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What We Know with Max Foster

U.S. Job Growth Slows Sharply In August; Officials: 475 Detained In Raid At Georgia Hyundai Plant; Trump To Sign Executive Order Reviving "Department Of War"; Defense Department Says Venezuelan Flyover Was "Highly Provocative"; U.K. Government In Disarray After Deputy PM Resigns. Aired 3- 4p ET

Aired September 05, 2025 - 15:00   ET

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

[15:00:22]

MAX FOSTER, CNN HOST: Worrying signs for President Donald Trump at the U.S. economy.

This is WHAT WE KNOW.

A worsening jobs market could threaten the entire Trump agenda if it carries on. Take a look at the latest numbers from the Bureau of Labor

Statistics. The U.S. economy gaining just 22,000 jobs in August. Meanwhile, the unemployment rate ticked up to 4.3 percent. That's far fewer than the

76,000 jobs that economists had expected.

Here's how the markets are reacting to all of that this hour. As you can see, they're all down, not massively, but there's a general negative mood

there because of these. Or ever since these numbers came out.

This employment snapshot paints a bleak picture of the U.S. economy under President Trump, no doubt. But even one of the top White House economists

admits these numbers are disappointing.

(BEGIN VIDEO CLIP)

KEVIN HASSETT, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: All the indicators that we're seeing are that inflation is low and economic growth

is solid. Income growth is solid as well, so that the only part of the data that's disappointing is the jobs numbers have been a little bit lower over

the last three or four months.

(END VIDEO CLIP)

FOSTER: Paula Newton is in New York.

We're talking about, you know, jobs are being gained in the economy, but we're talking -- we're looking at the trend, aren't we? Just explain what

we're worried about here.

PAULA NEWTON, CNN CORRESPONDENT: Yeah, incredibly slow growth. That is growth nonetheless. But actually, when we looked at the revisions here,

Max, for June, the U.S. economy actually lost the jobs.

Let's take you through some of the numbers though. If you look at first, the unemployment rate right, 4.3 percent, especially when you compare it to

other countries, may not look that bad, but when you actually see the trend line and you understand that it is one of the highest rates of

unemployment, as you can see it there since 2022, when they were just coming out of the repercussions of the pandemic, that is a worrying sign.

But if I take you over to the revisions as well, you will see that for June, while 22,000 jobs were created this month for June, the amount of

jobs was revised downwards significantly, and that meant that the United States, for the first time in years, actually lost jobs, net jobs in June.

You see it there.

All of this worrying, no doubt for the White House, but also for the Federal Reserve, which now has to decide whether or not it's going to

decrease interest rates. Most people are betting on a quarter point, but what happens next in terms of whether it's a quarter point or a half point,

really matters to the economy.

You see there that the markets they were spiking at first on the news, thinking that there might be a significant rate cut, but they reversed all

those gains. I wouldn't get too heated about the stock market. They are so close to record gains. I'm not sure how much it matters. What matters next

really is what the Federal Reserve does.

And when you actually look at the jobs where they were lost, guess what, Max? They were lost in manufacturing. And that is a huge issue for Donald

Trump, who has been promising to reshore. You also see construction there down quite a bit.

If those interest rates come down. And this is why the president continually nags Jerome Powell to take down those interest rates. There is

a chance it could spark a resurgence in the housing market, which has been lagging for several quarters now. And that might actually juice up some of

the jobs stateside.

I mean, look, William Beach, who is a former head of the Bureau of Labor Statistics, in the crosshairs right now as to whether or not the veracity

of these numbers can be counted on. Well, he said that this is a scary jobs report.

And to back that up, Max, he has said that look, he's worked under Biden, he's worked under President Trump. He has never seen any indication that

any of the numbers that were giving you here right now are juiced in any way to favor either political party.

FOSTER: I mean -- I mean, everyone is looking to the Fed to try to help here. But if this carries on in the way that some economists are

predicting, the Fed might be quite helpless if you've got rising unemployment and you've got rising prices, then the Fed can't necessarily

attack that with interest rates.

NEWTON: Exactly right. And those are the two mandates of the Federal Reserve. And when Jerome Powell a few weeks ago in a speech did indicate

that, look, you know, yes, we will look to easing monetary policy, perhaps cutting interest rates. He was very clear that he'd be what, Max, data

dependent, exactly as you say.

And if tariffs especially are really creeping up there and creeping up on inflation, that is going to be a problem for the Federal Reserve. So big

deal. You can cut a quarter point. I'm not sure how much difference that's going to make to people who have car loans or looking for a new mortgage.

What this economy may need is much more than that. And yet, as you said, the Federal Reserve's hands might be tied because of those inflation

markers. We will get new inflation data next week.

[15:05:02]

But again, the White House has to actually trust the data that they're getting. And so far, I'd say its jury's out on whether or not they're going

to continue to attack the very institutions that measure that data and report on the economy for so many individuals and businesses, not just in

the United States, but around the world.

FOSTER: Okay, Paula, thank you so much for bringing us that.

More from Paula in the next hour. She's covering "QUEST MEANS BUSINESS" tonight.

Now, U.S. Homeland Security officials say 475 people are in custody following one of the largest raids yet in the Trump administration's

immigration crackdown. It happened in Georgia at a massive Hyundai plant that was being built to make electric car batteries.

Straight to CNN's Gustavo Valdes in Georgia for us.

I mean, a huge raid, must have been frightening for many of the people working there, frankly.

GUSTAVO VALDES, CNN CORRESPONDENT: That is correct. And we've talked to witnesses who said that these felt more like an invasion, and a militarized

action, rather than a law enforcement activity, because they said they quickly came all the agents in full gear and chasing some of the workers

who tried to flee the scene. Homeland security acknowledged that a few of them tried to escape. They were captured and detained. They said there was

no use of force, and those who tried to flee, the number of those who tried to escape was minimal.

But they also make want to make clear that this was not a random enforcement. This is something they said they had been investigating for

several months. They had reports of people who were working illegally in the United States. And here the distinction is that they don't say

necessarily there are people who came into the United States. Most of these 475 people detained, they say, were from Korea, that might have entered

legally with some kind of visa. But that visa didn't allow them to work in the United States.

So, a little bit of a distinction here as to who are the workers. And this is something that we have seen in the past few years here in Georgia, where

another Korean battery maker, as they were building their plant, they were also caught employing some Korean workers that came to the plant. And back

then it was the union workers who complained about these jobs going to foreigners. When these foreign companies come to the -- to states like

Georgia who want the investment and they offer tax breaks and they want the locals to be the ones who are getting these jobs.

So, this is a little bit of a different scenario than what we've seen in other immigration enforcement, in which they go after perhaps people who

have been in the country a little longer under different circumstances. This was more of a targeted action, but they say the people who live in

that, it also felt like they were not, that they were a little too forceful in their execution. Now, the Korean government has said that they are

talking to the U.S. government, trying to make sure that their citizens are treated the way they deserve under the law.

And Hyundai, who is -- where we are, is this a campus where the plant is being built? They say that to their knowledge, these were not workers

directly hired by Hyundai. It was a contractor and that they are cooperating with the authorities to make sure that they comply with

immigration and labor laws in the United States.

FOSTER: Okay. Gustavo, from the factory there. Thank you so much for joining us with that -- that big news from there today.

Now, Pentagon rebrand in the works. It seems in a few minutes from now, President Trump expected to sign an executive order restoring the

Department of War name for the U.S. Department of Defense, a move he and Defense Secretary Pete Hegseth have previewed in recent days. Fully

changing the department's name will require an act of Congress.

Let's get to our senior White House correspondent, Kristen Holmes, for more on what all this means.

I mean, we know it's going to be very expensive as well, right? There's a huge amount of signage that needs to change.

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yeah, signage. I mean, there's a lot that has to happen here, but of course, this really is

on par with what we've seen President Trump do across the board.

Now, one thing to note is that the Department of Defense was originally called the Department of War, was established when the Army was established

by President George Washington. Now, all that changed in 1949, when there was an entire military reshuffle under President Truman.

President Trump himself has said that he believes that because we are putting -- we are putting out wars, that we are the strongest military,

that we should be called the Department of War instead of the Department of Defense.

Now, what we're looking for here is what exactly he is going to do to get around this potential act of Congress. Sure, there is a belief among the

administration that if they do bring this to Congress, that it will get approved by at least Republicans. But we also know that they are having

conversations about secondary names to essentially offset having to go through Congress to allow the Pentagon to shift its name to the Department

of War.

[15:10:06]

We'll see him present this. We assume the secretary of defense will be with him as well. He's making more announcements later today at 4:00 p.m., and

we'll see how exactly they plan to roll this out. Like many things that fall under this White House and this administration, they do have a backup

plan here to go around Congress should they need to.

FOSTER: Okay, Kristen, thank you. It's interesting.

Now, relations between the U.S. and Venezuela appear to be deteriorating further. The Pentagon accusing Venezuela of taking highly provocative

action. This after two Venezuelan military aircraft allegedly flew near a U.S. Navy vessel in international waters. It's the latest clash as the U.S.

has ramped up its war on drug cartels, including carrying out a lethal strike on a suspected drug vessel earlier this week, as you can see.

Zachary Cohen has more.

(BEGIN VIDEOTAPE)

ZACHARY COHEN, CNN CORRESPONDENT: Highly provocative. That's what the pentagon is calling a recent move by the Venezuelan military after two of

its fighter jets flew near a U.S. Navy ship operating in international waters. The Pentagon is also warning the Venezuelan government that it

should not take any further steps to interfere with the U.S. military's ongoing counter-drug operations in the region, and it's the latest

escalation of tensions between the two countries. It comes days after U.S. forces took the unprecedented step of destroying an alleged drug boat,

killing 11 people.

Venezuelan President Nicolas Maduro has repeatedly condemned the buildup of U.S. assets near his country, but the encounter between a U.S. ship and

Venezuelan fighter jets marks the first time he's used his own military to reinforce that message.

Now, top U.S. officials have strongly suggested that the Trump administration is preparing to conduct more strikes against suspected drug

traffickers and cartels operating in and around Venezuela. Defense Secretary Pete Hegseth, making clear this week that anyone attempting to

smuggle drugs into the U.S. will be considered an imminent threat.

PETE HEGSETH, DEFENSE SECRETARY: Every boatload of any form of drug that poisons the American people is an imminent threat, and at the DOD, our job

is to defeat imminent threats. A foreign terrorist organization poisoning your people with drugs coming from a drug cartel is no different than al

Qaeda, and they'll be treated as such as they were in international waters.

COHEN: The Trump administration's legal justification for carrying out this week's strike, or any additional strikes going forward, remains unclear,

but the threat of continued U.S. military action in the region is raising new questions about how Maduro might respond next time.

Zachary Cohen, CNN, Washington.

(END VIDEOTAPE)

FOSTER: As tensions rise in the Caribbean, one group is uniquely exposed.

Stefano Pozzebon speaks to fishermen who make their living on the seas, where warships are now gathering.

(BEGIN VIDEOTAPE)

STEFANO POZZEBON, CNN CONTRIBUTOR (voice-over): U.S. warships heading towards Venezuela. Tensions are rising in the Caribbean sea after president

Trump announced the U.S. conducted a kinetic strike that took out an alleged drug trafficking speedboat, killing 11 people.

But on shore, the sea looks calm. Work has not stopped for these artisanal fishermen, says Eduardo Ulloa (ph).

You can be a bit nervous, of course, but we still have to go out fishing. Otherwise, what are we going to eat?

Authorities have not issued warnings to keep these boats at bay. And with Venezuela's economy still in dire straits, nobody can afford an idle day.

Small scale fishermen like Ulloa normally stay within 20 nautical miles from the coast. They hardly risk encounters with the U.S. flotilla, but

still spend hours at sea without any comms.

If you stand up on the boat and look around, all you see is the sky and the sea.

The government's line, more belligerent. On Wednesday, Nicolas Maduro inaugurated a monument to its alliance with China, boasting close ties to

Beijing. On the day of Xi Jinping's massive military parade, in issuing a direct warning to Washington.

We're good people, people of peace. But let it be known, we are warriors. Fierce when they mess with our land, our history and our rights.

For now, the seas are calm in Venezuela, but choppy waters may lie just ahead.

Stefano Pozzebon, CNN, Chichiriviche, Venezuela.

(END VIDEOTAPE)

FOSTER: Coming up, cabinet reshuffle. The U.K. prime minister has dealt a big blow after his deputy was forced to resign.

(COMMERCIAL BREAK)

[15:17:37]

FOSTER: The British Labour government is in disarray after the deputy prime minister resigned over a tax scandal. Angela Rayner failed to pay the

correct amount of property tax on an apartment she bought earlier this year. She was also the housing minister. It has prompted a cabinet

reshuffle and another headache for the U.K.'s increasingly unpopular center left prime minister, Keir Starmer.

David Lammy, who had been serving as the U.K.s foreign minister, will serve as Rayner's replacement.

It's a different tale for the right-wing populist party Reform U.K., though. Nigel Farage's party surging in the polls on an anti-immigration

platform. At a conference today, he was seeking to put the boot into the country's two main parties.

(BEGIN VIDEO CLIP)

NIGEL FARAGE, LEADER, REFORM U.K.: We are the patriotic party. We are the party that stands up for decent working people, and we are the party on the

rise.

(END VIDEO CLIP)

FOSTER: More now from Nic Robertson on how Angela Rayner's resignation has shocked the government here.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The words that Keir Starmer wrote in his three-page handwritten note to Angela Rayner after she

handed in her resignation, kind of speak to that. A trusted colleague, a true friend, somebody who really showed the social mobility in the country.

This is a very significant political figure who's been close to his side since he's been prime minister, a significant player in his government. The

deputy prime minister, somebody that he's relied on, to sort of keep, if you will, the support of the left wing of the party as his sort of try to

hue it along a more centrist course.

But the language that is used there pays testament to somebody who's won admiration, particularly from the working classes in the U.K. You know,

she's talked about her own career and trajectory, leaving school at 16, pregnant without qualifications, becoming a grandmother when she was 37 and

when she became, an MP ten years ago, talking about she wished all those people that said to her back then, you will never amount to anything. She

wished they could see her now.

So, you know, when the prime minister talks -- talks about her in the terms of the embodiment of social mobility, he's really talking about somebody

who's sort of expresses and lives the core values of the Labour Party. And that's one of the reasons why this loss will be big for him.

I remember meeting with her on the election campaign trail a few years -- a few years ago. She was a powerful figure, a strong voice within the labor

party. So, this is a loss for the prime minister, but he's already moving beyond it.

Of course, politicians will. He's already appointed a new deputy prime minister, taking the foreign secretary, David Lammy, made him the deputy

prime minister, shifted the home secretary into the foreign secretary's position, shifted the justice secretary into the home secretary's position.

So significant reshuffle going on for the prime minister. More significantly, as you say, he's not doing well in the polls.

The leader of the opposition, in fact, commented on Angela Rayner's resignation and said, essentially, he didn't fire her. He should have fired

her. She had referred herself to the -- to the ministerial ethics committee just a couple of days ago, and they decided that she hadn't heeded the

warnings that she was given in deliberating the tax consequences of this house purchase that she made.

And that was the reason -- that was the context for her resignation. But there are those who will criticize the prime minister now outside of the

Labour Party for not firing her. That would be something that he will - he will find himself facing political heat from the opposition on.

(END VIDEOTAPE)

FOSTER: So, what we want to know is, can the current prime minister turn the tide?

Joining me now, Freddy Gray, deputy editor for "The Spectator".

Thanks for joining us, Freddy.

I mean -- you know, in this country, is it traditionally a two-party system, isn't it? And it does feel as if those two main parties are

crumbling right now.

FREDDY GRAY, DEPUTY EDITOR & U.S. EDITOR, THE SPECTATOR: Well, quite, I mean, we've had -- we've come out of a over a decade of a conservative

government. That became internationally famous for just going from crisis to crisis, failure to failure.

There was all the mess over Brexit. There was Boris Johnson's premiership. Then there was Rishi Sunak's premiership. We had endless disasters from a

Conservative government. And Labour came in promising, stability and at least, securenomics was an economic phrase.

And some people believed it, but in fact, we've just had more chaos at the top. And that's what's happened this week. And one of the big ironies for

me this week is that on Monday, Keir Starmer announced that phase two of his government was starting, which led everyone to say -- well, hang on a

second, what was phase one? Because it just seemed to be error.

And phase two, it seems, to be is carnage. And I think you're seeing a little bit of crocodile tears from Labour, today because there was a lot of

backstabbing. There was a lot of briefing going on against Angela Rayner from Labour people. They are like rats in a sack, trying to kill each other

and --

FOSTER: Yeah.

GRAY: I think to do the reshuffle he wanted to do.

FOSTER: It's going to be interesting, isn't it, for Donald Trump when he comes over because his -- you know, he's watching all -- he's being hosted

by a prime minister who's, you know, lost a lot of authority. At the same time, his great mate Nigel Farage is, you know, he's holding his conference

this week, isn't it? It's pretty spectacular show.

And they are riding high in their confidence, but also actually in the polls. Not that that means they'll get into government, but they're

probably doing better than any other party right now.

GRAY: Well, I think they have a very seriously good chance of getting into government at the next general election. And Nigel Farage said today he

thinks that general election is going to be sooner rather than later, 2027. He thinks because Labour are -- seem to be plowing this country into a

ditch. And so, yes, they have a seriously good chance.

And Farage has had an extraordinary week. He went to Washington to see Donald Trump, among other things, and, urged Donald Trump to take seriously

his concerns and reforms, concerns about free speech in Britain and then he's come home to this conference, which is now with the Tories and with

Labour struggling. So much reform are the coming party. A lot of energy, a lot of momentum with them.

It's -- it feels like it's all been teed up for Trump to do something spectacularly anti-government, anti-labor government, I should say.

FOSTER: And the -- well, that's it, isn't it? I mean, what do you think he might do?

GRAY: Well, I mean, I think, Reform are hoping that he will make some grandiose statement about free speech in Britain. The problem for them is

that so far, they've urged him to do it before. And he's just shrugged it off. J.D. Vance is much more concerned on a sort of more practical level

about free speech in Britain, the vice president.

[15:25:02]

But Donald Trump, Keir Starmer has twice in front of him said, oh, we have a strong tradition of free speech in our country. And we continue, we will

continue it. And Trump has just shrugged and said, okay.

So, it will be interesting to see if he does that. It's worth remembering that in 2018, when he came to Britain, he started off the trip by giving an

interview to "The Sun", where he said lots of outrageous things, that were very undiplomatic things about the British government, about how they we're

making a mess of Brexit, about how immigration had ruined Britain. And this completely sort of derailed this what should be a very civil state visit.

And I wonder if we might be about to see history repeating itself.

FOSTER: Yeah. I just wondered, you know, when you compare what's happening in the U.K. to other European countries like France you know, the debate,

you know, at the center of all these debates tends to be the cost of living crisis and how the right appears to have come up with a better answer to

that. But there is a tradition of the left dealing with that issue. But they seem so disorganized in France. They seem almost unpleasant in the

U.K.

What's going on with the left? Why don't we talk about the far left anymore?

GRAY: Well, the far left do have energy. You see that in France? You see that in Britain. You see that in America. But they don't have parties that

can really win power.

And Macron and Starmer are very similar ways, similar figures in various ways. They're both technocrats. By instinct. They're both socialist in

their core, but, public facing, more centrist. And they're both deeply unpopular and seemingly paralyzed in government, unable to deliver their

agenda because their party's the domestic politics has not supported them.

FOSTER: It's interesting. Freddy thanks for coming back onto the show, giving us your analysis.

Still to come, a tough job ahead for the economy. Investors mull disappointing data on the U.S. labor market. We get reaction from a former

chief White House economist.

(COMMERCIAL BREAK)

[15:30:36]

FOSTER: Let's return to our top story and the disappointment over the jobs numbers in the U.S. As we've been reporting, just 22,000 jobs were added in

August, far lower than the 76,500 new roles that economists had been predicting. And for the first time in almost four years, the U.S. economy

actually lost jobs with 13,000 less positions in June. Markets have been in the red as investors digest that news. President Trump cast doubt on these

numbers before they'd even been released, saying that the Bureau of Labor Statistics has been historically inaccurate.

The bureau's former chief told our Jessica Dean earlier that whilst this new data seemed accurate to him, it was the numbers themselves which were

scary.

(BEGIN VIDEO CLIP)

WILLIAM BEACH, FORMER U.S. BUREAU OF LABOR STATISTICS COMMISSIONER: So, we knew that the labor force was slowing. President Trump's successful effort

to control immigration has shrunk the rate of growth in the labor force, which was growing before because of all the immigrants coming in. So that

was kind of a blow to the labor force. But still, jobs should be created. These last several months have indicated to me that were in a definite

slowdown in the jobs market. Is that because of the tariff policies? Is that because of high interest rates? We have to pull that apart.

I think both are to blame. I think there may be other things as well. World trade is slowing because other economies are slowing as well. Interest

rates in a lot of foreign markets are rising in the private markets. You know, where people just bid on interest rates, even though central banks

are trying to get them down. That is signaling something as well.

So, it's too early to tell whether we're going towards a recession. We can definitely now say today that we're in a slowdown. There's no question

about that.

(END VIDEO CLIP)

FOSTER: What we don't know is, has Donald Trump actually got the economy off course?

Joining me now is the former White House chief economist Ernie Tedeschi. He's now director of economics at the Yale Budget Lab.

Thank you so much for joining us. I mean, it is the question, isn't it? I mean, we obviously heard there the view that this is the beginning of a

trend, but when do we know that this is a downhill path?

ERNIE TEDESCHI, FORMER CHIEF ECONOMIST, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Yeah. You know, I think that what this report showed is, I guess,

on the optimistic side in level terms, if you are employed, have a job, then the labor market is still okay. The unemployment rate this month was

4.3 percent. That is still a low rate. When you look at that key, 25 to 54 demographic, their employment rate at north of 80 percent, that is still

relatively high. That's, you know, 2001, 2000 levels.

But what it's also clearly showing, and I agree with the clip that you showed earlier, is that the labor market is weakening from that okay level.

The unemployment rate has gone up by more than half a point over the last two years.

And look, 22,000 jobs this month, 29,000 jobs per month on average over the last three months, that is weak no matter how you cut it, even taking into

account lower immigration, right, which is naturally going to bring down those payroll numbers.

So, look, if you are looking for a job right now, if you don't have one or you're -- or you are trying to switch jobs, I don't think this is a very

good labor market for you.

FOSTER: And people are going to be feeling that, aren't they? And then they're going to see Donald Trump saying the numbers aren't accurate. But

you wont be able to keep doing that if they're feeling the pain.

TEDESCHI: Right. So, you know, when you look over time, the revisions to the numbers have actually gotten smaller, not larger, over the last 50

years. Our government surveys have gotten more accurate, and they're staffed by, you know, experts and civil servants who are independent, who

dedicate their lives and careers to getting the numbers right.

So, it's just not a satisfactory answer that the numbers are, you know, being cooked or biased. They're not. They're -- you know, they will get

revised. You know, we saw revisions today. We will get annual revisions later this month or get the first look at them.

But, you know, that is because we are getting more information that we are incorporating. I think the core trend is clearly present, which is that

this labor market is weakening. Now, I don't think that we've gotten to the threshold where were at a recession yet.

[15:35:01]

Again, we've never had a recession where the unemployment rate has been at 4.3 percent. I don't think that we've had a postwar recession in the United

States, where the unemployment rate has peaked below 6 percent. So we're a ways off before we get to something where alarm bells should really going

off.

But look, the unemployment rate is rising and we can't be confident that it\s going to stabilize yet.

FOSTER: Is this combination that economists are fearing, though, isn't it? The combination of the rising unemployment and the rising prices? Because

that's a much more complex problem, isn't it, which the Fed can't solve on its own.

TEDESCHI: That -- that is exactly the problem. So, right, the role that the Fed plays in all of this is, you know, our Federal Reserve is unlike many

central banks and that they have two mandates. They have a full employment mandate and a price stability mandate. And usually despite having two

mandates, the -- you know, the two go hand in hand.

But right now, they're contradicting one another. So, you have higher prices in great part due to tariffs but not entirely due to tariffs, due to

some other supply side factors like droughts across the world, you know, affecting beef prices. And then you have a weakening labor market.

And so, the response of the Fed is not entirely clear. If they cut rates to try to bolster the economy, that's going to add inflationary pressure and

inflation, even though it has come down since its pandemic highs, has still not yet gotten back to the Fed's 2 percent inflation target. And tariffs

are only getting it further away from that target. So, it's a real conundrum for the Fed what to do in this case?

FOSTER: Yeah, it's really tricky. Ernie Tedeschi and his dinosaur, thanks for joining us.

Now the board of Tesla is making $1 trillion offer to CEO Elon Musk. The deal would make him the world's first trillionaire, would you believe? He's

pointing upwards appropriately.

The board says the, pay proposal is an incentive to get Musk to focus on Tesla moving forward. In addition to Tesla, Musk has many other businesses

and political interests. Of course, in recent months, Tesla has seen a decrease in sales and value.

Hadas Gold has more on all of this.

(BEGIN VIDEOTAPE)

HADAS GOLD, CNN MEDIA CORRESPONDENT: Max, if this pay package is approved, it would be the largest corporate compensation package in modern history,

and it would all be in the form of Tesla shares 423.7 million in shares.

And if Tesla reaches the value that Elon Musk would need to reach in order to be able to get this entire pay package, those shares would estimated to

be worth around $900 billion. Add that to his current net worth of about $400 billion, and you have vaulted Elon Musk into the world's first

trillionaire category.

But there are some pretty big, ambitious goals that Tesla and Elon Musk would need to meet in order for him to be able to get this pay package. And

here are some of those conditions.

First of all, the Tesla value would have to be around $8.5 trillion. That is an eight-fold increase from Tesla's current value of around $1.1

trillion.

Twenty million Teslas would need to be delivered. That's hugely ambitious. If you look at the numbers of 2024, Tesla delivered less than 2 million

vehicles, 1 million of those autonomous robotaxis would need to be delivered. One million of those autonomous Optimus robots would need to be

delivered, and Elon Musk himself would need to stay at Tesla for at least seven and a half years and ten years, if he wants to be able to get the

full share amount.

What was really interesting from this suggested pay package is that there was no restrictions on any of Elon Musk's outside activities, including

politics, and several Tesla investors had publicly said that they would love to see restrictions on Elon Musk's political activity because they

directly tie Tesla's struggles over the past year, their slumping sales, the volatile stock price as a direct result of Elon Musk's involvement in

President Donald Trump's election and eventual administration.

But the Tesla chair, Robyn Denholm, she has defended this package, saying it was necessary to keep Elon Musk engaged and involved. Take a listen.

(BEGIN VIDEO CLIP)

ROBYN DENHOLM, CHAIR, TESLA BOARD OF DIRECTORS: The plan is super ambitious and that that is what motivates Elon. So in in coming up with a plan that

will incent, motivate have his time, focus and attention on Tesla, we needed to come up with a plan that was super ambitious.

(END VIDEO CLIP)

GOLD: Shareholders will get to have their say. They will vote on this pay package on November 6th -- Max.

(END VIDEOTAPE)

FOSTER: Thank you to Hadas.

Still to come, Gaza City being destroyed before the eyes of the world. Israel's escalating attacks, despite a renewed appeal from hostage

families.

(COMMERCIAL BREAK)

[15:42:50]

FOSTER: Hamas has released a propaganda video of two hostages being driven around Gaza City amid an escalating Israeli offensive.

With the family's request, we're not showing the full video. The footage, said to be from August 28th. About a week ago. CNN has geolocated it to

Gaza City. The videos release came on the 700th day of the war, marked by protests across Israel calling for a ceasefire.

Hostage families say the Gaza City assault puts their loved ones in, quote, immediate and direct danger, because the IDF lacks precise intelligence on

their location. Yet Israel appears undeterred, escalating attacks on Gaza City by bombing a high rise building.

The IDF says the building was being used by Hamas. The buildings management denies that, saying it was housing displaced civilians. Israel says it gave

an evacuation order before the strike. The IDF is also targeting tents, sheltering families, leaving children amongst the dead.

Nada Bashir has more. Warning you, her report contains disturbing images.

(BEGIN VIDEOTAPE)

NADA BASHIR, CNN CORRESPONDENT: Well as the Israeli government warns of a deepening military offensive in Gaza City, Israeli attacks on the city have

intensified overnight Thursday into Friday, a barrage of Israeli strikes targeted both residential buildings and tent camps, according to hospital

officials on the ground, killing more than a dozen people, including several children.

Social media video from the scene showed doctors and aid workers treating bloodied and burned children following the devastating attack, with

residents recounting the horrifying incident to our own team on the ground.

UNIDENTIFIED FEMALE (through translator): I was asleep and woke up injured. I found my brother covered in blood, lying on the ground. I went outside

hoping someone could help me rescue him, and I was shocked to see my uncle, my cousins, my uncle's wife, my other uncle and his children all injured.

UNIDENTIFIED MALE (through translator): These were innocent children, innocent women displaced from Jabalya. They told them to evacuate Jabalya.

So, they came here and then they bombed them.

[15:45:00]

They were told this area would be safe. But there is no safe place in Gaza.

BASHIR: According to one Israeli official, some 70,000 Palestinian civilians have so far evacuated Gaza City. But that is just a fraction of

the 1 million people currently believed to be residing in the war-torn city.

Meanwhile, humanitarian airdrops in the area have been brought to a halt and a distribution points have been placed outside of the city, meaning

civilians will have to leave Gaza City in order to obtain what little food aid is being made available.

The military operation has drawn fierce criticism internationally, with U.N. officials warning that it could result in horrific humanitarian

consequences. And within Israel, there continue to be large-scale protests pushing for a hostage deal and even opposition from some of Israel's most

senior military officials.

With fears growing over the safety of Israeli hostages still held captive in Gaza, at least two of whom appeared to be held in Gaza City, according

to a propaganda video released by Hamas on Friday, in which captives Guy Gilboa-Dalal and Alon Ohel appear to be driven around Gaza City.

Despite concerns, Prime Minister Netanyahu has vowed to continue until his military gains total control over Gaza City, with military officials

claiming that the military already holds some 40 percent of the city.

Nada Bashir, CNN, in London.

(END VIDEOTAPE)

FOSTER: A man known as Thailand's cannabis king, is the country's new prime minister. This happening after a once influential leader fled Thailand on

his private jet.

Our Hanako Montgomery is covering that story for you.

(BEGIN VIDEOTAPE)

HANAKO MONTGOMERY, CNN CORRESPONDENT: Thailand's politics has taken another sharp turn. A new leader has just been elected.

Anutin Charnvirakul, a center right leader nicknamed the country's "cannabis king" for decriminalizing marijuana in 2022, is now prime

minister.

He also helped steer Thailand's COVID-19 response. He replaces Paetongtarn Shinawatra, heir to a dynasty that has long dominated Thai politics, who

was ousted by a court ruling over an ethics violation after only a year in office.

For two decades, power has swung between the military and the Shinawatra or their proxies. So her removal marks a pivotal juncture in Thai politics.

Anutin's election also comes a day after former Prime Minister Thaksin Shinawatra, Paetongtarn's father, fled the country for what he called a

checkup. Thousands of Thais tracked his flight as it detoured through India and eventually landed in Dubai.

On X, Thaksin explained the change of course, saying it was too late to land in Singapore and that his regular orthopedic doctor and pulmonologist

are in Dubai.

Now he has vowed to return to Thailand by September 8th, just a day before a court ruling that could send him to prison. Thaksin faces corruption and

abuse of power charges from his premiership between 2001 and 2005, charges he insists are politically motivated.

After being ousted in a 2006 military coup, Thaksin spent 15 years in self- exile, mostly in Dubai, to stay out of prison. He staged a dramatic comeback in 2023, only to be taken into custody to serve an eight-year

sentence.

But royal pardon reduced the term to one year, and he was quickly paroled, never spending a night behind bars. Even in exile, Thaksin remained a major

power broker, helping his sister, brother in law, and daughter rise to prominence.

So, the timing of his sudden checkup has raised eyebrows and fueled speculation that the Shinawatras know they're losing their grip on power.

Hanako Montgomery, CNN, Tokyo.

(END VIDEOTAPE)

FOSTER: New York City Mayor Eric Adams has scheduled a news conference today on the future of his reelection campaign. It's not known what he is

planning, but sources tell CNN that a key aide to president Donald Trump held a private meeting with Adams. They say Mr. Trump's Middle East envoy,

Steve Witkoff, discussed potential opportunities for Adams in the administration. We're told one of those possibilities is the

ambassadorship, potentially to Saudi Arabia. Nothings been finalized, but the talks appear to be aimed at convincing Adams to drop his bid for

another term as mayor.

Now, Trump is said to be eager to prevent progressive Democrat Zohran Mamdani from November's election. Adams leaving the race could potentially

allow Andrew Cuomo to consolidate the opposition vote to Mamdani.

Still to come, a soon to be saint may surprise you. We'll explain why so many people are heading to the Vatican this weekend for an historic

canonization.

(COMMERCIAL BREAK)

[15:52:23]

FOSTER: Catholics, young and old, are heading to Rome for a special ceremony this weekend. Pope Leo is set to canonize a 15-year-old boy who is

credited with two miracles since he passed away.

CNN's Vatican correspondent Christopher Lamb has the story.

(BEGIN VIDEOTAPE)

CHRISTOPHER LAMB, CNN VATICAN CORRESPONDENT (voice-over): God's influencer. An Italian teenager who is a computer whiz kid and love video games.

Carlo Acutis will become the first Millennial Saint.

Now when people think of saints, they often imagine men with beards and robes and something from the past. But Carlo Acutis, as you can see, is

someone who was laid out with jeans and trainers. So he's a very relatable saint.

And at a time when the Catholic Church is seeking to connect with a younger generation, this figure of Carlo Acutis has a lot of resonance today.

He died aged 15 of leukemia in 2006 and has developed a global following.

OLIVIA SANTARELLI, PILGRIM: He's just like us. He's just like a regular teenage guy and he had the same interests. He liked sports, he liked the

Internet, of course. And so, yes, he really just represents young people.

GARY FRIESEN, PILGRIM: I feel like I have a closer connection to him because I was born on the year that he died and I have the same hobbies as

him and on Instagram I try to spread the gospel as best as I can.

LAMB: Carlo's path to sainthood has been swift, but his mother Antonia said he wasn't raised in a religious household, his faith partly nurtured by his

Polish nanny.

ANTONIA SALZANO, CARLO ACUTIS' MOTHER: I was converted by my son, he was my savior.

LAMB: He grew up in a wealthy family but used his privileged position to help others, donating pocket money to the homeless while setting up a

website to document reports of miracles. Candidates for sainthood usually need two miracles attributed to their intercession.

Carlo's included a reported healing of a Brazilian boy with a birth defect and a young woman from Costa Rica injured in a bicycle accident in

Florence.

Interest in Acutis is global, his tomb here in Assisi received almost a million visitors last year and an official shrine has been set up in

Pennsylvania.

Carlo's mother describes him as a normal child who enjoyed playing on his PlayStation and made videos of his family pets. He also stood up for pupils

being bullied at school. Antonia believes his message can resonate with young people today.

SALZANO: It's a message of hope because Carlo said, yes, you have to use for the good. This is the motive why Pope Francis called Carlo influencer

of God.

LAMB: Acutis' canonization comes as the church is still reeling from the damage done by the scandals of clerical sexual abuse of children.

[15:55:06]

But also when research shows a rise in interest in Catholicism among Gen Z, many of whom are expected in Rome to witness this video gaming teenager

being declared a saint.

Christopher Lamb, CNN, Rome.

(END VIDEOTAPE)

FOSTER: Finally, tonight, an update. A significant piece of Hollywood history fetched a healthy price tag on Thursday. The lightsaber used by

Darth Vader in "The Empire Strikes Back" and "The Return of the Jedi" was sold for more than $3.6 million in auction. It was the highest priced item

sold by collectibles company Prop Store, and it fetched about half $1 million more than it had expected to. There it is. Hundreds of props were

up for sale, including one of 12 volleyballs that were used to portray Wilson in the film castaway. The distressed and worn Wilson was estimated

to be worth $20,000 to $40,000, but ended up actually selling for more than $100,000.

I'm Max Foster. That's WHAT WE KNOW.

"QUEST MEANS BUSINESS" with Paula, up next.

END

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