Trump dismisses BLS chief following underwhelming July employment figures
The Federal Reserve maintained interest rates at their current level on Wednesday, despite calls from President Trump for a decrease. The decision comes as traders are pricing in an 80% chance of a rate cut at the Fed's September meeting, following the July jobs report.
The report showed that the US economy added 73,000 jobs last month, fewer than expected, and the unemployment rate rose to 4.2%. These figures have raised concerns among economists and labor experts, who believe that the revisions to May and June job gains reflect a labor market that is far weaker than suggested by recent data.
May's job gains were revised down to 19,000 from the initially reported 144,000, and June's additions were cut to just 14,000 from the 147,000 initially reported. The revisions were made due to additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.
The July jobs report also sparked a political debate, with President Trump accusing the Bureau of Labor Statistics (BLS) and its former commissioner, Erika McEntarfer, of reporting "faked" jobs numbers in the run-up to last year's election. McEntarfer was fired by Trump reportedly in retaliation for resisting political interference aimed at manipulating economic data.
Following her firing, William W. Beach, a former chief economist for President Trump and a controversial figure criticized for politicizing data, was appointed to serve as the acting head of the BLS. This transition raised concerns among economists and labor experts about the potential politicization of critical labor statistics under the Trump administration.
Trump has also been speculated to seek the removal of Federal Reserve Chair Jerome Powell, who was first nominated as Fed chair by Trump in 2017 and re-nominated by President Biden in 2021. Chris Waller and Michelle Bowman, members of the Federal Reserve's Board of Governors, have expressed concerns about downside risks to the labor market that the Fed may be overlooking.
In a statement, Bowman added that the "labor market has become less dynamic and shows increasing signs of fragility." Waller stated that the Fed's "wait and see approach is overly cautious." Trump, however, has emphasized the importance of "important numbers like this [being] fair and accurate, they can't be manipulated for political purposes."
As the economy continues to evolve, these developments are likely to shape the ongoing debate about monetary policy, labor market trends, and the role of politics in economic data reporting.
Business leaders and economists are closely watching the political debate surrounding the July jobs report, as President Trump has accused the Bureau of Labor Statistics (BLS) of reporting fabricated job numbers and has called for a decrease in interest rates. This follows the Fed's decision to maintain current rates despite traders pricing in an 80% chance of a rate cut at the September meeting.
The media has been scrutinizing the potential politicization of critical labor statistics under the Trump administration, with the appointment of William W. Beach as the acting head of the BLS raising concerns among economists and labor experts. This comes as the Fed's Board of Governors, including Chris Waller and Michelle Bowman, have expressed concerns about the downside risks to the labor market that the Fed may be overlooking.
The ongoing debate about monetary policy, labor market trends, and the role of politics in economic data reporting is likely to impact financial markets and general news coverage, as investors and policymakers grapple with the shifting dynamics of the economy.
