This is a rush transcript from "Special Report," January 7, 2021. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's 199,000, another big miss here.

MARTY WALSH, LABOR SECRETARY: Unemployment rate is down to 3.9 percent. It's the lowest since the beginning of the pandemic. The American Rescue Plan clearly is working on getting sectors back to work.

JOE BIDEN, (D) PRESIDENT OF THE UNITED STATES: Americans are moving up to better jobs with better pay, with better benefits. That's why they are quitting their jobs. This isn't about workers walking away and refusing to work. It's about workers able to take a step up to provide for themselves and their families.

STEVE MOORE, FORMER TRUMP ECONOMIC ADVISER: We are not talking about minimum wage jobs that are going without workers right now.

(END VIDEO CLIP)

BAIER: Well, the jobs report came in. You saw the numbers there, 199,000 jobs in December, far fewer than the 400,000 that economists had expected. The unemployment rate, though, dropping to 3.9 percent from 4.2.

Let's bring in our panel, Morgan Ortagus, former State Department spokesperson, Harold Ford Jr., former Tennessee Congressman, CEO of Empowerment and Inclusion Capital, and Bill McGurn, columnist for "The Wall Street Journal."

Bill, let me start with you. It's clear that people are leaving jobs. Some are saying, the president is saying, others are saying that they are looking for better jobs, and there are jobs that are open. That's the unemployment rate. But what about the state of the U.S. economy?

BILL MCGURN, COLUMNIST, "THE WALL STREET JOURNAL": Yes, well, look, there is some good news. There is demand. And there is a lot of jobs to offer. Tight labor market means that some wages are going to go up. But I think we have to put this in perspective. We still have more than 3 million fewer jobs today than in February, 2020. We have a lot of work to do to catch up. And I think looming over this is the prospect of stagflation. I don't think Joe Biden has the slightest idea how to deal with the inflation, and the longer he waits, the worse it's going to get.

BAIER: Harold?

HAROLD FORD JR., FORMER TENNESSEE REPRESENTATIVE: So I think a couple things. Bill is largely right. Jobs are up, in fact, 6.4 million jobs have been created since Joe Biden has been elected president. Our unemployment rate at 3.9 percent. The Dow is up almost 20 percent for 2021, the Nasdaq up 21 percent, the S&P 500 up 27 percent. And wages are up.

But let's be clear, we still have some inflation worries, real inflation worries. I heard Charles Payne on a little earlier, and I thought he about nailed it in terms of what the challenges are. If I were president, or advising this president, rather, I would have Marty Walsh who for a lot of reasons, I think he is smart and I just like listening to the guy, I'd put him in charge of a task force where we would have daily if not two or three times a week updates on what we are doing to ease the supply chain, because I think that's what is contributing most to inflation.

I think the worry amongst economists, they may worry about it differently. Some may think it's transitory, some may think it's more permanent. One thing they all agree upon is that inflation is here. How too we ease that, and how do we ensure that main street can continue to thrive in 22?

BAIER: Morgan, one of the big things that's affecting everything with the U.S. economy, obviously, is COVID and COVID policy. Today at the Supreme Court, the mandates being challenged and justices questioning about that. It was interesting to hear some of this, and Shannon covered it at the top of the show. Take a listen to one exchange.

(BEGIN VIDEO CLIP)

JUSTICE ELENA KAGAN, SUPREME COURT: More and more people are getting sick every day. This is the policy that is most geared to stopping all this. There is nothing else that will perform that function better than incentivizing people strongly to vaccinate themselves.

DANIEL SUHR, LIBERTY JUSTICE CENTER: This is one of the most egregious overreaches of government power that we have seen in this generation, if not this century. The states and the American people are the ones responsible for their medical freedom.

(END VIDEO CLIP)

BAIER: What was interesting to hear, Morgan, was some of the justices in their questioning took things that Dr. Marty Makary, Johns Hopkins, others say is just not true. And to say that the vaccination prevents you from getting Omicron is just not true now either. What about this, what you heard today?

MORGAN ORTAGUS, FORMER STATE DEPARTMENT SPOKESPERSON: Yes, and it also wasn't true with Delta. Plenty of people have been getting breakthrough infections. That doesn't mean you shouldn't get the vaccine, but as you just said, it doesn't mean it prevents you from getting it.

I thought that Justice Alito summed it up best today when talking about the OSHA mandate for private employers. He said the mandate was essentially like trying to squeeze an elephant through a mouse hole. And I thought that was just such an adept way of describing this, what many conservatives believe is a total overreach by the -- by the administration.

I thought it was really interesting, because we know that the Supreme Court is hearing two cases. They are hearing about that private employer mandate. But they are also, they separately listened to the case for federal -- for healthcare workers who get federal funding. They seem perhaps maybe to be a little bit more open to that kind of mandate.

But what's clear is that so far, at least in what I heard in the arguments today, is that the justices are concerned that Congress did not pass this mandate, that it's being done administratively, and just way too much power at the hands of the executive. I also think that this will be potentially, if they rule the way we think they will based off the questioning today, big win for people fighting for conservative judges to get them in for a long time. This is exactly why people want conservative judges in.

BAIER: We'll see. It's sometimes tough to read between the tea leaves by the questions, but you're right. It does seem like it's leaning that way. Bill, it obviously comes after President Biden talking to governors just in recent days saying there is no federal solution to COVID-19.

MCGURN: Yes. If there is no federal solution, I think you should withdraw the mandates. I do believe it's a simple question. I'm old fashioned. I like the Constitution. And I think it was Justice Kagan said we don't want to give these decisions to the courts to do it. I don't want the courts to have it, but I don't want an unelected administrative agency to have it either. It belongs to Congress. If Congress wants it, Congress should write it explicitly. That's what the Supreme Court said when they threw out the eviction notice that the CDC was having.

I think this is a clear question, go back to the -- go back to Congress if you think this is right. And the precedent that will be set, if this is allowed, you combine something with health and an emergency, and anything goes. I think we are going to see a lot of Democratic policies turning into health initiatives.

BAIER: All right, let's do winners and losers. Harold, winner, then loser.

FORD: My winner is the great Sidney Poitier who you just talked about. We know about his decency. We know about his historic nominations and awardings as the first black actor, winning elite actor for in an Oscar. But he was the Bahamian ambassador to Japan for 10 years. He was knighted by Queen Elizabeth. Rest in piece, great man. You will be remembered fondly by all of us.

My loser are those who chose to show up at the prayer vigil last night on the Capitol steps. We shouldn't let politics affect our defending and our wanting to show Capitol police and D.C. police that we appreciate their valor and their courage.

BAIER: All right, Morgan, winner and loser?

ORTAGUS: My winner of the week may be names that our viewers don't normally know. But her name is Julia Fox. She is an actress and she is Yeezy's new girlfriend. And on their second date she got a closet full of designer clothes. So I am jealous. A little bit of an untraditional winner of the week. Your wife, Bret, we might agree with that winner of the week.

BAIER: She'll appreciate that, yes.

ORTAGUS: For loser of the week, I've got to go with the government of Virginia. Come on, guys, they left Virginians stranded for over 24 hours in blizzard conditions, freezing cold. This is -- talk about inept state government.

BAIER: That was rough. All right, Bill, quickly, winner and loser.

MCGURN: Quickly, winner, Arizona Governor Doug Ducey who gave parents a real choice with the $7,000 in aid they can use for tuition if their kids' schools are closed. My loser of the week is the moms and dads in Chicago who found out their kids' schools were closed. Excuse me.

BAIER: Yes, that is a loser of the week. We're going to get you some water, and thank you. You made it through that.

Content and Programming Copyright 2022 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2022 VIQ Media Transcription, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of VIQ Media Transcription, Inc. You may not alter or remove any trademark, copyright or other notice from copies of the content.