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Unemployment Rate Drops; Obama Vows to Fix Health Care Website; Nevada School Shooting; Math Teacher Killed in School Shooting; Two 747s Nearly Collided Over Scotland
Aired October 22, 2013 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: 148,000 jobs were created. That's fewer jobs than expected and just another wrinkle in a disappointing snapshot.
Our chief business correspondent Christine Romans is in New York to tell us what it all means.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Good morning, Carol. When you look at the average here, you've got about 185,000 jobs created, on average, each month before the shutdown. Again, this is a report that was delayed because of the government shutdown. So we know now in September, 7.2 percent unemployment rate, that's the best since November 2008. So that shows you the slow, steady improvement in the labor market and, again, 185,000 jobs created on average for the year.
Will that pace hold up, though? That is the big question because of the shutdown and because of the budget woes we've had. And the sharp pullback in confidence we've seen.
Want to break out for you the overall private sector, 126,000 jobs created there. And then public sector jobs 22,000 jobs created there. You can expect to see that number change next month when we finally get that report again because of the furloughs and probably the related layoffs in industries around government contracting. We'll be closely watching that.
Carol, I can tell you where we had a couple of bright spots, manufacturing. Couple of thousand jobs created there. We also saw warehousing and transportation, 23,000 jobs created there. And when you look within retail jobs, 20,800 jobs created there. Some were in auto dealers, showing signs of confidence again in September in the economy. Some of those were in garden centers and home improvement type stores again, showing some robust activity in the housing market.
All of this, carol, pre-shutdown. A big reminder that the economy was slowly healing. Jobs should be front and center. The single focus in Washington. These are pre-shutdown. The numbers after could tell a different story -- Carol.
COSTELLO: We won't know the numbers until October, at the end of October, right?
ROMANS: That's right. In fact, we're not going to know in fact until November 8th. That's when the next report is going to come out, it's going to be we won't know until November 8th. It will be delayed because of them shutdown, showing you how it's a fly in the ointment for all of us who are trying to sort of read the tea leaves of the economy, because leader and the lack of leadership in Washington.
We know, Carol, as well, that we just saw the CNN/ORC polling showing that Americans' confidence in the economy is falling and I think the shutdown is no big -- is the big reason. It really is. Lack of leadership in Washington at a time when you need to be growing jobs. All very concerning. Again this is a rear view mirror look, delayed report because of the shutdown -- Carol.
COSTELLO: All right. Christine Romans, reporting live from New York.
Now let's turn to another financial expert for some more realities behind this morning's numbers.
Monica Mehta is the managing principal of Seventh Capital Investment. She's a frequent columnist and the author of "Entrepreneurial Instinct."
Good morning, Monica.
MONICA MEHTA, MANAGING PRINCIPAL, SEVENTH CAPITAL MANAGEMENT: Good morning, Carol.
COSTELLO: OK. Can we find any comfort at all in these numbers?
MEHTA: Well, I think you're seeing more of the same with these numbers. I'll remind you in the summer we were creating about 148,000 jobs on average from May through August and so this new reading shows a little bit of a decline. But really what you have to bear in mind is even though the unemployment number keeps coming down, we are shedding about 300,000 people from the workforce all together. That's the number that we shed in August.
And so even though this unemployment number is coming down, the real thing that you need to look at is people are dropping out of the workforce. They're just not seeing the opportunities. And while all of this information gives you a little bit of a temperature of the economy, most of the financial community is looking to the Fed. They're looking to see what will this data do to impact the easing of bond buying, the unprecedented easing of bond buying and -- that the Fed has pumped in almost $3 trillion into our economic system over the past couple of years.
And removing that money from the system is going to have an impact to the markets. It's going to have an impact to the everyday person with the rate that they pay to the mortgage and all eyes are on the Fed and what this information means to the easing of the bond buying.
COSTELLO: Yes. And that decision is going to come within a month or two or maybe -- in a matter of a couple of weeks. Going back to those 300,000 people and all of those people still looking for work, what, we have 11 million people unemployed in this country? So disability payments are rising because of that, too. Explain that for us.
MEHTA: Well, so it's a really interesting phenomenon. Over the last 10 years, we've actually seen a number of people on disability double. And it's become this secret crutch for the economy. What's very interesting is that if you actually start scratching at the trend numbers, the -- the number of people who are filing for disability actually mirrors the unemployment number, when people are falling out of the workforce. Some of them are just deciding to not go back into the workforce and are filing for disability.
Now, I'll remind you, disability payments are not much. Maybe it's $1200. So one could speculate that it's people who are close to retirement age who really aren't finding the opportunities and are just deciding that it's better to just wait it out, wait until retirement, wait until Social Security kicks in. And they're trying to subside on this very small amount.
COSTELLO: Monica Mehta, managing principal of Seventh Capital Investment, thanks so much for joining me this morning.
MEHTA: Thank you.
COSTELLO: The disastrous roll-out of the Obamacare Web site isn't just having an impact on people in need of health care. A new poll shows it's also influenced -- influencing public opinion of the law. More than half of the country, 56 percent, say problems with healthcare.gov are signs of a bigger issue with the law itself. That's according to the "Washington Post" and ABC, which found that 40 percent think that problems with the Obamacare Web site are just an isolated incident.
Our senior White House correspondent Jim Acosta joins us now with more.
Good morning, Jim.
JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Good morning, Carol. This morning the White House is not revealing just yet who's been brought in to fix all of those glitches with the Obamacare Web site and they aren't saying exactly when these problems are going to be fixed. But the White House is up-front about one thing. They've got a big problem on their hands.
ACOSTA (voice-over): The way administration officials describe it, the so-called text surge to fix the Obamacare Web site sounds like a top secret mission with an all-star team of I.T. specialists parachuting in from across the country.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Nobody's madder than me about the fact that the Web site isn't working as well as it should, which means it's going to get fixed. ACOSTA: One question is whether warning signs were missed. The "Washington Post" reports the site crashed just days before it was launched during a simulation test involving hundreds of users. Despite a Pew Research poll finding only a small minority of Americans say the Obamacare exchanges are working well, White House officials don't want to delay the mandate, requiring Americans to have insurance.
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We're way still early in the process. So you're talking about a February 15th and a March 31st deadline. It is October 21st today. So let's be clear about that.
UNIDENTIFIED FEMALE: Welcome to the health insurance marketplace.
ACOSTA: Until the site is fixed, frustrated consumers are being urged to call a toll free number to shop for insurance. That's an option administration officials don't like, because it could be a big turn- off to younger, healthier buyers who do everything online and are critical to Obamacare success.
Last week, "Consumer Reports" warned if the glitches are too much to absorb, stay away from healthcare.gov for at least another month. The site has since posted an update saying the Web site's problems do not negate the law's benefits.
OBAMA: To free families from --
ACOSTA: Even the president's speech aimed at reassuring Americans about Obamacare had a hiccup, when a supporter standing behind him, Karmel Allison, nearly fainted.
OBAMA: I've got you. No, no, you're OK. This happens when I talk too long.
ACOSTA: A diabetic nearly her entire life, Allison later told CNN's Piers Morgan she's a big Obamacare backer because it will always cover her preexisting conditions.
KARMEL ALLISON, OBAMACARE SUPPORTER: I've been lucky enough to be covered because I was covered before I was diagnosed but have never been able to switch coverage and have always lived with the fear.
ACOSTA: And earlier this morning, Carol, we just got off the phone with a former innovation fellow, who used to work here at the White House, who says that the contractors who set up healthcare.gov were, quote, "a sloppy and, at worst, unqualified."
I had a long conversation with this innovation fellow over the telephone. And he said that part of the problem here is that the government's procurement process for hiring these contractors is really just gotten to the point where so few contractors are brought in that the process is not competitive enough and that these contractors have gotten lazy as a result.
There's more on CNN.com about this, Carol. But those contractors are going to be under heavy scrutiny this week. They're scheduled to testify at a hearing up on Capitol Hill on Thursday. Health and Human Services Secretary Kathleen Sebelius is expected to be on the hill next week -- Carol.
COSTELLO: So does this innovation fellow tell you how it all could be fixed? Is there a solution?
ACOSTA: Well, he did mention that. He thinks that they should bring in new vendors and perhaps break this Web site apart into smaller pieces and then go through each part and sort of build it maybe not from scratch but work through some of those problems in the smaller parts and then reassemble it. He was explaining to me -- and I'm not the biggest geek in the world, Carol, but he was saying that some of the coding that went into developing this Web site has a lot of problems in it and that that coding needs to be fixed.
So not to get too wonky with you, Carol, he says that a lot of this really needs to be rebuilt from the ground up. It sounds like it's going to be a long, painstaking process.
COSTELLO: Jim Acosta, reporting live from the White House this morning. Thanks.
ACOSTA: You bet.
(BEGIN VIDEO CLIP)
COSTELLO: Coming up in the NEWSROOM.
UNIDENTIFIED 911 OPERATOR: Active shooter. Sparks Middle School. Teacher down in the playground. They have one victim in the cafeteria.
COSTELLO: Another school shooting, a beloved teacher dead. Why he's being called an American hero.
(END VIDEO CLIP)
COSTELLO: Checking our top stories at 13 minutes past the hour.
Reports from two rights groups say some U.S. drone strikes in Pakistan and Yemen could be classified as war crimes. The Amnesty International report calls for, among other measures, compensating the families of civilian victims in Pakistan. And Human Rights Watch questioned the importance of several suspected Al Qaida targets in Yemen.
A line of wildfires nearly 1,000 miles long is burning across Australia's most populated state. The fires have destroyed more than 200 homes since Thursday and scorched an area the size of Los Angeles. At least one death has been reported. Officials fear tomorrow's conditions will be about as bad as it can gets with the possibility of more lives and homes lost.
In money news, Apple is expected to unveil new iPads today with faster processors on both the iPad and the iPad mini. The mini will likely at a high resolution retina display. Microsoft and Nokia are also expected to announce new products this week as tech firms gear up for the holiday shopping season.
This morning, so many whys amid heartbreak and another American town dealing with a deadly school shooting. A Marine turned math teacher lost his life at the hands of a middle school student who also turned the gun on himself.
CNN's Stephanie Elam joins us now from Sparks, Nevada, with more.
Good morning, Stephanie.
STEPHANIE ELAM, CNN CORRESPONDENT: Good morning, Carol. Police tell us it was all happening in just three minutes. Officers did not get off one shot, but it didn't matter before all of this tragedy happened on the middle school in Sparks.
ELAM (voice-over): Trying to make sense of a senseless killing. The small desert community of Sparks, Nevada, came together in prayer last night. This after chaos and tragedy at a local middle school.
UNIDENTIFIED 911 OPERATOR: Active shooter, Sparks Middle School. A teacher down on the playground. They have one victim in the cafeteria. One in the hall.
ELAM: Students were waiting for the morning bell to ring and then shots fired.
UNIDENTIFIED FEMALE: People started running and screaming, so I started running and then we heard another gunshot.
UNIDENTIFIED BOY: The kid is starting getting mad. And he pulls out a gun and shoots my friend.
ELAM: The shooter, a 13-year-old student, allegedly using his parents' gun, wounded two fellow students. One in the shoulder, the other in the abdomen.
A teacher rushed to their aid.
UNIDENTIFIED BOY: He walked up to a teacher and says, "back up." The teacher started backing up. He pulled the trigger.
UNIDENTIFIED BOY: The teacher was trying to make him put it down but he took the shot right then and there.
ELAM: A shot that killed 45-year-old Michael Landsberry, a popular eighth grade teacher. He was a former marine who served several tours in Afghanistan. He is now being called a hero. GENO MARTINI, MAYOR OF SPARKS, NEVADA: He was a very well-liked teacher by the students and other teachers. It's very unfortunate that someone like that that protected our country over there and came back alive, his life had to be taken.
REGGIE LANDSBERRY, BROTHER OF SHOOTING VICTIM: He loved teaching at Sparks Middle School. He loved the kids. He loved coaching them. He loved teaching them. He was just a good all-around individual.
ELAM: Students are pouring out their grief on social media.
"I had the chills when I heard that Mr. Landsberry died. Having him for the math was the best. It's too hard to even believe."
"No teacher will take his place. Nothing is going to be the same any more. You are a hero and you will always be missed at Sparks Middle School."
As for the student suspect, police say he took his own life with that gun.
AMAYA NEWTON, STUDENT WITNESSED SHOOTING: I knew the person with the gun. He was really a nice kid. He would make you smile when you're having a bad day. I saw him getting bullied a couple times and I think he took out his bullying on it.
ELAM: But it's still unclear what drove that child to resort to violence and whether or not he was targeting the students or the beloved math teacher who survived war, only to die what should have been the safe haven of an American middle school.
ELAM: And school is canceled the rest of the week. As of the two wounded students, last check, they were both in stable condition, one in serious condition and one in fair condition -- Carol.
COSTELLO: Stephanie Elam, reporting live from us in Sparks, Nevada. Thank you.
Still to come in the NEWSROOM: two jumbo jets with passengers onboard and on a collision course for a major disaster. Ahead, what happened at the very last moment that saved their lives?
COSTELLO: Two jumbo jets carrying hundreds of passengers came within seconds of colliding in Scotland.
Now, investigators are giving out details about that moment in late June and those details are disturbing. If not for the heroic efforts of air traffic controllers, those hundreds of passengers may have died.
CNN's Rene Marsh is in Washington with more on this story.
RENE MARSH, CNN CORRESPONDENT: Good morning, Carol.
You know, those two planes, they were about to cross the Atlantic Ocean. This morning, investigators say this near collision in the sky was due to pilot error. But what we still do not know this morning is why these pilots got it so wrong.
MARSH: Midair over Scotland, two 747 jumbo jets carrying up to 1,000 passengers are on a path to collide. British investigators say it's because the pilots didn't follow the instructions from air traffic control.
STEVEN WALLACE, FORMER FAA CHIEF ACCIDENT INVESTIGATOR: This is very hard to explain because it appears that two airplanes with two pilots in each airplane, everybody got it wrong initially.
MARSH: The problems started when one plane, jet two, asked the control tower for clearance to climb in altitude. It was cleared. But that put it at the same altitude as another plane, jet one.
The two planes were now on a converging path and moving closer by the second. The controller realizing that stepped in to prevent a collision.
WALLACE: He gave instructions to the pilot on the right to go to the right and on the left to go to the left. The conclusion of the British investigators was that each pilot did what the other pilot was instructed to do and the planes turned toward each other.
MARSH: At their closest point, the two planes were about 3 miles apart horizontally and 100 feet vertically. That's under the minimum separation requirement.
WALLACE: We have several layers of protection, and we got down to some of the last ones here. One pilot saw the other airplane, and said so, and the collision avoidance system activated properly.
MARSH: The plane's automatic alarms alerted the pilots and they corrected their paths.
Former FAA accident investigator Steven Wallace says it's rare four pilots get the instructions so wrong. But the safety nets kicked in and that, he says, should give comfort to airline passengers. He adds there hasn't been a collision between U.S. airliners since 1978.
MARSH: Well, investigators remain at a loss for answers as to why four pilots, two in each plane, misheard or misinterpreted the control tower's instructions. That's despite at least one of the crews repeating the instructions correctly. Investigators ruled out the possibility of call sign confusion because the call signs of the two planes were so different -- Carol. COSTELLO: Rene Marsh, reporting live from Washington for us. Thank you.
Two of the Cleveland kidnapping survivors are ready to tell their story. Attorney for Amanda Berry and Gina DeJesus says the two women will write a book with the help of Pulitzer Prize-winning "Washington Post" reporter Mary Jordan. Jordan grew up in Cleveland.
Berry, DeJesus and Michelle Knight were held captive for nearly a decade in Ariel Castro's house of horror. They were recovered in May. As for Castro, you should know, he was found dead in his prison cell last month.
Country music star Dolly Parton says she's all good after a car accident in Nashville. Police are blaming the crash on the other driver who apparently failed to yield. Parton and her driver were taken to a nearby hospital. Police say none of the injuries are serious.
Still to come in the NEWSROOM: White House calling in a team of tech experts to solve problems with the Obamacare Web site. But should they maybe check with private firms first, who have already been successful in the effort? I'll talk with the man who runs a private health care exchange, next.
COSTELO: Good morning. I'm Carol Costello. Thank you so much for joining me.
Checking our top stories this morning at 30 minutes past the hour.
Police in Sparks, Nevada, say they don't know if a middle school student was specifically targeting anyone when he opened fire before school yesterday. One teacher was killed and two 12-year-old students wounded before the young shooter committed suicide. A federal law enforcement source says the boy had brought his parents' gun to the school.
A mixed bag in the new jobs report. Unemployment fell to 7.2 percent last month. That's the lowest level in five years. Employers added 148,000 jobs, not as many jobs as expected. There were still more than 11 million people unemployed in the United States.
The opening bell about to ring. So, what will the markets show after this jobs report? Let's head straight to Wall Street and Alison Kosik. She's at the New York Stock Exchange.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol.
Stocks starting off slowly into the plus column. We did see the September jobs report coming two and a half weeks late, but its' still an important read on the economy. In fact, it's one of the most economic reports we get.
Interesting to see how stocks reacted, though. They held steady before the report came out. Then, there was this pop -- not necessarily because this report is being regarded as something extremely positive. It's because there is an expectation that the Fed is going to keep pumping stimulus money into the economy. You look at the unemployment rate even at 7.2 percent.