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Labor Secretary: We See No Reason That A Recession Is Near; Trump Urges Fed To Lower Rates Again, Citing Jobs Report; Intel Suggests Putin Now Looks To Hold On To Territory, Boost Russian Economy After Readjusting Goals In Ukraine. Aired 11-11:30a ET

Aired May 02, 2025 - 11:00   ET

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

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[11:01:02]

PAMELA BROWN, CNN HOST: Happening now, a better than expected report on the state of America's job market. The news appears to have Wall Street excited this morning. But what will the numbers do for recession fears?

Welcome to our viewers in the United States and around the world. Wolf Blitzer is off. I'm Pamela Brown. And you're in The Situation Room.

UNIDENTIFIED MALE: This is CNN breaking news.

BROWN: And we begin this hour with breaking news. And a stronger than expected jobs report, the economy added 177,000 jobs in April. That's 40,000 more than experts anticipated. Last hour, I spoke with the Labor Secretary who says she's happy with the latest numbers and that Americans shouldn't be worried about a potential recession. Take a listen.

(BEGIN VIDEO CLIP)

LORI CHAVEZ-DEREMER, LABOR SECRETARY: This jobs report has been positive. I'm not an economist, but I have surrounded myself and had discussions with my colleagues. And I have great economists right here at the Department of Labor. We see no reason that a recession is anywhere near. And so, again, as we capitalize on what the President has -- has enlisted us to do, it's to be out on the ground, listen to the American worker, listen to the American unions, listen to the workforce and say, what is it that we need? And we're going to do everything we can to strengthen that workforce, skill, re-skill and make sure that we have the workforce that delivers for Americans first.

(END VIDEO CLIP)

BROWN: All right, let's go live now to New York and CNN Business and Politics correspondent Vanessa Yurkevich. So, you heard the Labor Secretary say there, there is no reason to fear a recession. Does this jobs report echo that?

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Well, this is certainly an indicator that this is the resiliency of the jobs market in the face of uncertainty. But it is simply too early to tell whether or not we are headed for a recession or not. Some economists suggest that we may be. But economic data points to the fact that this is a very strong economy right now.

You see the numbers on your screen there, 177,000 jobs added, better than the 135,000 that economists had predicted. And the unemployment rate really holding steady at 4.2 percent. That is historically low. This is really historic expansion in the labor market that we have seen here. I want to note, though, if you look on your screen there, the March number came in at 228,000. That was actually revised down to 185,000.

So, you can see there the last two months of the -- of April and March there, kind of in lockstep in terms of this jobs market. Now, where were jobs added? Well, they were added in health care and social services, 58,000, leisure and hospitality. You had 24,000 jobs added.

You did see a bit of a decline in manufacturing by about 1,000 jobs. And the federal government lost 9,000 jobs. That is because of these DOGE cuts. This is the third consecutive month that we have seen a decline in jobs in the federal government, 26,000 now since the beginning of January.

Now, as you mentioned, markets encouraged by this news. Futures were pointing up. But the Dow, Nasdaq and S&P all up on this news. You can see the Dow up about 420 points. But, Pamela, worth noting, though, that there is still concern in the business community.

The U.S. Chamber of Commerce sent a letter to the administration saying that they've heard from thousands of businesses about concern over the future, over the economy and over tariffs. They use the word irreparable harm if these tariffs went into effect. That group asking the administration for exemptions for small businesses just because of the fears that these businesses have about what it means for their individual labor markets.

BROWN: All right. I want to ask you about this major shipping loophole for Chinese goods. It's coming to the U.S. It's just closed. So how is that going to impact these low cost sites, which are ultra popular here in the U.S.?

YURKEVICH: Well, it is turning their business model on its head because this de minimis exemption essentially meant that any goods coming into the country under $800 would be exempt from any duties or tariffs. But now that has gone away. So you have sites like Shein, Temu, Ali Express, even Amazon Hall, who offered very affordable items that were duty free. And they could because they didn't have to pay these higher tariffs. Listen to this stat.

[11:05:23]

More than 80 percent of total U.S. commerce shipments in 2022 were de minimis imports. And most of them were coming from China. So now you have that exemption that's gone away. And now you have that higher tariff of 145 percent. Who does this impact most, Pamela? Low income Americans who rely on these cheaper products, which are now going to be more expensive. Pamela?

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

And happening now, President Trump is once again calling for the Federal Reserve to lower interest rates, following that better than anticipated April jobs report. Let's go live now to the White House to CNN chief national affairs correspondent, Jeff Zeleny. All right, Jeff, what else are we hearing from the President?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Hey, Pamela, good morning. I mean, this jobs report that Vanessa was just talking about underscores the slow and patient approach the Federal Reserve has taken on interest rates. There's no question about that.

But for the President's point of view, he has long been calling for the Fed to act faster. And, of course, their next decision on whether to lower interest rates is going to come next week. So the President clearly trying to get ahead of that one more time and not calling for the firing of Jerome Powell, the Fed chair, as he has for weeks. But soften that a few weeks ago.

But he is talking about the lower prices and directly calling on the Fed to essentially act swiftly on interest rates. Let's take a look at a message he sent out earlier this morning on a Truth Social. He talks about grocery prices being down, gas prices being down. And he said mortgage rates are down. Employment is strong and much more good news as billions of dollars are pouring in from tariffs.

Of course, that is a little bit questionable. But he said, just like I said, we're only in a transition stage, just getting started. Consumers have been waiting for years to see the pricing come down, the President says. No inflation. The Fed should lower its rate.

So, of course, this is one more part of the drumbeat. The President has been really beating for quite some time to lower interest rates. But again, the steady jobs report suggests that they may not do that when they meet next week on May 7th. Pamela?

BROWN: Right. All right. I want to ask you about the budget proposal from the White House as well that will be unveiled today. What are you learning about that?

ZELENY: Well, Pam, the White House is going to release its blueprint, if you will, of spending for next year. And it is just that, a blueprint, because, of course, Congress will set the budget. But the White House is calling for $163 billion in non-defense related cuts. That's everything outside of the military, if you will.

As you can see there on screen, several agencies are expected to take significant hits from this. The question is how much savings, if any, has there been from the Department of Government Efficiency? That's very much an open question. But it calls for $557 billion in non- defense discretionary spending. That represents a big decline from a year ago.

But, Pam, this is just one sort of small piece of the proposal here. The bigger idea is what does the President's budget and tax plan look? They hope to have it together by July 4th. But today, at least, the White House is going to release this blueprint of spending for a Congress that is not in town today. And we should note the President also not in town today. He's currently at his golf course in Mar-a- Lago, Florida. Pamela?

BROWN: All right, Jeff Zeleny from the White House, thanks so much.

And joining us now to better understand all of this is Ed Luce, the U.S. national editor for the Financial Times. All right, Ed, so millions of Americans, they've been worried about a looming recession, all this economic turmoil. And then you get this strong jobs report from April. What do you make of it?

ED LUCE, U.S. NATIONAL EDITOR, FINANCIAL TIMES: I -- I think it's not that surprising because the tariffs have yet to really come into effect. And when they do, there's going to be a very different economic mood. But it's -- it is good news for the administration. I think it's good news for the Federal Reserve because that actually reduces pressure on it. Notwithstanding what President Trump says to Jerome Powell, it reduces pressure on Powell to cut interest rates. So I don't think they're going to be moving in their next FOMC meeting, which is next week.

BROWN: It is interesting that the President is again calling for the Federal Reserve to lower interest rates in the wake of the strong jobs report. So why do you think he continues to do that, even as there is a strong economic data showing that the economy is in good shape as it relates to the jobs market?

LUCE: Well, remember, President Trump, you know, is a property developer. He's -- he's a -- throughout his career lived on lower interest rates. That's what sort of powers his sector and has built his business model. He knows full well that lower interest rates make consumers feel more flush, more money in the pockets, lower mortgage and auto loan payments, et cetera, credit card debt.

[11:10:07]

But with tariff increases coming and -- and they are coming and this jobs report today will be, I think, very quickly forgotten. With tariff increases coming, consumers are going to feel the opposite. It will be a bit like that comment that the President made a couple of days ago that, you know, you'll have a choice of two dolls and you'll have to pay a couple of dollars more for them as opposed to paying less with a choice of 30 dolls. That's just another description for shrinking incomes.

So I think when we get to the second quarter of this year, we're going to see -- we're going to see an impact on the jobs market coming via the tariff mechanism, if you like.

BROWN: And the administration is trying to reassure Americans about what you just laid out, about what's about to hit their wallets from these terror policies, saying it's negotiating with a lot of countries to minimize the impact of the tariffs. But there is not much clarity on these alleged deals. I want to listen to what some of Trump's advisers have been saying about it.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, U.S. COMMERCE SECRETARY: I have a deal done, done, done, done. But I need to wait for their prime minister and their parliament to give its approval, which I expect shortly.

UNIDENTIFIED MALE: What country?

LUTNICK: I'm not going to tell you what country.

PETER NAVARRO, SPECIAL COUNSELOR TO THE PRESIDENT: We've got 90 deals in 90 days, possibly pending here. We're going to get this done for the American people.

KEVIN HASSETT, DIRECTOR, NATIONAL ECONOMIC COUNCIL: I could tell you that we've already got offers on the table for more than 15 countries.

(END VIDEO CLIP)

BROWN: And then I also spoke to Stephen Myron, who said that several countries, I think he said 20, have reached out with -- with written proposals. That's a lot of different rhetoric about potential deals. You know, are you surprised that Wall Street and the job markets have been so resilient in the face of the uncertainty?

LUCE: Well, we've seen pretty much the market wiping out all of its losses since so-called Liberation Day a month ago. We've seen, you know, it surge today on the jobs report. And so I think what the market's betting is that whether these deals are really deals or not, or more likely sort of kabuki symbolic agreements that Trump will walk away from this trade war and that that is good for the economy.

That is tended to be the market's rather optimistic take on Trump all along since he was elected last November to -- to bet on the more optimistic scenario. And it is quite a big bet, because if Trump isn't going to walk away from this trade war and these deals really don't amount to -- to serious deals or don't get done, then we're going to be back into bear market or at least correction market territory very, very quickly.

BROWN: Ed Luce, as always, thank you so much.

LUCE: Thank you.

BROWN: Still ahead, Western officials now believe Vladimir Putin's short term goals for Ukraine are changing. What new intelligence reveals about the recent shift.

[11:13:13]

And Elon Musk has promised to root out waste, fraud and abuse. So where do DOGE's efforts stand after 100 days? You're in The Situation Room.

(COMMERCIAL BREAK) BROWN: New this morning. Renewed calls for progress from the Trump administration on Ukraine. Secretary of State Marco Rubio is saying the U.S. needs to see a breakthrough on peace talks very soon. With Russia's economy struggling, new intel indicates that Putin could be looking to solidify territory his forces already control versus trying to seize all of Ukraine. CNN Chief National Security Correspondent Alex Marquardt is here with us. So that's interesting because initially some of the earlier intel reports was that Putin had this maximalist view.

ALEX MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Yes. And there have been these assessments for quite some time that Putin felt time was on his side. That he could grind down the Ukrainians. He could wear down Western support. And he would continue to try to progress across Ukraine.

Now his thinking appears to be shifting at least their indications based on intelligence that he is considering the possibility of the deal in -- in -- in a form that it is on the table. And he would solidify the gains that they have made. Of course they would try to push for some kind of recognition.

And remember his economy is in tatters. He would want to get it back up and running get those sanctions lifted. The U.S. has talked about the possibility of what they've called historic investment opportunities. And so these sources are telling my colleagues Zach Cohen and myself that there are these indications that he might be willing to enter into -- to some kind of deal. But he's not losing sight of those more maximalist goals.

This is how a senior Western intelligence official put it to me that he might be thinking about what a reasonable nearer term objective is so that he could not just claim victory domestically but really feel that he has achieved something that is worth a significant pause and then maybe retake up the fight at some point later.

And that's we heard from a number of officials both on background and -- and on the record that there is a sense that he could agree to something that Trump would get his win because Putin really knows that Trump wants this deal. And then the U.S. might get distracted. And at some point in the future Putin would then resume his goal of trying to take more of Ukraine perhaps all of Ukraine.

Now that could be a -- a farfetched goal but that is something certainly that we know that he has -- that he has never lost sight of and -- and that he does fully consider Ukraine to be within reach.

[11:20:02]

BROWN: And that's why I think it's so important for -- for Ukraine's point of view to have security guarantees.

MARQUARDT: Exactly.

BROWN: If any deal is reached because we've seen Russia time and time again breach deals right, breach peace deals. And so that's interesting analysis. Thank you so much Alex. We'll be right back.

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BROWN: Just over 100 days into President Trump's second term, Elon Musk appears to be winding down his time with DOGE. But the world's richest man seems to think the impact from this new government agency is here to stay.

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UNIDENTIFIED MALE: Is DOGE just getting started? This is a long-term enterprise.

[11:25:02]

ELON MUSK, TRUMP PRESIDENTIAL ADVISER: It's a long-term enterprise because if we take our eye off the ball, the waste and fraud will come roaring back.

(END VIDEO CLIP)

BROWN: Musk and his team have taken a figurative and literal chainsaw to Washington, all in the name of rooting out fraud and waste. But have they delivered on those promises? CNN's Brian Todd is back at the Magic Wall with a look at where DOGE stands 100 days in. Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, guys, DOGE is clearly one of the most controversial aspects of Donald Trump's first 100 days. He campaigned vociferously last year on the idea of cutting government waste, cutting the bloat. And he tapped that man, Elon Musk, to lead the charge in doing that.

What is DOGE? The Department of Government Efficiency, we see Elon Musk leading the way and, as many people say, taking a chainsaw to the federal government all along the way. Very, very controversial, disrupting many lives here in Washington and across the country.

We're -- we're taking a look at where DOGE is. Now, these are some of the agencies, not all of them, some of the agencies where DOGE has some of its employees, some of its operatives, as some people call them. These are young computer engineers, tech experts and others that Elon Musk has recruited.

They are in agencies like the Department of the Treasury, the Department of Health and Human Services, the Department of Homeland Security, the Department of Education, the Social Security Administration, and other agencies. They have spread out across these agencies. A key question is going to be how much sway are they going to have in these agencies once Elon Musk leaves very, very soon.

As far as the cuts already made, these are some really incredible stats from the firm Challenger Gray and Christmas just out that basically say that DOGE is responsible for 48 percent of all the job cuts in recent months, a total of 281,452 layoffs, not just from the federal government. That's the total number of DOGE-related layoffs related to everything that DOGE is doing across the country, and that includes the private sector.

We do have to say, you know, as far as that 281,452 figure regarding the federal government, just a little over 100,000 people have been laid off so far in the federal government. Let's talk about some of the agencies affected. Elon Musk and his group have basically gutted to the point of almost extinction the U.S. Agency for International Development. That is almost basically not there anymore.

Other agencies, the Department of Education, is winding down and will essentially shut down for all intents and purposes, as will the Consumer Financial Protection Bureau. That's been basically whittled to only the most basic functions. So some of these key agencies gutted or pretty much wiped away by DOGE.

As far as the savings, well, Elon Musk first said that DOGE was going to save about $2 trillion. Now, he has since pared that back. Early this year, he said that $1 trillion savings would be an epic outcome.

He has since claimed to have saved the government about $160 billion. Some of that is really in dispute among experts who monitor these things. And, of course, we are really not going to know some of the harder and more reliable numbers for probably several months or possibly even years, guys.

BROWN: All right. And Musk's time in Washington, Brian, it's also raised a lot of concern over potential conflicts of interest. There's been questions over his company's government contracts, as well as surreal scenes like this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I love Tesla.

UNIDENTIFIED MALE: Which one did you buy?

UNIDENTIFIED FEMALE: Wait, Mr. President, Mr. President, which car are you going to buy?

TRUMP: The one I like is that one. And I want that same color.

UNIDENTIFIED MALE: How does this work?

(END VIDEO CLIP)

BROWN: Musk has also raised eyebrows with a series of questionable and sometimes downright false claims. So what do we know there, Brian?

TODD: Right. Well, some of Elon Musk's claims of government waste have been exaggerated, to say the least, and false in other contexts. He claimed that FEMA spent 509 -- excuse me, $59 million on hotels for migrants. Again, these were misleading figures. He promoted a phony USAID celebrity video, which really was criticized at the time.

He also pushed a story about several million dollars in condoms being sent to Gaza that turned out not to be true. He made several misleading claims about Social Security data, including some of his claims that many, many dead people were getting Social Security benefits. A lot of these claims proved not to be true. And again, you know, lended to the controversy surrounding Elon Musk's tenure with DOGE. As far as how all this kind of plays out regarding his own companies and potential conflicts of interest, we'll take a look at this.

These are Elon Musk's companies with government ties, Starlink, Tesla, Space X and the social media platform, X, that he bought in 2022. You know, a lot of questions about potential conflicts of interest whether, Elon, the key question is Elon Musk benefiting from working with DOGE and making all these cuts? Are some of his companies benefiting? Some of that is being looked at right now. We can tell that -- tell you that Tesla, of course, in recent days has been reported to really be in some financial straits compared to its success in recent years, Tesla's stock has really kind of plummeted.

[11:30:06]

So you can't say that company is necessarily benefiting.