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More Jobs in April; White House Reacts to Jobs Report; Wall Street Reacts to Jobs Report; Boston Bombing Date Changed; Extreme Fire Dangers Warnings Up; Witherspoon Arrest Video Goes Viral

Aired May 3, 2013 - 09:00   ET


CAROL COSTELLO, CNN ANCHOR: Happening now in the NEWSROOM, breaking overnight, California inferno -- walls of flames, burning through the L.A. area.


UNIDENTIFIED FEMALE: I'll stay until I know that our house is still here.

UNIDENTIFIED MALE: As long as our families and dogs are safe, we can get through this.

COSTELLO: Also July 4th attack. The Boston bomber suspect telling investigators they initially planned an Independence Day attack in downtown Boston.

Plus, Reese under arrest.

REESE WITHERSPOON, ACTRESS: I'm an American citizen.

COSTELLO: The arrest and the tape.

WITHERSPOON: Do you know my name, sir? You're about to find out who I am.

COSTELLO: And the family of the woman gone missing for 11 years talks to CNN.

MORGAN HEIST, MOTHER TURNED UP AFTER 11 YEARS: I hope to eventually forgive her one day.

COSTELLO: Brenda Heist's daughter not mincing words, tweeting she hopes her daughter rots in hell.


HEIST: As of right now, I don't. I don't think she deserves to see me.

COSTELLO: You're live in the CNN NEWSROOM.


ANNOUNCER: This is CNN breaking news. COSTELLO: And good morning. Thank you so much for being with me. I'm Carol Costello.

We begin this hour with a glimmer of good news on the economy. And a glint of hope for millions of Americans still searching for a job. Just minutes ago, we learned that 165,000 jobs were created in April. That is better -- better than expected and it pushes the jobless rate down slightly, ever so slightly to 7.5 percent. That's the best rate, by the way, since December 2008.

CNN's business guru, Christine Romans, joins us now from New York to parse these numbers.

So should we be doing the happy dance?

CHRISTINE ROMANS, CNN BUSINESS ANCHOR: I know, I think we should, and quite frankly, the stock futures are up. You could see records at the open if this holds. It could be a record morning for stocks, watching you know 1600 in the S&P 500. And here's why. For the first time in a long time, you see the jobless rate fall, and not because people are leaving the labor market, but because people keep getting jobs.

I want to show you what the chart looks like for job reaction for the year. You can see that February and March were much better than expected.

In February, Carol, 332,000 jobs were created. The labor market is revising its numbers and was stronger in February than we thought. March, we thought it was 88,000, now 130,000 some. And in April, 165,000.

Let me show these sectors because a lot of people who are looking for a job want to know where these jobs are coming from. Service providing sector. That was a big part of this. Service related industry. Retail trade, health care, leisure and hospitality. That's where we saw big job gains.

When we look at overall the unemployment rate, you mentioned it's the lowest since 2008. I want to show you how it's drifting lower here. The jobless rate over the past year has been drifting lower. Some months we've been sort of saying, it's agonizing because the jobless rate is falling because people are just leaving the labor market.

This time around. It looks as though the jobless rate fell because more people were getting jobs, not because people were leaving the labor market.

We do know there were more people signing up for part-time jobs, but they would have liked full-time jobs, that still shows weakness in the underlying labor market. So when you see job creation of more than 150,000 a month, that's a good thing. And we've been saying that so far this year.

One last chart, Carol. The labor force participation rate, it's the lowest since 197 9. That means the people who are engaged in the labor market but is held steady last month and that's what you want to see. You want to see that number hold steady -- Carol.

COSTELLO: All right. We want to get some reaction from the White House. Jessica Yellin is traveling with the president in Mexico.

Jessica, has the White House released a statement yet?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hi, good morning, Carol. The White House has not yet released a statement but as soon as they do, I expect it will be a measured and positive reaction that acknowledges the fact that these numbers have fallen to a four-year low, but also says that the U.S. have a long way to go.

Look, the general response you'll get from White House officials that this is pretty consistent with what the White House has been maintaining all along. That they see growth in the private sector. But the effects of sequestration, those across-the-board spending cuts, are holding the economy back in other ways. That some of the games being played in Washington, as they would put it, are holding the economy back.

The big-picture theme you would you get is, if Washington were working better, if the White House and Congress could come to terms on some sort of big debt deal, then the economy would be growing even more aggressively. So I think you'll see a mixed reaction, with the White House acknowledges that this is very positive, but it could be even better where there are more movement by the nation's lawmakers.

COSTELLO: All right, Jessica. As soon as the White House releases that statement, we'll take our viewers back to Mexico. Thank you, Jessica Yellin.

We want to now talk to Stephen Moore. He's the senior economics writer for the "Wall Street Journals'" editorial page.

Stephen, welcome.


COSTELLO: OK, so we haven't heard the Republican response yet but we have heard from Grover Norquist, and you certainly know who he is.

MOORE: Sure.

COSTELLO: And he says we shouldn't read too much good news into these numbers, but come on.

MOORE: Yes. Look this is a positive report. I think Christine I think really nailed it. I think everything she said was very accurate.

You know, Christine, I think one of the most important things was the fact that you saw the upward revisions in the numbers from the previous months. So there's no question right now, the economy is picking up a little bit of steam.

Carol, I'd like to see the economy grow a little faster. But I'm not quite dancing a jig right now, but I will say this. The one thing that I am most concerned about right now is what Christine mentioned at the end of that report, which is that we're seeing more and more people getting hired but they're being hired what we call involuntarily in part-time jobs and I do think that there are a lot of reasons.

One is, you know, employers are still a little bit skittish about bringing people on full time. But I do think the Obamacare law is incentivizing businesses not to hire people full time because of those new costs of that law.

COSTELLO: That's right. A lot of small business people aren't hiring very many people because of Obamacare, and, you know, they are really a major part of our economy. They fuel the economy. I think they have a large part in the economy, right?

MOORE: Carol, do you -- Carol, do you know what a 49er is?

COSTELLO: From San Francisco?


Other than that, no.

MOORE: No, not a -- not a San Francisco 49ers. There's a new term in employment called 49er and those are businesses that are -- that are capping their employment at 49 workers and that's because once you --

COSTELLO: Well, below the 50 mark.

MOORE: Once you hire 50, all of those new regulations take effect. And I can't tell you how many times I talk to employers who say, you know, we just can't afford to hire that 50th worker.

The other thing that employers are worried about is, once you hire somebody for more than 30 hours a week, they are considered full time. So when you talk about things Washington could do to help the labor market, one of the things we can do is let's call -- let's say, you know, 100 workers, not 50, so those medium-sized businesses can expand.

COSTELLO: So just to make our viewers -- let our viewers understand more.


COSTELLO: When you have 50 employees, you're then required to provide them health insurance under Obamacare.

MOORE: That's right.


MOORE: That's right.

COSTELLO: So that's where the real -- (CROSSTALK)

MOORE: So what that means, Carol, is that extra cost of hiring that one additional worker, you know, can be huge because that means every worker has to receive the health insurance and when you're talking about businesses that like McDonald's or retail stores that have small margins, those are -- those are big costs.

But look, the big news is the economy is picking up steam. I'd like to see it growing faster and look I do agree with Grover that so far this recovery has still been subpar, but I've got my fingers crossed. You know, you see the stock market on a tear, so there is a wealth effect. Businesses are starting to feel they can invest a little bit right now. Let's just hope we can sustain this.

COSTELLO: I hope so. Speaking of the markets --

MOORE: Yes, me too.

COSTELLO: Speaking of the markets, let's go to the New York Stock Exchange, check in with Alison Kosik.

What do you expect to see when the markets today when they open at 9:30?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Carol, good morning. Get ready for the bulls to run. We could see the Dow hit another record today. And it could be another historic day for the S&P 500. All signs are pointing to that index crossing the 1600 level for the first time ever. That essentially takes the S&P 500 into a new century.

So psychologically that gives a boost of confidence and keep set momentum, that sort of wealth effect that he was -- your guest was just talking about. It keeps that wealth effect going.

But I found a critic about these jobs numbers, Carol. A trader I talked to just a short time ago. He's skeptical about these numbers. He says, look, you know, you look at the economy as a whole. The economy actually has been producing weak manufacturing reports over the past month and a half. He said also that number, 165,000 jobs added last month, it's good he says, but it's half of what we really need to continue growth in the jobs market.

And about that wealth effect that your -- that your guest was just talking about. He said -- the trader I talked to said there's a huge disconnect at this point. The bulk of the country, the bulk of Americans are not invested in the stock market. Their biggest asset is their home, and their home prices are still depressed or they're underwater. Meaning they owe more than their house is worth.

So this one trader is a little skeptical about these jobs numbers as far as recovery, a strong recovery going on, but the triple-digit gains in those numbers I have to say, they are a good sign -- Carol.


COSTELLO: Yes, they are. Let's look at the glass half full this morning on a Friday.

KOSIK: Exactly.

COSTELLO: Alison Kosik, we'll check back with you at 9:30 Eastern Time to see how the markets are faring.

Now the latest updates in the Boston bombing investigation. Today, we could find out exactly how Tamerlan Tsarnaev was killed during his confrontation with police. A hearse, presumed to be carrying his body, was spotted at a funeral home. We also learned this morning Tsarnaev's sisters and his uncle have claimed the body. It will not be buried until an independent autopsy is complete. And then the body will be returned to Russia. Relatives say the burial -- we're not sure where burial is. We'll check on that.

Plus new information on the original plans for the bombing, where the bombs were built, and how the FBI finally got their hands on Dzhokhar Tsarnaev's laptop.

Jason Carroll live in Boston with more details.

Good morning, Jason.

JASON CARROLL, CNN NATIONAL CORRESPONDENT: And good morning to you, Carol. Investigators learned about this information during an early interview with Tsarnaev. And what Tsarnaev told them is basically that Tsarnaev and his brother built the bombs right here at Tsarnaev's apartment. And he also said that the original plan was to detonate those on Independence Day.


CARROLL (voice-over): A U.S. law enforcement official tells CNN the Tsarnaev brothers initially considered a suicide attack during the Fourth of July celebrations. And Boston's Charles River Esplanade is typically packed with spectators for an open-air concert and fireworks. All of this, according to Dzhokhar Tsarnaev, who told investigators they moved up the date to the Boston marathon because the bombs were ready sooner than expected.

Bombs Tsarnaev say built in the very home his older brother Tamerlan shared with his wife and child. Late Thursday, a van believed to be carrying Tamerlan's body, transferred it to a funeral home outside Boston. All this as investigators continue to focus on his widow, Katherine Russell. Yet it is unclear what if anything Russell may have known or suspected.

Russell's attorney says she continues to cooperate with authorities. And authorities also have more questions for Dzhokhar Tsarnaev's three friends from the University of Massachusetts-Dartmouth. Now facing charges of obstructing justice and lying to authorities. One of whom led authorities to Tsarnaev's laptop, which could provide more clues.

And as the investigation continues, so too does the recovery for victims. Like Marc Fucarile, who lost a leg in the bombing. The other leg shattered, his arms riddled with shrapnel. MARC FUCARILE, BOSTON BOMBING SURVIVOR: I was scared because it was dark. I thought I was dead, that it was over.

CARROLL: Fucarile says he draws strength every day from a photo of his 5-year-old son.

FUCARILE: Because every time they stuck me with another needle, when they cut me, when they put something, or did something, when they're ripping, changing bandages, I look at that picture. That's what got me through it.


CARROLL: And also, Carol, an update on Tamerlan Tsarnaev. Where he will be buried. As you know many people here in Boston do not want -- do not want him buried here. What we are being told is that an uncle actually claimed the body last night. The Tsarnaev family wants an independent autopsy performed. Once that is done, a spokeswoman from Russia says the Tsarnaev family does, indeed, want him buried right here in Boston -- Carol.

COSTELLO: All right. Thanks for the clarification. Jason Carroll reporting live from Boston.

We want to bring in Tom Fuentes, he's in New York City this morning. He's a former FBI assistant director and CNN law enforcement analyst.

Welcome, Tom.


COSTELLO: OK. So, Tom. according to many sources, these two suspects, finished building their bombs quickly, so quickly that they actually drove around Boston trying to find a target. The case police department and supposedly they finally settled on the Boston marathon. Does this sound like a well organized plot to you?

FUENTES: Well, not necessarily. But this is what Dzhokhar Tsarnaev has told the FBI during the interviews that were conducted shortly after his arrest. They are skeptical. You know, they're treating every piece of information he provided, you know, they're not accepting it completely 100 percent. They're verifying it, they're going through all of the rest of the investigation to see if there's indications that what he said is true and turns out to be true.

So much of it so far has turned out to be the way he described it. So I think they have a tendency, at least on this thing to believe that they were somewhat disorganized as to what they were going to do, or when they were going to do it, based on finishing the bombs.

COSTELLO: Well, now we found out that they had originally planned to detonate these bombs, supposedly, on July 4th and then as I said, they finished making the bombs quickly and then they had to find another target.

FUENTES: Right. Yes, and we're not sure exactly, you know, what the intention or what the location would be for July 4th. You know it could be at a place that might have had more security or you'd have to go through magnetometers to get into the area where there -- a greater concentration of people. We don't know.

You know, they're obviously looking for a place where people were out in the open, exposed and you didn't have to go through any security checkpoint to be near a group of people.

COSTELLO: We also know that the bombs were supposedly made at the home where Tamerlan Tsarnaev lived with his wife and child.


COSTELLO: So are you absolutely sure that Dzhokhar Tsarnaev, because that's where police supposedly got this information from, is he telling the truth on that matter, that Tamerlan made these bombs in the home where his wife and child live?

FUENTES: No, they're not -- they're not taking that as a fact from him. That's why they're doing the investigation to verify that. That's why the investigation at the home to look for any evidence of the material, even trace evidence of it, still being in that apartment, to verify that some of the components at one point were in there, if not the entire bombs (ph).

So, he said but that doesn't mean they accept that as the truth until they conduct further investigation, which they have been conducting since he gave that information right after they were arrested.

CAROL COSTELLO, CNN ANCHOR: And police also have the laptop, Dzhokhar's laptop, which may or may not provide useful information, right?

FUENTES: It always does it will provide something, or they wouldn't want to hide it. The laptop was taken by up with of the individuals charged with obstruction, and he held onto it. It was not taken to the dumpster. He had it still in the dorm and turned it over, very quickly, to the FBI early on.

So they had that laptop for a while, and computers are always a wealth of information, in terms of the Web sites they visited. Possibly e- mails or if they had separate e-mail accounts that no one knew about.

There's a great deal of information to be had and they have been getting from the laptop since they recovered that a while back now. They had it for a while.

COSTELLO: Tom Fuentes, thanks so much.

FUENTES: You're welcome, Carol.

COSTELLO: The families of the victims who are killed in the Boston bombings could get more than $1 million each. Survivors who lost more than limb could also get more than $1 million. Twelve other amputees will get close to a million each. "The Boston Globe" reporting the One Fund Boston will unveil a plan to distribute the money next week, that fund has raised about $28 million since the bombings.

Now to southern California, battling several huge wildfires. High winds today will not help hundreds of firefighters gain control the biggest fire is in Ventura County, where 8,000 acres have already burned. About 2,000 homes could go up in flames.

And take a look at the pictures, they are unbelievable. These are conditions that Paul Vercammen found for us yesterday.


PAUL VERCAMMEN, CNN CORRESPONDENT: But the smoke is just absolutely horrific. It's encircling the entire neighborhood and these people are right now trying to evacuate.


COSTELLO: The flames inching closer to entire neighborhoods, those homes sit empty as owners wait it out in safer locations.

Stephanie Elam joins us near the fire line.

Good morning, Stephanie.


I can give you an update right off the bat and tell you that this fire here in Ventura County known as the Springs Fire, has now ballooned up to 10,000 acres that officials are now estimating have burned.

We've been out here all night and, throughout the night, we watched this entire hillside burn down there, as a fire burn down, jump over the Pacific Coast Highway and right towards the Pacific Ocean where it was out of land. The issue isn't, this isn't the only fire burning and that is taxing resources throughout the state.


UNIDENTIFIED MALE: Just came in like that.

ELAM (voice-over): High winds, soaring temperatures and dry brush are giving California fire season an early start.

Wildfires across the state are churning toward home, keeping hundreds of firefighters busy, and residents on edge.

UNIDENTIFIED FEMALE: Stay until I know that my house is still here.

UNIDENTIFIED MALE: As long as our family and our dogs are safe, we can get through this.

ELAM: Fire sprouted up in four southern California counties over the last couple of days. Two of the fires were contained quickly. JULIE HUTCHINSON, BATTALION CHIEF, CALFIRE: We staffed up several weeks ago. We brought on air tankers, hired seasonal firefighters. What it bodes for us is what the rest of the year is going to be like and are we going to wear people out. That's the bigger question.

ELAM: But as firefighters were getting a handle on the Summit Fire burning about 25 miles west of Palm Springs, a blaze in Ventura County began to spread quickly, on 25-mile-per-hour winds.

Erupting between the 101 Freeway and the Pacific Ocean, north of Malibu, the so-called Springs Fire charred about 6,500 acres in just five hours.

HUTCHINSON: Now, we're getting those hot, long days, winds, and the low humidities, and this stuff is just ripe and ready to burn.

ELAM: It's the number of active fires, including three burning in northern California, that's making this outbreak unusual.

HUTCHINSON: We don't see this type of activity usually until August, September.

ELAM: In the wake of the Summit Fire, one man is dealing with immeasurable loss. His mother, who bought this home in 1973, passed away just one month ago.

JOE KIENER, HOUSE BURNED DOWN: Thank God I wasn't in the house when it happened. Thank God I was able to get my dog out, and my mom was watching over me. And so, are the neighbors that are around.


ELAM: Now, the good news is that fire is 55 percent contained. It did burn some 3,000 acres, that man being the only person to lose their home.

But here at the Ventura fire where we are standing, there are still flames right above me on this hillside. They are only 10 percent contained and as you may be able to tell by the shot around me, it is really starting to get windy here and that's what firefighters are concerned about, Carol. It could really toss flames in different directions.

COSTELLO: And, frankly, air quality doesn't look so good. In between shots, are you wearing a mask. What is it like to breathe there?

ELAM: Yes, in the last couple of hours, as you can see behind me, the smoke has really started to pick up, especially as the son sort of finally made its way west. And that smoke is really thick. You can feel it, it was giving me a headache.

So, I started to wear the mask to control that, as the winds have picked up. Smoke is coming toward us. But firefighters are really concerned about the fire spreading to the southwest. There are homes in that canyon area behind there. Not a whole lot of them. But they are concerned about the fire spreading that direction. COSTELLO: Stephanie Elam reporting live for us this morning.

Just ahead in THE NEWSROOM, scathing dash cam video shows Reese Witherspoon's tirade. You'll hear it for yourself, next.


COSTELLO: Twenty-three minutes past the hour. Time to check our top stories.

Just about an hour from now, President Obama will speak to students in Mexico City as the president wraps up a two-day trip that focuses on the country's shared economic interests. Later the president heads to Costa Rica to meet with Central American leaders.

John McCain says he believes there is a 50/50 chance a revised bill expanding gun background checks will come before the Senate. He made that comment to a survival of the 2011 Tucson shooting. Six people were killed in that incident. More than a dozen others wounded, including, of course, then Congresswoman Gabrielle Gifford.

A bipartisan gun bill failed to pass in the Senate last month.

Crews are back on New York's Hudson River, looking for a crashed plane and anyone who might have been inside. The plane went down Thursday afternoon, 40 miles southeast of Albany. Eyewitnesses tell a local paper, the plane hit the water, burst into flames and sank. Authorities are not releasing the name of the pilot.

Reese Witherspoon's apology tour is getting off to a rocky start. She said she is really, really sorry for her tirade against an Atlanta police officer. And now, the dash cam video shows she and her husband being arrested, well, it has gone viral.

TMZ has the video. Here it is.


REESE WITHERSPOON, ACTRESS: I'm an American citizen.

OFFICER: I told you to get in that car and stay in there, didn't I?

WITHERSPOON: This is beyond, this is beyond. This is harassment. You are harassing me as an American citizen.

I have done nothing against the law.

JIM TOTH, REESE'S HUSBAND: Reese, can you please?

OFFICER: Yes, you have. You didn't obey my --

WITHERSPOON: I have to obey your orders?

OFFICER: Yes, you do.

WITHERSPOON: I do not. TOTH: Reese.

WITHERSPOON: Absolutely nothing.

TOTH: Reese. Relax.

WITHERSPOON: I'm now being arrested and handcuffed?


WITHERSPOON: Do you know my name, sir?

OFFICER: Don't need to know it.

WITHERSPOON: You don't need to know my name?

OFFICER: Not quite yet.

WITHERSPOON: Oh, really? OK. You're about to find out who I am.


COSTELLO: Oh. Later, Witherspoon's husband, Jim Toth, tried to make clear he had nothing -- nothing at all to do with his wife's rant.


WITHERSPOON: I'm obstructing your justice.




WITHERSPOON: I'm being anti-American?

OFFICER: Yes. You'd better sit down.


OFFICER: Sit your butt first, and it will be a lot easier.

WITHERSPOON: Interesting. Arresting me.

OFFICER: I tried.

TOTH: I'm sorry.

OFFICER: I absolutely, 100 percent tried.

TOTH: I have nothing to do with that.

OFFICER: I know.

(END VIDEO CLIP) COSTELLO: Witherspoon has been in damage control mode, including this apology on "Good Morning America" just yesterday.


WITHERSPOON: I have no idea what I was saying that night. I saw him arresting my husband and I literally panicked, and I said all kinds of crazy things, I told him I was pregnant. I'm not pregnant. I said crazy things, and if you only hear me laughing, I have no idea what I was talking about.

And I am so sorry. I was so disrespectful to him, and I have police officers in my family. I work with police officers every day. I know better.


COSTELLO: TMZ reports Witherspoon will pay a $213 fine. Her husband, Toth, pleaded guilty to DUI. He'll serve 40 hours of community service.

As we told you at the top of the show, a better than expected jobs report. So, how will the markets react? We suspect pretty good. We'll take you to the New York Stock Exchange, next.