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Economy Adds Back 559,000 Jobs in May, Jobless Rate Falls to 5.8 Percent; President Biden Addresses Latest Job Numbers as Unemployment Falls Below 6 Percent for First Time since March 2020; Facebook to Change What Politicians Can Get Away with on Platform. Aired 10:30-11a ET
Aired June 4, 2021 - 10:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JEREMY DIAMOND, WHITE HOUSE CORRESPONDENT: He is saying America is on the move again. He is calling this jobs reports more evidence of historic progress for American families and the American economy.
And I think what is important to highlight here is the fact that the White House isn't just looking at this one jobs report. They're looking at the progress that has been made since President Biden came into office. And I think that is the message that you'll hear from the president as he's expected to speak minutes from now here in Rehoboth Beach, Delaware.
Last month, for example, after that disappointing April jobs report, you heard the president saying that he still saw positive signs in certain sectors of the economy and more broadly that this wasn't just about one jobs report or the other. This was about the overall picture of the economic recovery, a recovery that we know is -- has been and will continue to be uneven in different spots because of the unprecedented nature of this economic recovery.
But nonetheless, the president is going to be touting the jobs gains from this last month and also talking, of course, about what we saw last week, which was this steady drop in these unemployment claims. So the overall picture is good and that's what we're going to hear from the president minutes from now.
POPPY HARLOW, CNN ANCHOR: Okay, we're standing by for that. Jeremy, thanks very much.
While we wait for the president, I'm joined now by Labor Secretary Marty Walsh. Good morning, Mr. Secretary, thanks for the time.
MARTY WALSH, SECRETARY OF LABOR: Thanks for having me today.
HARLOW: So you've got the numbers we just went through with Jeremy. We are still down 7.6 million jobs since the beginning of the pandemic. Do you have an estimation as to how long it's going to take to regain all of those?
WALSH: No. I wish I could predict it or see into the future here, but it is a month at a time. And we're seeing that the president's economic plan is working. The investments from the American rescue plan are getting people back to work, betting people back into schools. We're seeing that correlation in these numbers today. We're seeing growth that is exciting as far as moving forward.
You know, this economy and recovering from the pandemic is going to take -- we knew it was going to take time. We knew it was going to be kind of a steep climb here. This month are good numbers. It's great to see the hospitality industry and the restaurant industry coming back so strong this month. It's great to see the schools and education coming back this month. But there's no question that we still have work to do.
HARLOW: Except you do still have 8.1 million job openings. And we've heard from the hotel sector, the restaurant sector, et cetera, about how hard of a time they're having filling those jobs. And I understand there have been some gains in this report in those sectors but you have got governors in 24 states that have eliminated the extra $300 a week federal unemployment benefit saying it's keeping people from going back to work.
There is nominal evidence of that from the San Francisco Fed, not overwhelming. Some University of Chicago economists are seeing the same. I guess I'm wondering is the White House position that if indeed the $300 extra weekly benefits are keeping some people from taking these jobs, that is okay because net-net it's helping people?
WALSH: See, I don't view it that way. I think the unemployment insurance and the $300 that people are getting right now is allowing the opportunity to put food on the table and keep a roof over their head as their jobs come back, as the industries open up. When you think about hospitality, those jobs that are open in restaurants and hotels, they're not fully back yet because people are not fully back yet. And as we continue to move forward over next couple months, we're going see more and more activity.
I mean, I was just waiting to go on T.V. today and I looked over my shoulder and I saw a tour bus driving down the street in Washington, D.C. And I can't remember the last time that I saw a tour bus on the streets of America. So we're starting to see people traveling, people using more, going out more, doing things. And we're going to start to see more and more people get back into the economy. We can't just flip a switch and get everyone back to work tomorrow.
Those 8.6 million jobs that are allegedly are -- they're looking for people for, I mean, again, I think over the course of the next few months, we're going to see those jobs filled.
HARLOW: Okay, we'll watch that. I want to ask you about this big headline out of The Washington Post this morning on corporate taxes and President Biden signaling that he is willing to, in the infrastructure negotiations, drop his call for a 28 percent corporate tax rate that would have raised $2 trillion to fund the plan and replace it with raising the bottom minimum corporate tax rate up from zero, which some companies pay on a federal level, up to 15 percent. But doing the math here, that new proposal would only raise a trillion dollars. So where does the other trillion come from? Would that then be debt financed?
WALSH: Well, the president has been very clear from the very beginning that this is a negotiation that he's going to bring people to the table. And as we continue to have conversations, we're going to have conversations continuing about how we're going to pay for the plan and what the plan will be ultimately at the very end.
And I think that the president is true to his word in what he said there. And he's had open door conversations with everyone from all different sides of the aisle. Again, this is a very fluid conversation and negotiations will move forward.
HARLOW: No, I hear you. I'm not saying it's bad to compromise. I think we all think compromise is a good thing. But what I'm asking is about concerns from even some fellow Democrats, like Senator Ron Wyden, who chairs the Senate Finance Committee, who says, quote, inadequate corporate tax revenue could leave many critical investments of Americans, people off the table and he is concerned about a shortfall, right?
I guess I'm just wondering how the American people, the taxpayer, if this is the plan that gets through, going to be on a hook for a trillion dollars more than the president had with his original corporate tax rate plan?
WALSH: Well, yesterday is one conversation of many going on. So, there are other conversations happening about what the size this plan looks like, where the investments are going to be made, how do we pay for it. So, yesterday was just one conversation in many conversations that are happening right now.
HARLOW: Okay. TBD, more on that, it sounds like, to come.
On inflation, we just saw the highest inflation reading in 29 years. And you've got some corporate CEOs speaking out pretty remarkably on this. I mean, Honeywell's CEO, they're the most valuable industrial company, said, quote, we're seeing substantial inflation. It's definitely here, probably a little more pronounced than people think. That's what he told my colleague, Matt Egan.
I know the White House bet here is that it's temporary. And we all hope the White House is right on this, right? No one wants to see prolonged runaway inflation. But what if the White House is wrong? What is the plan?
WALSH: Well, one of the biggest conversations we had today at the Department of Labor, was -- we talked about inflation when we were going over the numbers for the jobs report. We're looking at increased wages. We're looking at the areas that gained and then we talked about inflation. And, again, I think that the jury is still out on what does this mean long-term as far as inflation goes? And I don't think necessarily as we think about moving forward if it continues, we'll have to come up with obviously a solid plan. But right now, as the White House said, our feeling is that it's a temporary increase, a temporary inflation number and not a long-term inflation number.
And, again, as we think about coming through this pandemic -- sorry.
HARLOW: I was just going to say, you said, we'll have to come up with a plan. Does that mean there is not a plan?
WALSH: No, no, no. I'm just saying -- I'm just talking about the Department of Labor, what we're doing at the Department of Labor. Certainly, this conversation came up today in our morning briefing. And it's going to be a conversation that we're going to continue to have internally to talk about what the long-term could be.
HARLOW: Okay. Sorry to step on you, a little bit of a delay here.
Final question for you, because it was interesting to hear last week in Cleveland, the president seemed to really acknowledge the inflation risk. Let me play for people what he said.
(BEGIN VIDEO CLIP)
JOE BIDEN, U.S. PRESIDENT: There's going to be supply chain issues, price distortions on the way back to a stable and steady growth. In the coming weeks, my administration will take steps to combat these.
(END VIDEO CLIP)
HARLOW: So he said, we are going to take steps to combat this. Can you shed some light on what those steps are?
WALSH: No. I mean, again, I think it's about getting the economy, getting people back to work in some places. I think one of the areas that we saw today in the jobs numbers that my area that I love is construction. We saw it down 20,000 jobs. And we're having the dialogue today about why that was the case. We didn't see it in small building homes. We saw it in larger construction projects.
And I simply asked the question, do we think it's because of supply chain and getting material? And a lot of people said that is probably the issue. So, again, this is -- the economy that we have right now is an engine and we're getting revving on all cylinders.
HARLOW: Secretary Walsh, thank you. And now, the president.
BIDEN: Today, we received great news for our economy and our recovery and for the American people. This morning, we learned that in May, our economy created 559,000 new jobs, unemployment rate fell to 5.8 percent and wages went up for American workers. That means we have now created over 2 million jobs in total since I took office, more jobs than have ever been created in the first four months of any presidency in modern history. Triple the rate of my predecessor, eight times the rate of President Reagan.
The unemployment rate is now below 6 percent for the first time since the pandemic hit, the first 14 months, first time, first time in 14 months, we saw the largest decline in the number of long-term unemployed and more than an entire decade, the last ten years. Long- term unemployment dropped by the second largest amount ever recorded. Not only that, but the signs of further progress are already here.
This report is based on a weekly -- a week in early May. That's how they determined the jobs growth or loss.
We have growth. And that -- and that week in May, we only had 35 percent of working age adults have been fully vaccinated.
Now, they were still all wearing masks. Since then, 21 million more adults have gotten vaccinated, making it easy for them to return to work safely. In short, this is progress, historic progress, progress that is pulling our economy out of the worst crisis it's been in 100 years.
And its testament to the new strategy that is growing this economy, not only growing it but growing from the bottom up and the middle out. Remember, when I took office in January, our economy was in a tailspin. Job growth had stalled. COVID was raging. Average initial claims for unemployment insurance were over 830,000 per week. Now those claims have fallen below 430,000, about half of what they were when I took office.
Before I took office, almost 24 million Americans are going hungry. Remember those long lines of cars, miles long, people waiting for just a box of food to be put in their trunk? That number has already dropped by 25 percent, still too many but clear progress.
Before I took office, independent experts were projecting that the American economy would grow by 3 or 4 percent in 2021, this year. This week, the Organization of Economic Cooperation and Development, the so-called OECD, which makes up a group including the world's largest economies and its membership and has been one of the leading bodies analyzing economic growth worldwide and individual nations increased their projection for U.S. economic growth this year to 6.9 percent in 2021. That's the fastest pace in nearly four decades.
In fact, the U.S. is the only major economy where projections of future growth are stronger today than they were before the pandemic hit in 2020. And in May, manufacturing activity was nearly as strong as it was in more than 15 years, stronger than in 15 years. No other major economy in the world is growing as fast as ours. No other major economy is gaining jobs as quickly as ours.
And none of the success is an accident. It isn't luck. It is due in no small part, first of all, the cooperation of the American people in responding to my effort to get COVID-19 under control, wearing masks initially and getting vaccinated and it's no small part to the bold action we took by passing the American rescue plan. The plan provided those resources to get shots in people's arms. Underwrite the vaccination effort, enough vaccines supply for every single American, more vaccinators, people who put shots in the arms, and more vaccination sites. And now 52 percent of American adults are fully vaccinated. 75 percent of our seniors are fully vaccinated.
And the American rescue plan delivered economic benefits directly to the American people. Because of that law, more than 167 million of those rescue payments of up to $1,400 have gone out to individual families.
A recent study, the Census Bureau data found just how much these checks mattered. They drastically reduced depression, according to the study, anxiety, and hardship for families. More than 40 percent fewer families struggled to afford food, rent, utilities, car payments, student loans and health care expenses. Small businesses and restaurants were getting killed. Now, we're delivering loans and support they need to reopen and to stay open.
Schools were struggling to reopen. So we made vaccinating teachers a priority. We delivered schools the much support they needed. State and local governments had to lay off tens of thousands of educators and first responders. Many are now back on the job thanks to the rescue plan. In fact, in May, state and local governments added 103,000 education jobs, returned them to work.
These funds are continuing to get out this month to support state and local governments, which will help get more people back to work. Small and medium-sized businesses are now able to take advantage of a special tax credit called the employee retention tax credit. It provides businesses a generous tax credit to retain or hire more workers. Through our restaurant revitalization fund, we anticipate being able to help over 100,000 hard-hit restaurants stay open or reopen.
And beginning next month, most families with children will be getting a tax cut which will be going and deposited into their accounts directly to their bank accounts every month. We know that access to child care is one of the biggest barriers in the way of parents going back to work. Our administration is delivering $39 billion in child care relief to help child care providers get back on their feet, the providers, and serve more families. And this month our economy added nearly 20,000 more child care jobs that were not there last month, in fact, allowing parents to have access to get help.
And temporary boost in unemployment benefits that ended -- that we enacted, I should say, helped people who lost their jobs through no fault of their own who and who still maybe in the process of getting vaccinated but it's going to expires in 90 days. That makes sense, it expires in 90 days.
To sum it up, look, COVID cases are down. COVID 19 deaths are up. Unemployment filings are down. Hunger is down. And vaccinations are up. Jobs are up. Wages are up. Manufacturing is up. Growth is Up. People gaining health care coverage is up. And small business confidence is up. America is finally on the move again. As we continue this recovery, we're going to hit some bumps along the way. Of course, that will happen. We can't reboot the world's largest economy like flipping on a light switch. There are going to be ups and downs in jobs and economic reports but there are going to be supply chain issues and price pressures on the way back to stability to steady growth.
In the coming weeks, my administration is going to take steps to combat the supply constraints, building on the work we're doing on the computer chips that is we're providing more computer chips to be manufactured here in the United States so it doesn't slow up the manufacturing of automobiles, for example.
Everyone needs to get their shots though. Now is the time to accelerate the process we've been making. Now is the time to build on the foundation we've laid, because while progress is undeniable, it is not assured. That's why I propose the American jobs plan and the Americans family plan for generational investments.
We need today -- we need to make those investments today to be able to continue to succeed tomorrow. We have a chance to seize on the economic momentum of the first months of my administration, not just to build back but to build back better.
This much is already clear. We're on the right track. Our plan is working. And we're not going to let up now. We're going to move on. I'm extremely optimistic. I hope you are as well. And may God bless you, may God bless America and may God protect our troops. Thank you all for being here this morning.
REPORTER: Mr. President, (INAUDIBLE) on the infrastructure talks?
BIDEN: I'm going to be having talks this afternoon and I will be able report to you after that.
REPORTER: Are you expecting a camera (INAUDIBLE), Mr. President?
BIDEN: I'll tell you after I meet this afternoon.
HARLOW: The president not answering many questions there, Jim, asking obviously about where the infrastructure negotiations are. But, overall, rosy picture that he is painting about the economy. It is getting better. But there is still a lot of economic pain and there is still a debate over whether unemployment is keeping some folks from taking some the open jobs.
JIM SCIUTTO, CNN NEWSROOM: True. He does say the OECD estimates the U.S. economy will grow 6.9 percent this year. That will be quite a figure, obviously a lot to make up for post-pandemic but still a remarkable figure, and as he notes ahead of Europe and many other countries. But on the way out, key question there, Poppy, right, will he be able to make a deal with the Republicans on the next step, infrastructure.
HARLOW: Yes, stay tuned.
Okay, We're going to take a quick break. We'll be right back.
SCIUTTO: CNN has learned that Facebook plans to end its controversial policy which shields politicians from the same content moderation rules, as they're called, that apply to regular users, like you and me.
HARLOW: That's right. The reversal comes after the social network's oversight board reviewed Facebook's decision to suspend former President Trump and decided the site's rules were overall too vague on this.
To explain it, let's bring in our Chief Media Correspondent Brian Stelter and our Correspondent Donie O'Sullivan. Good morning, gentlemen.
Brian, let me begin with you. Can you explain the change and how this is tied to the oversight board and the really big, ultimate decision Facebook is going to make here?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Right. this is the result of the ruling one month ago from the oversight board saying, yes, Facebook, you can do whatever you want to Trump but you've got to make the rules more clear.
And so as a result, this will have impacts for other world leaders, for other politicians, for others who want to use Facebook's platform to rile up a crowd with misinformation and hate and other kind of things. This is an attempt by Facebook to make the rules more clear for everyone and to say that just because you are an elected official, it does not mean you can just go along breaking all the Facebook rules.
But as we've always known with Facebook, they seem to be making this up as they go along. So I think we should be skeptical about what they're announcing today.
SCIUTTO: So, Donie, specifically, what does -- what do the Facebook rules look like now for politician and how do they differ from, if at all, the rules as they apply to you and me?
DONIE O'SULLIVAN, CNN CORRESPONDENT: Yes. So, sort of unbelievably, up until this point, Facebook has never made clear, not to politicians, not to the public, really what the rules are.
They are expected to make this announcement formally later today. But we have heard from a source who is familiar with what is going on that Facebook is going to sort of explain, you might remember last year when Trump posted on Facebook, and he also tweeted about losing will lead to shooting in Minneapolis after the killing of George Floyd. That was seen by Facebook staff as something that was glorifying or inciting violence and should have been taken down.
But Facebook views posts from world leaders to say, well, actually, they should be left up because they are newsworthy, they are part of the public conversation. Facebook now plans on no longer waiting so much on the newsworthiness and will start to act more on a content, whether it is hate speech or incitement of violence.
They will, however -- I am told, they will occasionally leave up some posts like this but they will label it with an explanation to say that they're leaving it up because it is newsworthy. And, finally, the big thing here, guys, is we're not hearing of any plan at all for Facebook to fact-check politicians.
So, really, when you take a step back and look at this in the current environment when we're hearing reports of Trump still talking about how he falsely might be able to come back in office and overturn election, posts like that are not going to be fact-checked. So some stuff is changing, a lot of stuff is not.
HARLOW: How do you explain that, Brian?
STELTER: I explain it as Facebook doesn't want to be in that business. And it's profitable not to be. It's incredibly profitable to just have a site up there and let people do what they want. It's incredibly powerful to be a nation state. Facebook is basically a nation state with incredible power to influence the conversation around the world and yet it does not even know how to do that or how it wants to do that from month to month when it comes to these world leaders. This is an issue not just for the United States but for all the countries around the world.
SCIUTTO: Yes, the financial incentives aligned against that change. Brian Stelter, Donie O'Sullivan, thanks very much.
HARLOW: Thanks, gentlemen. And thanks to all of you for being with us today and all week. Have a good weekend. We'll see you Monday. I'm Poppy Harlow.
SCIUTTO: And I'm Jim Sciutto. Have a great weekend.
At This Hour with Kate Bolduan starts right after a short break.