Historic Month Of Job Losses For The U.S.; U.S. And China Trade Officials Agree To Strengthen Cooperation
ANNOUNCER: This is CNN Breaking News.</s>JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Welcome to a special edition of FIRST MOVE this hour with an in-depth look at America's jobs crisis following the worst monthly job losses ever. We'll bring you analysis on what comes next and what restarting the economy may look like and will require and wherever you are in the world, advice on managing anxiety and stress. All right. Let me give you the numbers. The U.S. losing a stunning 20.5 million jobs last month. This report, just to give you a sense covers the period from mid-March to mid-April when new jobless benefit claims were at their highest. This now gives us a U.S. unemployment rate of 14.7 percent. That's the worst level since records began in 1948. As I've been saying all this week, bad as these numbers are, it's simply not an accurate picture of the damage that's been done during the lockdowns. These numbers don't include those who are out of work, but simply not searching for a job, which of course is tough while you're under lockdown. But there are other inconsistencies here. Most of these job losses were considered temporary in nature, though. So, the hope is that if that is the case, they could perhaps come back quickly. U.S. stocks, meanwhile, continue to gain ground, fueled in part I think by the hope that what we are seeing here is the lows, the worst of the economic damage. And now, the restart begins and perhaps things pick up, though, I have to say a word of warning from JPMorgan coming this week saying it could take as long as 12 years for the United States to gain all the jobs back that it lost over the past few months. Let's get to the drivers and analyze what we saw. Richard Quest joins me now. Richard, we run out of words to describe, I think what we're seeing here, not just in the United States, but of course, globally. And it says something when you're presented with an unemployment rate of 14.7 percent, and your initial response is relief, that actually it wasn't a lot higher. These numbers are horrific.</s>RICHARD QUEST, CNN BUSINESS ANCHOR, "QUEST MEANS BUSINESS": And that's certainly the thought because if you took yesterday's private payroll numbers, and you took them into today, the fear was it could be as high as 22 million that would be unemployed with a rate of over 16 percent. So, to the extent we've got what we've got today, there's a small blessing in that and there's another small blessing because I do think today we need to focus on what might be the positive or be little though it is, and that is of that 20 million -- 17 million of it -- 17.5 million identify their unemployment as being temporary, short-term, layoff, furloughed, being transferred onto the increased unemployment benefit. That means and again, it's horrific number, but it's -- we're looking for silver linings in very gray clouds, and it does mean that perhaps a much smaller number of this, two million perhaps will be long term unemployed, the rest being reemployed. And the other thing is, of course, there are increased unemployment benefits, but this is very small comfort for people who have seen their lives completely and utterly turned upside down.</s>CHATTERLEY: I agree with you, Richard. And there's so much guesswork at this stage. If there's any beneficial comparison to the economic depression, it's that we've acted differently this time around. We've ramped up spending, it's trillions of dollars. There's some kind of safety net that wasn't there even three months ago. But we're facing two crises here. The economic crisis and the underlying health crisis and key to recovery is addressing both of those things, and at the heart of it is confidence and that's the unknown and the big challenge here.</s>QUEST: Right, and we got a good idea of the future at least seen from the United Kingdom in yesterday's Bank of England monetary report. Now, the Bank of England, which I think it expects U.K. unemployment to go up to about -- well, into double digits, but the Bank of England said if you look three years out, two to three years out, you see an employment back at four and a half percent. Now, I grant you, this is so many unknowns that you can pardon the phrase, you wouldn't take it to the bank. If you told me on New Year's Eve that we would have an unemployment rate in the United States at 14.5 percent, I wouldn't have believed you and said you've been having the champagne early, instead.</s>QUEST: But I think we can say -- and one other piece of news on this looking forward to the future, Lufthansa this morning says it's hoping to put 160 aircraft back into circulation as of June. Meanwhile, IAG says it hopes to start meaningful flying in July. So, we can start to see to use the cliche, the green shoots of recovery, but they are very, very fragile.</s>CHATTERLEY: This is such a critical point, Richard. When I looked at those numbers 30 minutes ago, I was trying to do the math on what proportion of these job losses are in the leisure and the hospitality industry, and it's around 42 percent in April. This industry, this sector, and it's a lot of jobs was very much in the frontline, wherever you look around the world, but particularly here in the United States, bringing these jobs back is a huge, huge chunk of the numbers that we're talking about here.</s>QUEST: Anywhere between 10 to 14 percent, depending on which ones you look at of people globally are employed in some form of travel and tourism at its widest definition. So, it is a vast industry. And you're right, it's about 45 percent of the job losses, and that includes restaurants, bars, clubs, and tours and, and the like. Now if you take -- but the artificiality of these numbers is borne out for example, by the fact the airlines can't furlough staff now because they are bound under their agreement until September, and you've got PPP, which is also keeping many employees perhaps arguably falsely employed, or at least artificially employed on the government payroll. So, we won't get a good idea of long term unemployment facts, until at least -- I'm guessing probably July, maybe as late as August, September, when we've seen a recovery underway, and we've got an idea of what's not coming back.</s>CHATTERLEY: Yes, and the Congressional Budget Office saying a 10 percent unemployment rate, even at the end of this year, so millions of jobs gained from here, but still millions of jobs lost in the last two months. Richard Quest, thank you so much for your thoughts and analysis there.</s>QUEST: Thank you.</s>CHATTERLEY: Well, President Trump responded to this employment numbers saying the jobs will be back very soon.</s>DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Fully expected. There's no surprise. Everybody knows that. Somebody said, oh, look at this. Well, even the Democrats aren't blaming me for that. But what I can do is I'll bring it back. Look, I created with a lot of great people and with the country, because our country's warriors and now maybe more than ever because they're going back to work and they are warriors -- we created the greatest economy in the history of the world, the best we've ever had, best employment numbers, best stock markets, best number of jobs in every way, the best economy in the history of the world - -</s>CHATTERLEY: CNN senior Washington correspondent, Joe Johns joins us now. Joe, whichever way you look at it, blame game aside, these are crippling devastating numbers for the United States and the decision now on how to act to bring these jobs back and support confidence is key.</s>JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Absolutely, confidence is key, and that's probably one of the most important things that people on both sides of Pennsylvania Avenue have been stressing, however, Democrats say the way to get confidence in the economy, confidence in the various sectors is to have more testing. The people over here at the White House have a somewhat different view. They say the critical thing is limitation on liability, so that some of the companies when they start back up, don't instantly get sued, because someone caught coronavirus, for example. So, that debate continues, and it will probably make its way into legislation, at least, at some point. A couple other points about what the President said in his statement there, he was in the middle of an interview on Fox, his favorite station, when these numbers came out, and I do want to direct your attention to that claim he made that even Democrats don't blame him for this. It is also true that a lot of the President's critics have said that this situation could have been limited in the United States somewhat if the President had acted a bit quicker. As to what you raised there at the top, Julia, you know, that issue of when does this recovery that the President predicts start, the Council of Economic Advisers over here at the White House have put out what their view is and they've suggested that we might just see it an inkling, just a bit of signs of recovery in the next monthly report, which would come out at the very beginning of June.</s>JOHNS: Now, that would cover the month of May, but they say we're not going to see what they call, fuller measures of recovery, at least until the June report, which comes out in July. And that, of course, is a somewhat rosy scenario, given the fact that we don't know the level of confidence out there in the American public, and it's not clear at all that things are going to start moving that quickly. Back to you -- Julia.</s>CHATTERLEY: You raise a great point. There are two crises here, an economic crisis and a health crisis and they are entwined whether we like it or not, and we have to tackle both. Joe Johns, thank you so much for that. Now, as we were mentioning earlier, the hard-hit travel and hospitality sector account for many of the months of these dramatic job losses, around 42 percent. But the CEO of IHG, one of the world's biggest hotel groups is cautiously optimistic. He says some markets are already showing signs of recovery.</s>KEITH BARR, CEO, INTERCONTINENTAL HOTELS GROUP: Let me canter around the world and tell you where we're at today and then how we're thinking about the recovery. And so, in China, we had 190 hotels close at the peak, and now we only have a handful closed. So, we're back in business in China. Across Europe, Middle East and Africa, we have about 50 percent of our hotels closed. But in the United States, we have less than 10 percent. And so we're about 15 percent hotels closed around the world, running about 25 percent occupancy, and that varies from market to market. But the question is about the recovery and I was on a call the other day with about six CEOs and we're all saying our crystal balls are a little bit blurry at the moment about when that happens because it will really require when does social distancing begin to end, when do borders begin to open up. And so our view on recovery is that domestic businesses will recover first before big international ones. Mainstream businesses which have a big drive component will be part of that. There'll be individual business travel and individual leisure travel before groups, meetings, conferences and events, and international long haul will probably be the last to recover. Fortunately, the vast majority of our businesses are big domestic businesses and so our brand portfolio, our business plays to where the recovery should be first.</s>CHATTERLEY: That was Keith Barr, the CEO of IHG, outlining the shape of the recovery as he sees it. Now while we watch the economic fallout, investors are reacting positively to news on the trade front. The U.S. and China have pledged to create favorable conditions to implement the Phase 1 trade deal. Beijing says the two countries also agreed to strengthen cooperation on public health. Ivan Watson joins us live from Hong Kong with more. Ivan, you and I were talking about the Scold War yesterday. Well, Scold War and rhetoric aside, if we can at least see these two nations not taking further action to escalate trade tensions, in fact, moving towards positive directions on this front. That is good news.</s>IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Isn't it incredible, Julia, what a difference 24 hours makes where just a short time ago, Beijing and Washington were hurling these really nasty broadsides against each other, accusing each other of failings in confronting the coronavirus pandemic. And then suddenly we learn from the Chinese government, from a statement that in fact, there's been this phone call Friday morning Beijing time, Thursday night, Washington, D.C. time between a top Chinese official and the U.S. Trade Representative Robert Lighthizer and Steve Mnuchin. So, and then, on top of everything, they're talking about cooperation in the public health sphere and on continuing to work towards the Phase 1 of this Trade Agreement that the two governments had worked towards last year. So clearly, that has made investors a little bit happier. It does raise questions about what exactly has been going on with this sudden U-turn. Diplomats at the U.S. Embassy in Beijing have been telling CNN that the work on Phase 1 of the Trade Deal never stopped even throughout the entire pandemic, that some of China's purchases that were agreed to were impacted by the coronavirus pandemic, and it's hard to imagine that that that wouldn't affect things, given that it's brought basically much of the world's economy to a standstill. And we've just heard from President Trump speaking on his favorite channel, Fox, where he's been saying that he's kind of two minds that he was working towards a trade deal with China and then this pandemic hit and he is torn, he has not decided yet with what to do. So, I guess we can sit and watch and decide will the worlds' two economies continue blaming each other for this pandemic? Or are they suffering so much economically, that they recognize that they have to find a way to move forward? Or could they perhaps compartmentalize their relationship? And I guess we'll just have to watch and see.</s>CHATTERLEY: Yes, a Scold War de-escalation, perhaps. We should watch for the next 24 hours and see where we go. Ivan Watson, thank you so much for that. It's not over. Still to come, what the Great Depression can teach us about dealing with today's unprecedented job losses, and also what it can't. Critical. And 50 percent of Americans say their mental health is suffering as a result of the coronavirus crisis. We'll discuss ways to help support your mind while also keeping your body healthy. Stay with us. That's after this.