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Interview With Former U.S. Secretary of Defense Leon Panetta; Solid Jobs Report. Aired 1-1:30p ET

Aired May 02, 2025 - 13:00   ET

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

[13:00:58]

ERICA HILL, CNN HOST: Stocks rise sharply as the latest jobs report beats expectations, positive signs for an economy facing headwinds for President Trump's trade wars. Just ahead, what the new data says about the chance of a recession and the impact on your bottom line.

Plus: broadcasting battle. The president escalates his long-running feud with NPR and PBS. Why he's now looking to strip federal funding for both broadcasters, despite questions about whether he can even legally do so.

And Tennessee officials release video of a 2022 traffic stop the government has used to paint Kilmar Abrego Garcia as a criminal. He, of course, is the Maryland man the Trump administration admits was mistakenly deported to El Salvador. We will break down what that bodycam footage does and does not show.

We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

Happening now, U.S. stocks, as you see there, rallying after a solid April jobs report. Nice to see some green there at the Dow, the economy adding more than 177,000 new jobs in April. That beat expectations somewhat handily, amid, of course, this ongoing tariff uncertainty.

Let's get straight to my colleague Matt Egan.

So, Matt, a little bit of a silver lining here. It was a week that also saw the economy shrink for the first time in three years. So this is welcome news.

MATT EGAN, CNN REPORTER: Yes, Erica. Happy Friday.

And it is nice to be here to deliver some good news about an economy that has been rocked by recession fears. And, look, no doubt there's a lot of uncertainty, a lot of concerns about this economy, but, thankfully, the recession fears are not showing up in the jobs data, at least not yet.

Let me run you through the key numbers, this report showing that the U.S. economy added 177,000 jobs last month. That is a solid number in any environment, but especially this one. It beat expectations. And it was basically in line with March, which was revised lower. Now, the unemployment rate at 4.2 percent, again, that actually stayed

the same. That is a relatively low number. Now, when we look at the trend of job growth over the past year, what you can see is that job growth has been remarkably steady.

In fact, really just zooming in to the last three months, I mean, if you were asleep, you almost wouldn't know, looking at the jobs market, that were in the middle of a global trade war and that markets have been rocked by all of these concerns about a potential recession.

When we look at where the jobs have been added, leisure and hospitality adding 24,000 jobs, health care more than 50,000. Manufacturing lost jobs, which is notable because tariffs, of course, are supposed to be propping up manufacturing.

And the federal government lost jobs for the third month in a row. The market reaction right here very positive. You see stocks up across the board. Thankfully, this is one of those times, Erica, where investors are concluding that, yes, good news for Main Street is good news for Wall Street.

And, in fact, the S&P 500 is on track for its ninth straight day of gains. That would be the longest streak since 2004.

HILL: Wow. That would be quite a streak, especially after what we saw, of course, in the last couple of weeks.

We also heard from President Trump today after these job numbers came out, posting once again on TRUTH Social that the Fed should lower interest rates. How is the market responding to those comments?

EGAN: Well, investors are kind of saying the opposite, right?

The big takeaways here are that this is a resilient jobs market, despite all those uncertainties, that the hard economic numbers are beating the weak surveys and really that there is no need for a Fed rescue with interest rate cuts. In fact, investors have lowered their odds of an interest rate cut.

There's virtually no chance of a cut at the next week's meeting. But even when we move out to June, the odds of an interest rate cut have come down in the last 24 hours significantly because of this jobs report. And Goldman Sachs, they had been penciling in a rate cut in June. Now they don't see one coming until July.

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In talking to economists about this jobs report, one of the things that we have heard here is that it shows resiliency, right? Mark Zandi said that this jobs report shows that the economy is not in recession and there's this firewall between the uncertainty and what's going on here.

But he did say that the firewall, being the jobs market, feels fragile,and unless the trade war de-escalates in the next few weeks, the firewall will come down and a recession will ensue. And so, Erica, I think that is the key point here, right? This is a

rearview-mirror-looking number. It tells you where we have been, but not necessarily where we're going. And so all the economists that I'm talking to, yes, they're relieved about this report, but, no, they're not saying the economy is out of danger, not yet.

HILL: Yes, it is such an important note, and especially the fact that we are looking into the past to what has happened, as we wait to see what the future brings.

Matt, appreciate it, as always. Thank you.

EGAN: Thanks, Erica.

HILL: Also joining me now to discuss, David Gura, anchor and correspondent for Bloomberg News and host of the "Big Take" podcast, and Gavin Bade, trade and economic policy reporter for "The Wall Street Journal."

Nice to see you both this afternoon.

David, when we look at this, as Matt points out, these numbers are always, of course, a look in the rearview mirror. We know that payroll gains for both February and March were revised down, and revised down sharply. Do you anticipate there will be much of a revision to these April numbers?

DAVID GURA, ANCHOR AND CORRESPONDENT, BLOOMBERG NEWS: We have seen this kind of string of revisions.

But picking up on something that Matt said just a minute ago, I think that there's this kind of yawning divide between the hard data, like we saw today, which, as you point out, is kind of rearward-looking, and sentiment data, soft data looking forward.

And so, if you look at that, how people feel about the economy, and here I'm talking about consumers, but also executives and business owners, it's a markedly different story. So we have this moment in time where, again, it does seem like the economy is resilient, it's in a decent place here.

But the backdrop to all of that is anxiety, worry about where the economy is headed, and that's really being fueled by this trade war, these tariffs policies put in place by the president, and this sense of unease and confusion about where all of that's headed.

So, I think as we look forward here, we're going to look to see how much that informs the hard data. One of the things that we saw in the data that we got today was this uptick in trade and transportation, as companies overseas brought a lot of goods to the United States ahead of these tariffs going into place.

One would think that that would diminish greatly going forward here. So, there are trends, I think, that are going to start to emerge in the months ahead that will have an effect, kind of bring from that soft data to the harder data. HILL: One of the other things that stood out to me, Gavin, is the

number of people out of work for at least 27 weeks. That's back up, right, to a pandemic era high, 23.5 percent. And also the median length of unemployment was up to just over 10 weeks.

What does that tell you about the market itself? Is there a hiring issue?

GAVIN BADE, TRADE AND ECONOMIC POLICY REPORTER, "THE WALL STREET JOURNAL": I think there might be a hiring issue. There might also be a mismatch between the types of jobs that are open in the economy and the types of jobs that job seekers want to take right now.

We have seen this mismatch before. A lot of, for instance, advanced manufacturing jobs, they have really been struggling to fill those in this economy for a long time. And I think that's a warning light for the Trump administration, as they try to reinvigorate domestic manufacturing here in the United States.

There aren't as many people as there used to be who want to work those jobs and who have the technical abilities to actually do that. You combine that with the Trump administration's deportation campaign here, and I think you might start to see more of a mismatch between the work force and the job openings in this economy.

HILL: You know, and it's so interesting when you put it that way, David.

Of course, we heard from the president, who was delivering the commencement address at the University of Alabama last night. One of the things he said to the class of 2025 -- and I'm quoting this here -- is they're the first graduating class of the golden age of America. He said it's a period of both extraordinary change and incredible potential and what will be unbelievable growth.

If a new grad was saying to you, David, how should I feel about this job market, how would you characterize it in this moment for this new crop of college graduates?

GURA: As I talk to young people graduating college, I think there's some apprehension about where things are headed, kind of mirrored in what we were talking about just a moment ago with how ordinary consumers and businesses are feeling as well.

Where's this economy headed? And, of course, there's this roiling concern about how A.I. is going to reshape the labor force in this country. But picking up on what you were just talking about, sort of this golden age, this prospect of a golden age when it comes to manufacturing, that's a vision of a whole new world and a whole new terrain here in this country.

And we haven't really gotten a lot of detail from this administration about what that's going to look like, how they intend to facilitate the training of people to do those kinds of jobs. And there's this fundamental disconnect, I think, between the timing of all of this. We have seen this administration move incredibly fast to put these

tariffs in place. We have seen how fast they're moving to meet with other countries to kind of hammer out bilateral deals, the hope being they can do all of that quickly. This broader transition, if it's what they want to see through to more manufacturing, more high-skilled manufacturing, perhaps, is going to take a lot of time.

And it goes starting with that education that young people in this country are going to get. I think that's a huge X-factor here going forward. Yes, there could be this renaissance of manufacturing in this country. I think it would look radically different than what we think of as manufacturing, what that looked like in recent history in the United States, maybe before we saw these global trade deals signed a couple decades ago.

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What's the training going to look like? How are you going to get young people to do those jobs? And, indeed, how many of those jobs are there going to be going forward? We know that manufacturing is fundamentally different now. It's much more high-tech, uses a lot more robotics.

Are there going to be the quantity of jobs this government would need to have for this to be seen as a success?

HILL: Yes, it's such an important point. It's quantity, it's training, it's quality of the work force, and it's also how quickly those jobs would actually be available, to your point.

When we talk about these deals, Gavin, China now saying it's currently assessing proposals when it comes to beginning trade talks with the United States. What are you hearing about the potential for these negotiations and where things stand today?

BADE: Well, I think there was an encouraging note this morning from my colleague Lingling Wei at "The Wall Street Journal." She broke that the Chinese are considering making an offer about the fentanyl trade, about their shipment of fentanyl precursors, the chemicals that go in to make fentanyl.

They're thinking about bringing that up and bringing that into the trade talks with the United States. That is a big development, because, up to this point, the Chinese government wouldn't even acknowledge that they had anything to do with the fentanyl trade, at least publicly.

And so I think you're starting to see the first movements from the Chinese government here, saying, maybe we can offer them something, because, of course, they have taken a very hard line on this trade war, but these tariffs are damaging them as well as they are damaging us. And so maybe you're starting to see cooler heads prevail there.

But I do want to emphasize this is very early in the process. I don't think we're going to be seeing a deal next week, for instance. And as the government is trying to negotiate with the Chinese, they also have 17 other trading relationships they're trying to juggle, so a lot of balls in the air right now for them.

And it's a really high-stakes juggling game, if you will, as they try to get all these deals done.

HILL: Yes, it certainly is.

Gavin Bade, David Gura, great to have you both here. Thank you.

GURA: Thank you.

HILL: Still to come: That is, in fact, a lot of hats, not just when we're talking about trade deals. How about Secretary of State Marco Rubio now taking on a fourth role for the Trump administration?

Plus, the company that controls PBS and NPR says President Trump doesn't have the power to order them to cut their federal funding, despite his latest executive order. We're going to dig into that.

And the Trump administration, well, officials now say a 2022 traffic stop involving Kilmar Abrego Garcia, they have said repeatedly this supports their claim he was a member of MS-13, saying that he was involved in human trafficking. We now have video of that traffic stop. We will take a closer look at what it does and doesn't show us.

Those stories and more all ahead on CNN NEWS CENTRAL.

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[13:17:18]

HILL: Secretary of State Marco Rubio's resume just got a little bit longer. He's taking on another role in the Trump administration as the president's international security adviser, taking over for Mike Waltz, who, of course, the president removed from that position yesterday after he mistakenly added a reporter to a sensitive group chat about military strikes on Yemen.

This new role for Secretary Rubio is his fourth now. He is also temporarily heading up the National Archives and he's also acting administrator for USAID, of course, in addition to his role as secretary of state.

CNN's Alayna Treene joining us now from West Palm Beach, Florida.

So, how does one juggle all four of these jobs at the same time?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: It really is a lot of hats.

We actually saw the vice president joke yesterday on social media that perhaps he could wear another hat, he could potentially be the pope. It was a joke.

But, still, they recognize this as well. One key thing, though, I think, is really how are -- what are the logistics of this going to look like, Erica? Because that's something, from my conversations with White House officials, they just don't fully know yet. I mean, I can tell you, yesterday morning, as all of the reports were

coming out about how the president was going to be ousting Waltz very momentarily, they did not know who they wanted at that point in time to fill the role even on a temporary basis.

I had reported that they were potentially considering Secretary of State Marco Rubio or his deputy, Christopher Landau. But it wasn't really decided until the president posted on social media.

And I think just one clear example of that is, we had Kylie Atwood, our -- one of our CNN colleagues, at the State Department. And the State Department spokesperson, Tammy Bruce, was briefing in real time. And when Kylie asked her about this, she had said that she was just learning about it from Kylie.

So, again, I think it makes clear how much of a surprise this was internally that Waltz -- that Rubio was going to be named to replace Waltz. But one thing as well that was really interesting was, just hours before that decision, the president actually said, when he has any problems, he calls on Marco to handle them.

I think it was really exemplary of just how much the president has grown to rely on Rubio and the closeness of their relationships and how that's developed over recent months.

But, look, another key thing that I think they need to decide is whether or not they want to have Rubio in this role for a certain amount of time. When I have talked to my sources, they essentially tell me, for now, it really is meant to be on a temporary basis while they try to find a more permanent replacement for Rubio.

But some of the key questions that come up immediately is, for example, where is Rubio going to work? We saw him -- one of our great photojournalists at the White House, Khalil Abdallah, saw him entering, Marco Rubio, the White House this morning a little after 8:00 a.m.

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One of the questions I have is, will he be working out of Waltz's old office, which is in the West Wing, rather than at the State Department? How much of Rubio's portfolio will be handled -- be handed off to his deputy Christopher Landau?

These are things, again, that I don't think, from my conversations with people at the White House, they really have the answers for yet. So this is definitely going to be an ongoing conversation as he tries to figure out exactly how much he is going to spend and how much time really he is going to spend in the national security adviser role.

HILL: Yes, absolutely.

Alayna, really appreciate the reporting. Thank you.

Also joining me now with his unique perspective, Leon Panetta, who, of course, served as secretary of defense, director of the CIA, White House chief of staff, and director of the Office of Management and Budget, but not at the same time, important to note.

(LAUGHTER)

HILL: It's always good to have you, always good to talk to you.

When we look at this, I'm struck by a couple of points, right, in the reporting that we just had from my colleague Alayna Treene there, the fact that White House officials still aren't clear how this will work logistically for the secretary, who now has these three other interim roles, and also that it wasn't clear that it was going to be, in fact, Marco Rubio until just before it was Marco Rubio.

What does that tell you about the importance or maybe the importance being placed on the role of national security adviser for this administration?

LEON PANETTA, FORMER U.S. SECRETARY OF DEFENSE: Well, it's a lot of hit and miss is what's going on right now, trying to figure out how the national security team is going to work.

But, look, under the best of circumstances, these are very distinct roles. The national security adviser has a role to try to coordinate policy, to try to provide options to the president. It's a full-time job. And then add to that the fact that he's now head of AID, plus archivist, and the secretary of state.

Those are all very heavy roles that require a lot of responsibility. So, I think most of this looks transitional to me, that the hope is that, even though Marco Rubio is a capable guy, that ultimately they have to get permanent people in jobs that should be permanent to individuals.

HILL: When we look at this too, I mean, they are all full-time jobs, as you point out.

It has been done before, even if this is temporary, but it has been done before. Of course, Henry Kissinger held both positions at once, when we're talking about State and NSA. But, to your point, they serve different purposes, and they require the person in that job to be sort of focusing on different things.

Does that concern you at all for the state of national security and everything that this administration has on its plate right now? Because there are a number of foreign policy issues, of course, that the administration is looking to tackle.

PANETTA: No, it's -- look, we live in a very dangerous world. We have got challenges from Russia, from China, from Iran, from North Korea, from terrorism.

There's a lot of challenges that are arising as a result of a trade war as well. And so there's a lot going on. And you do need good people in each of these positions to be able to carry that responsibility. So, to have one person like Marco Rubio, who's secretary of state and has to spend a great deal of time on the road talking to our allies, talking to foreign leaders, dealing with issues abroad, confining himself to the office in the White House of being the national security adviser is going to take away from those other responsibilities.

So I think they're going to try to work this out. I would hope that they would get permanent people in these positions. But, in the interim, it's going to be a lot of mixed signals as to how effectively the national security team is operating for the president.

HILL: In terms of mixed signals, are those mixed signals domestically, or are you talking about mixed signals that are being sent out to our allies and our adversaries?

PANETTA: I think it's mixed signals that are being sent out to the world.

Look, Michael Waltz, he made some mistakes, but he actually had a very good and solid record with regards to his position on foreign policy and national security. He was tough on Russia. He was tough on China. He was very supportive of Ukraine. He was supportive of our allies. And he believed in a strong defense, strong military. So he had some good qualities.

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To now move him out and have the secretary of state, who, frankly, supports a lot of those same positions, but to have him now try to take both positions, I think our allies are trying to figure out just exactly who's on first and what exactly the foreign policy and national security policy of the Trump administration is.

HILL: Leon Panetta, always appreciate your insight and your expertise. Thank you.

PANETTA: Good to be with you.

HILL: Up next here: President Trump attempts to cut off funds to NPR and PBS, organizations responsible, of course, for news programs, popular kid shows, and emergency alerts. So can he do it?

That's next.

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