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U.S. Economy Added 151,000 Jobs in February, Fewer Than Expected; Trump to Hold Crypto Summit at White House Today; Soldiers Accused of Selling Military Secrets to Buyers in China. Aired 10- 10:30a ET

Aired March 07, 2025 - 10:00   ET

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

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[10:00:00]

PAMELA BROWN, CNN ANCHOR: I'm Pamela Brown. Happening now, breaking news, missed expectations. A new report just out on who's hiring. How the White House is reacting straight ahead.

WOLF BLITZER, CNN ANCHOR: And there's more breaking news, Pamela, student loan uncertainty. New CNN reporting on President Trump's plan to dismantle the Department of Education. Trillions, trillions of dollars in student loans are now in question.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer. You're in The Situation Room.

And we begin this hour with the breaking news. The February jobs report is now out with numbers covering the first full month of President Trump's second term. The U.S. economy added 151,000 jobs. That's lower than expected, but still a solid month of job gains. Unemployment edged up to 4.1 percent from 4 percent the month before.

We're covering the story from all the important angles right here in The Situation Room. Let's begin with CNN reporter Matt Egan. Matt, what's the biggest takeaway from this latest jobs report?

MATT EGAN, CNN REPORTER: Well, Wolf coming into today, there were real fears that this report was going to show trouble in the jobs market. Thankfully, that is not the case. This report shows that the economy added a solid 151,000 jobs in February. That's actually a slight improvement from January, which was revised lower to 125,000. That suggests that this jobs market, it's not going off the rails. It is not yet.

The unemployment rate, though that was the more disappointing news because we were expecting it to hold steady at 4 percent. It did not hold steady. It ticked higher to 4.1 percent. That is still historically low, but it went up because there's more people unemployed and there's fewer people looking for a job.

Now, one thing we should call out is what we saw in the federal workforce. We saw the biggest drop in federal employment since June of 2022, and that doesn't even account for the mass layoffs led by Elon Musk and DOGE. One other point here is the economy has now added jobs for 50 months in a row. That is the second longest streak in American history. Of course, Wolf, the question is whether or not that streak is going to continue when you think about all the mass layoffs and the trade uncertainty.

BLITZER: Let's hope that it does continue. We will see, though.

Matt Egan reporting for us, Matt, thank you very, very much. Pamela?

BROWN: In several industries, Wolf, saw significant job growth last month, while others lagged behind.

So, let's go live now to CNN Business and Politics correspondent Vanessa Yurkevich in New York. Vanessa, break down these numbers for us by job sector.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, let's look at the job sectors that gained in the month of February. You have health care, finance, transportation and warehousing, and also I'll add manufacturing to that list. You can see those numbers right there. Those are added jobs.

Manufacturing gained about 10,000 jobs, and we've already heard from the White House this morning touting that number because of President Trump's initiative to bring U.S. manufacturing into the fold and really produce jobs in that sector. They're pointing out that a lot of those jobs were in the auto sector.

But let's look at different industries that lost in the month of February. In particular, leisure and hospitality lost 16,000 jobs. A lot of that, this report notes, was due to strike activity. But this is an industry that you want to keep an eye on because it really is tied in with consumer sentiment and consumer spending. What is going to happen to that industry?

And then the federal government, as Matt mentioned lost about 10,000. Look at the breakdown though really quickly of where those losses were, about 3,500 losses in the U.S. Postal Service alone. That is a space to watch as we note that the DOGE impacts aren't fully impacted in this report. But we need to look at the next month's report to see where those impacts do start to play out. Pamela?

BROWN: All right. Vanessa Yurkevich, thank you so much. Wolf?

BLITZER: All right. Let's find out, Pamela, the how the Trump administration is responding to this new jobs report. I want to go to our White House Reporter Kevin Liptak. He's over there on the North Lawn of the White House. Kevin, what are you hearing?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, they are embracing this report, this first full month of the Trump administration, embracing not only the top line number, but also those bottom line numbers as well, saying that this is a reflection of the president's attempt to bolster manufacturing.

[10:05:09]

They're also embracing those job losses in the government sector, saying this is all evidence that the president's plan is working.

Listen to the president's top economist, Kevin Hassett.

(BEGIN VIDEO CLIP)

KEVIN HASSETT, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: I'm much more positively surprised by the numbers in the market. The bottom line is that the. Biden administration created a lot of jobs and they tended to be government jobs. About 25 percent of the job creation was government jobs. And we actually, as President Trump intended, reduced government jobs by about 10,000.

I think it's a fantastic report. It's showing exactly what President Trump intends to do. He intends to reduce government spending, to get rid of wasteful government jobs, and to create manufacturing jobs. And that's what you see.

(END VIDEO CLIP)

LIPTAK: I think one of the reasons the White House is embracing this report, because it shows a healthy job market that can absorb some of the shocks that many Trump allies see coming down the line, whether it's due to these whipsaw tariffs, whether it's due to massive government layoffs.

Already, you've seen the White House just in the last day trying to calibrate some of those effects, whether it's delaying the tariffs on Canada and Mexico, or whether it is Trump telling Elon Musk that he wants him to use a scalpel instead of a chainsaw to execute that massive shrinkage of the federal government. Wolf?

BLITZER: All right. Kevin Liptak reporting from the White House, thank you very much, Kevin. Pamela?

BROWN: All right. Well, Wolf today, some of crypto's biggest names are descending on Washington as President Trump prepares to host a first of its kind crypto summit at the White House just one day after signing an executive order to establish a strategic Bitcoin reserve.

So, let's go live now to CNN Senior Business Writer Allison Morrow in New York. So, what do we know about this summit, Allison?

ALLISON MORROW, CNN BUSINESS SENIOR WRITER: This is hard to overstate how important it's for the crypto industry. It is Christmas morning for crypto. They are getting a seat at the table for the first time ever in about 15 years of existing and they're getting a Bitcoin reserve, which ultimately is going to backstop the price of an asset that all of these executives who are descending on D.C. own a lot of. So, it's it's great news for crypto and plenty of critics would have issues with the reserve. But right now, the crypto industry is very happy.

BROWN: All right. So, walk us through the strategic Bitcoin reserve. What exactly is that? How much does the government have on hand?

MORROW: So, there's a lot of logistics to it, but basically the government has about $17 billion worth of Bitcoin that it has seized over the years in criminal and civil forfeitures. A lot of that money is sold off in tranches. It is used to compensate victims and some of the leftovers go to law enforcement. So, basically, they're taking that amount of money, that $17 billion worth of Bitcoin, and putting it in a fund that will grow over time. And they're saying that they're still going to use those funds to compensate victims, but there's a lot of details still to work out about how it will be set up.

BROWN: Allison Morrow, thanks so much. Wolf?

BLITZER: You know, Pamela, there's more breaking news we're following right now, very disturbing breaking news. Two active duty U.S. soldiers are now being charged with selling America's military secrets to buyers in China. According to the indictment, one of the soldiers allegedly sold nearly two dozen hard drives marked secret or top secret.

Let's go live to our National Security Correspondent Natasha Bertrand. She's over at the Pentagon for us. Natasha, what more are you learning about these charges, very serious developments?

NATASHA BERTRAND, CNN NATIONAL SECURITY CORRESPONDENT: Well, Wolf, as you said, two active duty U.S. Army soldiers who were stationed in Washington State, as well as a former soldier, they were accused of selling secrets to China and all three of them were arrested on Thursday.

Now, we don't know too much about these soldiers that were arrested, but what we do know is that one of them was a battery supply sergeant. One was a health services administrator and the third former soldier, his service record is unknown at this point, but he only served for about three years until 2017.

Now, according to the indictment, one of the active duty soldiers is accused of selling nearly two dozen classified hard drives marked either secret or top secret. He's also accused of selling information about HIMARS rocket systems to buyers in China, and he received about $15,000 beginning in August of 2024 for selling those secrets, according to this indictment.

Another current Army soldier, as well as the former soldier, they apparently conspired between 2021 and 2024 to steal sensitive information about U.S. Army operational capabilities, including Bradley and Stryker vehicles. Interestingly, you're seeing some of these capabilities, including the HIMARS rocket system and the Stryker vehicles, things that the U.S. has been providing to the Ukrainians, that the Russians, of course, have had to be fighting against.

[10:10:04]

And so this is not the first time, of course, that the U.S. military has had to grapple with their service members selling secrets to China. Several have been accused of doing so over the last several years, Wolf.

BLITZER: Yes, a very, very disturbing development, indeed. Natasha Bertrand at the Pentagon for us, thank you very much. Pamela?

BROWN: It certainly is, Wolf.

Breaking news coming in, a federal judge is denying an attempt by federal workers unions to lock down private data from DOGE's work inside the Treasury Department.

Joining us now in The Situation Room, CNN Senior Crime and Justice Correspondent Katelyn Polantz. What more are you learning about this ruling and the significance of it?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Well, Pamela, we've been waiting for this. from this particular judge, Judge Colleen Kollar-Kotelly in the federal court in Washington, because this is the judge just a week ago who was asking all of those questions. What is DOGE? Who's involved here? What are they doing? Who's in charge? Who's giving them direction? And this is about the Treasury Department and the very sensitive payment information, personal information that is held within that department when they make payments, trillions of dollars, sent out to people in checks from the federal government.

What the judge decided today is that these unions that are suing, they just don't have enough evidence right now to show that they're going to be harmed immediately, that the people working with DOGE working at the Treasury Department looking at these payment systems are going to be releasing their confidential information somehow. And so the judge says, I can't give you what you want at this time, an injunction. I'm not going to block DOGE more than the agency is already doing themselves to make sure people are complying with the law, with privacy laws. She's not going to limit DOGE operating at the Treasury Department.

There's a lot of lawsuits like this, privacy, being concerned about DOGE, their access to data. A lot of them are falling flat at this stage because there just isn't a lot of evidence. And these agencies are now taking steps, like at the Treasury Department, to make sure they're compliant, to make sure sensitive information is not going to be released publicly. And as far as we've seen, it hasn't been.

BROWN: Yes, because I think a lot of Americans are wondering what are they doing with our private data?

POLANTZ: Yes. They are clearly looking at the software and the systems that exists there. There are clearly payments that the Trump administration doesn't want to have go out. That's where this originated from, concern that they would shut off some payments at the Treasury Department. But the DOGE people there, they've gotten some training, from what I understand, and they are not sharing sensitive personal information at this time. And the courts need a lot of evidence in order to step in and do something here. And it's just not there yet.

BROWN: All right. Katelyn Polantz, thank you so much,

BLITZER: Katelyn, thank you for me as well.

And still ahead, fireballs in the night sky for the second time this year, the SpaceX Starship spacecraft explodes midflight and how far the debris was seen. We're going to tell you.

BROWN: And next --

BLITZER: Yes, go ahead.

BROWN: Yes, I mean, that's extraordinary video coming in.

Up next, when will the massive federal firings come into play when it comes to the jobs report? We're going to discuss that with chief economist at Moody's.

You're in the CNN Situation Room. We'll be right back.

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[10:15:00]

BROWN: This morning, a snapshot on the state of the economy. The February jobs report shows a solid month of gains with 151,000 jobs added. But remember, this report doesn't capture the recent mass federal layoffs since the survey ended before the bulk of firings began.

Joining us now is Chief Economist at Moody's Analytics Mark Zandi. Hi, Mark, nice to see you. What is your take on this jobs report?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, you use the word solid, Pamela. I think it's solid, 150, 000 jobs. That's kind of right down the strike zone. That's enough jobs to ensure that unemployment, which ticked up a little bit in the month remains low. It's around 4 percent. That's close to full employment. But as you said, you know, there's a lot of script to be written here dead ahead. It feels like that, you know, this is the calm before the storm. We saw a little bit of weakness in federal government employment, but we're going to see a lot more, you know, when we get this report for the month of March, a month from now.

And the other thing to consider, obviously, is the trade war. We're now in the middle of a pretty significant knockout, drag out kind of terror for, and that's going to do some damage. It already is. You can see in the stock market, you can see it in terms of uncertainty of businesses. So, I expect we'll see that showing up with weaker job numbers in the months ahead.

So, you know, enjoy this number while you can. I suspect that the numbers we're going to get in the next few months aren't going to be nearly as good.

BROWN: Tell me a little bit more about why you think that and how much the DOGE cuts might play into your thinking on why it may not be as good as what we're seeing right now in the future.

ZANDI: Yes. Certainly, there's the DOGE cuts. I mean, the federal government employment fell 10,000 in the month of February. Of course, that was based on a survey done by the Bureau of Labor Statistics earlier in the month. Some it doesn't catch all of the layoffs and other actions that have been taken since then. And there are many now we're talking about, you know, tens of thousands, if not hundreds of thousands of job loss in the federal government that will play out over the course of not just next month, but in coming months and maybe over the next year or two.

But more importantly, it's the tariff war, the trade war that's now unfolding.

[10:20:03]

And that's already doing a lot of damage in terms of the uncertainty it's creating among business people. They don't know what to do with all this. I mean, it's on again off again, which products, which companies, which countries over what period of time. And they're not cutting yet. You know, they're kind of sitting on their hands trying to make sense of it and get some clarity and hopefully that they get it. But the longer this drags out, the trade war drags out, the more the uncertainty is going to turn into decisions about cutting jobs and cutting investment. And I suspect that will be the case here.

Now, maybe the president will figure out a way to kind of cool things off and wind the trade war or tariff war down. But at this point, it doesn't feel like that.

BROWN: Yes. What do you think about the fact that he had implemented these tariffs on Canada and Mexico and then sort of pulled them back? You know, is it better in terms of sending a signal to just stick with the plan or, you know, pull it back when you see the reaction from the stock market, but then lead to that leads to sort of that uncertainty and that chaos?

ZANDI: Well, it's hard to answer that question. I don't know, you know, what's the thinking here, you know, around all this. Because it's hard to discern what the motivations are. You know, what exactly is the endgame? What's the motivation? And, you know, if it's, you know, more about cutting individual trade deals with different countries and, you know, make some actions with regard to, in the case of Canada and Mexico, fentanyl and immigration, okay, that's one thing. That would imply that, you know, maybe this is going to be short lived and we're not going to go down a full blown trade war, that they'll reach deals, they'll declare victory, and we'll move on. That's what happened in President Trump's first term.

But, you know, increasingly, it feels like this is more about revenue. Because this is a tax, right? Tariffs are a tax on American consumers, American businesses. Maybe it's about the revenue that it generates. If that's the case, then these tariffs could be higher for longer and do a lot more damage and other countries are going to retaliate, and it's going to be a much more significant event. So, very hard to know what the motivations are. And that's critical. You're seeing what the economic impacts are. But the mere fact that I and many other business people are sitting around trying to figure out what this all means is not good for business, right, because of the uncertainty that it creates. And if you have uncertainty, you freeze. Yes.

BROWN: And, you know, we've seen these warnings about the prices going up. Americans are worried about rising costs on everyday goods.

Let's take a listen to what Treasury Secretary Scott Bessent said last night.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY DEPARTMENT: Access to cheap goods is not the asset is not the essence of the American dream.

The American dream is rooted in the concept that any citizen can achieve prosperity, upward mobility and economic security. For too long, the designers of multilateral trade deals have lost sight of this.

(END VIDEO CLIP)

BROWN: What is your reaction to that?

ZANDI: Yes, I agree about the opportunity. I mean, I think that is the American dream. That's key to it that. You know, we all have the opportunity to succeed if we work hard and do the right thing and are innovative and creative. I'm all for that. But I'd also say part of the American dream is also having a good standard of living, meaning that I am able to afford the things that I need and I want. And, you know, raising tariffs and taxes means that that's harder to achieve that goal. And that's definitely part of the dream.

I mean, we do these things because we want a better standard of living and purchasing the goods that we can import from the rest of the world are a part of that standard of living.

BROWN: Mark Zandi, nice to hear your analysis and having you on our new show. Thank you so much.

ZANDI: Yes, thanks for having me.

BROWN: Wolf?

BLITZER: And, Pamela, SpaceX is trying this morning to figure out what went so wrong when its Starship spacecraft exploded.

The uncrewed spacecraft had a, quote, rapid, unscheduled disassembly over the Caribbean, which is that explosion that you've just seen right here. The FAA temporarily stopped flights into several Florida airports because of the falling debris. Watch this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We just had the rocket launch and it blew up. If you guys are closer to the debris and need to deviate, let us know. If you're seeing it, that's okay.

UNIDENTIFIED MALE: Attention all aircraft, due to a space vehicle mishap, a debris response are has been activated pretty much from Orlando area, south. If you guys do see any debris from that Starship explosion, let us know.

(END VIDEO CLIP)

BLITZER: We're told that astronauts from the International Space Station could actually even see the spacecraft explosion. This is the second consecutive failure of a Starship spacecraft this year. Pamela?

BROWN: All right, Wolf.

[10:25:00]

Up next, sounding the alarm about what he says is the Trump administration's overreach. We're going to speak to Democratic Senator Peter Welch about his concerns over DOGE.

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BLITZER: There's breaking news we're following right now. The jobs report on President Trump's first full month at office is out and it shows mixed results for the U.S. economy. Employers added 151,000 jobs in February, slightly lower than expected.

We're now told, by the way, that the president will be making a statement. I assume the statement will be on the jobs numbers right at the top of the hour. We'll have live coverage coming up right here in The Situation Room.

[10:30:02]

But joining us right now, Democratic Senator Peter Welch of Vermont. He sits on the Senate Finance and Judiciary Committees.