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Unemployment Rate Hits Four-Year High As Economy Stumbles; Job Growth Turned Negative In June For First Time Since Dec. 2020; Manufacturing Industry Lost 12,000 Jobs In August; Trump Seeks More Control Over Historically Independent Fed; Trump Passes Kennedy As Some In GOP Seem To Grow Weary On Him; Trump On RFK Jr.: "I Like The Fact That He's Different". Aired 12-12:30p ET

Aired September 05, 2025 - 12:00   ET

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

[12:00:00]

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DANA BASH, CNN HOST, INSIDE POLITICS: Today on Inside Politics, economic storm clouds. The White House is trying to downplay a dismal jobs report showing unemployment at a four-year high, amid growing political fears. The economy is running out of gas on Trump's watch.

Plus, what's old is new again. The president is rewinding the Pentagon back to 1947, signing an executive order to change the Department of Defense to the Department of War. What's the strategy behind the name game? And from billionaire to trillionaire. Elon Musk may be getting a new first of its kind title, as his massive Tesla package highlights the United States' growing wealth gap.

I'm Dana Bash. Let's go behind the headlines at Inside Politics.

The Trump economy is sputtering. We learned this morning that job growth in the past three months has all but ended. There were just 22,000 new jobs created last month. And new revised data showed the economy actually lost jobs in June. The first time that's happened since President Trump's first term, back when most of us were still in isolation during covid. And unemployment ticked up to 4.3 percent, the highest in nearly four years.

An economy that's stalling out is bad news for any president, but particularly for one who got back into the White House in large part because of what voters saw as his economic acumen. When President Trump didn't like last month's jobs report, he fired the head of the agency that compiles it. This morning, he placed the blame on his economic nemesis, the Fed chair, Jerome Powell. Jerome too late, Powell should have lowered rates long ago. As usual, he's too late.

I'm joined by a terrific group of reporters here, Anne Marie Horton of Bloomberg, CNN's Matt Egan, Abby Livingston of Puck, and Astead Herndon of The New York Times. Matt, take us through some of the numbers and what they mean.

MATT EGAN, CNN SENIOR REPORTER: Yeah, Dana. Look, this was another brutal jobs' report, and this really suggests that after years of historic resilience, the job market is facing some serious trouble right now. I mean, hiring has basically stalled out to almost nothing, right? Just 22,000 jobs added during the month of August. That is a fraction of what economists were expecting.

It's crazy to think that, not even a year ago, back in December, the economy was adding 300 plus 1000 jobs. Now we're what, not even 10 percent of that. And as you noted, we saw that June was revised lower to show that for the first time since covid the U.S. economy actually lost jobs. So that ends this nearly five-year streak of uninterrupted job growth. That was the second longest streak in American history. It's now over.

And then the unemployment rate, so you mentioned that ticking up from 4.2 percent to 4.3 percent, that's not high per se, but it is the highest since late 2021. And Fed Chair Powell, he has said that that's the number one indicator that he's looking at for evidence of weakness in this job market.

I think that we shouldn't rule out the possibility that this is just a slow patch and the economy can rebound from here, right? I mean, job markets been so resilient for so long, but clearly this is another major challenge, and the warning signs of the economy are really piling up.

BASH: Yeah. Stand by, because I do want to get back to what you just mentioned on the Fed and interest rates. Astead, let's talk politics. And I mean, yes, the president likes to say that immigration was a big issue. I'm sure it was, the culture wars, definitely. But we know the biggest reason, and it was the fact that people were hearing from President Biden that the numbers are good. And let's just wait. But people didn't feel that way. Now it's the numbers that aren't looking good either.

ASTEAD HERNDON, NATIONAL POLITICAL REPORTER, THE NEW YORK TIMES: Exactly. It's a mirror image from kind of 2021 when we had Democrats at that time, kind of telling people, don't look at the numbers, don't kind of believe what's in front of you, you kind of hear that from Trump.

Now this is what we had kind of warned about all through the summer, the prospect that his kind of self-imposed economic crisis, tariffs driving that could pose not just uncertainty, but the downward job market, and really reverse what has been Trump's number one strength coming into this. But I also think, you got to add in the big, beautiful bill with this right, that speaks to, I think, is a kind of hypocrisy at the heart of Trump's second term.

[12:05:00]

For all the talk about his growth among working class voters, his growth among working class voters of color. What we have seen in terms of economic reality here is a bill that largely amounts to a wealth transfer, a removal of benefits from SNAP and Medicaid. And I think that's the reason why you see some of those poll numbers, particularly on the economy, reversing among the very groups that deliver trump the White House last year. BASH: Abby?

ABBY LIVINGSTON, CONGRESSIONAL CORRESPONDENT, PUCK: You know, Trump immediately pivoted to the Fed and Jerome Powell. But when I talk to Republican sources, they're all worried about tariffs, and the full brunt of that has not been felt yet. Some say we may not feel that. But politically speaking, the question I have is, does this impact the gubernatorial elections in November in New Jersey and Virginia? But moreover, when does this hit next year? If it does, and how does that affect the midterms?

BASH: And you know, there was such hullabaloo to use a word that probably shouldn't be used very much. Anne Marie over the fact that the last time, last month when the jobs' report came out and the president wasn't happy about it. He got rid of the head of the Bureau of Labor Statistics that compiles them.

And so, the commerce secretary was on this morning, interestingly, before we all knew what the jobs numbers were, and was once again going after BLS, even though the guy that they removed was, is no longer there.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, COMMERCE SECRETARY: They just bent against the president's success. They're rooting against America and against Donald Trump, and that's got to end. So, he can't replace somebody, you know, two weeks ago, and you expect fundamental change, but what you will get is an agency that's on side.

(END VIDEO CLIP)

ANNE MARIE HORTON, CHIEF POLITICAL CORRESPONDENT, BLOOMBERG TELEVISION: Well, there isn't fundamental change yet. At BLS, the commissioner actually doesn't even have control over the data. The data is collected by statisticians. They sit in different uses. They're almost walled off. And then once the press release is written, it's sent to the commissioner, and the commissioner then sends it off to the White House and the CAA -- CA.

The one issue that Wall Street has in terms of credibility, and this is the gold standard. The jobs report -- the U.S. jobs report is the gold standards of economic data. The one issue that Wall Street has is the fact that when you go out and these statisticians are looking for these surveys, the response rate has been so low for months.

That is why we saw massive revisions last year. That is why we are seeing massive revisions now, to this point where June actually have a negative print, negative 13,000 that is a huge deal for this economy and for this Federal Reserve. So, the problem is, is that they're not getting 100 percent of the data when that first print comes out. And this is why you have those revisions.

When you talk about though, the new BLS commissioner, I think only this week, his nomination was sent to the Hill. He hasn't even had a hearing yet, and many are still questioning, actually, if he's going to be able to get through Senate confirmation.

BASH: Right, exactly. And then there's all of that, but then there's the underlying argument that you're still hearing from the administration, which is to blame the people who are compiling the numbers as opposed to the actual policies, or maybe it's just the pendulum of the economy.

EGAN: Yeah. The argument there, you know, it's an interesting one. It would kind of be like if you had an NFL owner, right, whose team just lost big, and instead of changing the quarterback or the play calling or firing the head coach, they go out and fire the scoreboard operator, right? I mean, you might not like the score, but there's probably some bigger issues out there, and shooting the messengers is probably not going to fix anything.

But to get back to -- something we were discussing earlier about the self-imposed nature of some of this. Let's look at manufacturing, right? So, tariffs. They're supposed to be propping up manufacturing. And what we're actually seeing is that U.S. manufacturing lost another 12,000 jobs in August. This is not an anomaly. It's a fourth straight month of job loss. It's kind of ironic here, because obviously, historically high tariffs are supposed to make American manufacturing jobs great again.

And I think at best, we're seeing that's off to a very slow start. But at worst, economists are telling me that all of this chaos on the trade front, the tariffs are up and down. They're paused. They're restarted. It's just paralyzing manufacturers, and some of them are shedding jobs. They're cutting workers instead of adding them.

HORTON: Well, that's why we don't know if this is a real weakening or an inflection point. Corporate America has been really consistent until they get certainty of policy out of Washington, the one big, beautiful bill, tariffs. What are those actual rates going to be? They're basically sitting on the sidelines. They're not hiring, they're not firing. A lot of economists will say corporate America is in place of stasis.

Now that there's clarity, what the hope from this administration is, is that they will actually go out and hire people, because they have clarity in terms of what the rates are likely going to be. Most countries are not going to get one 15 percent. So, that might be a signal for corporate America to actually go out and hiring, but we don't know yet. That's why the second half of this year, especially going to the midterms next year, is going to be so important.

BASH: Yeah, no question. You were talking about -- one of you, maybe both of you, were talking about the president's approval rating on the economy. Let's just take a look at it. The difference between January, when he became president officially, when he was inaugurated, he was up six on this issue of the economy. Now, this is only eight months later, down 18. That's a pretty big fall.

[12:10:00]

HERNDON: It's a huge fall, and it is, I think, what is driving some of the Republican concern, shaping next year's midterms. But I also think, you know, usually we get to this point in politics, and we ask the question of, who will be blame? Who will voters blame?

I think Trump's actually taking care of that question for us, because he made such a show about tariffs. He made such a kind of stamp of -- to make this his own economy. That I think at this point, when you still hear White House officials trying to blame Biden or years past, it sounds kind of ridiculous. They have actually ensured that voters entitled whatever comes next to their own policy. And I think that's fair, because, as we said, the self-imposed nature of it all.

BASH: I don't want to lose sight of the interest rates and the Fed of it all --

HORTON: Too late.

BASH: And -- right. And this is what our colleague Allison Morrow wrote this morning. The Trump administration attempts to wrest control of the Fed by firing Cook without due process and installing Miran, the rare economist who's criticized Fed independence, could satisfy the president's short-term needs. However, it's all but guaranteed to end badly for the economy if the Fed can't be trusted to protect Americans from runaway inflation or mass unemployment.

Fun fact from our producer, Courtney Flantzer, did you guys probably know this in your, you know, think about this in your sleep. In 1970, Richard Nixon appointed a friend and advisor, Arthur Burns, to be Fed chair. And he also was working on Nixon's reelection campaign, and the economy didn't recover for years.

EGAN: Yeah. That's when we had the great stagflation.

BASH: Yeah.

EGAN: And I think that's a really important lesson here. I mean, we talk about Fed independence. I know it sounds kind of wonky in the weeds, but it matters, because if the Fed loses control of inflation, then the cost-of-living problem that helped get President Trump elected in the first place is only going to get worse.

And investors, if they lose confidence that the Fed really means business when it comes to inflation, then you're going to see long- term interest rates go higher and higher. That's going to make it more expensive for the government to borrow, and it's going to lift mortgage rates, right, making it even harder to buy a home.

BASH: And yet, real quick. Wall Street so far is not reacting negatively, probably because they think that this jobs report shows that the Fed will reduce rates.

HORTON: Right. And pretty much, it cemented that. I think actually, the debate on Wall Street is not just that they're going to reduce rates, but do they actually go for potentially a jumbo rate cut of 50 basis points. But earlier this month, the treasury secretary told me on Bloomberg Surveillance, that's what he would like to see. But this is the double-edged sword this administration has. They're getting what they want out of the Fed, but because of a weak labor market, not because inflation is coming down. It's because the weakness in the job market that is opening this door for the Fed to walk through and cut interest rates.

BASH: Fascinating, fascinating, and very important morning. Thank you all. Don't go anywhere. Coming up. Robert Kennedy Jr.'s aggressive Senate testimony raises alarms even among some Republicans in Congress. But probably no surprise, it scored him some points with his boss. Stay with us.

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[12:15:00]

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BASH: For three hours yesterday, Health and Human Services Secretary, Robert F. Kennedy Jr., aggressively tore into many of the senators asking oversight questions, part of the checks and balances process in America. Many of the senators gave it right back. It repeatedly devolved into screaming matches. Kennedy clashing with every Democrat and even some Republicans who were asking about his leadership and his position on vaccines and the firings at the CDC.

Most importantly, it left Americans and their physicians even more confused about what the country's healthcare policies really are right now, especially on vaccines, not vaccine mandates, but vaccine accessibility. Now, in the end, the top Republicans, two of them in the Senate, said that Kennedy's future at HHS wasn't up to them.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Do you have confidence in them, Senator?

UNIDENTIFIED MALE: Is there a reason to that answer.

SEN. JOHN BARRASSO (R-WY): I have confidence in what the president of the United States is doing, and I will not second guess.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT (voiceover): Do you have a full confidence in RFK Jr. as health secretary?

SEN. JOHN THUNE (R-SD) (voiceover): Well, it's not exactly what I think. What I think it's the president ultimately to whom he answers, so if the president has confidence in him.

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BASH: President Trump made clear, Kennedy is not going anywhere.

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DONALD TRUMP, PRESIDENT OF UNITED STATES OF AMERICA: He's got a different take, and we want to listen to all of those takes. But I heard he did very well today. I like the fact that he's different.

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BASH: My panel is back, and CNN's Gloria Pazmino is joining us at the table. Nice to see you. Abby, I want to start with what -- actually, what the Republicans are saying. And you saw John Barrasso, who is not only the number two Senate Republican, he's also a doctor, a medical doctor.

There he was getting in the elevator, and he said, it's up to the president. I'll tell him what to do. In his questioning of Kennedy during the hearing yesterday, he -- there was a tell, I'll just leave it there. Listen?

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BARRASSO: Secretary Kennedy, in your confirmation hearings, you promised to uphold the highest standards for vaccines. Since then, I've grown deeply concerned. The public has seen measles outbreaks. Leadership in the National Institute of Health questioning the use of mRNA vaccines, the recently confirmed director of Centers for Disease Control and Prevention fired. Americans don't know who to rely on.

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[12:20:00]

BASH: And just to underscore. He is as loyal to Trump as they come, and he is looking at his HHS secretary saying, I am concerned.

LIVINGSTON: I got texts from some of the old school type Republicans who were cheering him on and saying, that's our voice. And I thought it was interesting. Also, Senator Cassidy seemed to try to set up RFK in the context of the vaccine being Trump's greatest achievement in the first term and undermining that, and it seemed to be sending a message to the president.

But at the same time, they have no power in this situation. Their power -- unless they wanted to impeach, which I doubt they will do. Their power was in January when they confirmed this was not a shocker. Caroline Kennedy is one of the most famous Americans, and a relative of RFK Jr., said, he is not an honest broker, and they went ahead and confirmed him.

HERNDON: Yeah. I mean, I think the war defense RFK have been there completely, but Donald Trump did this one purpose. You know, Donald Trump made a fairly unholy alliance with RFK Jr. and with his MAHA movement. And I think specifically, because I remember being at those rallies when Trump used to tout his vaccines of the first term, he would get booed from the crowd. It was one of the rare points of disagreement.

BASH: Astead, I'm glad you brought that up. We have one of those moments. This is from Alabama in August of 2021.

(BEGIN VIDEO CLIP) TRUMP: I believe totally in your freedoms. I do agree you got to do what you have to do, but I recommend take the vaccines. I did it. It's good. Take the vaccines, but you got no, that's OK. That's all right. You've got your freedoms.

(END VIDEO CLIP)

BASH: Go ahead.

HERNDON: It's a very important transition from Trump one the Trump two, and you could see it happening on the trail. By the end, when we get closer to 2024, he's brought in a lot of those disaffected Democrats, those independents who aligned with RFK. And I think, really speak to how the pandemic really broke a lot of institutions and belief in kind of baseline facts.

RFK is someone who has a political base of support that Donald Trump understands, and that's why he comes to those Senate hearings, looking to pick a fight. Yeah. Adam (Ph) on the podcast, he comes ready to fight because he wants those and he knows his supporters will back.

BASH: Yeah, absolutely. You mentioned RFK and what people think of him. This is the approval rating. This is the CBS/YouGov poll, just a couple of days ago that came out. RFK, approval rating is 45 percent, disapproval 40, excuse me, 55 percent. He is underwater, as they say, but he is -- we have that number. There you go.

You see, he's underwater, but he's less underwater than most of the other cabinet secretaries, and then his boss, the president of the United States.

HORTON: Well, I think this could actually be a midterm issue because Fabrizio Ward did polling and was circulating it to Republican senators ahead of this hearing. And when they went out and even looked at individuals who voted for Trump, 22 percent said, they didn't want to see mandates, didn't want to maybe take -- even go out and take another covid 19 vaccine, but hepatitis needles, that number skyrocketed to 60, 70 percent of Trump voters who want those vaccines.

So, the messaging from the White House, I think needs to be clearer, potentially, than what we heard from the president last night. And I was really struck with the president said last night because he said he didn't see it. He has a different way of thinking. And who was he sitting next to?

One person away, sitting next to his wife, the First Lady, Melania Trump, was none other than Bill Gates, an individual who I'm sure had a lot to say to the president about vaccines, someone who has spent billions of dollars, not just in the United States, but around the world to develop vaccines and immunize people. So, I think this is going to be one of those tight ropes they're going to have to walk into the midterms next year.

BASH: And he has become, you know, far better than I, part of the like, conspiracy underworld that he is somehow involved in because he vaccinates, you know, hurting people, which, obviously there's absolutely no -- no proof, no truth to that --

HORTON: But he was sitting next to the president.

BASH: But he was sitting next to the president, which I'm sure, you know, people who --

HORTON: It's balancing in that word science, techier word, than the MAHA world.

(Crosstalk)

BASH: Yeah. Gloria?

GLORIA PAZMINO, CNN CORRESPONDENT: Yeah. But I think also, one thing what we saw during that hearing is so much of what appeals to President Trump, right? The brashness, the showmanship of it all, even the rudeness at one point. And you heard what he said, I like him because he's different. And the secretary went in there and went toe- to-toe with some of these lawmakers.

We're also seeing how some Democrats, including governors, are trying to respond to this here in New York. The governor announced today that she is going to sign an executive order to allow pharmacies to vaccinate people who want to be vaccinated. So, you could see how Democrats, maybe not so much, the ones in Congress, certainly at the governor's level in Massachusetts, I believe, they're trying to do the same thing, trying to respond to these things.

[12:25:00]

HERNDON: I'd say one thing. I think that, you know, one of the reasons that RFK Jr. appeals to this new version of Trump is also one of the reasons the Epstein files of it all hurts him so much this time. Because I think that Trump has really leaned into that anti- establishment, bucking up against the norms and institutions. And in that case, he's someone who's seen this, being on the side of the rich club, not being someone who's leaning into transparency.

And so, you see the positives with kind of RFK, but you also see the negatives when Trump acts as a traditional politician and those types of hypocrisies. I think, I've really hurt him in the second term, and the reasons we're seeing some of those own supporters do a 180.

BASH: Fascinating. That's such a good point. All right, everybody stand by. Coming up, putting the war back in warrior. The big changes headed to the Defense Department, at least the branding. That's next.

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