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American Morning

Labor Secretary Responds to Unemployment Figures

Aired June 01, 2001 - 10:18   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
STEPHEN FRAZIER, CNN ANCHOR: That is how Wall Street's responding to those unemployment figures. Now let's get the reaction from the federal government.

CNN's Jeanne Meserve joins us from Washington with a little bit more analysis.

Jeanne, good morning.

JEANNE MESERVE, CNN CORRESPONDENT: Good morning Stephen.

And joining me is secretary Elaine Chao, the secretary of labor. She joins us this morning from Kansas City.

Secretary Chao, the numbers 4.4 a little lower than had been expected, but still way up from the 3.9 percent rate we saw in September. What's your explanation for where we are?

ELAINE CHAO, LABOR SECRETARY: I think the market expectation was that the unemployment figures were going to be, actually, worse than they are. So obviously we're just pleased to see what seems to be a one-month stabilization of the unemployment numbers. We're hopeful that this will mean that there will be less people going on unemployment rolls, but this is a one-month stabilization figure, so let's see what happens.

Now what's -- the good news, also, is that unemployment rates between -- in the African-American population has dropped. Unemployment rates in the Hispanic-American population, the largest minority population, has also dropped.

But there are darknesses. Most of the job loss continued to be in the manufacturing sector and, in fact, the manufacturing sector has experienced one of the largest job losses ever. So...

MESERVE: Yes, we have seen a drop...

CHAO: ... so it's still a mixed picture in the economy.

MESERVE: It's seen a drop in the manufacturing sector of 124,000 just in that one month; 675,000 since July. What's happening there?

CHAO: Well, I think, clearly, there are mixed signals. We have positive signs and we have negative signs. This a one-month signal, and we need to look at it carefully. Now, the president...

(CROSSTALK)

MESERVE: ... concerned that this weakness in the manufacturing sector could spread to other segments of the economy?

CHAO: No, I don't think so. I've talked a lot about how our economy is undergoing some transformation. We are shifting from a manufacturing-based economy into a service-based economy. And so we're continuing to see losses of jobs in the manufacturing sector. And this, I think, brings in the whole question, the whole issue about workforce development and training that's needed.

And I've established a new office of the 21st century workforce. We are holding a major summit on June 20 to address some of the skills gap issues, the shrinking workforce issues and the changing conditions at the American workplace. These are real issues...

MESERVE: Can we talk for just a moment...

CHAO: Sure.

MESERVE: ... can we talk for just a moment about the Federal Reserve...

CHAO: Yes.

MESERVE: ... do you want to see a further rate reduction on their part? Would that help the unemployment picture?

CHAO: Well, I'm never in a position to advise the Federal Reserve to do anything. I think the chairman is doing a very good job. But the president has just passed his tax bill. He's going to be signing it next week. It's a bill that will give more dollars back into the pockets of Americans; rebate checks should be cut later this year, the fall. And I think that will provide a welcome stimulus to our economy.

Also the president has a new national energy policy, one that has not been -- our nation has not had a national energy policy for the last decade or so. And some of the hardest hit areas, obviously, are in the energy-related areas. And so we would hope that the national -- that the president's national policy plan will also begin to help those in the energy sector as well.

MESERVE: Laboratory Secretary Elaine Chao, thank you so much for joining us this morning from Kansas City.

And now Stephen and Daryn, back to you in Atlanta.

FRAZIER: Jeanne, thanks so much.

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