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Manufacturing Jobs Declined for Second Month in a Row; Deadline Extended Until Monday for Candidates to Challenge Iowa Results; Seven Democratic Candidates to Debate in New Hampshire Tonight. Aired 12:30- 1p ET

Aired February 07, 2020 - 12:30   ET

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

[12:30:00]

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: -- construction had a surge in job creation, transportation warehousing, bars and restaurants added a lot of jobs, health care again, 36,000 jobs there but manufacturing still a weak spot here in this economy. Many say manufacturing is actually in a recession.

The unemployment rate, 3.6 percent. It went up just a little bit, but why? Half a million people got off the sidelines and started looking for work. They had not been looking for work, now they have entered the labor market, so that pushed the number up again. So that is actually a sign of strength in the American labor market.

So how do we stand out here? Last year 2.1 million net new jobs created. That's with some revisions that came with this January report, so you can see overall the trend is right in line with what we've seen going back to 2011. This is, again, about trends. This is an American labor market that has healed from the great recession and continues to add jobs a full 10 years into the economic recovery.

Pretty remarkable, 3.1 percent wage growth. You would expect to have wage growth stronger and earlier in this kind of a recovery. Now you're seeing 3.1 percent. That's fine.

John?

JOHN KING, CNN HOST: Christine, thank you very much.

Ana Swanson, the trade and international economics correspondent for the New York Times joins us now. If you're a president running for re- election, if you're an American looking for work, this is a good economy. It's a remarkable 10 years-plus now into the expansion, 225,000 is a strong number, 225,000 new jobs.

I want to start with the one flashing light in there. Christine just mentioned it and we can put it back up on the screen here. 12,000 negative job loss in manufacturing. What is it? Everything else is going -- humming along, what's wrong with the manufacturing sector?

ANA SWANSON, TRADE AND INTERNATIONAL ECONOMICS REPORTER, NEW YORK TIMES: Absolutely. So this was a really solid report but manufacturing, as you mentioned, is a weak spot. The president has continued to talk about this blue collar boom including in the state of the union this week. But the manufacturing sector really is hurting, in part due to the effects of the trade war, also due to Boeing's troubles with the 737 Max. There was, earlier this week, a positive indicator in terms of a gauge of factory activity which suggests that maybe looking forward we could see that pick up. But all in all, that sector is really in trouble.

It's really the service sector that is booming, so maybe the president should change his pitch and talk about the service sector, I don't know.

KING: Yes. Well, health care, which would be a little more politically difficult. I just want to show though politically if you look at this, this is a Gallup poll this past week. Approval of the president on the economy, 63 percent, 63 percent. This is a president's normal approval rating, he's hovers in the 40s. I think it can just got up to 50. More than six in 10 Americans think he's doing a good job when it comes to the economy which is great.

And here's why if you look at it. Again, manufacturing might be soft spot but weekly earnings up $87 since the president took office, not gangbusters but heading in the right direction. The Dow Jones, if you have investments, up more than 9,000 points since the president took office. The price of a gallon of milk is down, the price of gas is up but just a little bit (INAUDIBLE).

So if you're the president now, these economic indicators, and if you're an average American consumer, take the politics out of it for a minute, they're good for you.

SWANSON: Absolutely. So this is really great news for the president who obviously is going to make the economy the center piece of his re- election campaign. And it does undercut the argument of Democrats who are saying, you know, people you feel like you need a really big substantial change right now

You know, one of the highlights of this report really was, you know, what you just mentioned that the unemployment rate rose which is, you know, usually a bad thing, but in this case it rose for a good reason, which is that you have many more people being pulled off the sidelines and pulled into the labor force. And that's benefiting women, it's benefiting workers with disabilities, workers with criminal records, older workers. So, there's a great variety of people who are really benefiting from this hot economy.

KING: Right. And just for context purposes, 10-plus years into these expansion which means the president has been president for three years, it means it began in the last administration. In the state of the union address, if you listened to it, he was making the case the patient was dead and I brought it back to life. It's just not true. If you look at the final 36 months of the Obama administration, the economy created 8.1 million jobs. The first 36 months of the Trump administration, the economy created 6.6 million jobs.

So he inherited a strong economy, he doesn't like to admit that, I guess politically, you can understand that. But the question now is, strong at end of the Obama administration, strong at the Trump administration, is there anything in this report or the other day do you look at, that suggests that there's a problem out there, or is this growth going to continue all the way through the election year?

SWANSON: Well, you're absolutely right that presidents get too much blame for bad economies and they get too much credit for good economies. The economy tends to move because of factors all its own. I do think that, you know, the risk of the -- of a recession which people were very worried about into last year is now pushed off a little bit, probably through, you know, through the end of the election. Meaning that, you know, the next person in office could really be stuck with something.

That manufacturing sector is a little bit worrying. I also think that recent worries about the coronavirus are particularly concerning because factories have been shut down, you know, flights have been stopped, and a lot of economic activity across the Pacific is affected by that.

[12:35:06]

And you saw Larry Kudlow, the White House adviser, saying earlier today that it could affect growth by, I think, two-tenths of one percent. Some economists think more than that. So we'll have to see how quickly we can bounce back from that.

KING: Sometimes it's a surprise, sometimes it's a surprise that comes in. Ana, appreciate you coming in with the insights there.

Up next, discrepancies in a big deadline for 2020 Democrats. New CNN reporting finds errors in the count out of the Iowa caucuses.

(COMMERCIAL BREAK)

KING: Some breaking political news out of the state of Iowa.

[12:40:00]

There was a deadline about 20 minutes from now. That was what candidates had until 1 p.m. Eastern Time noon in Iowa to challenge, to ask for a re-count or re-canvassing of the Iowa Democratic caucuses. But, some breaking news that that deadline is being moved. Let's get straight to CNN's Jeff Zeleny, he is live for us in Des Moines. Jeff, what's going on?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: John, we are learning now that the Iowa Democratic Party is going to extend that deadline until noon Iowa time on Monday for campaigns or candidates to request a re-canvass or a re-count, if you will, of the results of the Iowa caucuses. Now one of the reasons for the extension is, because these precincts, we just got to 100 percent last night, so, you know, they certainly are recognizing the need to give campaigns and candidates a little more time to pore over these records and the numbers to see if they need to request this. But let me take a quick read through the statement that just came out a few moments ago, John. We're actually seeing a couple different deadlines. Beginning tomorrow at noon, the Iowa Democratic Party is requesting for campaigns to submit documentary evidence of inconsistencies between the data reported and the records for result of a correction. So that is supposed to come by noon tomorrow. So basically saying to campaigns, if you see some inconsistencies in certain precincts or satellite caucuses, give that to us by noon tomorrow. And then by noon on Monday, request a re-canvass or a re- count.

So that is the new deadline. But here's the reality, John, the question is, is it worth it for the Sanders' campaign or the Pete Buttigieg's campaign or the others for that matter, to dig back into this? Any close election and certainly any close caucus campaign is likely going to have some inconsistencies. So if you request this, if you're the Sanders' campaign, yes, it's possible that you could come out actually on top with maybe another delegate, or it's possible it could go the other way. The Buttigieg campaign the same way.

So, the reality here is both may just declare victory which they have and move on. So we'll see what they decide over the weekend. But John, one thing is clear, the Democratic Party here in Iowa after inspecting these candidates for more than a year is sending out a message that, look, we're split, we like Pete Buttigieg, we like Bernie Sanders. So that resolves nothing and that goes forward.

One thing that is clear, this caucus process here in Iowa deeply flawed, the counting of it is. So, there are likely to be incriminations, so many tensions between the state party, the national party. All of that will be worked out, you know, in the coming weeks or months, but for now that deadline extended until Monday, John.

KING: The confusion extended as well, I guess. Jeff Zeleny, re- establishing his residency in Des Moines, Iowa for us. Jeff, thanks for all your help out there in recent days. So I'm laughing but it's great to have a great reporter on the ground because this has been such a mess.

So now they're extending, we'll see if the candidates, both Bernie Sanders and Pete Buttigieg last night were saying, let's move on, let's move on. But we'll see if somebody decides they want a count here.

But the issue is, in the two deadlines, because we can -- and I think we can show you some of these examples here. You know, CNN reporting, the New York Times also did an analysis. You had multiple counties reporting different numbers of state delegate in equivalents than they were supposed to have in their precincts. They have awarded more delegates than they were supposed to allot. In some precincts, the total vote numbers in the final round were higher than in the first round. But the process says once the voting starts, you can't have new people come in, so how could the numbers go up? The numbers are supposed to be static or conceivably some people might leave if their candidates not viable.

So, A, it's a mess, and now they're extending the analysis of the mess, I guess a few more days to what end?

JACKIE KUCINICH, CNN POLITICAL ANALYST: I mean, if you're one of the candidates, if you're -- so, Biden and Buttigieg have both said, like OK, high five, everybody, we both won and are moving on depending on what camp you're a part of. If you're one of the candidates that did now win, why in the world would you want to relive this? You know, the Biden campaign, why would you want a reminder? If you're the Warren campaign, why would you want to come out in theory where you ended up or worse?

So, it just seems unlikely like to what end would --

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Yes, what do you have to gain --

KUCINICH: What are you going to gain from this at the end of the day? A delegate, maybe less? But you have to wonder with this caucus process, because these aren't trained political operatives who are conducting these caucuses. They're just normal people, normal voters.

Going back, how many inconsistencies were there, because we've never really, really took a forensic look at the caucus process. So you have to wonder how common this actually was looking back even at previous caucuses.

KING: Right. And if you listen to the chairman of the National Democratic Committee which -- the Democratic National Committee, they don't have anything to do with this, they say. Number one, he says, don't blame me. And number two, it seems pretty clear, if he gets to vote, Iowa is not there next -- in four years.

(BEGIN VIDEO CLIP)

TOM PEREZ, DNC CHAIRMAN: What happened was unacceptable. The Iowa party acknowledged that they fell short, the chair apologized. We have to have a broader conversation about caucuses because there's no doubt about it that what happened here was unacceptable.

JOHN BERMAN, CNN HOST: How much of this was on you, Chairman?

PEREZ: Well, again, the Iowa Democratic Party runs the caucus, OK? And what happened was unacceptable.

[12:45:08]

At the same time, we went -- we came in there, we want to make sure that everything is right.

(END VIDEO CLIP)

KING: The buck does not stop in Washington is what Tom Perez is trying to say there. And look, he's in a tough spot. But you heard the president again this morning saying they can't count votes and they want to take over your health care. It's tee-ball for the Republicans.

TOLUSE OLORUNNIPA, CNN POLITICAL ANALYST: Yes, that's an easy message for the Republicans to attack on and saying that the Democrats are not able to even run a caucus, they are not even able to control a very easy process of voting, why should we put them in charge of the government. That is going to be an easy message that as long as they're continuing to talk about Iowa, that Republican message is going to keep going out.

COLLINS: Yes, it's hard to overstate how thrilled the Trump campaign is about this, some Republicans in general, but they are essentially basking in it. If you talk to any of them, this could not have gone better for them to have the impeachment trial over this week and to have this debacle happen that they can point to throughout all of these early states, they can say, look at who you're going to be putting in office with this. So they're really taking advantage of it.

KING: And the Democrats can just hope it's early February, maybe by November this is all forgotten.

Up next for us, he was forced out of his job after publicly disagreeing with the president. Now he's endorsing a Democratic candidate, Michael Bloomberg.

(COMMERCIAL BREAK)

[12:51:08]

KING: Topping our political radar today, the former Republican Congressman Joe Walsh announcing on CNN this morning, he's quitting the presidential race. That, after winning just one percent of the vote in Iowa versus 97 percent for President Trump. Walsh telling CNN's John Berman he's out, but he'll continue to do whatever he can to defeat the president, even if that means supporting a Democrat.

(BEGIN VIDEO CLIP)

JOE WALSH (R-IL), FORMER PRESIDENTIAL CANDIDATE: It's Trump's party, John. It's not a party. It's a cult. He can't be beaten in the Republican primary, so there's no reason for me or any candidate, really, to be in there. The party has become a cult.

(END VIDEO CLIP)

KING: Democratic Presidential Candidate Mike Bloomberg getting a big endorsement today at a campaign event in Virginia, the former Navy secretary and lifelong Republican Richard Spencer. You may remember, Mr. Spencer forced out of his job after criticizing President Trump's intervention in the Navy SEALs war crimes case. Spencer says he's never voted for a Democrat until now.

(BEGIN VIDEO CLIP)

RICHARD SPENCER, FORMER NAVY SECRETARY: I don't care if you're a Republican, you're a Democrat, or independent. If we are to sustain this experiment we call democracy, America needs the best leader available. Mike has a track record, a track record of productivity, a track record as an honest and principled man.

(END VIDEO CLIP)

KING: And as we go to break, remember, a big Democratic debate in New Hampshire tonight. Here's a question, will we have a defining flashback like this from the Republicans in 2016?

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), PRESIDENTIAL CANDIDATE: They memorized 30- second speech where you talk about how great America is at the end of it doesn't solve one problem for one person.

SEN. MARCO RUBIO (R), PRESIDENTIAL CANDIDATE: This notion that Barack Obama doesn't know what he's doing is just not true.

CHRISTIE: There it is.

RUBIO: He knows exactly what he's doing.

CHRISTIE: There it is. The memorized 25-second speech.

RUBIO: Oh, that's the reason why this campaign is so important.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[12:57:25]

KING: Just hours away from the last Democratic debate up in New Hampshire. We talked about that. The primary is Tuesday. This is the last weekend for the candidates also to be on television.

An interesting switch from Joe Biden, his ads have been focusing mostly on, I can beat Trump, I'm electable. A switch to something more personal.

(BEGIN VIDEO CLIP)

JOE BIDEN (D-DE), PRESIDENTIAL CANDIDATE: I was sworn in to the United States Senate next to a hospital bed. My wife and daughter have been killed in a car crash. And lying in that bedroom, my two surviving little boys. Forty years later, one of those little boys, my son Beau, was diagnosed with terminal cancer and given only months to live. Health care is personal to me. ObamaCare is personal to me.

(END VIDEO CLIP)

KING: More of A personal story, you bring Obama in. For a guy who's been having trouble making a connection with voters even though he's so well known.

OLORUNNIPA: Yes. He has tried different messages, the electability message, the I can take on Trump, I can heal the country message. It seems like going back to the biography personal story and something that he's trying now that he had a struggle in the first race in Iowa where all of those messages didn't seem to propel him to the top of the pack. So, he's going back to something that's worked for him in the past in terms of showing his personal story. We'll have to see if it works in New Hampshire.

KING: We're waiting to see if this Bloomberg strategy works. A guy who spent $300 million already of his own money. He's waiting, he's not in the first four contest.

There is another billionaire in the Democratic race, Tom Steyer who spent a lot of money. This ad is interesting, directly going after two of the guys way above him in the polls.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We simply can afford to nominate another insider or an untested newcomer who doesn't have the experience to beat Trump on the economy.

TOM STEYER (D), PRESIDENTIAL CANDIDATE: He's running on the idea that Democrats can't grow an economy, are a bunch of socialists --

(END VIDEO CLIP)

KING: He goes after three. He goes after Biden, Buttigieg, and Bernie Sanders there.

KUCINICH: Wait, what experience in government does Tom Steyer have to be calling Pete Buttigieg? He's someone who doesn't have any experience. That's the first thing that stand out to me. But again, this is one of these, OK, to what end. Because it's not like --

KING: If anyone else is nominated, he's not getting an invitation to the convention.

KUCINICH: There is that.

KING: And one more quick one. Amy Klobuchar, again, fifth in Iowa, hoping for a miracle in New Hampshire.

(BEGIN VIDEO CLIP)

SEN. AMY KLOBUCHAR (D-MN), PRESIDENTIAL CANDIDATE: We have a president who thinks everything is about him. His tweets, his golf courses, his ego. I'll be a president and a commander-in-chief who restores decency in the White House and gets things done.

(END VIDEO CLIP)

KING: On camera there. It's interesting.

KAROUN DEMIRJIAN, CNN POLITICAL ANALYST: I mean, this just kind of (INAUDIBLE) on her face but I don't know about, you know, decency versus Trump, that's what everybody is trying to say in some form or another in that field.

KING: Hoping a final end. We'll see. Thanks for joining us on INSIDE POLITICS. Hope to see you back here up early, get up early with us. I'm going to be your wake-up call, 8 a.m. Sunday.

Don't go anywhere, a busy news day. Brianna Keilar starts right now. Have a great afternoon.

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