrapping
zero COVID. But they're certainly saying it's time for to change to tweak the approach to pandemic control,
SOLOMON: As you said incremental changes there, Ivan Watson, good to have you. Thank you. Let's all get back to that red hot jobs report the U.S.
economy adding 263,000 jobs in November much hotter than was expected.
Julia Pollak is the Chief Economist at ZipRecruiter. Julia thanks for being with us. Is this report so good, that it's bad? I mean, what's your top
line reaction to this?
JULIA POLLAK, CHIEF ECONOMIST, ZIPRECRUITER: So this report is much stronger, at least the establishment survey is much stronger than expected,
with 60 percent more job gains than was typical in 2019. And growth across a very, very broad and unusually broad set of industries.
That wage growth number also is concerning. And that's probably why we're seeing stock markets react the way they're doing much, much stronger. There
was a sort of the hope that wage growth was cooling. That's what the last report suggested. But wage growth popping right back up in this report.
And there are several reasons why that may continue. One, we still have a very tight labor market. Two job seekers now have new expectations or
they're seeing their friends get double digit increases. They're seeing their friends get signing bonuses and so they're holding out for those.
[09:10:00]
POLLAK: And then there's been an increase in union activity and the pay transparency laws are also encouraging companies to raise their pay for
existing workers to match the offers that they now have to post in their job postings.
SOLOMON: Right, wages increasing from 4.7 percent annually last month to 5.1 percent in this most recent report. Julia, how do you explain the
recession warnings that are everywhere with the fact that the labor market continues to show just incredible resilience and the fact that consumers
continue to spend, I mean, you would think that both things stand at odds with one another?
POLLAK: Sure. So this labor market is still being propped up by the continued recovery of industries like leisure and hospitality that are
still well below their pre pandemic strength. And by the strength of the U.S. consumer, despite this rapid increase in interest rates, that should
be reducing employment, in construction, in manufacturing, and in a range of industries that are typically very, very sensitive to rising interest
rates.
This time seems to be somewhat different one because U.S. homeowners have locked in those sub 4 percent mortgages, and so they're not seeing their
mortgages go up. And that's why they're spending is not being affected by the increase in interest rates too badly.
And then business balance sheets are also by and large, very strong. Companies use that period of low interest rates to get a hold of credit and
cash. And many of them are now sitting on a lot of cash. They are somewhat insulated from what's happening in the stock market. And that's why we're
continuing to see, you know, a surprising degree of resilience.
SOLOMON: I think you make an interesting point about thinking about the sectors right? I mean, where we are still seeing growth, leisure and
hospitality, as you pointed out. The layoffs that we have seen have largely been focused in areas that are more interest rate sensitive technology, for
housing, for example, media and books and companies that are more sensitive to advertising.
At what point in the cycle, do you think that that broadens? And then we actually really start to see a slowdown, because we haven't seen that type
of slowdown yet.
POLLAK: So there are a couple of signs that a slowdown may be coming in this jobs report. So we see a decline in Temporary Help Services
Employment, Temporary Help Services Employment is usually sort of a leading indicator, it falls in the months prior to a recession.
We also see a decline in employment in employment services, which suggests that companies are planning to pull back on hiring. And that certainly is
the sort of conversation in many, many businesses, they are anticipating a downturn, they are preparing, you sort of, you know, an emergency response
plan and escape route.
They do not have to use it just yet you know, most companies are still seeing sales hold strong, strong demand. But that certainly is a worry. So
far, we're not seeing that many dominoes in the chain fall in places where we are seeing weakness like in the housing sector, we're not seeing job
losses as great as might be expected in the mortgage sector.
We're not seeing a decline in construction employment rose in this report. So, so far, the pain has been surprisingly contained, and limited.
SOLOMON: It has been limited. Julia, one thing that you know, a lot of economists have been watching is the implications of wage growth and how
that impacts inflation this idea being that if employers have to pay their workers more that could then get passed down into higher costs that you and
I as consumers pay for.
But we haven't really seen evidence of that actually starting to happen, right that wage price spiral. And yet wages increased, surprisingly, over
this last month. I mean, do you think that that becomes a real concern? When do we start to really see perhaps a wage price spiral in the sense
that wages go up, and then that could be feeding into inflation?
POLLAK: Well, so initially, the main contributors to inflation were energy costs and goods prices. But now there is a sign that the main driving force
is sort of core services inflation and that is largely driven by wage growth.
Wage growth, your annual earnings increases of 5.1 percent is totally incompatible with inflation of an inflation target of 2 percent. So yes,
wage growth is much too high to bring inflation down to where the Fed wants it to be. And inflation will probably take quite a lot longer to come down
than the Fed would like. They may slow down.
So does that mean that's an interesting point that I just want to follow up on really quickly. So does that mean that if now we are starting to see
wages trickle into service inflation, that the Fed will have to put more people out of work because part of this inflation is being driven by the
labor market?
POLLAK: I think they may just be more patient, they may just take longer to see inflation come back down to where it should be. You know in past
inflationary episodes it's taken four or five years to bring inflation back down.
[09:15:00]
POLLAK: I think that at some point the Fed will stop raising rates. They'll just hold them steady for a long while. They are concerned about the
possibility of sort of breaking something in financial markets somewhere or causing, you know, a debt crisis and a foreign country.
There are several countries with some serious vulnerability. So I think they're, they're concerned about being too aggressive. They may pause,
allow inflation to stick around and be higher than they'd like for longer and bring it down more gradually.
SOLOMON: Julia Pollak, wonderful to have you. She is the Chief Economist at ZipRecruiter. Turning to sports and the Qatar World Cup to underdogs
advancing to the knockout stage, Morocco has reached the round of 16 for the first time in 36 years, and Japan's secured its spot after a
controversial goal sending four time champion Germany home. Amanda Davies is live in Doha with more. So Amanda it has certainly been a tournament of
upsets. What are you expecting today?
AMANDA DAVIES, CNN WOLRD SPORT: Well, this tournament has taught us anything it's expected the unexpected. Thursday really was quite something
and we're still feeling the shock waves reverberate around the streets of Doha.
But in terms of today, the Cameroon Coach Rigobert Song he says he and his side know this Brazilian squad off by heart for whichever team TJ puts out
and that they're preparing for it as if it is a final. Cameroon is looking to reach the knockout stage for the first time since that famous run at
Italia 90, but they haven't won their final group game in any of the last seven World Cups.
And remarkably, Brazil hasn't faced single shots against them on target so far in their two games. We do know though that Cameroun can score goals
they fought back from 2 down you might remember in the last game against Serbia, they drew 2-2 but the issue with that is they know they have to win
if they want any chance. They have to try and score goals and with the attacking threat that Brazil posed that is when things could get a little
bit messy for them.
There was early kickoff though it kicking off in what just over 40 minutes' time and there's a huge grudge match, bringing back a whole lot of emotion
and memories of 2010 between Uruguayan Garner. Luis Suarez famously stopped a Ghana goal with his arm on the goal line.
It was a goal that would have put Ghana through to the semi-finals for the first time in their history. The resulting penalty wasn't converted. So
Suarez got told in the press conference yesterday, he is seen as the devil himself. That was what one of the - and journalists put to him.
But you got to say Luis Suarez seemed to be relishing that thought, but a Ghana win would put Uruguay out at the group stage for the first time in 20
years, and it's Ghana the team who very much been informed over the last couple of weeks.
One other update I have to bring you from Team USA ahead of their round of 16 match against the Netherlands. Coach Gregg Burkhalter says things are
looking pretty good for their Captain America, Christian Pulisic, his pelvic contusion - he's been in a race against time to be fit after being
taken to hospital midway through their match on Tuesday. Things are looking positive and we're going to find out a little bit more when they take to
the pitch for open training in 40 minutes time.
SOLOMON: And lots of people root for Captain America so it's good to hear that he's on the mend. Amanda Davies Good to have you. Thank you. Straight
ahead, mixed messages from China on zero COVID policy restrictions may be easing but some basic freedoms are still being withheld. We'll dig deeper.
Plus, making fuel out of thin air we will look at bold moves to help the airline industry turn carbon neutral. We'll be right back.
(COMMERCIAL BREAK)
[09:20:00]
SOLOMON: You're watching video recorded Wednesday in China's southern City of Hangzhou police aggressively enforcing the zero COVID strategy there
dragging this man as we can see from his home. Authority said that he refused to go to a quarantine facility after coming into close contact with
someone who had tested positive for COVID-19. He did later apologize about the way he was treated.
Meanwhile, officials in some areas including Beijing are softening some COVID-19 rules, easing lockdowns and pulling back on stringent COVID
testing. And for now tensions appear to have cooled. CNN's Selina Wang spoke with one demonstrator willing to risk it all for freedom.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Silence will not protect you.
SELINA WANG, CNN CORRESPONDENT (voice over): This person one of thousands across China willing to put their lives on the line to speak out. Years of
pent up anger over Chinese draconian COVID lockdown, boiling over into protests.
UNIDENTIFIED MALE: I felt like I lost control of my life because of this COVID policy. Nobody is telling you when this is going to end we are
limited physically. And now we're limited mentally we are forbidden to express our ideas.
WANG (voice over): For some that cathartic emotional release spilled into calls for political changes some even chanted for Xi Jinping to step down.
UNIDENTIFIED MALE: He's the one who's responsible for this whole policy thing. But for me, first thing, first, I want us to recover policy gone and
if we have more freedom of speech and freedom of press, of course that would be great.
WANG (on camera): What do you think you guys achieved by participating in that protest?
UNIDENTIFIED MALE: If you don't demonstrate if you don't show them your voice your idea they will never know.
WANG (voice over): And this is what happened next. China's security apparatus swiftly smothered the protests. CNN is shielding the protesters
identity because of fears of retribution even conducting the interview in a car to avoid tracking from authorities.
Police are calling and visiting the homes of some protesters and in Shanghai randomly stopping people to check their phones on streets and what
appears to be in subways. Protesters say they're looking for VPNs needed to use banned apps like Twitter or Telegram, which some protesters use to
communicate.
Another protester told CNN. I'm afraid we cannot hold protests like this again in the future. There are always undercover agents in our telegram
group. Every few beaters on the street, there are police and police dogs. The whole atmosphere is chilling.
WANG (on camera): I'm at the center of a protest in Beijing right now. They're chanting that they don't want COVID test. They want freedom.
WANG (voice over): Less than 24 hours after this we drove back to that spot. Police cars as far as the eye could see. Then a few days later--
WANG (on camera): It's pretty much back to normal like nothing ever happened. And that is precisely the goal of the Communist Party
WANG (voice over): In Guangzhou residents destroyed COVID testing booth. Police in riot gear immediately sworn in they marched through a market
shouting at people to firing tear gas to disperse protesters. Pushing through with shields and making arrests.
[09:25:00]
WANG (voice over): Pushing through which shields and making arrests. Authorities have gone into overdrive to censor all evidence of unrest
online.
UNIDENTIFIED MALE: That white piece of paper actually represents the censorship and all the deleted contents and cannot arrest us for just
holding a white paper. I still have that white paper I protested and I put it in my diary as a souvenir to show my future generations that you should
always fight for your rights and never let your voice are silenced.
WANG (on camera): How does it make you feel though that the government even censored pictures of people holding white papers?
UNIDENTIFIED MALE: By doing this they're just gonna make the crowd even angrier that of trying to silence us. They should really focus and the
trend to think why this happened.
WANG (voice over): Authorities are silencing them but it seems they are listening. Right after the riots in Guangzhou the city started lifting some
lockdowns for meeting COVID roadblocks. - a man screams with excitement as he bikes through streets being opened up. But so many others are still
counting down their days and lock downs in quarantine. Wondering when zero COVID moved to the end sullied away, CNN, Beijing.
(END VIDEOTAPE)
SOLOMON: And I want to bring in now Professor Susan Shirk, she is the Former Deputy Assistant Secretary of State and the U.S. Bureau of East Asia
and Pacific Affairs. She is also the Author of "Overreach: How China derailed its peaceful rise".
Professor Susan, it's wonderful to have you on the stage. First, I want to ask this news that China may be sort of peeling back or incrementally as
our correspondent put it, some of these policies what does that mean to you? I mean, are these significant? Is this the beginning of a relaxing of
zero COVID?
SUSAN SHIRK, PROFESSOR, UNIVERSITY OF CALIFORNIA SAN DIEGO: I think it's pretty clear that the zero COVID extreme policy is being relaxed in
response to the protests. And we see especially the effort finally, at long last to vaccinate to make a major effort to devote resources to expanding
vaccinations, especially among the elderly population.
You know, for so long, the resources, the money and the manpower that could have gone into vaccinating everyone were devoted to this testing and
quarantining approach. But it's pretty apparent that now they've adapted, they've responded to the discontent. And that's the direction they're
moving in, which is certainly going to be welcomed by people in China as well as the rest of the world.
SOLOMON: So then, do you believe that this - the protest became to a point where it was politically too dangerous for Xi? Or do you just think that
zero COVID clearly proved that it had its limitations?
SHIRK: Both. I mean, it had proved its limitations a lot earlier. But this highly centralized personalistic dictatorial system, you know, it's not
very good at getting feedback from the bottom, from the, the roots, the grassroots of the society. So it really takes something extreme, like the
protests that we saw in multiple cities, to get the attention of the leadership. And finally they made the pragmatic move.
SOLOMON: One thing that got my attention, Susan, when I look at the videos of the protests, which were also showing on your screen here, is that many
of the protesters are young. Economically, how damaging has this policy been for China?
I mean, we know unemployment, for example, in China is very high, I think 18 to 24 percent, on unemployment among young people is also very high. So
how damaging and how much of this frustration from the people is because of the economic ramifications of zero COVID?
SHIRK: Well, I think it's probably the case that much of the frustration comes from the economic problems, especially unemployment, as you pointed
out. And the Xi Jinping administration, in addition to continuing the extreme zero COVID approach, which of course was very disruptive of
economic life.
And made it very difficult for many people to get to their jobs, they lost their jobs, especially urban migrant population who work in services.
[09:30:00]
SHIRK: In addition to that, Xi Jinping's administration had really cracked down on the private sector. And jobs in China are more associated with the
private sector than with state owned enterprises.
The private sector had really taken a whack from the central government, because Xi saw it as a potential power center to challenge him and so he
imposed quite drastic regulations back in 2021. And the private sector hasn't responded since you see all the private entrepreneurs who are
heading for the exits.
SOLOMON: So Shirk, what do you expect now? I mean, we're starting to see these small incremental pull backs of zero COVID. But we're also seeing a
crackdown on free speech. As we said, we're also seeing censorship; of course, we're also seeing people's phones being checked. I mean, what do
you think happens now?
SHIRK: That's really hard to predict. Of course, they're combining the repressive approach to preventing more collective action. And they're
ready. They've got tremendous capabilities in that regard. And I expect that that will continue.
And of course, that's very much resented, especially by young people. But on the other hand, if the government has been responsive, then I'd say it's
the rare individual in China who would dare risk their whole future by coming out to demonstrate next time.
SOLOMON: It's a very interesting point. Susan, it's been wonderful to have you thank you. That's Professor Susan Shirk.
SHIRK: Thank you. Thanks so much.
SOLOMON: And coming up jobs jolt, the U.S. is out with its last and latest monthly jobs report of the year and it is moving markets and I don't mean
in a good way, the very latest just ahead.
(COMMERCIAL BREAK)
[09:35:00]
SOLOMON: And welcome back to "First Move". And TGIF everyone, Wall Street is up and running. Also reacting to today's red hot jobs report the major
averages falling on news that are much stronger than expected. 263,000 jobs were added to the American economy last month.
What really concerned markets, though, was six tenths of a percent rise in average hourly wages double what was expected. These are the last big jobs
numbers before the Fed meets to raise interest rates again later this month.
Fed Chair Jerome Powell saying this week that the central bank could hike by a less aggressive half a percentage point as it waits to see the effects
of its inflation fighting campaign so far. So will today's numbers affect the Feds thinking?
CNN's Chief Business Correspondent Christine Romans joins me now. So Christine, what do you think? Will this change the calculus for the Fed at
all when they meet?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I think the Fed is pretty much baked in here for a 50 basis point rate hike next time around,
but they're going to be very careful about watching how that data is coming through. I mean, there's usually depending on how you measure it up to six
month lag and when a rate hike start affecting your monetary policy starts affecting the labor market, there is a lag.
And so if you look back to March and you look toward today, it might be that those big, big rate hikes just haven't filtered through to the economy
yet. But here's what we know, resilience, right Rahel? Resilience is the Word of the Week.
The unemployment rate 3.7 percent still stuck in that 3.5 to 3.7 percent band. And that is just remarkable that 3.7 percent number that you're still
that low near 50 year low for the unemployment rate. And then you start talking about the jobs added, the lowest number of jobs added in a year and
a half.
But any other time in American history 253,000 jobs added would be quite, quite strong, especially considering that we've had six rate hikes in a row
here. So if you throw that up in November, the jobs added month by month, this year, you can see a deceleration, but from a very, very strong level.
And then I guess finally, looking at that inflation numbers still a worry, you still have this gap between wages and inflation. That's pretty high and
you want to see a job market that cools a little bit. You know, you and I both talked about this a Goldilocks having it cool a little bit so that it
doesn't really hurt a lot of people and hurt the spending of so many Americans.
But at the same time doesn't, you know doesn't get so strong that it starts spinning off inflation that gets hard to get rid of. So a lot of cross
currents here, I think but the overall word I guess my word of the week is going to be I thought it was going to be Goldilocks today. It isn't. I
think resilience; I think is the Word of the Week.
SOLOMON: Yes, I think that's a fair word. I mean, I think one thing that I might say is that it's too good. But it's not; it's good that it's bad.
Christine, before I let you go one thing that got my attention that you and I talked about a lot is the labor force participation rate, that not
helping the Fed in this report. I mean it didn't budge.
ROMANS: Yes, not moving at all here. And what you want to see, I think, right with all this talk of, of job openings, 10 million job openings,
wages increasing, you want to maybe two years after the COVID crash, you want to see more people starting to come into the labor market.
But we really haven't seen that and, you know, the Fed or at least not this month in a big way at least.
And you know, the Fed chief was talking about this week in this Brookings Institution, speech he had remember he was talking about how there are some
retirements that are probably going to stick the COVID retirements are going to stick.
And they'll likely be some investing in technology to replace jobs that you just can't get the workers, it is still a very tight job market, you have
still for every job open. You know there are so many; there are just so many jobs open for every job seeker, that it's really a mismatch still.
SOLOMON: It's a great point. I think the last estimate was 1.7 for every one American looking. It's a very interesting time; I think to be covering
the economy, Christine, to be honest, because the pandemic as you know did so many strange things to the economy. And now we're all just trying to
understand, you know what the other side of this looks like, Christine Romans, great to have you.
ROMANS: Have a great weekend, Rahel.
SOLOMON: You too. And we'll have more "First move" after the break.
(COMMERCIAL BREAK)
[09:40:00]
SOLOMON: And welcome back. A wave of layoffs has spread throughout the tech industry companies like Meta, Twitter and Amazon all announcing significant
job cuts in recent weeks. So what's happening in tech and what does it mean for the economy?
CNN Anchor Poppy Harlow spoke with someone who knows Silicon Valley better than most Reid Hoffman, Co-Founder at LinkedIn and was also one of the
first investors behind Facebook.
(BEGIN VIDEOTAPE)
REID HOFFMAN, CO-FOUNDER, LINKEDIN: For those of us who are a little older have lived through these kinds of bear markets and retractions before and
there's still a lot of energy and technology, it just that each entity and each company now goes as opposed to try to do everything. We have to do a
few things really well.
And ultimately, that's better for the industries that are better for society. Obviously, there's a lot of pain and the dislocation there's, you
know, layoffs are never a good thing. But, but I think that's what's going through. I don't think this is like a, you know, kind of like For Whom the
Bell Tolls moment. I think it's a refocusing moment.
POPPY HARLOW, CNN REPORTER: You were one of the first investors in Facebook. Do you think looking at it now, it is a net positive for the
world and society and truth or not?
HOFFMAN: So I think, the truth is I think a little bit more complicated. I do think it's a net positive. I know that's a little bit of a contrarian
thing to say these days. But part of the reason I think that is we always kind of focus on well, there's these vaccine deniers and these people, you
know, spouting crazy theories like pizza gate and look at that.
And you're OK, that's crazy. QAnon - crazy but on the other hand, there's tons of people who are sharing, like, you know, here's my daily life
experiences. And here, I'm staying connected, my family and my friends and all the rest.
I mean, when you have over a billion people, using the share, that's all of this kind of good social fabric kind of goes unreported. And I do think
that there's information flow there that flows in a good way, despite the fact that one can pull up examples just like one can pull up examples out
of the internet that are like, well, that's crazy or that's terrible. And so I think it is net positive.
HARLOW: People are dying from the crazy. Some people are dying from the crazy.
HOFFMAN: Yes.
HARLOW: Like and I wonder, you know, and I mean, QAnon conspiracy theories have led to actual violence.
HOFFMAN: Yes, 100 percent think that that's a problem and it needs work. But by the way, people are dying from driving on highways too and we don't
say stop driving on highways.
HARLOW: Except companies like Facebook are making money off of this.
HOFFMAN: Well, but then again, you say, well, people are selling cars. And so I mean, I think look I think I'm not trying to say there are no issues
and it can't be improved.
HARLOW: Yes.
HOFFMAN: What I am saying is the fact that it is generally thought of as kind of a den of complete disaster.
HARLOW: Yes.
HOFFMAN: You know is kind of like highlighting the fact that there was a drunk driver on the highway that caused an accident say there goes the
whole highway system.
[09:45:00]
HARLOW: How do you make it better and safer for when my kids are old enough to get on the platforms, they're more protected?
HOFFMAN: So I think there's two or three variables. So one variable is to say, I think one of the legitimate criticisms of social media is that
because they're pursuing engagement and clicks and time, that it tends to orient towards agitation, towards division towards anger towards fear
towards, you know, disregard.
And you say, well, OK, let's try to create, like kind of the tuning of the algorithms, the tuning of what's going on, to contain that some. Obviously,
some anger disregards important and say, you know, you know, a manufacturer is putting lead in children's toys, you say, actually be angry, right.
But, try to do that, generally, I also think that freedom of reach and freedom of speech are not the same thing. So I should be able to say the
moon is made out of blue cheese, or the Holocaust never happened, you know, both of which are kind of crazy town statements.
But, but that doesn't mean that it should necessarily be spread. And when there is when there is kind of things that are going on that have, you
know, kind of damage, especially, for example, things that would lead to violence or lead to, you know, kind of, you know, anything that kind of
that has, like significant human suffering.
HARLOW: Yes.
HOFFMAN: It has this kind of truth coefficient. Well, you can figure out I mean, this is part of the genius of technology, how to tune that down some
doesn't mean zero errors, just like no zero errors on the highway, but you can make it less and that's what I think we should be focused on.
(END VIDEOTAPE)
SOLOMON: And coming up on "First Move", innovation and aviation coming right out of thin air. I speak with CEO of a company that is recapturing
carbon and then turning it into fuel. That's next.
(COMMERCIAL BREAK)
SOLOMON: Welcome back. Fuel from thin air it may sound like science fiction but one tech startup is making it a reality. Air Company says that its
mission is to help lower the airline industry's carbon emissions. And it's doing it by its carbon neutral jet fuel made from co2 that's already in the
atmosphere.
A company made a bit of a splash in 2019 when it launched vodka. Yes, the vodka that some drink derived from recaptured carbon. Now it says that it
can use that same process to turn harmful greenhouse gas into fuel that can then power jets.
Air Company's sustainable aviation fuel was recently tested by the U.S. Air Force and it already has two major airlines JetBlue and Virgin Atlantic on
board with its vision. Joining me now is Gregory Constantine he is the Co- Founder and CEO of Air Company, Gregory, wonderful to have you, so explain to me again how it works?
GREGORY CONSTANTINE, CO-FOUNDER AND CEO, AIR COMPANY: Yes, thanks for having me. We take captured carbon dioxide before it's emitted into the
atmosphere and we convert that carbon dioxide into carbon negative alcohols and fuels.
[09:50:00]
CONSTANTINE: You know some of the alcohols that you mentioned go into those consumer products. But the goal of our business is to create the most
amount of impact at scale. And the aviation industry has always been deemed one of the hardest industries to de-carbonize, given that it makes up
somewhere between two to 3 percent of global co2 emissions on an annual basis. So we've focused our business towards working on how we can create
sustainable fuels, aviation fuel being one of them.
SOLOMON: So what are some of the biggest challenges to growing scale? I mean, is it an expensive process? Is it time consuming? Walk me through
some of the challenges?
CONSTANTINE: Yes, whenever you're working on innovative and new technologies, such as this, you know, you really need economies of scale.
So you know, as we've been working on scaling up our business, not only from an output perspective, but also from a cost perspective, we decided to
monetize our research and develop on our pathway towards that scale.
So there's some of the consumer products that you see. And yet that some of the challenges that you get to, in order to get to scale are exactly that
output and cost.
SOLOMON: I see. Walk me through some of the partnerships that you've already been able to gain.
CONSTANTINE: Yes, we work with some incredible partners. You know, we're working with the likes of JetBlue, the likes of Virgin Atlantic on our
aviation fuel. You know, we're successful and actually flying the first ever test flight on our fuel that's made directly from carbon dioxide with
the U.S. Air Force. We've got partners in other areas of business, such as NASA, where we work on things such as fuels, in aerospace in other arenas.
SOLOMON: Gregory is this type of sustainable aviation fuel the type that needs to be blended with more traditional jet fuel to be used in current
engines? Or is this something different in the sense that it can be used as is in current engines? Help me understand that the technology behind that.
CONSTANTINE: Yes, it's a great question. Not so know that no engine changes need to be made. We've tested it and it has the exact same components as
traditional jet fuel. However, it's a 100 percent drop in fuel in that it does not need to be blended, as long as the legislative practices in those
countries allow for that.
So the benefit of the fuel is not only in its creation, in its creation, we are actually carbon negative post-burn. We are carbon neutral by it,
doesn't it not need any blending. It has all the properties that are traditional jet fuel needs in one single process from directly from carbon
dioxide.
SOLOMON: How large would you say the demand is right now for this type of sustainable aviation fuel?
CONSTANTINE: Yes, the demand is very, very strong for it, not only is there a massive pour from customers wanting to know that, you know, the flights
that they're going on, are being treated in a more sustainable way. But you're seeing a lot of legislative changes here in the U.S. and around the
world that are pushing airlines to be more sustainable and to have more sustainable practices across the board. So not only from a fuelling
perspective, but throughout other areas of their pipeline, but the demand is very, very high.
SOLOMON: And then so then how soon do you think before we actually see a fully commercial electric flight?
CONSTANTINE: Fully commercial electric flight I'm unsure of I think that there might be some time before that. I know areas are going towards it.
From a fully commercial flight that's running on fuel made directly from carbon dioxide like ours, definitely inside this decade, we've really kind
of sped up a lot of those timelines have been proven out the creation of it, but also the flying of it on a plane with the U.S. Air Force. So it's
going to be happening a lot sooner than people anticipated. And then the industry anticipated.
SOLOMON: And then to that, and you say that you expect your company to be able to plan the first test of its fuel on a commercial plane by next year.
So by 2024, is that still in place?
CONSTANTINE: Yes, we plan to test it on commercial planes as soon as next year for sure. There's regulatory hurdles that you need to get to,
obviously, to make sure that when you're flying passengers and the likes of otherwise on it, that'll definitely happen inside this decade. But yes,
absolutely we plan on testing on a commercial plan as soon as next year.
SOLOMON: I see. And then tell me just very quickly, how else have you been able to use this technology? As we mentioned in the intro, vodka,
apparently made quite a big splash. How else have you been able to use this technology?
CONSTANTINE: Yes. So the alcohols that we created, the fuels that we create can be --to a number of different industries. Ethanol is one of the
alcohols that we create. So as I mentioned earlier, you know, when your cost to produce is relatively high in the early stages of innovative
technology like this, we went and sold it in some of those industries that the beverage industry and the fragrance industry, we sell both of those
products on market right now.
And we have a few other products that are going to be coming out of the back of the technology, but the goal is scale. And that's what we spend all
of our time working on so that we can really increase our output and decrease our cost to produce, so that we can meet the demand of the
industries such as the aviation industry.
[09:55:00]
SOLOMON: Well speaking of scale, I think it'd be fascinating to see how it takes off. No pun intended, Gregory Constantine, great to have.
CONSTANTINE: Thank you.
SOLOMON: He is the Co-Founder and CEO of Air Company. And a lot of Netflix subscribers are sure to be spending this Friday watching. One say the
streaming service says that the Addams Family spin-off co-produced by Tim Burton has broken a record set by none other than the Stranger Things
franchise.
More than 340 million hours of Wednesday have been streamed since its premiere last week. I've been hearing a lot of buzz about it. It's the best
weekly numbers for an English language series and Netflix history. I'm going to try this weekend.
And finally, the Rocket Man is set to rock one of the most famous music festivals in the world. Glastonbury announcing today that Sir Elton John
will play the main stage at its next festival in June. Sir Elton is in the midst of his farewell World Tour and the state is being built as his last
UK concert ever.
The news bit of a disappointment though for Swifties who had hoped that maybe Taylor Swift would have filled that Glastonbury slot or should we say
blank space. And that is it for the show. "Connect the World" with Becky Anderson is next. It's been a privilege to be with you this week.
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END
