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Maria Bartiromo Speaks to Secretary of Labor Elaine Chao on "Closing Bell" Today at 3:35 PM ET (Transcript Included)

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WHEN: TUESDAY, SEPTEMBER 18
WHERE: CNBC'S "CLOSING BELL"

The following is the unofficial transcript of a CNBC interview with Elaine Chao, Secretary of Labor, on CNBC's "Closing Bell" today. All references must be sourced to CNBC.

In the interview with CNBC's Maria Bartiromo, Chao discusses the Federal Reserve's interest rate cut, housing, financial markets and education, among other topics.

MARIA: ALL RIGHT. THANKS SO MUCH, DYLAN. WE ARE IN WASHINGTON TALKING ABOUT COMPETITIVENESS OF AMERICA AS WELL AS, THE FEDERAL RESERVE. WHETHER IT'S KEEPING THE CURRENT WORKFORCE SHARP, OR TRAINING THE NEXT GENERATION, IT IS ALL IMPORTANT TO THE COMPETITION OF THE UNITED STATES VERSUS OTHERS. JOINING US A WOMAN WHO IS SHAPING THIS AREA OF AMERICA'S COMPETITIVENESS, LABOR SECRETARY ELAINE CHAO WITH ME.

CHAO: THANKS FOR HAVING ME.

MARIA: LET'S FIRST TALK A LITTLE BIT ABOUT THE NEWS OF THE DAY. FEDERAL RESERVE LOWERING INTEREST RATE, DISCOUNT RATE AS WELL AS THE FED FUNDS RATE. WHAT IS YOUR GUT? IF WE SEE RATES GO LOWER DO YOU EXPECT THAT THE ECONOMY WOULD HAVE AN IMPACT, SORT OF SHORT TERM, LONG TERM? DO YOU THINK WE'LL SEE MORE HIRING?

CHAO: I THINK SO, YES, ABSOLUTELY. LET ME SAY WE'VE HAD SOME CHALLENGES, IN OUR HOUSING MARKETS AND IN OUR FINANCIAL MARKETS WHY THE PRESIDENT ACTED VERY DECISIVELY TWO FRIDAYS AGO INTRODUCING A NUMBER OF PROPOSALS INCLUDING ASKING THE CONGRESS TO PASS A FEDERAL HOUSING AUTHORITY MODERNIZATION PROGRAM. SO, WE UNDERSTAND THE ISSUES IN THE, HOUSING MARKET AND THE PRESIDENT HAS ISSUED A NUMBER OF PROPOSALS. AND, PROGRAMS WHICH I THINK, WILL HELP, HOMEOWNERS, AVOID FORECLOSE AND, KEEP THEIR HOMES. SECONDLY, ON THE FINANCIAL MARKETS, CLEARLY THERE HAS BEEN, THERE'S BEEN, A REASSESSMENT OF RISK AND,THAT IS WHAT WE ARE FACING RIGHT NOW. BUT, FINANCIAL MARKETS, ALWAYS, FOLLOW THE FUNDAMENTALS OF AND ECONOMY. AND THE FUNDAMENTALS OF THE U.S. ECONOMY IS HEALTHY. AND --

MARIA: BUT SECRETARY CHAO, JUST LAST MONTH WE SAW THE EMPLOYMENT REPORT COME OUT AND WE SAW DECLINE OF NEW JOBS CREATED. ARE YOU WORRIED ABOUT THAT? DO YOU THINK WE'LL SEE THAT CONTINUE?

CHAO: I'M ALWAYS WORRIED NUMBERS COME OUT LESS THAN WHAT WE HAD EXPECTED. ON THE OTHER HAND LET ME SAY WE'RE LOOKING AT THESE NUMBERS VERY CAREFULLY. THAT WAS A ONE MONTH REPORT. WE GET ABOUT THE 60% OF THE DATA IN AT END OF ONE MONTH. LET'S SEE WHAT HAPPENS FOLLOWING TWO MONTHS. PLUS THE FACT AUGUST IS SQUIRRELY KIND OF MONTH. EVEN THOUGH ALL THE DATE IS A IS -- DATA IS SEASONALLY ADJUSTED WE THINK THERE ARE REPORTING ISSUES. PRIVATE SECTOR CREATION RATE WAS GOING POSITIVE AND IT WAS GOVERNMENT SECTOR AS YOU MENTIONED THAT WAS DECLINING BY ABOUT 8,000 JOBS. MOST OF THAT WAS IN SCHOOLS WITH TEACHERS. IT'S AUGUST. END OF SUMMER. SO WE'RE NOT QUITE SURE, WHETHER THAT'S A REPORTING PROBLEM OR WHETHER THAT SHOWS SOMETHING, MORE SYSTEMIC. LET'S TAKE A LOOK AT THE NEXT TWO MONTHS NUMBERS AS WELL.

MARIA: LET ME ASK YOU THIS.

CHAO: SURE.

MARIA: WHERE ARE THE JOBS RIGHT NOW?

CHAO: WHAT OUR COUNTRY IS FACING RIGHT NOW IS A SKILLS GAP. WE HAVE, A LOT OF EMPLOYERS WHO ARE LOOKING FOR SKILLED WORKERS. AND NOT BEING ABLE TO FIND THEM. AND WE HAVE WORKERS WHO LACK THE REQUISITE SKILLS TO ACCESS THESE GOOD-PAYING JOBS IN HIGH GROWTH INDUSTRIES. IN AUGUST OF 2003 OUR ECONOMY PRODUCED WELL OVER 8.2 MILLION NET NEW JOBS. THE MAJORITY OF THE NEW JOBS BEING CREATED REQUIRE HIGHER SKILLS, MORE EDUCATION. BY DEFINITION THEY'RE BETTER PAYING JOBS. THEY ARE JOBS IN, INDUSTRIES THAT DIDN'T EVEN EXIST LIKE, 20 YEARS AGO, TEN YEARS AGO. SO WE ARE FACING TREMENDOUS AMOUNT OF, TREMENDOUS SHORTAGE OF WORKERS IN, HEALTHCARE, IN NANO TECHNOLOGY. GEOSPATIAL TECHNOLOGY, LIFE SCIENCES. INFORMATION TECHNOLOGY. DIFFERENT KIND. SO OUR ECONOMY IS VERY, FLEXIBLE. IT'S VERY RESILIENT. IT'S CONSTANTLY CHANGING. AND WE NEED TO MAKE SURE THAT OUR WORKHORSE FORCE IS CONSTANTLY CHANGING ACQUIRING RELEVANT SKILLS TO BE ABLE TO DRIVE THE ECONOMY.

MARIA: THAT IS AN EDUCATION ISSUE.

CHAO: EDUCATION AND JOB TRAINING ISSUE. INTERNATIONAL LABOR ORGANIZATION A PART OF THE UNITED NATIONS ON LABOR DAY SAID AMERICA'S WORKFORCE IS THE MOST PRODUCTIVE IN THE WORLD. IT'S THE MOST FLEXABLE AND THAT FINANCIAL MARKETS ARE, OUR ECONOMY IS THE MOST RESILIENT IN THE WORLD.

MARIA: THAT HAS GOT TO BE GOOD NEWS. WE LOVE TO HEAR THAT GOOD TO HAVE YOU WITH US.

CHAO: THANKS SO MUCH.

MARIA: THANKS FOR JOINING US, SECRETARY CHAO WITH ME ON.





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