Trump orders firing of US official as cracks emerge in jobs market

WASHINGTON - President Donald Trump said Friday he has ordered the firing of a key economic official, accusing her of manipulating employment data for political reasons after a new report showed cracks in the US jobs market.

US job growth missed expectations in July, Labor Department data showed, and revisions to hiring figures in recent months brought them to the weakest levels since the Covid-19 pandemic.

Without providing evidence, Trump lashed out at the department's commissioner of labour statistics, writing on social media that the jobs numbers "were RIGGED in order to make the Republicans, and ME, look bad."

In a separate post on his Truth Social platform, he charged that Commissioner Erika McEntarfer had "faked" jobs data to boost Democrats' chances of victory in the recent presidential election.

"McEntarfer said there were only 73,000 Jobs added (a shock!) but, more importantly, that a major mistake was made by them, 258,000 Jobs downward, in the prior two months," Trump said, referring to latest data for July.

"Similar things happened in the first part of the year, always to the negative," Trump said, insisting that the world's biggest economy was "booming" under his leadership.
He later told reporters "we need people that we can trust," accusing the economic official of inflating hiring figures under former president Joe Biden's administration.

'Dangerous precedent'

The United States added 73,000 jobs last month, while the unemployment rate rose to 4.2 percent from 4.1 percent, said the Department of Labor earlier Friday.

Hiring numbers for May were revised down from 144,000 to 19,000. The figure for June was shifted from 147,000 to 14,000.

This was notably lower than job creation levels in recent years. During the pandemic, the economy lost jobs.

The employment data points to challenges in the key labor market as companies took a cautious approach in hiring and investment while grappling with Trump's sweeping -- and rapidly changing -- tariffs this year.

The numbers also pile pressure on the central bank as it mulls the best time to cut interest rates.

With tariff levels climbing since the start of the year, both on imports from various countries and on sector-specific products such as steel, aluminum and autos, many firms have faced higher business costs.

Some are now passing them along to consumers.

William Beach, who previously held McEntarfer post at the Bureau of Labor Statistics, warned that her firing "sets a dangerous precedent and undermines the statistical mission of the Bureau."

The National Association for Business Economics (NABE) condemned her dismissal, saying large revisions in jobs numbers "reflect not manipulation, but rather the dwindling resources afforded to statistical agencies."

"Firing the head of a key government agency because you don't like the numbers they report, which come from surveys using long established procedures, is what happens in authoritarian countries, not democratic ones," slammed Larry Summers, former US Treasury secretary under Democratic president Bill Clinton.

'Gamechanger'

Heather Long, chief economist at the Navy Federal Credit Union, said Friday's jobs report was a "gamechanger."

"The labor market is deteriorating quickly," said Long, noting that of the growth in July, "75 percent of those jobs were in one sector: health care."

"The economy needs certainty soon on tariffs," Long said. "The longer this tariff whiplash lasts, the more likely this weak hiring environment turns into layoffs."

It remains unclear when the dust will settle, with Trump ordering the reimposition of steeper tariffs on scores of economies late Thursday, which are set to take effect in a week.

A sharp weakening in the labor market could push the Federal Reserve toward slashing interest rates sooner to shore up the economy.

On Friday, the two Fed officials who voted this week against the central bank's decision to keep rates unchanged warned that standing pat risks further damaging the economy.

Both Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller argued that the inflationary effects of tariffs were temporary.

They added in separate statements that the bank should focus on fortifying the economy to avert further weakening in the labor market.

Putting off an interest rate cut "could result in a deterioration in the labor market and a further slowing in economic growth," Bowman said.