Return to Transcripts main page

New Day

U.S. Hiring Slows Sharply; Backlash over Street Racing; Aired 8:30-9a ET

Aired September 02, 2022 - 08:30   ET

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

[08:30:00]

STEFANO POZZEBON, JOURNALIST: The suspect, a 35-year-old Brazilian national, pulled the trigger, pointing the gun just a handful of inches from Cristina Fernandez de Kirchner's face. But for a technical reason that the vice - the president of Argentina said a technical reason that they could not determine, the gun did not trigger. And that, he said, is the only reason why Fernandez de Kirchner is still alive.

But I think this also shows how, in Argentina, tensions -- political tensions are exacerbating. Only last week, on August 23rd, a federal prosecutor asked to sentence Fernandez de Kirchner to 12 years in jail. And that had an enormous protest among her supporters that helped rise the tension in Argentina.

And I think it was striking to hear the message from the Argentina president almost using the same words as U.S. President Joe Biden, saying that democracy is under attack in the country.

John.

JOHN BERMAN, CNN ANCHOR: It is remarkable to see. Terrifying.

Stefano Pozzebon, thank you so much.

So, just in, the August jobs report released seconds ago. We'll give you the numbers, next.

BRIANNA KEILAR, CNN ANCHOR: Plus, street racing in the neighborhood where the "Fast and Furious" movie franchise was filmed, sparking protests in L.A.

(BEGIN VIDEO CLIP)

ANNA MARIE PIERSIMONI, LOST HUSBAND TO STREET RACING: I feel furious. Yes, there's another meaning to that word in the movie "Fast and Furious."

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[08:35:27]

BERMAN: The August jobs report just in. Let's get right to chief business correspondent Christine Romans.

Survey says --

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Survey says still a tight labor market, John. And 315,000 jobs added in the month. Now, that's cooler than the 500,000 the month before, but it's still above trend jobs growth here. And more than economists had been expecting.

We saw a couple of revisions downward in June and July to the tune of about 105,000 overall for those two months. But, overall, in normal times, 250,000 jobs added in a month is a nice strong performance for the labor market. We've been running way above that for some time.

The jobless rate here, important to note, it had been 3.5 percent. It is now 3.7 percent. So, the jobless rate actually went up a little bit. This could be because the labor force participation rate rose. Meaning, more people are out there considering themselves in the labor market trying to find a job that can sometimes nudge up that unemployment rate. Of 3.5 percent, the number we had last month had been just about matching the lowest since the Nixon administration.

So, what does this mean for the Federal Reserve? I think that's the biggest question we've all been asking. A really super red hot jobs number would have been concerning for those of us watching the Fed and wondering how the Fed is going to tame inflation and try to carefully manage a soft landing in this economy. This number shows that jobs growth is still strong, but not quite as strong as it had been in past months. The unemployment rate will continue to watch.

Let me tell you where the jobs growth was. Professional and business services, 68,000 there. Healthcare, 48,000. Retail, 44,000. So, you've got some categories here showing some really strong jobs growth, John.

BERMAN: All right, Christine Romans, stick around. Joining us now as well, CNN business correspondent Rahel Solomon, CNN White House correspondent John Harwood.

Rahel, first to you, jobs reports these days are looked at in different ways, right?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Absolutely.

BERMAN: It's not just, oh, more jobs, very good for the economy. But what are the numbers that jump out to you?

SOLOMON: Well, I think labor force participation was something that I was watching very closely coming into this because there had been so much imbalance in terms of the supply of workers and the demand of workers. So what we had been hoping to see is some people come off the sidelines and return to the workforce to try to create a bit more balance, right? I mean the last time we heard from Chairman Powell, he talked about the fact that the labor market was clearly out of balance, right? That it had strengthened to an unhealthy level we've heard him say. So, we want to see people come in from the sidelines and we're seeing that. Also, one thing that I was watching very closely is wages. Wages, of

course, have a huge sort of implication for inflation. And wages started to moderate. Still increased month over month, but yearly, moderating. And that is a good sign, a more positive sign for the Fed as it tries to fight inflation.

BERMAN: Talk to me more about that, both of you, if you will. If you're looking at this from the Fed's standpoint or from the standpoint of inflation, which is the major concern right now in the economy, what do you see in here that you like or dislike?

ROMANS: well, look, when you're looking at this number, you want to see cooling in job growth. That's actually a good thing. And for some time you've had economists saying, we want to see this start to slow down a little bit because that's going to make it easier for the Fed to manage what's called a soft landing, meaning that you can cool off the economy without throwing it into recession. So, that's one thing you want to watch here.

You know, 315,000, that's a slowing pace. That is a slowing pace of job growth. And that's what you want to see. And that higher unemployment rate, I think Goldman Sachs had forecast 3.4 percent, which would have been the lowest since 1969. That would have been, I think, a warning sign for the Fed. That would have meant you had a lot of people still off the sidelines, not looking for work. You have a still very tight labor market. Companies hungry to find workers. And that's all very inflationary.

BERMAN: And we just saw the Dow Jones futures, the futures up there, which are up, which may be a reaction to some of what you're just saying, the solid but slower and also the wage numbers there, which I know have been of concern.

SOLOMON: For sure. The moderation. And I think what's also very interesting about this report is it was, one, right in line with what most economists were expecting. The expectation was 300,000. This came in at 315. But this is a slowing, a slight cooling, but not a sort of going from, like, the, you know, the hot of summer to the cool of winter.

ROMANS: Yes.

SOLOMON: I mean it is a gradual slowing, which we want to see too. We don't want to see a drastic sort of drop off in job growth, a drastic jump in the unemployment rate. We want to see some easing so the Fed can be a bit more delicate about interest rates, so it can be a little bit more careful about interest rates if it sees a sort of transitioning.

[08:40:00]

BERMAN: Is it fair to say that several months ago that the concern was things were out of control, right? And that some of the reports that have come in over the last, I guess, eight weeks might allow you to interpret it that, well, things may not be where you want them, but they aren't amok anymore. ROMANS: They're not amok. But when you look at the labor market, I

think our headline yesterday for CNN Business called it an inferno, the labor market. I mean you've got 11.2 million open jobs. You have, for every worker, every job seeker, someone looking for a job, there are two open jobs. That's remarkable. We've never really seen anything like that.

You also have - I was just crunching these numbers. You have more than 600,000 fewer people in the labor market today than you did before the -- you have a hole in the job market. The hole in the available number of people at a time when you've had immigration, you know, visa processing has been slower, you've had fewer people coming into the workforce. So there are a bunch of things happening here all at once I think that make it really interesting and unusual to try to look at these numbers.

By the way, economists have been consistently wrong and gobsmacked for about two years about inflation, about the job market, about how the economy is performing coming out of Covid. So, this is another sort of piece of that puzzle.

BERMAN: Yes, not surprising that economic models can't handle something like a global pandemic that they've never seen before.

ROMANS: The pandemic broke all the economic models. It really did.

BERMAN: Brianna.

KEILAR: Yes, here in Washington, of course, the White House, John Harwood, looking at this very carefully. What are they seeing?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, I think what they want, what Jay Powell wants, what President Biden wants, and really what Americans in general want is slow and steady. Of course, we want the maximum number of people employed. Of course, we want their wages to be as high as possible. On the other hand, you don't want inflation out of control, and you want to try to control inflation without crashing the economy.

So, this is a report that suggests that we're slowing down in a constructive way, as Rahel and Christine were just indicating, a little slack in the labor market, labor force participation increasing, the unemployment rate going up. Obviously, that doesn't sound good. But the more -- the less tight the labor market is, the less inflation we're going to get. And it increases the odds that we could achieve that soft landing without a recession.

I would say that the last point that Christine made is the one we can't forget. We need humility here because we've been surprised over and over and over again by different inflection points. But for this moment, not a bad report for the Fed. Not a bad report for the White House.

KEILAR: Yes.

And here in recent months it's been a lot of too much of a good thing. You look at jobs numbers, oh, that's great, they're so high. That's not always the story because of inflation and because the job market almost being too hot.

Would the White House, looking at this, 315,000 jobs, are they happier with that, a steady slowdown, or would they be happier if it were more, like, 200, 150?

HARWOOD: Well, I think they want it headed in that direction. The president's talked, I believe, about getting to a place where you're adding about 150,000 or 200,000 jobs a month. So, the trajectory is down. And those revisions downward also signal that same path. And so you get a little more than 300,000 this month. If it goes lower, and next couple of months, that suggests the Fed may, at some point before too long, be able to temper the interest rate increases, and maybe they could pull off this smooth, soft landing.

KEILAR: Maybe thread that needle, Berman.

HARWOOD: Maybe.

BERMAN: Yes, that's the goal. It's not easy. It's never really been done successfully before.

Any news on sectors, Christine?

ROMANS: So, we saw professional business services. These tend to be higher paid. These are office jobs in law firms and the like. Those were up 68,000. Healthcare up 48,000. And retail up 44,000. The retail sector has been so fascinating. There have been some layoffs in retail, but mostly because of big changes in their inventories, in their strategies, post Covid again. It broke all of the business models. And so retail has really been having some changes here. We'll see how that continues going into the holidays.

One thing I thought was interesting, the number of people teleworking or working from home because of the coronavirus pandemic declined a little bit. So, you can see the work from home fizzle a little bit as more people are headed to the office. That's about 6.5 percent of the workforce are teleworking or working from home because of coronavirus.

SOLOMON: Yes, and I think just to put a fine point on everything, we have the Fed meeting in a few weeks, but we have a CPI reading, a consumer inflation report, in two weeks. So, this job report is going to be sort of taken into consideration at that Fed meeting. But we also have a CPI report, which, by the way, Fed leaders have come out more recently saying that that's more important in terms of what they do in that September meeting. But you get a report like this and maybe you think that the Fed could lean toward half a percent.

[08:45:03]

All eyes now on CPI.

ROMANS: Who knows? The Fed chief talks next week. There's a big important Fed chief speech next week, and also a couple of Fed governors are speaking next week. So I think it will be the quiet Labor Day holiday week where the labor market is still everybody's guessing game at what it means for the Fed and its strategy.

BERMAN: Oh, please, there are no quiet weeks anymore, anywhere, on -

ROMANS: No, they don't exist.

BERMAN: I know you said - did you say the CPI report comes out in two weeks. Any sense of rising, falling? I mean gas prices have continued to come down.

SOLOMON: I think gas prices will still help on that sort of headline, right? We're coming from 8.5 percent yearly last month. So, I think we'll continue to head in that direction.

I think the components, however, under the hood of headline inflation, are still rising. Shelter prices is a huge part of headline CPI, and that doesn't show any signs of indication as rent prices continue to go up. So, perhaps energy should help on the top line, but under the hood it's still looking really hot.

ROMANS: Can I ask you the takeaway for American workers. A lot of people -- we're talking about the Fed and we're talking about the macro economy. But, come one, workers, people, if you are gainfully employed, you like your job and you see leverage, you know, this is still a good economy to be -- there are two jobs for every job seeker. And there also is still a lot of room for the 55 and older, the people, that demographic, haven't really come back to pre-pandemic levels yet. And that may be one of the reasons why we're just so confounded by what's happening in the job market. People with home - you know, with a 401(k) balance and home equity, who are 55, saw the pandemic and they're, like, I'm not ready yet to come back. Maybe those people will -- some of those people will start to inch into the labor market again.

BERMAN: So, 350,000 new jobs added. A good number under any analysis in normal times.

All right, Rahel, Christine, John Harwood in Washington, thank you all so much.

KEILAR: Street racing where the "Fast and Furious" franchise was filmed, it's leaving its mark in one Los Angeles neighborhood, and it's had some deadly consequences.

(COMMERCIAL BREAK)

[08:50:30}

KEILAR: The street racing that was glorified in the "Fast and the Furious" movie franchise now has one California community actually furious. Fans of the movies have been invading the L.A. neighborhood to host illegal street races, and neighborhood residents say they're just fed up.

CNN's Stephanie Elam has more.

(BEGIN VIDEOTAPE) STEPHANIE ELAM, CNN CORRESPONDENT (voice over): From around the globe --

UNIDENTIFIED FEMALE: In the "Fast and Furious" world, Bob's Market is an icon.

ELAM: "Fast and Furious" fans come to this Los Angeles neighborhood to take pictures in front of this shop made famous by the movie franchise.

UNIDENTIFIED MALE: We were here in L.A., so I want to see the market and also the house from "Fast and Furious."

UNIDENTIFIED MALE: It's nice. I mean this is really great.

ELAM: But the movies, known for their fast cars and daring stunts, have left their mark on this neighborhood in another way. The scars of street racing and doughnuts mark the intersection where so-called takeovers, similar to these, have invaded the neighborhood.

BELLA, ANGELENO HEIGHTS RESIDENT: They're coming around drifting, doing doughnuts, spinning around like crazy with their mufflers sounding like explosions.

ELAM: For the people who live here --

BELLA: The smoke that it leaves behind from the tires burning, it lingers. It doesn't go away.

ELAM: It's more than a nuisance.

UNIDENTIFIED FEMALE: You hear these, like, screeches, and it happens until the cops come.

ELAM: It's dangerous and illegal. Takeovers like these happening at all hours of the day.

BELLA: You're putting our lives at risk. You're putting our neighborhood at risk. They don't stop at the stop signs anymore.

ELAM: Across the country, drivers are taking over streets, racing, doing doughnuts and burnouts.

Just in the last week, an entire block was damaged by out of control cars in Des Moines. Police in Salt Lake City arrested six people for illegally racing. Another blocked police from getting to a shooting in Portland, Oregon. Chandler, Arizona, police say an illegal drag race left one driver dead. Near Chicago, a pedestrian was struck and killed. A city alderman saying higher fines and impounding vehicles has little effect.

BYRON SIGCHO-LOPEZ, CHICAGO ALDERMAN: We see it, these incidents, not stopping. They haven't stopped. If anything, they've gotten worse and worse.

ELAM: Rumble strips in Compton, California, did little to slow down the takeovers.

Fed up residents in L.A. taking to the streets in protest.

ANNA MARIE PIERSIMONI, LOST HUSBAND TO STREET RACING: That's Larry and that's Larry.

ELAM: Anna Marie Piersimoni is one of them. She lost Larry Brooks, her husband of more than 30 years, when he went out for some exercise and never came home.

PIERSIMONI: The driver revved his car to 90, spun out, lost control. He hit my husband and six other cars. My husband had ten minutes to live after that. It's called vehicular manslaughter. But it was murder.

ELAM: She and others are calling for a disclaimer to be added to the "Fast and Furious" films, convinced they glamorize street racing.

Universal Pictures did not return our request for comment.

PIERSIMONI: I feel furious. Yes, there's another meaning to that word than the movie "Fast and Furious."

LILI TRUJILLO PUCKETT, FOUNDER, STREET RACING KILLS: You can go to jail. You can kill someone. You can injure yourself.

ELAM: Lili Trujillo Puckett started the non-profit Street Racing Kills after her 16-year-old daughter Valentina was killed in 2013. Now Puckett mentors street racers who have been punished by the courts.

PUCKETT: Having your whole dreams and your life is gone away for 40 years. And you're going to have the other party telling you this is what you took away from us.

ELAM: Her message not heard nearly enough, she says, lost in a haze of burning rubber, and roaring engines.

Stephanie Elam, CNN, Los Angeles.

(END VIDEOTAPE)

KEILAR: Just the ramifications and the losses of those families are so - it's so terrible and hard to hear. It's -- everyone thinks it's sort of fun and games, you see, and then you see what some people are paying the price for.

BERMAN: It makes you look at the movies a different way. I've seen all of them, but I haven't quite thought of it like that before.

KEILAR: Yes, I hadn't either.

Later today, two former Trump White House lawyers will appear before the January 6th grand jury.

(COMMERCIAL BREAK)

[08:58:50]

BERMAN: As the pandemic caused many restaurants to shutter and workers to go without paychecks, this CNN hero refused to let her community go hungry. Even though Chef Kim Calichio was also out of work, she continued doing what she does best.

(BEGIN VIDEO CLIP)

KIM CALICHIO, CNN HERO: I had a choice to either sit here in my house and be overwhelmed, or I can do whatever it is that I could possibly do, without thinking about whether it's going to work or not.

We're going to two apples, the bunch of bananas, two tomatoes.

We started a Go Fund Me to direct deliver groceries to families across Queens.

Great. And then these guys.

And within a week we raised $10,000. We thought the pandemic was going to be over in two weeks. So we were, like, we'll spend this ten grand and then we'll go back to work. And that never happened.

The first week we delivered 25 grocery packages to 25 families. And within a month's time we were delivering 400 to 500 groceries to families every single week.

(END VIDEO CLIP)

BERMAN: So, to see Kim's operation, or see her operation in action, go to cnnheroes.com.

Like we see so many cases in heroes, it's adversity that leads to innovation.

[09:00:02]

And it's so interesting to see things that were created during the pandemic to respond to unprecedented circumstances, they're finding ways to continue them on.

KEILAR: Yes, that's what got families through the pandemic, and is still getting families through. It's beautiful.

BERMAN: All right, another busy day. CNN's coverage continues right now.