A recent report from the U.S. Bureau of Labor Statistics painted a dreary picture of the job market.
The report showed that the economy added a relatively meager 73,000 new jobs in July. But the standout feature of the report was an adjustment to the previous two months of jobs, which was lower than previously reported by more than 200,000 jobs.
After the jobs report came out with low numbers, President Donald Trump directed his team to fire Erika McEntarfer, the BLS commissioner.
In a post on Truth Social, he claimed that McEntarfer was a ‘Biden appointee’ who possibly manipulated the numbers, and in another, claimed the "Jobs Numbers were RIGGED."
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Jobs report fallout
The July jobs report showed a smaller-than-hoped-for number of non-farm payroll jobs were added to the U.S. economy during the month. The July numbers posed a setback for the administration. But the real blow is that the report corrected a previous estimate of jobs created in June and May, with an adjustment downwards of 258,000.
The major adjustment to previous job estimates paints a significantly different picture of the economy. While revisions to previous months’ job estimates are common, this downward correction was larger than normal. And fewer jobs means a bleaker picture, which the President vehemently denied.
In a Truth Social post, he wrote, “The Economy is BOOMING under “TRUMP” despite a Fed that also plays games.”
Beyond the backlash against the numbers in the job report, the President took action against the BLS Commissioner by firing her.
He wrote in a Truth Social post, “We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified. Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes.”
While some have praised the move, others see it as a politically motivated overreaction.
In an interview with NBC News, Max Stier, CEO of the Partnership for Public Service, said, “President Trump is once again destroying the credibility of our government by firing expert and nonpartisan officials because he does not like the facts that they present."
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A jobs miss: How this could shape Fed policy
Regardless of the firing drama, the jobs report remains unchanged. Since it’s common for number adjustments to be made in future reports, the job estimates may change. But for now, the unemployment rate sits at 4.2%.
Various sectors of the economy have seen different prospects. For example, the healthcare and social assistance industries seem to be growing based on the job numbers. Manufacturing and construction didn’t see too much change in employment. And government employment continued to fall.
The relatively low number of new jobs is raising alarm bells for some. But it’s unclear whether or not Federal Reserve Chairman Jerome Powell will finally make the interest rate cuts that Trump has been angling for in recent months.
In the same post that he announced the BLS commissioner’s firing, he said, “Jerome ‘Too Late’ Powell should also be put ‘out to pasture.’”
For now, it seems that Powell isn’t convinced that rate cuts are the answer because the Fed is still working to control inflation and is uncertain about the coming impacts of tariffs on the economy.
In a recent conversation with reporters, Powell said, “If you move too soon, you wind up maybe not getting inflation all the way fixed and you have to come back. That’s inefficient. If you move too late, you might do unnecessary damage to the labor market.”
After this rather noncommittal position, it’s unclear if rate cuts are on the horizon. But investors seem to think rate cuts are coming, with market expectations shifting toward a rate cut.
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This article originally appeared on Moneywise.com under the title: US jobs stats are so weak Trump claims they were ‘rigged’ — but the jobs slump could bring interest rates down
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