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October Jobs Report; Interview with Robert Gibbs; Interview with Rep. Greg Walden; October Unemployment Rate is 7.9 Percent; In October U.S. Economy Created 171,000 Jobs; U.S. Jobs Number Revised Up for August and September of 2012

Aired November 2, 2012 - 08:00   ET


SOLEDAD O'BRIEN, CNN ANCHOR: O'BRIEN: Good morning, everybody. You're watching STARTING POINT. The crucial October employment report, it is the most important employment report of the Obama administration, I think it's fair to say.

Just four days until Election Day. Hiring unemployment numbers could give fuel to both President Obama and also to Governor Romney, depending on how it comes out.

The report also has a significant meaning for all of us and our money as well. We're covering the story from all angles. A lot of expert insight from our correspondent, Christine Romans sticking around with us this morning. Ali Velshi joins us from Ohio. Erin Burnett is with us this morning. Candy Crowley, Brianna Keilar, Miguel Marquez, Alison Kosik joining us as well.

We're going to be talking with Robert Gibbs. He's the senior adviser to the Obama campaign. Republican Congressman Greg Walden will be our guest. Grover Norquist is on earlier this morning. He's the President of Americans for Tax Reform. He's back with us. Ken Rogoff, he's a Harvard economics and public policy professor. Sheila Bair sticks around with us as well. She's the former chair of the FDIC.

Plus, we're talking about Sandy this morning. Sandy's destruction, unfortunately, it's far from over. It's a pretty desperate situation for the millions of folks who are still in the cold and the dark. Many people don't have food, don't have shelter. The gas lines, you're looking at some of them there, just completely out of control.

It's Friday, November 2nd. Special edition of STARTING POINT begins right now.


O'BRIEN: Welcome, everybody.

Today's team: business correspondent Christine Romans is with us. Erin Burnett is with us as well. She's, of course, the host of "ERIN BURNETT OUTFRONT". Chief business and economics correspondent. Candy Crowley is with us. She's the chief political correspondent and host of CNN's "STATE OF THE UNION." Ali Velshi is in the chief business correspondent. He's in Ohio this morning. John Berman sticks around, the anchor of "EARLY START". Helps us out with the news.

Sheila Bair is joining us at the far end down there, the former chair of the FDIC. Grover Norquist is with us as well. He's the President of Americans for Tax Reform, joining us this morning.

Nice to have all of you. I want to welcome our international viewers who are joining us as well this morning.

Lots to get to. Let's start with -- half an hour away from the most important report. I think it's fair to say that. I don't think that's overstating it, right?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: This is a big report for the economy, because this shows what the biggest labor market, the biggest economy in the world, is doing and what the expectation is.

From CNN Money survey of 13 economists, Soledad, 7.9 percent, the unemployment rate. That would be up slightly and 125,000 jobs added. The trend is what's really important to watch here. This is the trend for the unemployment rate.

Back in January 2009, the unemployment rate was 7.8 percent. That's when the President took office. We had a stimulus. We had an unemployment rate that still went to 10 percent. And now it's been coming down and it's back down at 7.8 percent.

There's psychology in these numbers that's going to be very important here, because these numbers are going to tell us what happened in the months and they're going to confirm where that trend is going but also just a few days before the election.

And really, if you see a number below 7.8 percent, this is going to be something that is going to be advantage Obama. Something below 7.8 percent, assuming conspiracy theorists don't go bananas. And anything above 7.8 percent is Romney advantage, because team Romney will say, look, this is not good enough.


ROMANS: The President is not doing a good enough job, restoring job.

O'BRIEN: But the prediction, right, is up slightly.

ROMANS: Right.

O'BRIEN: And who knows if that prediction will bear out. So, Erin, I'd be curious, you can, you know, tick up and still be below the 8 percent, which Christine says is the line. What's the impact of that?

ERIN BURNETT, CNN HOST, "ERIN BURNETT OUTFRONT": I mean, I have to say I agree with Christine. That 8 percent becomes psychologically important.

ROMANS: Right.

BURNETT: When you look at past presidential elections, anything over seven is tough. But if it's going in the right direction, it's moving down like it was with Ronald Reagan, you can do it. If it's going the other direction, it becomes a problem.

O'BRIEN: If it goes the wrong direction but still below eight?

BURNETT: I think 7.9 is going to be a nonevent.

ROMANS: Me, too.

O'BRIEN: What about political implications of this? Not just in terms of spin but there are obviously swing states where this is going to be critical.

SHEILA BAIR, FORMER CHAIR, FDIC: I think it's going to be important to undecided voters. By definition, they're undecided, they don't have a sense of how healthy the recovery is. I think it feeds into the Romney argument that this is sluggish growth and particularly if we see, you know, labor force participation going down again. If we see again, this is part-time work, this is low-wage work, that all feeds into the Romney argument.

So, I think there's a lot riding on this one with the undecided voters and the race is very close. That's very important.

O'BRIEN: You know where a lot of undecided voters, somewhere near Ali Velshi. Ali Velshi is hunting down the undecided voters. And you're in a state where, you know, it's going to be critical in this election. Talk to me a little bit about some of those individual states, how they're going to be crunching these numbers, because somewhere I think the big picture may be less relevant.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: In Ohio, it certainly is. First of all, it's hard to find undecided voters in Ohio. Most of the Democrats have already voted. I mean, really, I've been tweeting out, it's like, if you're undecided, come and see me. Guess what? I'm standing alone.

There are a few undecided voters in key critical states and they may actually carry this election for somebody one way or another.

In a state like Ohio, where the unemployment rate -- I hate the unemployment rate. You heard me say this for years. I want to punch it in the face because it is such a hard to understand number. But the unemployment rate in this state is substantially lower than the national average. Ohio, which has struggled for decades, they got burned on steel, then they got burned on autos, finally, has seen some improvement.

And the Republican governor of this state wants to take credit for that. President Obama wants to take credit for that. It's edging toward President Obama, but in all of these key big undecided states like Virginia, like Florida, like Ohio, we are statistically very close. Yes, President Obama has a bit of an edge in most of the polls here in Ohio, but it's still statistically relevant.

So, two things have to happen. One, they have to get out the vote. Both these organizations have to get out the vote. Number two, there is that small group of voters that can still be convinced. And today will be influential in convincing them, Soledad, about which of these presidents can -- which of these presidential candidates have a better vision and better ability to guide the future.

This is all for President Obama. Is this working or is it not?

O'BRIEN: Hmm, interesting.

Let's get right to Candy Crowley. You know, Candy, I thought Ali said something there that was very interesting. He says you have tussle, right, among these Republican governors where the states have done OK, have done well-ish, you know, in the slow recovery, sluggish recovery, and they're trying to figure out, so who gets the credit?

In a way, they're in a position where they can't say states are doing terribly because that doesn't help them in the narrative. Also, they don't necessarily want to say it's doing great because it doesn't help them in their narrative.

Talk to me about this dynamic.

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: You know, it's been tough. In Virginia, in Ohio, in Florida, all three run by Republican governors. The same in Wisconsin, although that race looks a little further apart with President Obama in the lead.

So, it's been tough but what they've done, for instance, when you look at Virginia and the campaigning that's been done there, a lot of what Governor Romney has focused on is what the fiscal cliff will mean for the defense industry and he has blamed, you know, huge oncoming cuts in the Defense Department, which northern Virginia is heavily reliant on, and put that on President Obama. When you go to Ohio, you hear a lot about the coal industry, when Romney is on the attack.

So they've taken the economy and done micro-arguments about it as opposed to, oh, boy, the economy is really terrible here. So, I mean, it's been tough but it has been doable in terms of taking some of the economic things in a particular state and using those as arguments. And saying, by the way, listen, you know, your unemployment rate is great here. But let's look at the kind of jobs that's being created, let's talk about wage stagnation, that kind of thing.

O'BRIEN: Everyone sort of looks at the big number. Of course, you really need to drill into the report to see what kind of jobs and exactly what is beneath those numbers.

It's something that Grover Norquist, who is joining us, has said as well. You say you're more interested in another number.

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: Well, yes. The question is a lot of people have left the workforce, several percentage points, several million Americans. It's a little bit odd for the President to say, see, my number is 7.9 or 7.8. It's not as bad as it was a year ago where millions of Americans know they're looking for work and they've either got part-time work or no work at all, or they've given up looking for work.

The real unemployment number, 14.7 percent, you're looking at people who are trying to get jobs, can't get jobs. You can show all -- give them all the numbers they want. They know they're paying twice as much for gasoline as they did when Obama got elected. He has a policy of higher energy prices, which he brags about. He thinks that's a good idea.

O'BRIEN: I just got to tell you, when you mentioned the gas, Christine Romans just rolled her eyes. We're going to get back to Christine on the gas thing. That's a whole other conversation.

But I want to keep talking about it. I want to bring in Robert Gibbs, because I think you raised some interesting points and I want to pose those questions to him. He, of course, is the senior adviser for the Obama campaign.

It's nice to see you. If these numbers --


O'BRIEN: If these numbers -- we've been talking about that line, that 8.0 percent. If these numbers are a little bit higher than predicted, which is 7.9 percent, how devastating is this for the campaign? That's bad, isn't it?

GIBBS: Well, Soledad, I don't want to get into the prediction business. We'll know soon enough. But I think if you look at what we're likely to see is the 32nd consecutive month of private sector job growth. We went through an economic calamity that this country hasn't been through in 80 years. We're digging out of that and we've spent four years digging out of that huge hole. We've added in that 32 months probably -- more than 5 million jobs. We'll know exactly how many after we see the report.

But we're moving this country forward. We're adding good-paying jobs. We're adding security to the middle class.

And, you know, what Mitt Romney wants to do is go back to the failed economic theory --

ROMANS: Oh my God.

GIBBS: -- of tax cuts showered on the rich that somehow sprinkle down to the middle class.

O'BRIEN: So let me interrupt you there.

GIBBS: Except the problem is that that theory has never worked. It's what got us into this mess.

O'BRIEN: So let me interrupt you there on a couple of things. You say creating good-paying jobs to bolster the middle class. If you look at the actual jobs that have been created, Christine -- keep me honest on this, a lot of those jobs have not what people would consider those high-paying jobs. ROMANS: Two-thirds of them have been under $14 an hour. And more of the lower -- most of the jobs that are coming back are much lower paid than the jobs that were lost.

O'BRIEN: Second point of that -- and then I'll let you answer, you talked about those 32 months of private sector growth. There's a little chart that I can hold up. It's really great. It goes up.

But the one that's next to it, which is the public sector growth -- you can't really see it. It goes like this -- down -- which can't be good because public sector really has been shedding jobs.

How much of a problem is spinning that message?

GIBBS: Well, it's a really -- it's a bad trend if you're thinking about wanting to strengthen the economy for the long term, because a lot of those public sector jobs are teachers in the classroom.

I don't think -- nobody but Mitt Romney believes that we ought to have fewer teachers in our classrooms. Barack Obama believes we need more teachers in the classroom, reduce class sizes and make sure we're preparing a workforce that is capable of doing the jobs that we are bringing back from overseas, the manufacturing jobs we're adding.

I will say this, you know, I don't have the statistics in front of me on the wages. We've added more manufacturing jobs to this economy in the last few years than have been added since the mid-1990s. Look, I know there are some -- Grover will be part of the gloom and doom caucus. And I'll let him play that role.

But, look, we're moving this economy forward. We're strengthening it. Are we where we want to be? Absolutely not. That's because we had a huge hole to dig ourselves out of.

O'BRIEN: Robert Gibbs, senior adviser for the Obama campaign -- nice to see you. Thank you for talking with us.

GIBBS: Thanks for having me.

O'BRIEN: Beside the report, there's other stories making news. And John Berman has a got look at those for us. Good morning.

JOHN BERMAN, CNN ANCHOR, "EARLY START": It's a big, big news day here.

It's been nearly four days since Superstorm Sandy slammed into the East Coast. The storm has now killed at least 92 people in the United States. Nearly 3.5 million customers along the Eastern Seaboard still without power this morning. The economic loss is staggering -- estimated $30 billion to $50 billion. Rescue agencies still trying to get food and water to those in need.

And gasoline is in short supply in parts of New York and New Jersey. Long lines now a common sight at many gas stations around this region and, really, the anger is starting to spill over, unfortunately. A new complication in Sandy's wake, a major gas crunch that we told you about this -- long lines for fuel and not just for cars. We're talking about generators also. Frustration turning into anger and anger into rage.

One man was even charged for pulling a gun on another driver in Queens who tried to cut in line. Can you believe that? The shortages may not end for another week.

The Vice President shifting from campaign mode to comedy mode last night. He rattled off David Letterman's top 10 list. Here are a few top 10 good things about early voting. This, according to Joe Biden.


JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: If you vote early you don't have to pay taxes. I'm sorry. I'm being told that's not accurate.

DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN": That's not accurate. He's being told that's not accurate.

BIDEN: Of course, there's the open bar.

LETTERMAN: That's right, the open bar.


BERMAN: Joe Biden for you, ladies and gentlemen.

O'BRIEN: Letterman absolutely dying of laughter, but not exactly what he thought he would be.

All right. John, thank you.

Still ahead on STARTING POINT: talking about today's unemployment report. It will be crucial to both campaign campaigns, both political campaigns. You just heard from the Obama campaign. We're going to hear from a Romney supporter, Congressman Greg Walden. That's coming up next.

You're watching STARTING POINT. Got to take a break. We're back in a moment.


O'BRIEN: Welcome back, everybody. Just minutes away from what could be a bombshell to the presidential campaign, the October jobs report comes out in just about 13 minutes and just four days before the election. Let's get right to Oregon Republican congressman, Greg Walden. He's a Romney supporter.

It's nice to see you, sir. Thank you for talking with us. A CNNMoney is predicting --

REP. GREG WALDEN, (R) OREGON: Nice to be with you. O'BRIEN: Thank you. Appreciate that -- 125,000 jobs added. Unemployment could tick up, they're saying to 7.9 percent. Sluggish, slow, but job growth. What do you make of this number? Do you think that's probably accurate?

WALDEN: I have no idea whether it's accurate or not, but I know -- as you say, the economy is sluggish, it's slow, it's not what we were promised. The President said if they just enacted his plan, unemployment rate would be at 5.3 percent right now. So, that's 8.5 million Americans that don't have work that were told follow the President's plan, you'll have work. And they don't have it.

So, I mean, this is not the kind of recovery you expect. It's not what we've had coming out of any other recession. You've had over six million Americans on long-term unemployment that, at its peak, that's almost double any other president going back clear to Ronald Reagan's days. And so, I just don't think the policies have worked as promised and pledged.

O'BRIEN: President Obama has written an op-ed for CNN as did Governor Romney. I'm going to read you a little bit of what the President wrote. "The wars in Iraq is over. Osama bin Laden is dead. Our heroes are coming home. Our businesses have created more than five million new jobs in the last 2 1/2 years, home values, 401(k)s are rising. We're less dependent on foreign oil than any other time in the last 20 years, and the American auto industry is back."

And in a nutshell, I think this is the administration's position. This is what has been accomplished. You know, sounds good.

WALDEN: You know, I was in the radio business for 22 years, a small business owner. I've worked with small business owners all my life. I don't think they're buying. I don't think it's not what you're feeling out on the ground when you're around the country, and I've been all over the country, all over my district.

We still get 10 and 11 percent unemployment out in state of Oregon, in my district. They're not feeling this. If you look at the front-page of most papers, they're talking about how families are having to restructure and live at a lower level. I mean, I just heard some of the discussion about the jobs that are created are under $14 an hour.

Some parts of this country, they'd love to have $14 an hour jobs. They're not even seeing those. So, this is not what America can be. And that's why Governor Romney and Paul Ryan have a plan to create 12 million new jobs. We can use our energy resources more than we are today. I was in North Dakota a while back. They've hired 30,000 people there to work in the buck in oil field.

If the Keystone Pipeline had been approved, you'd have 20,000 new American jobs coming. They'd have a pipeline to bring that oil out of the Balkan fields as well as out of Canada, down through the country. We'd have construction, jobs going. We can do a lot better than we are.

O'BRIEN: And I guess we'll know what those numbers are in just few minutes. We're waiting for those. Thank you for talking with us this morning. We appreciate it.

WALDEN: Delighted to be with you. Thank you.

O'BRIEN: Thank you. Still ahead -- he's delighted. I like that. Still ahead on STARTING POINT, we're going to take a short break as we await for the October employment report. We're back right after this.


O'BRIEN: Welcome back, everybody. You're watching our special coverage. We're just about six minutes away from that highly anticipated October employment report. It's the final jobs report before Tuesday's election, just four days from now, and it would definitely have an impact on both President Obama and Mitt Romney's campaigns.

I want to welcome Ken Rogoff to our panel. He's joining us live from Boston. He's a Harvard University professor of economics and public policy. We're going to begin, though, and welcome, sir. We're going to begin, though, with Christine Romans. Christine, let's talk a little bit about how they crunch these numbers.

ROMANS: OK, Soledad. So, the jobs report is actually two separate surveys. The unemployment rate comes from a survey of 60,000 households. The job creation number comes from a survey of 141,000 businesses. Now, to get the unemployment rate, 2,200 census workers interview 60,000 households in person and over the phone.

Everyone over the age of 16 is classified as employed, unemployed, or not in the labor force. From that, then the government extrapolates the unemployment rate. Now, the job creation number comes from another sample. It's the sample of 141,000 businesses. They tell the government how many workers they have on their payroll.

Now, like the household survey, the sample is meant to reflect the whole U.S. It includes factories, offices, stores, and various government entities like teachers. Now, both surveys look at a particular week or pay period usually around the 12th day of the month. So, this month, this month, it was the week of October 7th to the October 13th.

Households were contacted the following week to find out if they were working or looking for a job from that week of the 7th to the 13th. Now, businesses submitted payroll information for roughly the same period. Soledad, once all of these numbers are in, the labor department and its statisticians and economists boil them down and gives them to the President's council of economic advisers the day before they are released.

I'm on the call right now, and in just about four or five minutes, we're going to get the number from the labor department. So, I'm going to listen now. And when I've got it, I'll let you know.

O'BRIEN: All right. You go to the call. I'm going to turn to Erin now. Let's talk a little about analysis on this. We all talk -- talk about this number and that line, the 8.0 percent. BURNETT: Right.

O'BRIEN: Why is that line so critical?

BURNETT: It's more of a psychological line than anything else. It's also interesting, as Christine points out, the two different surveys. People tend to pay attention to the unemployment rate, because it makes sense it's always the headline number, but the number that is seemed, you know, sort of by investors, economist is the most accurate reflection of what's really happening is that payroll number, what businesses report.

And that, of course, has been anemic for a long time. Although, last month, you know, even though it was anemic, despite that big drop in the unemployment rate, we did see some upward revisions from prior months. So, it does seem that things are getting better, but as you said, I think accurately, sluggish more of -- that's still the way to describe the labor market. But it is that payroll number to watch.

O'BRIEN: What do you think could make the marker less sluggish and less morbid?

BAIR: I think uncertainty is really weighing (ph) on the market right now, uncertainty with the fiscal cliff, regulatory uncertainty. I don't think it's so much -- the debate isn't, you know, whether you should regulate or not regulate, whether you should have a fiscal responsibility plan or not.

I think that, really, the biggest issue is make some decisions, let us know what the future is going to look like. And you know, what is healthcare going to look like? What are payroll taxes going to be? What is the corporate code going to look like? Do we have a long-term plan to get these budget deficits under control?

We have very resilient economy. If people just know what the rules are and what the game plan is, they can follow it and react to it. But now, there's a huge amount of uncertainty.

O'BRIEN: I'm going to ask you to join us. Do you think that uncertainty, as Sheila is saying, is playing a huge role in all of this? By the way, for everybody, I might interrupt you when these numbers come out. So, carry on. But I'll jump in when the numbers come in to Christine. Go ahead, sir.

KEN ROGOFF, PROFESSOR OF ECONOMICS & PUBLIC POLICY, HARVARD UNIVERSITY: I think the uncertainty is huge. And you see it in business investment which is very weak. You're sitting there. There's about to be an election, which could mark a huge shift in policy. You don't know which way it's going to go. You're going to wait before you do a big investment, big hiring.

And as Sheila said, there are all these uncertainties about how health care is going to be resolved, the fiscal cliff, a lot of uncertainties holding back the economy at the moment. Hopefully, some of it will get resolved soon. O'BRIEN: I'll be asking the question of (ph) Grover Norquist, because I'm going to read a quote, Grover, of you to everybody. And you said this, "We have to dramatically reduce the cost of defense whether there's a sequester or not. Maybe the sequester focuses their attention. And to the extent that it does, that's a healthful thing."

And I think some people would say, you know, this leads us all to the fiscal cliff and we're playing that game of chicken basically on the highway. Don't you think?

NORQUIST: Well, I think it's important that we reduce government spending across the board, and conservatives need to look at defense spending in the same way we look at other kinds of spending and if it's wasteful, let's do less of it. So, it's very important. We've had an explosion of spending under Obama.

Bush spent too much money, but Obama did it on steroids. You know, a trillion dollars of stimulus spending, $5 trillion of debt. He's bankrupting the country.

We're talking about these numbers on unemployment, but the damage -- the long term, permanent damage done to America by Obama's spending spree and the regulatory -- when you say there's uncertainty, there's a lot of uncertainty, because there are thousands and thousands of pages of regulations that this administration is not putting out before the election because it's going to be so devastating the economy. They don't want people to see it yet.


NORQUIST: -- damage from Obamacare doesn't kick in for another year.

O'BRIEN: So, let's bring in John Berman.

BERMAN: I just want to talk a little bit about the time when we talk about how this is four days before the election, but it also comes after a very interesting week politically, one in which a lot of people think that President Obama may have stemmed whatever momentum Mitt Romney had.

And President Obama may be going into this week, with the hurricane, the way he handled it, and swing state polling which frankly shows him consistently in the lead in most of the important states.

A lot of people think President Obama has the wind at his back going into this weekend. This jobs report may be the last opportunity for Mitt Romney to change the momentum yet once again. We've already seen it changed so many times --

O'BRIEN: Let's go to Candy Crowley, because Candy, of course, when you look at polls, it's Mitt Romney who gets the advantage, when people are asked about what's the thing you care about the most and who would do the better job, it's economy and Mitt Romney.

CROWLEY: It is, but when you ask folks that other question that pollsters always look at, who understands the life or the needs of people like you, President Obama always scores higher on that. So, there's kind of this macro picture. People look at Mitt Romney and they say, oh, I think actually he'd be better fixing the economy as a whole.

But then, when you ask them who understands you, who understand what's going on in your life, they say President Obama. So, I think that there is -- obviously, there's some conflict there. But closer to home you get, I think as a candidate, the better your chance.

Now, I can also tell you that the Romney campaign is looking at his own numbers, all the numbers we see, and they still see a clear path, they say, to victory as do both sides. But it's one of those things where, as we all know, it comes down to who's got the biggest -- who's got the best turnout model in which states. And, that's just something that's not really knowable until Tuesday evening.

O'BRIEN: It always comes down to that, right? The poll that really matters is the poll that happens on Tuesday evening. Candy, thank you.

Let's get to Ali Velshi. I have to warn you, I may be cutting you off in two seconds. We're waiting to -- Ali, wait a minute.

VELSHI: We've got the number right now. It's 7.9 percent.

ROMANS: It's 7.9 percent, 171,000 jobs created, 171,000 jobs created, 7.9 percent is the unemployment rate. So the jobs -- the jobless rate is exactly as they expected, but the job creation was a little bit better. There are some revisions in these numbers, we're told, from the our producer at the labor department. Revisions in this number that are actually good. So I'm going to toss it back to you with some more details. But this is a number that is exactly in line on the unemployment rate but better in the job creation. As Ali has pointed out, that job creation number is a number that a lot of people really watch because that's from businesses, what businesses say they're doing.

O'BRIEN: How do people understand that in some ways? Erin, we'll start with you. You've had eight seconds to analyze these numbers.

BURNETT: Right. There's a lot of numbers in here you want to look at, earnings and things like that. The 7.9 percent, that's fine. The 171,000 I'll highlight. That's a good number relative to what we've seen in recent months. I don't have the numbers in front of me. It's above the rate you need to actually keep up with population growth and people entering the workforce. We're in a big hole, so we're not anywhere near that. That's a solid number, 171, would be my initial take without the background data.

O'BRIEN: Grover Norquist, Erin says solid number. What do you think?

NORQUIST: Well, 7.9 percent unemployment, these are all lousy numbers. When you add in the fact that a lot of people aren't in the workforce, as we've been discussing, two percent of the population has left the workforce. That's why the unemployment numbers aren't at over 10 percent, which is the real unemployment number of over 10 percent of people who want to work and aren't working. This has been a real problem. And it's not only that the economy is weak and had four years of a very poor economy, even the recovery part of Obama's administration has been weaker than any recovery since the 1930s. We spent $5 trillion to get a lousy economy.

O'BRIEN: Let me interrupt you for a second. Sheila Bair, do you think he has a point, $5 trillion for a lousy economy or do you say, people will look at that 171,000 and that is -- in some ways this is about a narrative out of this report?

BAIR: Right, 171,000 is a good number. We've been averaging 150,000. That is a very good number. The 7.9 percent is probably a slight negative for Mr. Obama because it doesn't suggest continued improvement. That number has a lot of faults, as we'll discuss. And you have to point out the job quality again. But -- the 171 itself is a good number.

O'BRIEN: Robert Gibbs, Mr. Rogoff, called Mr. Norquist Mr. Doom and Gloom would you say he is doom and gloom or a realist that is taking a very clear look at the dire straits of the economy without -- and how he sees it?

ROGOFF: There's a forward looking and backward looking component. I think in the backward looking component, I think that when you have a decent cries like this you cannot compare it to 1982. You cannot compare this to Ronald Reagan. You have to look at really deep, systemic financial crisis around the world that the U.S. has had. And then the recovery is still tepid, but not compared to those. It's a little better than average, frankly. It's much better than a lot of countries have been doing since 2007, and it's better than earlier United States recoveries when you look at things unemployment when we've had deep banking crises. That said, nobody is happy with this, and we would like to have a path to faster growth going forward.

O'BRIEN: Ken Rogoff. Let's get right to Ali Velshi. I want to ask you a question. Under the establishment survey data, we start break out the actual jobs, nonfarm payment, health care, retail, leisure and hospitality. What is the one you look at most closely?

VELSHI: In terms at looking at a recovery, and particularly because I'm in Ohio, I'm always interested in the manufacturing numbers. One of the disadvantages of the way out economy is going is we tend to see more in business services and professional work because we're not manufacturing as much. Manufacturing is important. The other thing you want to lock at is health care. It's been a growing area for the entire recession. We've gained health care jobs. Those are key.

The other thing we want to look at, Soledad, revisions to August and September. They are much better. Sheila just said over 150 is better. It's not great. It's better. August we thought we gained 142,000 jobs. It's now been revised up to 184,000 jobs. September, we thought we gained 114. It's not a great number. It's now been revised upward to 148,000 jobs.


O'BRIEN: Ali, let me stop you for a second. Tell me if I'm wrong for August it was revised from 142,000 to 192,000 non --

O'BRIEN: Yes, 192, you're right. You are right. I misread that, to 192. So these are now in the vicinity of strong. Both President Obama and Mitt Romney have talked about 12 million jobs in four years. That would be 3 million a year, 250,000 a month. Now we're edging up to 200,000 in August. We're now getting into the vicinity of real job creation that could actually have an effect on people. And that's what's important here.

As you know, I have real problems with the unemployment number being bandied around as a political football, because it's hard to understand. It is actually a moving target. Grover gets stuck on it, but the fact is that this job creation number and wages earned and the type of jobs are all more important, and this is actually quite positive. I don't mean that politically. I mean this is good for America.

O'BRIEN: Let's talk about what you raised. I want to bring in Candy Crowley for this. You know, Ali, Candy, said that manufacturing is what he wants to look at. When I read what they say about manufacturing, manufacturing employment changed little in October. On net, manufacturing employment has shown little change since April. So that has to be a little black cloud in what I think some people are saying are good, decent numbers.

CROWLEY: Well, it is, and especially since the President has always focused on manufacturing, talking about bringing manufacturing jobs back, because, of course, that rings to the good old days. You could have a great middle class life inside manufacturing plants. And that way of living has for decades kind of gone away. However, I think what you're -- that does take away from one of the President's talking points when you talks about, and we've added good manufacturing jobs. They still have added some, just not since April is what I think you just said.

But I think what you have here politically is more fuel for the same fire. I think the President has said we're headed in the right direction but it's not enough. He has been saying that for four years. You'll hear Mitt Romney say they've spent a whole lot of money and we don't have much to show for it. This is a weak recovery. We don't want to stay on this slow road to recovery. I can do this better. He has been saying that for a year and a half. So I think we just have both sides saying yes, here is our latest report and it proves exactly what I was just saying.

O'BRIEN: Interesting. Let's go back to Christine Romans. Christine, I want to flag something in this report on the front page, saying that the unemployment for blacks increased to 14.3 percent.

ROMANS: It did. And most of the worker groups were unchanged or fell a little bit -- unchanged rather. The jobless rate for blacks is 14.3 percent, for adult men, 7.3 percent, for women 7.2 percent, for teenagers almost 24 percent. We've been watching these worker groups. And as you know, for Black American workers, for black Americans the unemployment rate has been about double, even in good times. So there's a structural problem there that many poem have said the recession and recovery since the recession have only made worse. So that's something we're closely watching.

Also we'll be looking at factory jobs, a ladder to the middle class, jobs that have been gutted really in the past 20 years, that's something that is a very big -- not month to month. This is a longer term, multi-president kind of issue that has to be tackled. And the recession, quite frankly, set us back on that.

In terms of where we were seeing the job growth, professional and business services tend to be higher paid jobs. Computer systems designers and engineers, those tend to be very god jobs, growth there. Different kinds of technology, information technology, and also retail trade and leisure and hospitality, those are lower-paying jobs. Those tend not to be jobs that you can send a kid to college on. Often they tend to be part-time jobs as well.

So, manufacturing incredibly important, Ali is right, especially in those swing states. Health care jobs that have been growing, it's these knowledge jobs that have been growing, there's good demand for.

We talk about these numbers, too. When you talk to CEOs, Soledad, the thing they say is we can't find workers with the right skills for our jobs. Politically, we're talking about we need more jobs. But CEOs say we don't have the right workers. We have the jobs, not the right workers. That becomes an education story.

BERMAN: The numbers we've been talking about, the most politically charged numbers here, the labor force participation rate, which rose 578,000 in October and the labor force participation rate edged up to 63.8 percent. So there is movement in that number that you were talking about before. How much is that really?

ROMANS: So that is the number that Grover Norquist has been talking about. We're talking consumer confidence that was strong this week, guys. People are looking at their 401(k)s. They're a little bit better. Revisions Ali was talking about the last several months. They're hearing all of this and some discouraged workers are saying I'm going to try again. They're going to try to get a job.

O'BRIEN: Erin Burnett, when you look at this, everybody at the table is furiously taking notes on their report. What do you look to flag?

BURNETT: Ali and Christine have pointed out some of it, and John. There are some good things when you look at a participation rate. Obviously still low. You see in row tail and other areas hiring.

Long term unemployed, little change. These are people that have not had a job for 27 weeks or more. So you're not seeing a change there yet. Other two things we look at are people working longer weeks. That generally means you'll hire more people. Workweek is unchanged.

And in terms of hourly earnings, when we look at income growth that has lagged so significantly over the past decade or more and you saw that edge down a little bit. There are definitely good things in here. I think the headline, no question, is good. Upper revisions for the past two months when you add those together, revisions from 142 to 192, 114 to 148, and 171 that's very good. Overall take will be very good. When you're saying is it really getting stronger, will people start to earn more, will we see an uptick, you're quite seeing that pressure yet.

O'BRIEN: Ken Rogoff, as Erin just said, 142 to 192, an August revision. September revised upward from 114,000 to 148,000. Is this a number that people like yourself or economists crunch and say this is interesting or does it really have an impact on those of us who are not crunching these very numbers and looking back to past months for their statement of employment figures?

ROGOFF: Well, these numbers are so rough, and there's so much uncertainty around them that they do keep getting revised. And we do tend to look at the last few months, not just the current number, what the overall revisions, and overall picture is more positive than it was. Let's be clear, this is still a tepid recovery. This is a good, modest, good report in the context of still this very slow recovery.

It doesn't change the overall picture. I think politically, you know, it's probably slightly better for President Obama, obviously, than if it had gone over eight percent, the unemployment rate, or we had seen a big drop in jobs. From an economic point of view, it's modest improvement. But it's not the kind of growth we need to get 12 million jobs over the next four years like both candidates are promising. So it isn't a game changer, not a disaster.

O'BRIEN: All right, so back to Candy Crowley, I'm sure everyone is spinning this, trying to figure out the headline that they write. Who -- I hate to talk about winning when you're talking about people's jobs and people's lives, but in terms of how it's spun, it will be a win and a lose. Who do you think gets the momentum out of this?

CROWLEY: You know, I hate to put a damper on this, but we are at a point where I think you look at the undecideds -- we're not talking about nationwide undecideds. We're really talking about undecideds inside these swing states. It's such a miniscule number.

O'BRIEN: Meaning what? How many?

CROWLEY: It depends on the state. It depends on like two percent, three percent, four percent, around in there. And you get to a point on the weekend before an election where you begin to know that many of those undecideds are really the disgusted, and they may not show up on Tuesday.


CROWLEY: You're going to see a portion of undecideds not show up. Do people go into the voting booth still not knowing who they're going to vote for? I have talked to people who say that's exactly how they are. So insofar as this shifts them, I would assume that 171,000 sounds like the strongest I've heard in a while in terms of creating new jobs. And you can still see it's a slow recovery.

So I thought these numbers and the people's feel for the economy have been baked into their choice for a long time. But if it's going to be an advantage, I'm assuming that it may be a slight advantage for President Obama. But I honestly am not sure that this is going to move those figures in a way that we're going to notice.

O'BRIEN: We've got to take a short break. Ahead on STARTING POINT we're going to talk a little bit more about the 7.9 percent unemployment figure, 171,000 jobs created in the month of October. And we'll talk about the ripple effects on the presidential race, on financial markets, on the overall recovery, all that and much more. We're back in just a moment. Stay with us.


O'BRIEN: Welcome back everybody.

You are watching STARTING POINT. We are digesting the important October jobs report which was just released, 171,000 jobs have been added, that's more than what was expected. Unemployment rate 7.9 percent, that's ticked up from 7.8 percent.

So what about the impact on financial markets, what about the impact on the presidential race with the election just four days away? I want to get right to Alison Kosik, she's at the New York Stock Exchange who's taking a look at that. Also Miguel Marquez who's going to be live in Las Vegas for us, talking about the folks who are unemployed.

Brianna Keilar though is in Hilliard, Ohio for us this morning, she's got more on that. Good morning Brianna.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Good morning to you, Soledad. We're still awaiting reaction from both campaigns. But you can almost already tell what they're going to say. You would expect the Obama campaign to emphasize the steadiness of numbers and say it's no time to change course and you would expect Governor Romney to say this is a slow recovery, the number shows that and it is time to change course.

Overall, though, it seems unlikely that this will affect the election. Certainly it works to President Obama's advantage that the number did not hit eight percent, an important hurdle that was cleared last month and that undercut the Romney campaign argument that eight percent unemployment seemed to be the norm.

But the real issue is battleground states like Ohio, where I am now. Unemployment here is significantly lower than the national average. It's seven percent here. It's like that in a number of other battleground states. And that really may be more of a determining factor -- Soledad.

O'BRIEN: All right thanks, Brianna. I appreciate it.

Financial markets, what's the impact there? Let's go right to Alison Kosik. She's got more for us. Hi Alison, good morning.


So we watched futures before the report came out. They were lower. And then once the report was released you saw a small pop, at least with the Dow, it moved up about 40 points. And that pretty much is a sign of optimism from the markets. It's not a great response, though, because there's a harsh reality that 171,000 jobs added.

It is a good number, this is no doubt a good report but if you look at the overall trend, if you have the job markets doing it's just not roaring ahead. And you know we're at this point right now where the number of jobs being added every month is just not enough to keep up with population growth. You know, it averages out to 157,000 jobs created every month.

It's just not enough momentum in the jobs market. We're not gaining back enough jobs fast enough and in the right places. You know, Soledad, some people are saying that this is more of a minimum wage recovery, meaning jobs in restaurants and retailers are adding a lot of jobs, but that doesn't give the income enough and makes it hard for a lot of people to still pay the bills -- Soledad.

O'BRIEN: All right, Alison thank you for that.

Let's go right to Miguel Marquez. As I said, he is in Las Vegas this morning, talking about folks who are unemployed. You know, Grover Norquist keeps coming back around to that number, which is a significant number of folks who are underemployed or unemployed. Good morning.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Good morning. No place has been hit harder than Las Vegas and Nevada, the unemployment rate here across the state is the highest in the country. We're on top of the stratosphere here in this hotel and attraction in the state has made -- is guardedly optimistic like much of the country. They've sunk more than $20 million in improvements in the last couple of years, they started to higher in the last couple of months. They've hired more than 100 people.

And I want to show you this building right here, this is the Strip, obviously, in Las Vegas, but that big dark spot in the middle is the Front Blue Hotel, it's 4,000 rooms, almost 4,000 rooms, $2.9 billion in investments. It has not been finished. It sat there for now almost a year unfinished. But I've talked to some of the county officials and they say that -- that it's just getting past the point where they can start construction on it again.

So there is, across this county and this state guarded optimism that things are getting better -- Soledad.

O'BRIEN: Miguel Marquez for us. Thank you Miguel, I appreciate it.

All right, Erin, let me ask you a question. With this report now, the President has now created more jobs than were lost. Do you think this report now puts him over the edge in that? In terms of a narrative, we've been talking about some of the political spin out of this that's going to be important.

Alison said it's not adding enough. Does this -- now with especially the revisions up, is it adding enough? ROMANS: Well this year, for now the average according to the government employment growth this year has now averaged 157,000 a month.

BURNETT: What do you need?

ROMANS: You need 125,000 to 150,000 about. So you're basically absorbing the new entrants into the workforce. But you still have all those people who got shut out. You need -- you need to be creating more than this to be robustly growing and to really be growing the economy. But now we're starting to absorb new entrants into the workforce.

BURNETT: It's like we call it the hole. So you know you can be back to where you are. But the hole, it's all the people who -- you know when we were losing jobs there were still people who were coming of age, who wanted to get jobs, who are coming to this country. The immigration slowed down but it still happened. Those people are all sitting out there.

So even if you're net, even with where you were we've got more people living in this country and more people who want jobs. That's what we call the hole, that's what you have to dig out and start to get people -- those people with jobs.

O'BRIEN: You guys were talking about the markets being messed up. Because Alison was also sort of updating us on the reaction from the markets. But the market is kind of a hot mess right, with obviously Sandy -- I mean with Sandy.


UNIDENTIFIED FEMALE: We call something to affect in your life, Soledad.

O'BRIEN: I try. Every day I get out here and try. But -- but so what is the -- how do you read those numbers that we're seeing from the markets or the reaction from the market at a time when the market was closed because of Sandy at the beginning of the week?

BURNETT: I mean, it's tough. Because there has been -- there's a lot of people and the markets are working in backup locations, who are far away.

O'BRIEN: Right, right.

BURNETT: So I mean, it's going to be a muted day in some senses. But I really think they're going to react to the payroll and they're going to react to what we have been pointing out, which is three months that got with this month and the past two revisions that got revised up and that's what -- we'll get the market up.

O'BRIEN: We continue to watch all of it. Our "End Point" is up next.

We're back in just a moment. Stay with us. You're watching STARTING POINT. (COMMERCIAL BREAK)

COSTELLO: OK. It's time for "End Point". Rules to "End Point", short and tight.

Grover Norquist, this is for you. A couple of things I want to ask you about. Two stats that you spoke about when we started this conversation have actually improved a little bit. Not much, but a little bit. Underemployment which was 14.7 percent, now 14.6; labor force participation, it's well, that's better. Are you feeling encouraged at all?

NORQUIST: No. It's not even a dead cat bounce. Half the people who just graduated from college are either fully unemployed or grossly underemployed. Young people are looking at a future where there just aren't jobs and certainly aren't good-paying jobs.

And this report, if the Obama people are happy with this, that's the most depressing thing I've heard. This is more of the same. And what is he going to do to fix it? More debt, more spending, higher taxes. We did that for the last four years and it hasn't made things better. We've got a declining standard of living and we're going to be paying for this debt forever.

O'BRIEN: All right. We appreciate you joining us, Grover. Nice to have you this morning.


O'BRIEN: Let's get Ken Rogoff. Ken -- are you still with us? What's your take away from -- I'm sorry -- let's go to Candy, I've got her next.

Candy, you know, what is the big takeaway politically from this, do you think? I mean Grover is like what -- dead cat bounce which sounds bad.

CROWLEY: It does sound bad. I think, again, this is fuel to the same fire that both the President and the governor will come out and say, you see? I told you all along this was so, and this report is exactly what I was trying to tell you about. And I think they will both tell you that they have said all along that you shouldn't pay too much attention to one month. So I'm not going to pay too much attention to this one month. I think probably folks have already figure this into their decision for Tuesday morning.

O'BRIEN: And it really is, Sheila Bair, how you feel isn't it? I mean if you can look at a number and if it doesn't feel good -- you've got 20 seconds in our last 20 seconds. No pressure.

BAIR: OK. I think the reality is the unemployment rate is (INAUDIBLE) and it's now higher than it was when Mr. Obama took office, so that's going to give Mr. Romney a talking point. But the job creation number is a good one. So I think it's a wash and probably won't have much impact.


O'BRIEN: It's great to have all of you on our panel this morning. Erin, you've got a long day so we here are grateful you're coming in early for us.

Great to have you back with us Sheila, also.

Coming up Monday on STARTING POINT, we're going to be live in our nation's capital at CNN Election Center. We begin 5:00 a.m. Eastern Time. Full comprehensive coverage of the presidential election leading up to Tuesday's vote. John is going to join me. Zoraida will join me. Christine will be with us as well.

Also ahead this morning, Christine Romans and Ali Velshi have a one- hour special that focuses on the jobs report and what it means for the election and much more. That begins right now. See you Monday, everybody.