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Jeff Mordock and Lindsey McPherson


NextImg:Disappointing employment numbers, tariffs uncertainty dog Trump with Democrats seeking foothold

Weak economic indicators are making President Trump’s supporters nervous and Democrats increasingly hopeful about a political comeback.

Job numbers released Friday were disappointing. Unemployment ticked up, and employers added just 73,000 jobs in July. The employment gains from May and June were revised down by a combined 258,000 jobs.

In one bright spot, however, gross domestic product grew by a surprisingly strong 3% in the second quarter, surpassing the expectations of analysts who forecast a 2.4% increase.



In two Sunday political talk shows, White House economic adviser Kevin Hassett said the monthly jobs numbers were “unreliable” and “not keeping up with the economy,” even as he touted the GDP growth.

“The eyes on the horizon are seeing really smooth sailing ahead,” the National Economic Council director said on “Fox News Sunday.”

Former Treasury Secretary Larry Summers, who held Mr. Hassett’s position during the Obama administration, said the downward revision on the early summer job gains “means there’s a real possibility that we’re in a ‘stall speed’ kind of economy.”

SEE ALSO: U.S. trade representative: Talks with China ‘very positive,’ Aug. 12 tariff deadline may be extended

Speaking on ABC’s “This Week,” Mr. Summers did not predict a recession but said the risk is “made more serious” by Mr. Trump’s tariff policies.

The economic numbers were mixed as Mr. Trump scored several trade deals and fine-tuned tariffs but left plenty of uncertainty.

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On Thursday, Mr. Trump moved back the start date of his punishing import taxes from Aug. 1 to Aug. 7.

Mr. Trump also imposed tariffs ranging from 15% to 41% on 66 nations and the European Union, the highest levels in more than a century. He announced a 35% tariff rate on imports from Canada, a 50% tariff rate on imports from Brazil and a 39% rate on imports from Switzerland.

A 90-day pause in tariffs on many Chinese goods will expire Aug. 12. The president may extend that deadline as trade negotiations with China, the biggest source of U.S. imported goods, “have been very positive,” U.S. Trade Representative Jamieson Greer said Sunday on CBS’s “Face the Nation.”

Mr. Trump’s trade announcements were shaded by his firing of the head of the Bureau of Labor Statistics.

SEE ALSO: Trump fires Biden labor official after negative job report

The president accused Erika McEntarfer, a Biden appointee, of falsifying the July data to make him and congressional Republicans look bad and of fudging numbers before the November election to help Vice President Kamala Harris.

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Mr. Summers called the firing “the stuff of democracies giving way to authoritarianism.”

Sen. Alex Padilla, California Democrat, accused Mr. Trump of “trying to weaponize the Bureau of Labor Statistics” because of his “insecurity about the economy.”

“I think an investigation is certainly in order,” he said on NBC’s “Meet the Press.”

Mr. Hassett said Ms. McEntarfer is a “terrific person,” but he defended Mr. Trump’s decision to remove her as a need for “a fresh set of eyes at the BLS.”

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That may involve changing the formulas used to calculate the job numbers. He said he has been warning since 2015 that the formulas cannot keep up with the fast-moving modern economy.

“When the data are unreliable, when they keep being revised all over the place, then they’re going to be people that wonder if there’s a partisan pattern in the data,” Mr. Hassett said.

In another twist, Adriana Kugler announced she was stepping down as Federal Reserve governor, giving Mr. Trump a vacancy to fill as he presses for the central bank to lower interest rates.

The Fed voted Wednesday to keep short-term interest rates between 4.25% and 4.5%, but the decision included the first dissent from two board members in more than 30 years.

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Both dissenters are Trump appointees. Ms. Kugler, a Biden appointee, voted with Fed Chair Jerome Powell and other board members to keep rates steady before announcing her resignation.

“She knew he was doing the wrong thing on Interest Rates. He should resign, also!” Mr. Trump wrote on Truth Social.

Mr. Hassett said the president has “set up an active search” to appoint the next Federal Reserve chair to succeed Mr. Powell when his term expires.

Treasury Secretary Scott Bessent is working with the president on the search, “and they’re going to go through a list of names,” he said on NBC’s “Meet the Press.” “I’m sure the president will pick the best available person.”

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The president’s choice to fill Ms. Kugler’s board seat may also be his pick as chair.

Mr. Powell’s term ends in May, but his board term does not end until Jan. 31, 2028.

The president told reporters he was “very happy” about the open board seat and had candidates in mind.

“I’ve got a lot of good candidates,” he said.

Mr. Trump wants the Federal Reserve to help unlock economic growth by lowering interest rates, reducing the cost for Americans to borrow money for auto loans, mortgages and credit card spending.

Economists expect the Fed to lower rates at its September meeting, given the declining labor market.

Voters are souring on Mr. Trump’s handling of the economy, according to recent polls, and Democrats are hopeful that the frustration will turn into big wins for them in the midterm elections next year.

Just 37% of voters approve of Mr. Trump’s stewardship of the economy, according to a Gallup poll released last week. That was down from 42% in February and in line with other polls, including from The Wall Street Journal and CBS News.

Most troubling for the White House is that the biggest drop in support comes from independents. Only 29% said the president is doing a good job on the economy.

Democrats have struggled to find footing since Mr. Trump retook the White House and Republicans won the House and Senate.

They finally see a message they can sell to the American people and have started hammering Mr. Trump over the economy.

Senate Minority Leader Charles E. Schumer, New York Democrat, linked the anemic jobs reports to Mr. Trump’s “chaotic tariffs.”

Apart from their merits, the tariffs have been marked by shifting deadlines and changing amounts.

“That is what tariff whiplash looks like,” Mr. Schumer said on the Senate floor Friday. “Businesses are waving their arms around in the dark without a clue of what Donald Trump is going to do next, and we now have clear evidence that it’s stunting hiring and growth.”

Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, gave a dire warning.

Trump and Republicans need to change course dramatically before they plunge us into a recession because we certainly can’t sustain this chaos and uncertainty for another 3½ years,” he said.

Republicans can counter the Democrats’ narrative, said Republican strategist Jimmy Keady.

He said Republicans need to make the case that Mr. Trump’s tax cuts will boost the economy after record-high inflation and soaring gas prices under President Biden.

“The Democrats can spin all they want, but voters remember what it was like when $20 filled a tank of gas, and they know President Trump is the one who can deliver that again,” he said.

The White House acknowledged that the jobs report was disappointing but insisted that, once fully implemented, Mr. Trump’s tariffs, combined with his tax cut and spending package known as the One Big Beautiful Bill Act, would get the economy humming.

Stephen Miran, chairman of the White House Council of Economic Advisers, said the law helped seal trade deals covering 60% of the global economy because “it contains enormously powerful incentives for investment in America.”

“These are both going to be massive tail winds for the economy that are going to create an economic boom,” he said.

Ryan Young, a senior economist at the Competitive Enterprise Institute, said the economy is strong, but he sees plenty of warning signs.

He said tariffs are not strictly inflationary but do raise prices, and businesses are spending resources on finding workarounds for tariffs rather than making better products at more affordable prices.

“Since the economy was in good shape before the tariffs hit, there is still some room to fall before the economy really craters,” Mr. Young said. “But slower jobs growth, tepid growth and the risk of higher inflation pose a triple threat that may be hard to overcome.”

Overall, the economy is sending contradictory signals. Consumer spending and business spending increased in the second quarter. Consumer spending rose at an annual rate of 1.4% from April through June, up from 0.5% in the first quarter. However, that is projected to slow as the effects of Mr. Trump’s tariffs filter into retail prices.

Meanwhile, business spending increased by 1.9% in the second quarter. Company purchases of computers, delivery trucks, factory machines and other equipment grew at a daily healthy 4.8% while spending on buildings, oil rigs and other structures dropped 10.3%.

Although the GDP was better than expected, the gain in economic output was temporarily pumped up by the sharp decline in imports ahead of Mr. Trump’s tariffs. Companies didn’t order as many goods from other countries as imports plunged 30.3%, reversing the 37.9% rise in imports during the first quarter.

• Mallory Wilson contributed to this report.

• Lindsey McPherson can be reached at lmcpherson@washingtontimes.com.

• Jeff Mordock can be reached at jmordock@washingtontimes.com.