The Prague Post - Trump orders firing of US official as cracks emerge in 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.

Trump lashed out at the department's Commissioner of Labor Statistics -- Erika McEntarfer -- after the report, charging that she 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 wrote in a Truth Social post, referring to latest data for July.

"Similar things happened in the first part of the year, always to the negative," he added.

But he insisted that the world's biggest economy was "booming" under his leadership.

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 jobs 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 partially to consumers.

- 'Gamechanger' -

"This is a gamechanger jobs report. The labor market is deteriorating quickly," said Heather Long, chief economist at the Navy Federal Credit Union.

She added in a note that of the growth in July, "75 percent of those jobs were in one sector: health care."

The US economy has added an average of just 35,000 jobs per month since May, data showed.

"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."

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

The president also raised tariffs on Canadian imports, although wide-ranging exemptions remain.

Mortgage Bankers Association economist Joel Kan said that for now, "goods-producing industries saw contraction for the third straight month."

"Service industries involved in trade also saw declines in job growth, potentially a result of the uncertain tariff environment, as businesses either put their activity on pause or pulled back altogether," Kan added in a note.

- 'Overly cautious' -

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 added.

Waller said: "I believe that the wait and see approach is overly cautious."

L.Bartos--TPP