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Source: Kilmar Abrego Garcia Being Returned To The U.S.; Trump Tells CNN He Is Not Even Thinking About Elon; Russia Hits Ukraine With Massive Aerial Attack; U.S. Economy Adds 139,000 Jobs In May Beats Expectations; U.S. Supreme Court Restores DOGE's Access To Sensitive Social Security Data; Air France-KLM CEO Explains Benefits Of IndiGo Partnership. Aired 4- 5p ET
Aired June 06, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:33]
ANNOUNCER: This is CNN Breaking News.
POLO SANDOVAL, CNN HOST: And good evening from New York.
We begin with breaking news. The Maryland man mistakenly deported to El Salvador earlier this year by the Trump administration, will be returned to
the United States. A law enforcement source now telling CNN that Kilmar Abrego Garcia will be facing federal criminal charges after he arrives in
the United States.
His deportation has become really somewhat of a major controversy for the White House. You recall the Supreme Court even ruling back in April that
the Trump administration had to facilitate his return after being deported, and it was just two months later that Abrego Garcia will be on his way
back. Certainly, not under ideal circumstances.
So, in the next hour, we will be diving deep into what this possibly could mean, especially for Donald Trump's immigration agenda, as this man has
really become a major flashpoint.
Let's go now to the Department of Justice in Washington, D.C., where they are speaking more.
PAM BONDI, U.S. ATTORNEY GENERAL: -- to face justice.
On May 21st, a grand jury in the middle district of Tennessee returned a sealed indictment charging Abrego Garcia with alien smuggling and
conspiracy to commit alien smuggling in violation of Title 8 USC 1324.
We want to thank President Bukele for agreeing to return Abrego Garcia to the United States. Our government presented El Salvador with an arrest
warrant, and they agreed to return him to our country. We are grateful to President Bukele for agreeing to return him to our country, to face these
very serious charges. This is what American justice looks like.
Upon completion of his sentence, we anticipate he will be returned to his home country of El Salvador. The grand jury found that over the past nine
years, Abrego Garcia has played a significant role in an alien smuggling ring. They found this was his full time job, not a contractor.
He was a smuggler of humans and children and women. He made over a hundred trips the grand jury found, smuggling people throughout our country, MS-13
members, violent gang terrorist organization members throughout our country. Thousands of illegal aliens were smuggled.
This is especially disturbing because Abrego Garcia is also alleged with transporting minor children. The defendant traded the innocence of minor
children for profit. There are even more disturbing facts that the grand jury uncovered. It is alleged this defendant is part of the same smuggling
ring responsible for the death of more than 50 migrants in 2021 after the tractor trailer overturned in Mexico. This is part of that same ring.
The defendant abused undocumented alien females, according to co- conspirators, who were under his control while transporting them throughout our country. This defendant trafficked firearms and narcotics throughout
our country on multiple occasions. They were using vehicles, SUVs with added seats in the back, floors that had been ripped out, guns, narcotics,
children, women, MS-13 members, that is what the grand jury found.
A co-conspirator alleged that the defendant solicited nude photographs and videos of a minor. A co-conspirator also alleges the defendant played a
role in the murder of a rival gang member's mother. These facts demonstrate Abrego Garcia is a danger to our community.
We want to thank the Department of Homeland Security, the FBI, our state and local partners, our acting U.S. Attorney Robert McGuire, and
prosecutors from the Joint Task Force Vulcan.
Questions --
[16:05:06]
REPORTER: Attorney General, the traffic stop that we've seen video of from Tennessee, where Abrego Garcia was first identified by the local
authorities. At the time, the Homeland Security Department declined to take custody of him.
What has happened in between that time and in between the time that the government has been arguing that he was not returnable from El Salvador?
What has happened since in this investigation that brought you here?
BONDI: Yes. The question was in 2021, there was the traffic stop and what has changed since then? What has changed is Donald Trump is now President
of the United States, and our borders are again secure.
And thanks to the bright light that has been shined on Abrego Garcia, this investigation continued with actually amazing police work, and we were able
to track this case and stop this international smuggling ring from continuing.
REPORTER: These were recently found facts, right?
BONDI: Yes. Recently found facts.
REPORTER: To that point, can you just explain when this investigation was opened? The investigation in Tennessee? Can you say when that investigation
was opened?
BONDI: Well, the grand jury indicted on May 21st. This investigation has been ongoing.
REPORTER: This case has been hotly debated here in Washington. In your mind, does this resolve that issue in terms of his deportation? And should
this be seen in any way as complying with the judge's order to return him to the U.S. and the Supreme Court, ruling that the U.S. government should
facilitate his return?
TODD BLANCHE, U.S. DEPUTY ATTORNEY GENERAL: Well, there is a big difference between what the state of play was before the indictment and after the
indictment. And so the reason why he is back and was returned was because of an arrest warrant, which was presented to the government in El Salvador.
So, there is a big difference there.
As far as whether it makes the ongoing litigation in Maryland moot, I would think so. But we don't know that, you know, he just landed today.
REPORTER: I just want to confirm what you said earlier that you're intending to prosecute him and keep him in an American prison if he is
found guilty, and then would remove him after his sentence is over.
BONDI: Correct. Yes. He will be prosecuted in our country, sentenced in our country if convicted, and then returned after completion of his sentence.
UNIDENTIFIED MALE: Last one, Sadie, Wall Street Journal.
REPORTER: Okay. I have two, one is on topic, one is off topic. Maybe I misunderstood you, but you were mentioning that he had some involvement in
a murder or was connected to groups that had, you know, involved with this other smuggling ring. But to be clear, the only charges he is facing right
now are the, like, you know, human smuggling charges. That's one offense.
But the other things that you have talked about are not actually in the indictment.
BONDI: No co-conspirators allege that, and we were clear to say that he is charged with it is not only very serious charges of alien smuggling, and
again, there were children involved in that, you know, human trafficking, not only in our country but in our world is very, very real. It is very
dangerous.
And as you saw recently in Virginia, the arrest we made of the MS-13 member, unrelated to this, we learned at that press conference that's where
they bring young children into our country, and they start grooming them at middle school age to become MS-13 full-fledged members, commit violent
crimes throughout our country.
It is highly organized. It is very dangerous and they are living throughout our country. But no more because they are being arrested, they are being
prosecuted and being convicted and deported when appropriate.
That's all for today. Thank you.
SANDOVAL: All right, just finished listening to U.S. Attorney General Pam Bondi in Washington as she brings us up to speed right now on what has been
a recently unsealed indictment against Kilmar Abrego Garcia, the man who lived in Maryland until up to just a few months ago when he was detained by
U.S. authorities and then quickly deported back to his native El Salvador despite several rulings from multiple courts in the United States that he
should be returned.
So now, this Maryland father is now back in the United States, expected to face these charges that were just laid out by the main prosecutor in the
United States.
We do want to go now to Washington -- back out to Washington and my colleague, Jeff Zeleny, who is standing by.
[16:10:02]
Jeff, you and I just listened in to A.G. Bondi. What do you make of this sort of repositioning of the Trump administration in its approach? This is
certainly not the government complying with a previously issued order, but instead actually bringing, as they describe him, a suspected human smuggler
to face charges.
JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, look, first and foremost, Polo, it is something that the White House said would never
happen, the President said would never happen, that Mr. Abrego Garcia would not return to the U.S. He is returned to the U.S.
It sounded at that press conference that he has already landed here. I don't believe that we have confirmed that. But look, so I think a couple of
things, from a political standpoint, it points out that there is no constitutional crisis here. I mean, the administration essentially has
followed the ruling of the Supreme Court here. But to save face, if you will, or perhaps to find an off ramp, if you will, these charges also are
coming with this. So this is a major development, a stunning move in some respects here, and it has been in the works for several weeks, obviously
because the grand jury there in the middle district of Tennessee obviously heard evidence and they offered up the indictment that was unsealed just a
short time ago.
So certainly, a major development, but it is the effectively the Trump administration that wrongfully deported him. They acknowledged that in the
early court hearings and I am just thinking back to when this actually happened, it really shined a light on the President's invoking of the Alien
Enemies Act of 1798, which has only been done three times in American history, always during war times. That's the auspices under which he was
deporting so many to El Salvador.
Of course, many judges have questioned that, that is still pending for a broader decision before the Supreme Court. But at least in this case, it
shows the administration complied, but is also facing new charges for him. So we will see how this plays out in the court system -- Polo.
SANDOVAL: A dramatic shift in the story of Kilmar Abrego Garcia.
Jeff Zeleny in Washington, we appreciate your reporting.
Let's get some analysis now from CNN legal analyst and former U.S. attorney, Michael Moore with me.
Michael, you were listening also to A.G. Pam Bondi.
Your initial reaction as she laid out these charges and really painting Abrego Garcia now as a suspected human smuggler, a charged human smuggler.
MICHAEL MOORE, CNN LEGAL ANALYST: Yes, well, I am glad to be with you.
I mean, this press conference to me, they really needed sort of a rag to get the egg off their face, I think and that's -- they are using this case
for that. For all intents and purposes, to somehow claim that the grand jury has come in now and issued this indictment into what sounds like if
you believe her, some lengthy investigation that went on for some period of time to deal with these organizations and people who may have been
involved, that suddenly now all of a sudden, the case where they are being called to answer, in front of a federal judge that somehow now they have
got this gentleman charged with everything, including the kitchen sink just doesn't seem to pass the sniff test to me.
We will see what the indictment says. And, you know, you have to remember, this is an indictment. It just simply means that there has been usually an
agent has come in and testified before a grand jury that these people, and I think you're likely to see that this is some type of conspiracy allege
that somehow these people agreed to do these things, and we will have to find out whether or not they have the government has the proof to show and
to sustain a conviction on the charges that they've alleged.
But it didn't sound to me when I listened to the findings of the indictment, the true bill of indictment, the charges, it just didn't have
the same type of serious charges that she was trying to tout from the podium.
And so, it is going to be interesting to see exactly what information they had and frankly, to if I was the federal judge in the case who had been
asking the judge, the Department of Justice, for some information about what was going on, and they were sort of doing this in secret and unwilling
to share in camera, was there I would begin to question, to sort of the motives, as they were getting mighty close to contempt issues.
SANDOVAL: Michael, as you said clearly, you haven't seen the indictment, so that is going to certainly be telling here. But do you get a sense that
this administration or the prosecutors here really tried to add more meat on the bone for the grand jury, to your earlier point, even mentioning this
truck accident from 2021 in Mexico, that allegedly is part of the same human smuggling operation that he is alleged to have ties to.
Did you get a sense that they really did sort of try to bolster their case, potentially in front of a grand jury just to get him indicted?
[16:15:01]
MOORE: Or perhaps to include it in the indictment. I mean, we just don't know yet. I mean, I think you have to remember the process in an indictment
and with a grand jury is that, in fact there are a group of citizens, and they do -- they are there in good faith, I believe, to do their job and the
only information they hear is from the government. They only get to hear what the prosecution wants to put before them. They do not hear evidence
from the defendant.
They don't know. They don't hear from a defendant's lawyer to say, wait a minute, my client wasn't even there or whatever the case may be. So their
information is very limited, and the only thing they are deciding, frankly, is, is there enough to go forward? So has the government told me enough to
make me think, well, maybe another jury or trial jury should hear this. So let's move the case forward.
It just -- it almost strikes me as like a little too cute by half that suddenly the government is being called to answer questions by a federal
judge about their failings, to respond and to do anything to get this gentleman back and he has been, you know, he is clearly -- they've told
them -- the judge has said, bring him back, and they said, well, we are not doing that. And now all of a sudden they have an indictment. Lo and behold,
the whole, you know, two countries have worked together to get him back.
Well, the only thing they are bringing him back on is an order for arrest signed by a judge. Well, there was an order signed by a judge saying to
bring him back. In fact, there was a unanimous Supreme Court decision talking about facilitating. So these are things that are -- you know, this
is the kind of thing that that can be troubling as you think about what actual evidence is there?
Look, if he did a half the things that she laid out from the podium, if they can actually prove beyond a reasonable doubt that he did those things,
and I would think that the federal prison system is a good place for him to spend some time, but that remains to be seen and it just felt like when she
was, you know, throwing in information about what co-conspirators have said this, co-conspirators have said that. Well, why isn't that in the
indictment. Why isn't that included in the indictment?
So that to me is something that the department is going to have to explain later on. And I am sure the case will go forward, there will be some
questions raised by the federal court, too, as he looks into, you know, what was going on with this defendant. The judge is looking into that.
SANDOVAL: And the Attorney General said if Kilmar Abrego Garcia is found guilty, then he would be certainly convicted and then serve time in the
United States and then be released.
But the other question that wasn't asked there, well, what if he is found not guilty? Then that certainly is going to place the administration in a
very tough spot as well to see what they would do to this individual.
MOORE: Right, and trials take a long time. Criminal prosecutions take a long time, you know, so we will see.
SANDOVAL: Michael Moore, so lucky to have your analysis on board in what is a breaking, developing story. We are going to have much more on this.
Michael, thank you for your time, by the way. Really appreciate you.
MOORE: Glad to be with you.
SANDOVAL: Yes, we are going to have much more also on the Elon Musk-Donald Trump rift right after this.
(COMMERCIAL BREAK)
[16:20:27]
SANDOVAL: And welcome back to QUEST MEANS BUSINESS.
Still, there are no signs of the U.S. President and the world's richest man mending their explosive rift. Donald Trump told CNN's Dana Bash that he
will not be speaking with Elon Musk anytime soon, saying that he is "not even thinking about Elon."
Well, meanwhile, allies of both men, they are trying to defuse the tensions after they traded bitter accusations against each other on social media on
Thursday.
Meanwhile, Tesla stock you can see here rising even higher today and it closed nearly four percent higher, recovering some of their losses from
Thursday. Get this, $152 billion in losses after that feud broke out on Thursday.
Let's head now to London and our Anna Stewart for more on what's happening right now.
Anna, with today's gains, do you think that there is some of these Tesla investors that may have looked past this ongoing Trump-Musk feud?
ANNA STEWART, CNN REPORTER: Well, I think there hasn't been as much escalation as maybe some had worried about overnight, particularly on
social media. There has been a slight softening there, but we are not seeing a full recovery.
You said it, $150 billion wiped off the market cap yesterday, and that hasn't completely recovered. It is actually $34 billion yesterday, just of
Elon Musk's net worth, so this is a very costly feud and it was always going to be, wasn't it, when we had one of the most powerful men in the
world having a sort of complete breakup of the bromance with the world's richest man. This was always going to be spectacularly expensive.
Now, it is expensive in terms of the share price of Tesla, for instance. And there is, of course, the real impact that we could see if the E.V. tax
credit is removed. JPMorgan analysts put that at maybe a $3 billion price tag for Tesla, but also, if this rift were to escalate, there could be big,
big, more costlier issues for Elon Musk's Tesla, but also some of his other businesses.
First of all, we've got to think about how many of those companies rely on federal regulation. Tesla, they're trying to, of course, bring self-driving
cars to the masses. Then you can think about a company like Neuralink, which makes PCIs, those are chips that go in human brains. And then you've
got federal contracts, think about SpaceX and how reliant that is on federal contracts.
So lots at stake here, and perhaps that is why and perhaps the share price falls yesterday, perhaps that's why Musk is easing off the gas a little bit
when it comes to posts on X today.
SANDOVAL: Yes, the race to Mars on the line here, and all of this while we are learning that Trump says that the U.S. and the Chinese officials, that
they plan to meet in the coming weeks, even President Xi saying that he is confident that trade tensions could be resolved.
What else is the White House saying about this this week?
STEWART: Well, it is interesting. We have this post from President Trump saying he is pleased to announce that Secretary of the Treasury Scott
Bessent, also Howard Lutnick, also the U.S. Trade Rep, Ambassador Jamieson Greer that they are all going to be meeting in London this Monday. So we
are waiting to get a few more details on what this meeting will be.
We know, of course, President Xi and President Trump had a call yesterday. It was 90 minutes long. President trump said it was very encouraging, and
actually, during slightly an awkward press conference with the German Chancellor, where he spoke about almost everything you can imagine, from
autopen to trade talks, he did mention that the talks with China had been very good. They've straightened out any complexity. He said, this is very
complex stuff, but we've straightened it out.
Particularly complex is this issue of Chinese rare earth materials and export controls to the U.S., so there is plenty to get into. We will see
how those talks go on Monday.
SANDOVAL: A few clearly spilling into the markets, Anna Stewart, so good to have you. Appreciate you.
All right, as she just mentioned SpaceX, it could also face some consequences from Elon Musk's feud with the President. NASA uses the
aircraft, the Dragon Spacecraft, to send astronauts and equipment to the International Space Station. Musk threatened to decommission it if Trump
retaliates against the company.
Well, important to point out he later walked back those threats. Let's go now to Donald Cohen, who is the founder and executive director of the
research group In The Public Interest. He is also the author of "The Privatization of Everything." And he joins us live.
Good to have you.
DONALD COHEN, FOUNDER AND EXECUTIVE DIRECTOR, IN THE PUBLIC INTEREST: Thanks for having me.
SANDOVAL: So let's start with SpaceX, which is really a big topic of conversation. It is also the heart of the U.S. government's space
ambitions. Keeping all of this in mind, who needs who more when it comes to getting to Mars? Going back to the moon -- which is clearly a goal for
Trump.
COHEN: Well we -- who needs who? That's a good question. So we need to be able -- before you get to the who, we need to get clear about the what.
Okay, so if we've decided that we need to get to Mars, then we need to do it in a way that we have the maximum level of control over the research,
over the science, over the technology, over the mission, right?
[16:25:14]
So we could use contractors, but only if we have locked-tight solid control over them, which is very hard to do and I think what we are Seeing you
know, what hit the news yesterday in you know, somewhat of a cage match, we don't have to get into that, is that when you contract for things, for big
things, you essentially are contractually giving up some control over that thing. And, you know, and so we need to make sure we can get it done.
So I think I would say we don't need them, they need us. But aside the point is we actually need to do it ourselves. NASA has been doing it for
years.
SANDOVAL: Yes, at least there is usually an end in sight for a cage match, so that's perhaps putting it lightly with this ongoing feud and no end in
sight.
David, do you think that NASA has other alternatives to SpaceX to get payloads, to get crews into space? Perhaps Boeing or Bezos' project?
COHEN: Well, you know, you have to ask, this is new contracting over the last few years. How did we do it, you know, ten years ago? How did we do it
15 years ago? They signed contracts to get the technology to then launch the missions. They didn't hire Boeing to launch the missions and to carry
out the missions to deliver the folks at the space station.
They hired Boeing or they hired the, you know, the companies that made the rockets to make them and they had adequate oversight and they had adequate
safety standards, and they had to watch, you know, super carefully. Right?
But the last thing you want to do is give them the ability to control the mission. That's the problem that we are seeing here.
SANDOVAL: How closely do you think on the question of Jeff Bezos and his Blue Origin project, how closely is he watching all of this? Could his --
could all of these developments actually perhaps even benefit him if SpaceX and the government continues to or potentially loosen ties?
COHEN: Well, I am sure he is watching incredibly closely. You have to remember people who, you know, cover -- people and companies that provide,
that do things are looking for ways to sell those things and there is not that many space companies that do what these folks do. If he sees an
opportunity to get some market share, he is absolutely going to do that.
But again, I am also hoping that Boeing does and other companies that do that don't say that they can do the mission, they can just build the
spacecraft. That's really what we need.
SANDOVAL: And can they do it quickly and safely enough is the other question as well.
COHEN: Of course, of course. But we've been here before and we've seen this before. Here is a really important issue that's brought up, when we give
away control of the mission, we don't include redundancy that we need to be able to step in and do the mission. Right? So we put the mission at risk.
So that's what at stake here.
SANDOVAL: Yes, Donald Cohen, always a pleasure to have you. Thank you so much for all of this great insight. Appreciate you time.
COHEN: Yes. Thanks for having me.
SANDOVAL: Much more still on the way, including a new U.S. Jobs Report. It is hinting a steady but cautious labor market in the face of economic
uncertainty. We are going to be talking to a former chief economist with the U.S. Labor Department on the other side of the break.
(COMMERCIAL BREAK)
[16:31:55]
SANDOVAL: Hello again. I'm Polo Sandoval for Richard. There is more QUEST MEANS BUSINESS. In a moment, the U.S. economy added more than 130,000 jobs
in May, we're going to be breaking down on that -- all that latest data for you.
And the Air France-KLM Chief Executive telling Richard Quest exactly what he's expecting this busy summer travel season.
But before that, the headlines this hour. The Maryland man mistakenly deported to El Salvador by the Trump administration has been returned to
the United States. U.S. Attorney General Pam Bondi announcing that Kilmar Abrego Garcia now faces human smuggling charges. His deportation became a
major controversy for the White House earlier this year. The Supreme Court even ruled in April that the Trump administration had to facilitate his
return.
And President Trump says that he will not be speaking to Elon Musk for a while, after an intense public fallout this week. In the most personal
attacks, Musk accuses the U.S. president of being in the Jeffrey Epstein files, at the heart of this feud is Trump's massive tax and domestic policy
bill. Musk calling it a, "Disgusting abomination."
And Ukraine's President Zelenskyy, saying that Russia struck nearly every part of his country overnight, powerful explosions rocked Kyiv, where
officials say that at least four people were killed and also dozens more were injured.
Russia says that it was responding to what it called Ukraine's terrorist attacks. The strikes follow Ukraine's raid on Russian airfields just this
past weekend.
An emotional day on the stand for former girlfriend of Sean Diddy Combs in the rapper's sex trafficking trial in New York City. A woman identified as
Jane has been testifying to sexual encounters between the two. She also described money paid for escorts, hotels as well, along with ongoing drug
use. Sean Combs has pleaded not guilty to charges including sex trafficking and racketeering.
And as we just noted, Russia launched a barrage of drones and ballistic missiles across Ukraine early Friday, at least four people were killed, and
we mentioned dozens of others who were hurt.
Ukrainian President Volodymyr Zelenskyy said that Russia fired more than 400 drones and 400 missiles targeting nearly every part of his country. The
strikes following Kyiv's raid last weekend on Moscow strategic bombers. Let's go now to CNN's Fred Pleitgen which has been monitoring the situation
from Berlin.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): The massive explosions rocked the Kyiv skyline overnight, shaking the Ukrainian
capital as the country endured another night of intense Russian bombardment. Several emergency workers were killed in the capital, and
dozens of civilians were injured across the country.
In Lutsk, Northwest Ukraine, as the sun rose, the missiles fell. Athlete Sofia Rumasyuk (ph), a Ukrainian shot putter, captured the moment of
impact. She and fellow athletes from the Ukrainian national team were visiting the city for a competition when their hotel was hit by a blast.
[16:05:15]
The country has been bracing for Russian retaliation after an audacious strike by the Ukrainian military on airfields deep inside Russia, as
residents in Kyiv picked through the remains of their apartments this morning, many feeling lucky to have survived.
ARTEM, RESIDENT OF DAMAGED APARTMENT (through translator): Usually we stay in the corridor during the attacks and this time my wife also insisted that
we sleep in the corridor, so she saved my life.
PLEITGEN (voice over): It wasn't clear if this was Putin's much anticipated response or just business as usual in Russia's aerial campaign. Russia's
Defense Ministry said it had struck targets in Ukraine in response to what it called Kyiv's, quote, "terrorists act."
Ukrainian President Zelenskyy calling on America and Europe to put more pressure on Russia to end the war, saying, anyone, quote, "giving the war
more time to take lives that is complicity and accountability."
This after President Trump on Thursday compared Russia and Ukraine to children fighting and said it may be better to let them continue for a
while.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Maybe you're going to have to keep fighting and suffering a lot because both sides are suffering before
you pull them apart, before they're able to be pulled apart.
PLEITGEN (voice over): Fred Pleitgen, CNN, Berlin.
(END VIDEOTAPE)
SANDOVAL: Back in the U.S., jobs market seems to be showing signs of cooling down. The economy adding 139,000 jobs last month, and that's more
than some expected. But also a decline from the month before, in April.
The unemployment rate holding steady at 4.2 percent. The Bureau of Labor Statistics says in health care, also leisure hospitality, basically social
services, that's accounting for some of the strongest job gains in these numbers.
Big losses, though, especially happy with the federal government, as we know, especially with those DOGE cuts.
Let's go now to Heidi Shierholz. She is president of the Economic Policy Institute and also former chief economist at the U.S. Department of Labor.
Heidi, it's really good to have you.
HEIDI SHIERHOLZ, PRESIDENT, ECONOMIC POLICY INSTITUTE: Thanks so much for having me.
SANDOVAL: You've gone through these numbers as you do every month, no doubt. You've seen it, overall, pretty good, perhaps, as we mentioned, even
better than some expected in terms of the job gains.
But let's get to the sort of buried headline here, from your expert perspective. Did you see any signs of weaknesses there?
SHIERHOLZ: Yes. OK, so I think of this report is a tale of two surveys. There's more than one survey that comes out every first Friday of every
month, the payroll survey, which is where we saw that we added 139,000 jobs. That's a slowdown from prior months, but it's still pretty solid.
The Household Survey, which is where the unemployment rate comes from, was much weaker. So, the unemployment rate held steady, but that top line
number masked the fact that in that survey, we saw a big decline in employment that didn't show up as increased unemployment, because it had
people dropping out of the labor force altogether.
So, we are seeing this sort of mixed signals, which that could mean that that we are just humming along and things are going to be OK, but it also
could mean that it's the -- you know, a glimpse of what we may see in the future of the -- of the heading towards a weaker economy.
And with the really chaotic policies that are coming out of the administration, I am concerned at this point that it's the latter. Like, we
in the softer data we are seeing, you know, measures of economic policy uncertainty through the roof right now.
And when that happens, when businesses don't have certainty about what's happening, they're not going to invest. You know, and if they back off on
investments, that actually hurts, it's a drag on the economy, will reduce hiring going forward.
SANDOVAL: Yes, I'm so glad you mentioned what is a potential red flag in that household survey and what it tells us.
Now, when you look at the previous job reports, especially when you talk about employment gains. This year, comparing it to what we've seen in the
past, though relatively steady this year, I did see that it's been slower than the last.
So, what's behind this? Is it the economic uncertainty that we've seen the last few months?
SHIERHOLZ: I think that that's right. We are starting -- I mean, one of the things is we -- as you get closer to full employment, you do see job growth
naturally slowing, so there's a piece of that going on.
But when you dig down in the numbers, you also see signs of the policies that are have -- that are coming out of the administration, like the -- in
the private sector, we added 140,000 jobs in May. 145,000 jobs were added in service than the services producing sector. We actually lost jobs in the
goods producing sector, we lost 8,000 jobs in manufacturing, and that could be the early signs of manufacturers feeling the hit from the import taxes
that Trump has put on goods, import taxes, aka tariffs.
[16:40:15]
SANDOVAL: Do you -- and on the issue of tariffs, Heidi, do you -- is there sort of an argument to be made that they could be linked to the increases
and the decrease in some of these sectors, like manufacturing, as you point out, taking a hard hit?
SHIERHOLZ: Yes, I think that's right. I think, you know, it'll -- it remains to be seen. But it could be that we're seeing the first signs of
that really showing up.
Then the other thing that is a dog here, that is -- sorry, I have a dog here that is (INAUDIBLE).
SANDOVAL: I saw him trying to make a cameo, I love it.
SHIERHOLZ: Sorry about that. The other thing that -- yes, I think we are starting to see tariffs here. The other thing that's the impact of some
tariffs here. The other thing that's -- that is -- that is going on that we saw in these data was that the weakness was really kind of across the
board, except in healthcare and hospitality, which both saw strong gains. Everything else was either stagnant or down.
And so, that sort of broad based, except for a couple of sectors like sort of weak showing, that doesn't -- that suggests that we may be seeing just
an overall slowing down. And I think that that is related to the sort of broader policy uncertainty that we're seeing out there.
SANDOVAL: In the last few seconds I have with you, Heidi, expand on that, overall. Today's numbers, do they paint a picture of a resilient market to
you? Do you have faith?
SHIERHOLZ: It is mixed. I -- we came into this like Trump inherited, and it's not a perfect economy, right, but an extremely strong macro economy.
The unemployment rate had been at or below 4.2 percent for 39 months, so any softening that we do see is 100 percent the result of policy choices of
this administration. But we do not yet know if what we're going to see is like ongoing softening, softening, softening, or if this is more like an
economy that's just trudging along, slowing a bit, but trudging along, and that remains to be seen.
I'm concerned, because the red flags that we're seeing in the softer data, consumer sentiment, measures of economic policy, uncertainty, those
measures are really flashing red, but we have not yet seen them throw up -- show up in a really robust way yet in the harder data.
SANDOVAL: Some great analysis coming from Heidi Shierholz, who has to share the screen with a very well behaved dog, I might add.
SHIERHOLZ: Thank you.
SANDOVAL: You both have a wonderful rest of your day. Appreciate your time.
SHIERHOLZ: You too. Cheers.
SANDOVAL: All right, we'll be back with much more after this.
(COMMERCIAL BREAK)
[16:46:05]
SANDOVAL: And some breaking news just into CNN, a critical decision from the U.S. Supreme Court as it has restored the Department of Government
Efficiency's access to sensitive social security data. Of course, that agency, known as DOGE, justice is lifting a lower court ruling that had
blocked access for that agency.
The group saying that it needs the data to root out fraud and modernize its systems. Critics, meanwhile, saying that the effort is a fishing
expedition.
Joan Biskupic has been following this very closely out of Washington. Joan, tell us what this means for the average citizen.
JOAN BISKUPIC, CNN SENIOR SUPREME COURT ANALYST: Sure. Good to see you. There are two big wins for the Trump administration and DOGE, the
Department of Government Efficiency today from the Supreme Court, the first, as you say, lifts a block on DOGE having access to this sensitive
Social Security Administration, which, as you know, includes, you know, not just the social security numbers, but dates of birth, bank account and
numbers, a lot of sensitive information.
And the justices lifted that stage that had been on there, giving DOGE now access. It was the conservative majority that allowed it to go forward. The
three liberal justices, Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson, broke off. And Justice Jackson, in her dissent that was joined by
Justice Sotomayor said the decision will, "Hand DOGE staffers the highly sensitive data of millions of Americans." Obviously, complaining about
that.
But then, separately, today, in another win for DOGE, the justices paused a lawsuit that had been brought by a watchdog organization against the depa -
- DOGE the Department of Government Efficiency saying that it needed access to, you know, exactly who's running it, what's -- what kind of materials
they were gathering from people. And DOGE had said that it was not subject to normal Freedom of Information Act laws. And the justices went ahead and
put a pause on that effort from the watchdog group to start engaging in the legal process of discovery, to get information and to obtain documents.
And again, in that case, also, the three liberal justices broke off. So today, two wins for the Trump administration and two for DOGE, at a time
that President Trump is locked in this very public feud with Elon Musk, who obviously shepherded DOGE.
SANDOVAL: CNN's Joan Biskupic Live in Washington with a critical decision coming out of several critical Supreme Court decisions coming into D.C.
Appreciate your time, Joan.
BISKUPIC: Thank you.
SANDOVAL: All right, so on the way here on QUEST MEANS BUSINESS, summer travel season, it is underway in the Northern Hemisphere. The Air France-
KLM CEO Ben Smith on how bookings are shaping up for the next few months.
(COMMERCIAL BREAK)
[16:51:29]
SANDOVAL: Well, I certainly was watching this week. I know you were too. As airline CEOs throughout the week have said that they have a variety of
concerns about the industry.
Now, they say that demand is mostly holding up despite economic uncertainty, but still, they are facing things like supply chain issues and
also other challenges. Here's some of the highlights from this week.
(BEGIN VIDEO CLIP)
BEN SMITH, CEO, AIR FRANCE- KLM: When I started as a CEO, which is a long time ago, you know, I'd be looking out 12 months, even sometimes 18 months,
to try and figure out what was going on. Now you're looking really at one, two, three months. I don't know of anybody who's sort of trying to predict
what's going to happen in 12 months' time.
SEAN DOYLE, CEO, BRITISH AIRWAYS: We flagged that we did see some softness in the non-premium cabinet of the United States, but what we have seen is
robust demand in premium cabins.
And actually, everything that we see, we show that people from the U.K. and Europe are traveling to the U.S., and you know, that's based on all the
booking data that we have in front of us.
SCOTT KIRBY, CEO UNITED: Newark has been in the news a lot, but the truth is that happens all around the system, and it's indicative of the need to
get back to full staffing and upgrade the infrastructure and the technology and the facilities at the FAA.
TIM CLARK, PRESIDENT, EMIRATES: We have been working on a new economy seat for three years.
RICHARD QUEST, CNN HOST: Tell me more. Tell me more.
CLARK: I know, I can't do that, but I'm well engaged. We know what it is that we need to do with that economy seat.
(END VIDEO CLIP)
SANDOVAL: And that perhaps was one of the biggest teases this week.
Meanwhile, the chief executive of Air France-KLM says that fewer economy travelers are looking to visit the United States.
Ben Smith sitting down with our own Richard Quest this week in New Delhi. Smith said that he has airline -- that his airline has actually lowered
prices to try to keep up with that demand, and he also said that he expects more challenges with the need for more air traffic controllers.
(BEGIN VIDEO CLIP)
SMITH: France has had a lot of experience with disruptions, with ATC, so it's not new to us. We don't expect anything better. We have been putting a
little bit more slack in the schedule so that we can recoup if we've got delays that were unexpected.
But it's -- I think, of all the countries in the world that have had to dealt with -- deal with ATC disruptions, I think we're number one.
QUEST: What are you seeing in terms of the forward bookings now, particularly, I'm thinking for the United States?
SMITH Well, what we're seeing both point of sale U.S. and point of sale Europe are strong, premium bookings. So, first class, la premiere,
business, Premium economy, very strong, solid, in line with our expectations. What we said publicly is we're seeing some softness in the
economy cabins, but we are still able to maintain demand, but with lower pricing.
QUEST: So, it's not a crisis, but there's a bit of -- there's a bit of management required.
SMITH: Yes, a little. But also, we are having an unexpected lower fuel price environments. So hoping that can balance out the year end results.
QUEST: Right. The IndiGo deal -- the IndiGo deal yesterday was fascinating, absolutely fascinating. Its international expansion is absolutely what
Peter is going after, how do you see it?
SMITH: Well, I mean, you've been in India now a few days. I mean, the country is growing. The middle class is booming. There's 1.4 billion
inhabitants here. So we've actually had a relationship with IndiGo now since 2022 where our flights into India, KLM and Air France code onto the
IndiGo flights. IndiGo is now starting service to Europe, so we are just doing it in a reciprocal manner in Europe. That's -- you know, that's very
natural.
[16:25:05]
QUEST: Is it weird negotiating with a former head of one of your airlines? I mean, Peter was, of course, at KLM, leaves KLM goes to IndiGo. I mean,
everything goes around that comes around, well, it's true.
SMITH: Well, first of all, the deal between our friends, KLM and IndiGo, the first step was done in 2022. So, this is not a new negotiation for us.
So, you know, in 2022 to be negotiating India with a former head of one of our group Airlines was different.
But you know, this is a -- as you just said, people switch jobs. I mean, I'm now competing against my old you know, where I was working for 20 plus
years. I just saw a lot of my colleagues here. So look, we're in the same industry. This is an alignment with us. So I think it's a -- you know, I
think it should go well.
QUEST: If you take from when you started to where you would like the group to be is 100 percent, accepting that that's a movable feast, where are you
in the transformation of the Air France Group?
SMITH: The number one priority was to stabilize the labor crisis that was taking place in Air France. And we've managed to significantly decrease it.
With labor laws in France, you could never fully solve that, but I say we're in a much better position there.
Second was to put in place a commercial strategy that was sustainable at Air France, because in the past, those of you that have followed our
company, have seen that it's been very difficult for Air France to produce the bottom lines that the other competing carriers have been able to do in
Europe.
So, I'd say on the existing airlines we have, happy with how we're going forward. Still a long way to go when it comes to bottom line.
Transavia, our discount airline has now is going to be fully taking over the portfolio of Air France at Orly, Orly Airport, and that is -- it's in
the transition. We have a new fleet that's coming in. We like to secure Orly, as you know, a real, really profitable part of our group.
(END VIDEO CLIP)
SANDOVAL: Ben Smith and Richard Quest with a preview of what's to come.
Finally, let's take one last look at the markets. The Dow closing 443 points higher after the May jobs report was released, which again showed
some steady growth. Stocks also getting a boost after President Trump said that the U.S. and China will begin holding trade talks on Monday, reminder
that words and the markets, they are certainly intertwined.
And that is QUEST MEANS BUSINESS. I'm Polo Sandoval, a treat and a pleasure sitting in for Richard Quest. "THE LEAD" with Jake Tapper starts next.
(COMMERCIAL BREAK)
END
