Melissa Lee (2:05)

Except for Tesla. The question here is are we effectively ceding the EV industry to other players around the world?

Katie Kramer (2:13)

It's Tuesday, December 16, 2025. Squawk Pod begins right now.

Andrew Ross Sorkin (2:19)

Stand Andre by in 3, 3, 2, 1.

Steve Liesman (2:22)

Q. Andrew.

Andrew Ross Sorkin (2:25)

Good morning and welcome to Squawk Box right here on CNBC. We're live @ the NASDAQ Marketsite in Times Square. I'm Andrew Ossorkin along with Melissa Lee. Joe and Becky are off today. It's nice to see you again. Good morning to you two days in a.

Melissa Lee (2:37)

Row. On today's KWOK Planner, key economic data, most importantly, the latest jobs numbers from the Labor Department. This is a combined report with information on October as well as November. Rescheduled because the six week government shutdown prevented data from being collected. The report will help economists make sense of the employment picture and help Fed members as they weigh further interest rate moves. We'll get an employment unemployment reading for November, but not one for October because government workers couldn't survey households during the shutdown. It is the first time the government will not be able to release a monthly unemployment number. The October jobs picture will also face distortion because of government workers who took deferred buyouts as part of White House efforts to shrink the federal.

Andrew Ross Sorkin (3:16)

Workforce. So what are we supposed to make of.

Melissa Lee (3:19)

It? Well, I think that it's interesting. You know, we had the Fed meeting last week and some debate as to whether or not they should have postponed the meeting in order to see this piece of data so backward looking.

Andrew Ross Sorkin (3:29)

That it's maybe just.

Melissa Lee (3:31)

Well. Well then you can say they don't need any of this data if it's all backward.

Andrew Ross Sorkin (3:35)

Looking. Yeah, but this, this one in.

Melissa Lee (3:37)

Particular, this one in particular is backward looking. There are a lot of things to look through, exceptions or it's not clean. It's not clean data.

Andrew Ross Sorkin (3:44)

Data. But still, we got some corporate news for you this morning. Ford saying it's going to take roughly $20 billion in charges related to a pullback on investments in all electric vehicles and a restructuring of its business priorities. EV sales slumping domestically after the Trump administration put an end, an early end, I should say, to the federal tax credit for car buyers. Ford's plan includes refocusing investments on hybrid cards, hybrid cars, and canceling a new generation of large all electric trucks in exchange for smaller, more affordable EVs. One highlight, Ford's all electric F150 Lightning pickup truck will transition to an extended range EV that includes an electric powertrain as well as a gas powered generator. Take a look at what Ford CEO Jim Farley had to say on CNBC about all of this.

Steve Scalise (4:31)

Yesterday. The very high end EVs, the 50, 70, $80,000 vehicles, they just weren't selling. And we had planned a full EV lineup, but we also have hybrids and we learned a lot about the market and we think it was the right time to listen to the customers. We evaluated the market and we made the.

Andrew Ross Sorkin (4:53)

Call. Ford also announcing plans to use battery plants in Kentucky and Michigan for a new energy storage business. But at some point, you know, I Interviewed Mary Barr just a couple weeks ago at DealBook. And here we have Jim Farley saying a very similar thing. I mean, they had already talked about charges and things. So when you, when something like this happens, do you say to yourself what was the mistake? But was the mistake in misjudging the consumer demand? Was the mistake in misjudging the politics of, and policy that was going to go into the subsidies of, for these cars? Was the mistake in misjudging the investment in infrastructure? That never happened. Where do you, where and if a board and a management team is responsible for these kind of losses and these kind of big long term investments, how do you, how do you, how do you judge it or.

Melissa Lee (5:47)

Misjudge? I mean, I think it was a combination of all these things. I think when you take a free market and you distort in some way with policy changes that, that help create a new market, you run that risk. Either the market grows to meet that or it doesn't. And maybe in this case it didn't. And there was too much investment being put in. There's too much assumption that the investment would be put in terms of the infrastructure, the charging side of things, and that didn't.

Andrew Ross Sorkin (6:12)

Come. Well, the flip side of this, by the way, is putting aside any of the climate issues, there's an argument to be made that without the subsidy investment that we are no longer making in our automobile industry and the tariff program that we are now implementing that from a competitive set, you're going to go to Asia, you're going to go to Europe, you're going to go to other parts of the world, and the kind of cars are you going to be able to get there are going to be materially better for materially less. And we could ultimately just be completely and utterly left behind, except for.

Melissa Lee (6:46)

Tesla. Although, I mean, I think that the question here is are we effectively ceding the EV industry to other players around the.

Andrew Ross Sorkin (6:54)

World? I think. But then the question is, are we ceding the entire automobile industry? If you ultimately believe the automobile industry is going to be, is going to be EVs, have you just decided that we are just not in that.

Melissa Lee (7:05)

Business? Except that we have Tesla still, we being the United States of.

Andrew Ross Sorkin (7:09)

America.

Melissa Lee (7:10)

Sure. So which is, which is a viable, profitable player and the players in Asia are not profitable and do still survive on subsidies within those markets. So I mean, it's no, you know, BYD for, for all the cars it sells. It's not making money on these.

Steve Liesman (7:26)

Cars.

Andrew Ross Sorkin (7:26)

Right. But ultimately, if they can get to a Point of escape.

Steve Scalise (7:30)

Velocity.

Andrew Ross Sorkin (7:30)

Sure. Which by the way, Tesla did get to escape.

Melissa Lee (7:33)

Velocity. That's.

Andrew Ross Sorkin (7:34)

True. Then, then you actually run yourself into a real.

Melissa Lee (7:36)

Problem. Right. But we can't forget Tesla being a major player, a dominant player in the market, period. And being a profitable.

Andrew Ross Sorkin (7:43)

Player. Yeah, but I think that still just, I'm not saying it's a small player, but it's a small. On a. In the United States, it's on a relative basis to what the rest of the industry looks like. And then the question is what happens to the rest of the. If there's, if there is no competition, then what? That's the other piece. The only competition is going to come from combustion engine.

Melissa Lee (8:05)

Companies. Well, it's not that they're not going to make any EVs, they're just going to make different EVs, smaller EVs, more affordable EVs. Same thing with GM. GM as you know, took a $1.6 billion charge on its EV business, but they still make EV. So it's just, they're, they're just sort of. Right. Sizing the business to what the market actually is. Without the.

Andrew Ross Sorkin (8:22)

Subsidies. Without the subsidies. And I think maybe there's a question about whether we should have done that or.

Melissa Lee (8:26)

Not. Let's create. Are you, are you changing the marketplace by, you know, with these, look.

Andrew Ross Sorkin (8:32)

We changed the marketplace the first time with these policies, but the rest of the world was also changing the policies. Right? I mean, so life is.

Melissa Lee (8:39)

Relative. Yeah, absolutely. Now let's get to the latest on the race to be the next Fed chair this morning. Prediction market Kelshi puts former Fed governor Kevin Warsh in the lead with better seeing a 48% chance he'll be nominated by President Trump. Previous frontrunner Kevin Hassett, who leads the National Economic Council is now in second place. Sources tell cnbc. Hasset's candidacy has seen pushback by high level people close to President Trump. Some are worried the bond market could see upheaval for time if investors see Hassett as too close to the.

Andrew Ross Sorkin (9:09)

President. Meantime, the Nasdaq looking to expand trading hours. According to SEC filing, the exchange wants investors to be able to trade 23 hours a day, five days a week that include a new night session from 9pm to 4am Eastern Time. In addition, the exchange's current premarket regular and post market hours. The New York Stock Exchange and CBOE Global Markets also recently announced plans to move to round the clock stock trading. I don't know where you land on that as an idea have to.

Melissa Lee (9:38)

Cover those sessions I'm okay with it, but I mean, in theory it should, it could in fact increase the volatility because there'll be more swings right at other times the.

Andrew Ross Sorkin (9:49)

Day. So is that a, is that a feature or a bug to be able to trade 24 hours a.

Melissa Lee (9:53)

Day? And I mean, Robinhood offers trading. You know, you can sell us stocks around the mosque. So on some level it exists. But this is mainly for overseas.

Andrew Ross Sorkin (10:05)

Players. And prosecutors in California set to decide whether and how to charge the son of filmmaker Rob Reiner after he was arrested and booked on suspicion of murder. Reiner and his wife Michelle Singer Reiner were found dead in their Los Angeles home over the weekend. Nick Reiner is being held in jail without bail. Sources tell the NBC News the 32 year old had been disruptive at a holiday party on Saturday with his parents hours before they were found dead. President Trump drawing criticism after he posted on social media about the deaths of Rob and Michelle Reiner, making claims that their deaths were related to Reiner's political activism. Police have not provided information about a motive. It's a, it's a terrible, I can't even fathom what happened, if this.

Melissa Lee (10:54)

In fact happened, because it' swe don't know yet. Imagine the last images in your head, your child doing that to you and you're thinking what is.

Andrew Ross Sorkin (11:03)

Happening? It's just, it's heartbreaking. And separately though, it's just a pile on at this point because everybody's already said it. It's disgraceful what the President said.

Melissa Lee (11:13)

Yesterday. It doesn't matter what your politics.

Andrew Ross Sorkin (11:15)

Are. It's just, it's one of those moments that's beyond, beyond the pale. No matter what side of it you're on, I hope that people recognize that and people who are around him recognize.

Steve Liesman (11:26)

That. Teas will be.

Katie Kramer (11:29)

Next. Coming up next on Squawkpot, Congress wraps up its legislative year and House Republicans are still battling over health care and the soon to expire subsidies tied to health insurance through the Affordable Care Act. Will there be any kind of deal in time? House Majority Leader Steve Scalise joins.

Steve Scalise (11:46)

Us. We gotta get it through the House. It's never easy when we have a two seat majority. I'd love to say a lot of Democrats will join in, but for whatever reason, they are stuck in this Obamacare or bust.

Katie Kramer (11:56)

Mode. Plus another Steve, our own Steve Liesman with exclusive results from CNBC's latest All America survey. President Trump's approval rating on inflation and the cost of living fell to a new.

Andrew Ross Sorkin (12:07)

Low. So if you were the president, what would you do right.

Steve Liesman (12:09)

Now? I guess I wouldn't be saying that affordability is a democratic.

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Melissa Lee (13:00)

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Katie Kramer (13:17)

Forms. It really does come down to just trusting.

Melissa Lee (13:19)

Yourself. Life is short and you just.

Natasha Sarin (13:21)

Gotta think big to accomplish big.

Katie Kramer (13:23)

Things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. This is Squawk Pod from CNBC Today with Andrew Ross Sorkin and Melissa.

Andrew Ross Sorkin (13:40)

Lee. President Trump's approval rating remains challenged by the affordability issue. Our senior economics reporter Steve Liesman joins us with the results of the CNBC All America survey. What are you seeing.

Steve Liesman (13:51)

Here? Yesterday we did what consumers were saying about it. Now this is the political side of it. President Trump's approval on the critical issue of inflation and the cost of living fell to a new low in the CNBC All America Economic survey, with the President continuing to lose support not just from the broader American public, but but from some of his own key constituencies as well. The survey of a thousand people nationwide found that over the course of the year, approval of the President's handling on inflation has dropped from 37% to 31%. Disapproval risen to 60 to 60% from 60. Sorry. To 66% from 60%. The result -23 net approval President is now -35 with a further 8 point decline in just the last quarter. You can see that widening gap right there. Among the big changes from Trump supporters on inflation. Republican voters plus 58 on inflation are now plus 32. Blue collar was split blue collar workers now they're minus 30 on the president on inflation. And in rural counties they were plus 13 in April. Now they're minus 14. For a big, big switch there for the first time since April, a majority of Republicans also rating the economy as just fair or poor. They Democrats at 93% independence 86% Republicans now 53%. That's above the majority level there. The good news for the President, the decline on inflation views has not hurt or even helped his overall economic approval ratings, though both remain underwater, especially economic approval at -11 on net. It's a feature of this second term here that his economic approval is below his overall approval and that one reason why his numbers are staying up there is because Republicans remain solidly behind the president on the economy and on issues of immigration and tariffs, despite you can see their overall negative views by the public. 89% Republican approval on immigration versus 46% for the broader public, 81% on tariffs versus 41%. Still, the numbers are not trending well for the president. And Republicans for the midterms public now prefers a Democratically controlled Congress by 50 to 46% majority. It's a slim margin, but the biggest one we've seen since 2020. And I guess I'd say that politically this is a big issue. But economically, that's where it becomes really interesting because most economists and politicians are saying the tariff inflation issue is not that big a deal. What we're hearing from consumers and the way it's affecting political views suggests that price increases are a bigger deal now.

Melissa Lee (16:21)

Than. Well, particularly if you piece together what you brought us yesterday, what you brought us yesterday with what we saw today, and that is people are spending more. And they say it's because we are paying more for the same amount of.

Steve Liesman (16:35)

Goods. And we're not hearing it necessarily from the retail analysts that there's a problem out there. Remember, the Biden administration underestimated the effects of inflation on the political situation. That was a mistake they made. Not not, I'm sure, what they could have done about it other than not spend as much as.

Andrew Ross Sorkin (16:53)

They. So if you were the president, what would you do right.

Steve Liesman (16:55)

Now? I guess I wouldn't be saying that affordability is a Democratic hoax. And I'm interested because it doesn't seem like that political position is playing very well. I wouldn't be saying.

Andrew Ross Sorkin (17:08)

That you think that they could do.

Steve Liesman (17:12)

About. They could back off tariffs. They could back off tariffs in a hurry and you would probably see interest rates decline and you'd almost certainly see inflation decline. What's interesting here. Just don't. The mistake I think some people might be making is the overall inflation rate is kind of steady and didn't go up as much 3%. But there is inflation in goods and that's where it is. And our survey and suggests that people are seeing it at the checkout counter because what I checked yesterday was if it was just a sentiment thing, then we wouldn't have seen it among people who had done their shopping. But people who did their shopping had the same view on prices as those who hadn't done their shopping. So people are seeing it at the checkout counter and it's something that's out there right now. Now the other thing the President can do is just ride it out because if it ends up being a one time increase in the price level, then you should see less of it.

Melissa Lee (18:03)

Next year, which is what Powell effectively believes, right? That it is going to pass through and that they will get closer to.

Steve Liesman (18:10)

2%. So you're taking on the chin now politically and maybe it hurts you in the, in the midterms, but by next year if there is not another increase. That said, I'm talking to some people that say we've only seen a piece of the past year on.

Melissa Lee (18:23)

Tariffs. The only thing is that the inflation goods is one piece of it. Then you have the health care issue, you have electricity, other things piling up on top of the consumer. And it's like you can ride that out in terms of the bump in goods from tariffs, but that doesn't isolate the inflation, you know, insulate, I should say consumers from the effect of inflation on other.

Steve Liesman (18:42)

Areas. I also think that one tremendous value for this survey is recognizing that we live in a very distinct milieu of people who are wealthy and they're getting wealthier through the stock market. Right. That is not necessarily true for the bulk of Americans who are out there, 61% telling us they believe their wages are not keeping pace with inflation. And that's the average. That's the reality for a lot of Americans out there. So go online, read this survey and see how average Americans think versus what is out there in your.

Andrew Ross Sorkin (19:18)

World. Do you remember Greg Gibb wrote a piece two weeks ago in the Wall Street Journal about this idea of affordability being. He didn't say it was a con job, which is sort of what the President said, but that affordability is almost like a psychological sense of relativity that you really, that that actually has no real basis in sort of history or where things. I mean, if you were to look at sort of where we are on historical basis, you'd actually think pretty good. Maybe, but maybe.

Steve Liesman (19:46)

Not. Because there's no doubt there's a psychological aspect to this. It's in the headlines. But, and I was thinking about that this morning. It's like here I am with the actual results of the survey, reporting it, and perhaps some of the survey results are a result of previous reporting. So it gets a little circular. It is true. However, I've also learned over the years, Andrew, not to tell people they're experiencing a different reality from the one they're telling.

Andrew Ross Sorkin (20:14)

Us. And by the way, that was the mistake that Biden made, Trump.

Steve Liesman (20:17)

Made. If you say things are bad, I'm not going to argue with you because one of the things I think we know is that people know their economic.

Andrew Ross Sorkin (20:23)

Reality.

Steve Liesman (20:24)

Yes. Better than almost anybody. It's why, by the way, sometimes we ask people, how's the country? And they say it's terrible. How are you? We're okay. All right. We get a lot of that in these.

Andrew Ross Sorkin (20:34)

Surveys. Steve, thank.

Steve Liesman (20:36)

You.

Andrew Ross Sorkin (20:37)

Pleasure. And we should tell everybody that tomorrow on Squawk Box, Steve's going to bring us a special live interview with Fed Governor Christopher Waller. Waller, of course, has been in the running to succeed Jay Powell. Steve will bring us that conversation with Waller live from the Yale CEO summit. It's at 8:15 exciting Eastern time. We were looking at the Cauchy numbers. Are you, are you surprised that WASH is now apparently outpacing, at least just by a.

Steve Liesman (21:02)

Hair? Our report yesterday perhaps had an influence on that, where we heard that there was some pushback from Wall Street. I'm not surprised. I think the president has latitude to do what he wants with certain departments. I feel like he has less latitude with the Fed. And I feel like people on Wall street have told the President, do what you want with Justice, Defense Department, don't mess with the Fed. Make sure that there's somebody credible in there. It's so important for the Fed to have that credibility and people they scorn. But remember, while we went through the high inflation period of the post pandemic period, inflation expectations remained under control. The belief both on Wall street and by the way, in the general public that prices would have, would be kept under control, remain.

Andrew Ross Sorkin (21:56)

There. But you think that the problem that Wall street thinks about Hassett vs. Warsh is that they think that Hassett is more loyal or too loyal to the president and that Warsh will be his own.

Steve Liesman (22:10)

Man.

Andrew Ross Sorkin (22:12)

Yes. But if you're the president, you may not want somebody who's their own.

Steve Liesman (22:17)

But you also don't want to get calls from your Wall street buddies that say, don't put this guy in. I think you want to have a little bit of.

Andrew Ross Sorkin (22:25)

Approval. A Republican health care proposal is on thin ice in the House ahead of the coming holiday recess. Joining us right now with the latest, House Majority Leader Steve Scalise. Good morning to you. Help us understand where you think this is. I don't know if you think our description of thin ice is right, but what do you think the chances are that something gets done as open enrollment is literally happening around the.

Steve Scalise (22:48)

Country? Well, thanks. Good morning and thank you for having me. We've been working for a long time to lower premiums for all Americans, 100% of families across America. Democrats, as you know, have only been focused on trying to give big bailouts to insurance companies dealing with 7% of Americans. So big difference between the two sides. What we're going to be bringing to the House floor tomorrow, on the floor on Wednesday is the Lower Premiums Act. This is a bill to lower health care premiums for all Americans. It's going to be focused on things like association health plans, the Choice act, which is a way to use health savings accounts so that employers can work with their employees and give them better options for lower premium health care plans. We do what's called cost share reductions. And it's, you know, basically a term up here in Washington, 2 lower premiums for everybody in Obamacare. So if you want to stay in Obamacare, a lot of people probably don't. But for those people, there would be 12%.

Andrew Ross Sorkin (23:47)

Reduction. Let's just take this down to a very base case. I'm a family. I got five. I'm a family of five. Tell me, and let's say I want to get on this program, how's it going to work? Tell me what the program is that I'm currently on and what you think the new program looks like. What's my deductibility look like? What do my premiums look like? Just walk us sort of a basic American who's thinking about what to do here, how it's going to impact.

Steve Scalise (24:13)

Them. Yeah, it seems like all the attention has been focused on Obamacare, which, you know, it's a lot of people, but it's a small percentage of Americans. But 80% premium increases just for people in Obamacare. We want to help lower their premiums, but right now nobody has options. It's really not a competitive marketplace. So if you don't like the plan that you have, it's really Hard to shop it around. Like, for example, car insurance, your homeowner's insurance. I mean, you turn on the tv, there are commercials with lizards and all kind of other animals that are selling you options to get lower insurance. You don't really have that in health insurance. So we want to open up the marketplace because right now, if you don't have any choices, you're going to pay more. So we're going to give people the options to buy different kinds of plans that are better for them. Lower costs, better coverage for their families, lower deductibles for their families. And then also, you know, when you open up health savings accounts, you think about some of the abilities you have to work with your employer to get better options through your company if that's the route you go. Obviously, if you're already on Medicare and Medicaid, that's a different set of families. But if you're either in the private market or Obamacare, you have literally no options. We want to give people choices to get lower.

Melissa Lee (25:29)

Premiums. Leader Scalise, to get to Andrew's question though, how does, how does an average American think about what their health care spend will look like under the plan that you put forth? You mentioned lower premiums, lower premiums. But how will this actually work compared to what is already being paid? Because that, that is the bottom line that people care about. But when you just say law.

Steve Scalise (25:51)

Let'S say, look, a lot of Americans.

Melissa Lee (25:52)

It doesn't mean anything.

Steve Scalise (25:54)

Right? A lot of the press only focuses on Obamacare. A lot of Americans still get their insurance through their employer. Well, right now, if your employer offers a plan, you pretty much have a take it or leave it. You know, they're going to cover a portion, maybe a lot of that copay, and then that's the only choice you have. Otherwise you're going to be out trying to buy insurance at 100% on your own. Nobody can do that. So what we do is set up what's called in this case the choice account. So it's a health savings account where if you can find a better plan for your family outside of your employer, you can use the employer money that right now he's spending on your higher cost plan and go buy a lower cost plan using the employer's existing money. Right now that's not allowed in law. We open that up. So those are different choices that we're making available to people so that you will see a marketplace for insurance, for health insurance, just like you see it for car insurance and homeowners insurance. Which by the way is a very robust marketplace. You know, pick up the phone, you could save 500, $700. You don't have that in health insurance. Wouldn't it be great if you actually had the ability to shop around policies? How quickly that's what we're working towards.

Andrew Ross Sorkin (27:06)

Later. Quickly. How quickly to the extent this gets passed and I know that's a big if. How quickly do you think this filters out into the marketplace in terms of cost to the American public come.

Steve Scalise (27:15)

2026? Well, we're going to pass this bill Wednesday, so it'll be over in the Senate. If it passes the Senate this week, you know, a month from now. I can't predict the Senate schedule, but I think Americans, once they see this, are going to call their United States Senator Republican and Democrat because it will take 60 votes. Make no mistake. Call your senator and say, hey, I want some health care freedom, I want some choices. You know, we have PBM reform in this too. So you get lower prescription drug costs. Another big cost escalator in health care is in this bill. So a lot of options for families to lower costs. We pass it through the House, it still has to go through the Senate.

Andrew Ross Sorkin (27:56)

So. Well, that's my question. What's the chance to get through this? What's the chance it gets to the, to the desk of the President before the year is.

Steve Scalise (28:03)

Out? Well, the President wants to sign this bill. The President's talked about this a lot. The president wants to see better options and lower premiums for families. He knows that the Affordable Care act is not affordable. The Democrats created a system that's incredibly broken. They broke it, we're going to fix it, but we got to pass a bill first to do it. So I think the Senate's going to be the biggest hurdle. We got to get it through the House. It's never easy when we have a two seat majority. I'd love to say a lot of Democrats will join in but for whatever reason they are stuck in this Obamacare or bust mode where they don't want families to have options. They want to force everybody into a single payer government run system that's not good for most Americans. So we're going to give those choices. You'll see a vote on the House floor, see where your member of Congress voted, but then get engaged with the senators who to get this bill.

Andrew Ross Sorkin (28:53)

Through the Senate, a leader separately. And this literally has happened while you have been, I think on the air. I don't know if folks have been following this. There's a piece in Vanity Fair that has just come out, an interview with Susie Wiles, of course, who's the chief of staff to the president, who says some. She apparently sat for 11. There were 11 different interviews going on here with the Cabinet team. Some astonishing quotes. I just want to read you this. I'm curious what you, what you react to it. She said that Mr. Trump, quote, has an alcoholic's personality. She goes on to say that J.D. vance has a conspiracy, has been a conspiracy theorist for a decade. She says Russell Vogt, who's the budget director, is a right wing, absolute zealot and that Pam Bondi completely whiffed in handling the Epstein files. This is the chief of staff of the president. This literally came out just this morning as we've been speaking to.

Steve Scalise (29:52)

You. Well, I obviously have not read that article. I'll have to read it. I know Susie. She's the hardest working person up in D.C. with the hardest working president in America. Donald Trump. By the way, he doesn't even drink alcohol. So not sure what that quote is related to. The full context would be helpful. But President Trump never stops working for American people. I've talked to him about health care, talked to him about a lot of issues and he's engaged in all of them. He wants to help lower costs for families. Again, not just in health care at the grocery store. Look at gasoline prices. We're seeing a four year low in gas prices at the pump today. That's more money in people's pockets. We're seeing higher wages. We need to do more and we're going to do more. But those are some good things that President Trump's already delivered on in less than a.

Melissa Lee (30:39)

Year. Leader Scalise, you mentioned the affordability issue, which is a key one that both parties will face come midterms. The health care pieces is part of this. But there is a broader sense amongst the American people that they are, even if their balance sheets in reality look decent, they don't feel good. Or maybe their balance sheets are not good and they don't feel good. And you mentioned things like the cost of fuel coming down. But the fact of the matter is they go to the checkout line at the grocery store and they are paying more. We had the CNBC All American survey which polled shoppers, holiday shoppers. They said they are spending more because the cost of goods is higher. What is your message? Instead of just saying that fuel prices have come down, this has come down. People still feel.

Steve Scalise (31:25)

Strapped. Yeah, they do. And think about this for four years under Joe Biden we saw a dramatic increase in 40 year increase in inflation, meaning things cost more. Government was borrowing trillions of dollars, jacking up the cost of everything. And your buying power got lower during the Biden years. And so we're finally starting to fix it. We're bringing that down, but it's taking time. And I know people, you know, they want to see it all happen overnight. We're seeing good improvement, but not enough yet. We're still working on it. Look, next April, when people file their taxes because of the tax bill we passed this year, you're not going to see it till you file your return. But most families are going to get over $1,000 back in their, in their filing on their from the IRS because of no tax on tips, no tax on overtime, holding all the income levels the same so that we didn't get a tax increase. There was going to be a massive tax increase that would have hit, you know, we're doing a number of things. We got a big housing bill coming up this week out of committee and we're going to actually be focused on lowering the cost of homeownership. You talked about the Federal Reserve. I hope the Federal Reserve keeps lowering interest rates as we're reducing the deficit. The deficit up here plays a big role in interest rates back home when people borrow for things like home ownership or credit cards. And so we're finally getting control over spending that's going to lower interest rates so people can go buy a home. And then we're bringing these housing bills. So all of it takes time, but we're working on all of it at the same time right now. And I think early next year you're going to start seeing bigger indicators. Trillions of investments already coming into the country from deals President Trump has already cut manufacturing, higher wage jobs. You know, you're seeing it all. The AI revolution is bringing good jobs.

Andrew Ross Sorkin (33:10)

Too. Leader Scalise, I want to thank you representing the First District of Louisiana. We love Louisiana. We appreciate your time this morning. Look forward to talking again very, very.

Commercial Announcer (33:19)

Soon.

Steve Scalise (33:20)

Great. Stay well. Thank you all for having me. God bless and merry.

Andrew Ross Sorkin (33:22)

Christmas. You.

Katie Kramer (33:23)

Too. Next on Squawk pod, the delayed October jobs report is here in mid December. Jobs Tuesday is coming up with a panel of experts, including former treasury official Yale's Natasha.

Natasha Sarin (33:37)

Sarin. We're in this like no higher, no fire moment in the economy or there's just a lot of.

Katie Kramer (33:43)

Uncertainty. So much more to come right after.

Melissa Lee (33:46)

This. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself like a shot. And you just gotta think big to accomplish big.

Katie Kramer (34:11)

Things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Squawkpod from cnbc. It's here. It's time for the monthly jobs report, delayed a little bit thanks to our extended government shutdown this fall. And we sort of got two months for the price of one. For November, job growth totaled 64,000, better than estimates. The unemployment rate, though, rose to 4.6%. That is its highest level since September of 2021. But data for October, we got an abbreviated monthly report for October as well. That data showed a slump, the third time in six months that payrolls went negative. Those numbers were lower, though, due to federal layoffs deferred from earlier in the year. It's complicated. Andrew Ross Sorkin and Melissa Lee invited a panel of experts to the Squawkbox desk this morning to break down this report. And they started with Steve.

Steve Liesman (35:11)

Liesman. The key that I told myself I was going to look at, I said, steve, don't get bogged down by all the numbers. Focus on one thing. The unemployment rate. Yes, unemployment rate. The reason why we want to focus on that is that is where the key issue of labor supply and labor demand meet. And you get the ratio that tells you what's going on. And that number ticking up is a little bit weaker than expected. However, when I take the first part of what I talked about, which is the federal government side, I'm wondering how much of that little uptick in there may have come from the federal government side of people who want a job but did not find one after being fully and officially laid off in the month of October and into November. So it's a little bit weaker. I tried to ask Powell at The last conference, Mr. Chairman, are you essentially prepared for weakness? And he said, well positioned. So I don't know if this number is within the tolerance of, hey, we're good. We cut already a couple times, three times. We're well positioned now for that weakness that he expected. Remember, the chair sat there at the podium and said it could be minus, you know, another 60,000 after we get done with revision. So these numbers are okay in the private sector. We have to wait to see how the private sector absorbs the excess labor that has been laid off from the federal level. I'm not saying that labor was excess. They were just laid off and now they're.

Melissa Lee (36:38)

Excess. Right. A lot more still to go through. Mike Santoli is standing by. Mike, as Rick had mentioned, we are seeing a pullback in yields pretty much across the curve. We also see a slight bit higher actually we're kind of flat on the futures.

Mike Santoli (36:51)

Front. Yeah. With the reflex. Melissa was just a little bit of a firming up of the equity index futures. It feels like the first impression is it's one of the more palatable ways you can get the unemployment rate going to 4.6%, which is you still have net private sector job creation. It probably has dovish implications, at least on the margins for the Fed. And I think the market has been locked into this rotation into economically sensitive parts of this market. It was even evident yesterday even as we kind of have price pressure on the capex trade that drives the indexes. So there's nothing in these numbers that I think is going to move the market really strongly off that spot, especially because there's such a strong confidence that we're going to get some kind of an economic reacceleration into the first part of next year with some of the tax stimulus heading and all the rest of it. So an acceptable number. I don't think it's kind of game changing. You don't want to see weakness kind of continue to kind of rise, roll through that unemployment rate at this point. But for now not something that requires too much alarm. And so that you mentioned the benign treasury market response as.

Melissa Lee (37:57)

Well. Yep. And we're back pretty much almost where we are at the beginning of this on the treasury front. 4.17 on the 10 year. Let's expand our panel right now. Joining us here on set, Alison Schrager, senior fellow at the Manhattan Institute and Natasha Sarin, a Yale Law School professor, president and co founder of the Budget Lab. She's also a former Biden administration Treasury official. Alison, start off with you. What do you make of the numbers? Does it change anything? Does it change your view of what the Fed is going to be.

Alison Schrager (38:22)

Doing? Not really. I mean, I think we keep getting these reports, we sort of have a mess, you know, labor market and you know, still sort of worrying inflation. And you know, if you're looking for an excuse to cut further, you could probably find it by saying the labor market's weakening, I'm going to do something about it. What strikes jumps out at me is we still have very Strong labor growth, which suggests inflation is not going to go well below too. I think when you look at the summary of economic projections or hear Fed officials, they seem to think that anyway, they're really like at the very least ending cut, maybe we have more rate cuts next year. Seem to still think that inflation is going to magically go back to 2%. And I think this is just another data point that suggests that's just not magically.

Natasha Sarin (39:03)

Happening. And I think we're actually. I agree with what Alison is saying, but I think that there's a couple of pieces here that we sort of seem to have gotten our heads, gotten ahead of ourselves with. One is that it looks like these like 60,000, 50,000 jobs growth numbers are just kind of the new normal. And that's a pretty interesting fact. When you look just a year ago you were seeing 200,000k private sector job growth in a way that's pretty striking. And it tells you something about there's both a labor supply, supply side here that's pretty important that in a world where so much immigration restriction is happening, you're starting to see that have real impacts with respect to the labor market and also to what Steve was saying about where Powell is. I mean, he mentioned that a bunch of the revisions you kind of are. He's a little bit nervous that the BLS doesn't really have the capacity in real time to be able to tell us what's happening with respect to business closures and business openings. And so some of these labor market numbers, which are already looking a little bit weak, might actually end up being revised down and might be inflated, which makes the Fed's job pretty difficult in a moment. We're also pursuing the most inflationary policies of our lifetimes with these tariffs. So I think it's a bit of a difficult balancing.

Alison Schrager (40:10)

Act. It's actually going to be an interesting experiment, not necessarily, but good for humanity. But interesting for economists that, you know, there's always been this sort of debate, you know, and economists were quite strident that more immigration, boost wages for everyone flavor fallacy, all this stuff. And now we actually have a big pullback in immigration. What's going to happen with.

Steve Liesman (40:28)

Wages? We used to have an economy where we would get a blip in the unemployment rate and it would come down the next month. And the interpretation was people are coming into the workforce and they're looking for jobs or get released looking for jobs and they find them the next month. Is that still this economy? Would you give, would you give the unemployment rate a Mulligan here and say they're going to come back next month and. And this number could be on the way back down.

Natasha Sarin (40:52)

Again. I'm curious what Alison thinks. I kind of think we're in this like no higher, no fire moment in the economy or there's just a lot of uncertainty. There's uncertainty about where tariffs are going to land. There's uncertainty about what's going to happen with respect to AI that you all have been talking about all morning and many, many other mornings beyond this one. And so I think what that means is that there's a bit of like reticence about how bank both from a corporate perspective to think about hiring trajectories, but also as individuals who are in the labor market, how should they think about making some of these adjustments and moving on to new roles in a moment where there is just a lot of economic.

Alison Schrager (41:28)

Uncertainty? Yeah. Although it might, we might sort of have sort of a bit of a boost next year. I mean one, we have hopefully some certainty around tariffs. We just never knew what they were going to be because there's so much flux. So hopefully that calms down. And also we have a lot of of the sort of corporate tax credits finally coming along from big beautiful bill. So we might see a bit of a sort of uptick in hiring hopefully next year as sort of all this sort of expansionary policy takes shape. And hopefully we have some more certainty around the.

Natasha Sarin (41:55)

Tariffs. So like with the big beautiful bill, I mean only a very tiny sliver of it was really about those types of sort of corporate boosts. The rest of it is just deficit finance tax cuts that go.

Steve Liesman (42:05)

Disproportionately. The depreciation appreciation thing that by the way, the treasury tells me last week that that they have not even put out the rules for it yet. Yeah. So it may be that companies have yet to really take advantage of a tax cut, that they're not sure what the rules are around it. So they're waiting for the I.R.S. put that out. Put it this way, for what it's worth, there's a belief at treasury that the tax advantage or the tax benefit is not fully appreciated on among companies in the C suite and that there's a avalanche perhaps of investment coming next.

Natasha Sarin (42:37)

Year. They've been anticipating this sort of for quite some time. So I'm a little bit skeptical and worry a bit that some of that is sort of wishcasting around the.

Alison Schrager (42:44)

But was very effective in TGCA like in restoring the full depreciation. You know, really could have a boost like we had.

Natasha Sarin (42:50)

Back. That has a huge boost. I just worry that all of this is happening at a moment of tremendous uncertainty and really high.

Katie Kramer (42:56)

Deficits. And that's the POD for today. Thanks for listening. Squawkbox is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Thanks to Melissa Lee for sitting in. You can tune in weekday mornings on CNBC at 6 Eastern or get the best of our TV show right into your ears. Listen whenever you want. When you follow Squawk Pod wherever you like to listen to podcasts, we'll meet you right back here.

Andrew Ross Sorkin (43:21)

Tomorrow. We are clear. Thanks.

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