US President Donald Trump ordered the dismissal of a civil servant whom he accuses of manipulating employment figures, after official data warned of a drop in hiring.
I have just been informed that our nation’s ‘jobs numbers’ are being compiled by a (former Democratic President Joe Biden) appointee, Dr. Erika McEntarfer, Commissioner of Labor Statistics, who falsified the jobs numbers before the election to try to boost Kamala Harris’s chances of winning, Trump claimed on his Truth Social platform. I have directed my team to fire this Biden political appointee immediately. He added: Important numbers like this must be fair and accurate; they cannot be manipulated for political purposes.
This Friday morning, the monthly employment report surprised with a gloomier-than-expected picture of the state of the labor market, at a time when experts predict a slowdown due to Trump's tariff offensive.
The world's largest economy added 73,000 jobs in July, according to the Department of Labor's report. Moreover, the number of jobs projected for May and June was revised. The adjusted figures (19,000 in May and 14,000 in June) are therefore the lowest since the COVID-19 pandemic. Overall, there were 258,000 fewer jobs than reported in the initial data. The unemployment rate increased slightly to 4.2%, compared to 4.1% in June.
The US government maintains that the economy is booming and wants the Federal Reserve (Fed), the US central bank, to further support it by lowering rates. The economy is booming under Trump despite a Federal Reserve that also plays with interest rates, the president denounced this Friday.
This week, the Fed opted to keep interest rates unchanged for the fifth consecutive time, but two governors disagreed. They explained why on Friday. A rate cut would have preemptively protected the economy and the labor market, Governor Michelle Bowman argued in a statement. Her colleague Christopher Waller believes the Fed's wait-and-see attitude is overly cautious.
Amid the pressure, the Fed announced that Governor Adriana Kugler, Biden's 2023 nominee, will step down from her post next week and return to Georgetown University as a professor.
News that makes Trump happy
The president says he's very happy with the upcoming vacancy. He'll now be able to propose a successor, who must then be confirmed by the Republican-majority Senate. Analysts have been surprised by the magnitude of the corrections in the jobs report, but they don't question the veracity of the new figures.
Investor expectations for rates changed immediately after the report was released. Many are now betting on a rate cut at the September meeting. Navy Federal Credit Union economist Heather Long believes there is an urgent need to address the uncertainty: The longer this rate instability continues, the more likely it is that this low hiring environment will result in layoffs. According to Jamie Cox of Harris Financial Group, Federal Reserve Chairman Jerome Powell will regret leaving rates unchanged this week.
