Trump is putting the US economy at risk. What the media is writing
Economists are warning of a risk to the US economy after President Donald Trump fired the head of the Bureau of Statistics due to a report on the falling employment market. Investors disapproved of this reaction from the White House. At the same time, Trump got the opportunity to appoint his own person to the Board of governors of the Federal Reserve, who will become its chairman in the future. What the media write about the US economy is in the Izvestia digest.
BBC News: Trump fired Labor statistics commissioner over poor report
US President Donald Trump fired Erica Mcentarfer, commissioner of the Bureau of Labor Statistics, head of one of the most important economic institutions in the United States, a few hours after weaker-than-expected employment data caused additional concern about the president's tariff policy. The unprecedented move by the White House has sparked accusations of politicizing economic data.
BBC News
The Bureau of Labor Statistics released data showing that employers in the United States created only 73,000 jobs in July, well below the projected 109,000 new jobs. The agency also revised down its forecast for employment growth in May and June, reporting a reduction in the number of jobs by 250,000. This was the largest downward revision of employment figures — not counting the period of the COVID-19 pandemic — since 1979.
The leading indices of the US stock market closed with a sharp decline on Friday. Some analysts have suggested that the employment data may reflect a blow to small businesses, which tend to be slower to respond to surveys and are particularly vulnerable to tariffs. The fight for data is heating up against the backdrop of changes in Trump's trade policy, as a result of which goods from around the world are subject to new duties ranging from 10% to 50%.
The New York Times: the dismissal of an official due to statistics threatens the United States with dangers
When Trump didn't like the weak employment data released on Friday, he fired the person responsible for preparing them. This was a step that has no precedent in the century-old history of economic statistics in the United States. And for good reason: when political leaders interfere with government data, it rarely ends well.
The New York Times
Perhaps the most famous example is the case of Argentina, which in the 2000s and 2010s systematically underestimated inflation data to such an extent that the international community eventually stopped relying on government data. This loss of confidence led to an increase in the cost of borrowing for the country, exacerbating the debt crisis, which eventually led to a default on international obligations.
It is still too early to say whether the United States will follow the same path. However, economists and other experts said Trump's decision to fire Mcentarfer, the Senate-confirmed head of the Bureau of Labor Statistics, was a worrying step in that direction. Reliable and independently prepared statistics are crucial for making the right decisions in both the public and private sectors. Fed officials rely on government-collected data on inflation and unemployment to determine how to set interest rates that affect Americans' mortgage or car loan payments.
The Washington Post: Investors' fears have intensified due to Trump's reaction
For months, the U.S. economy seemed to be overcoming the devastating effects of Trump's trade and immigration policies. However, within 72 hours, this rosy forecast was overshadowed as the latest government data showed that the revolutionary restructuring of the world's largest economy was facing an obstacle. The disappointing employment report showed that the labor market is much weaker than expected by the White House and the Fed. Inflation has turned out to be relentless again, and consumers are becoming more cautious in their spending.
The Washington Post
According to economists, after Trump promised during his election campaign to relieve businesses of worries about Washington's dictates, he made government policy and his own norm-violating behavior the main variables affecting the $30 trillion U.S. economy. All this combined has led to the annual economic growth rate of 1.2% in the first half of the year, which is a marked decrease from the 2.4% growth rate at the end of 2024. The S&P 500 index, which has been rising since mid-April, reacted by losing 2.5% of its value this week.
The president's desire for full control over the data and decisions of government agencies extends to the country's central bank. Trump simultaneously declared an "economic boom" and called for urgent interest rate cuts to boost growth, renewing his attacks on Federal Reserve Chairman Jerome Powell. The weak employment report that Trump criticized may, ironically, increase the likelihood of a Fed rate cut at its next meeting in September.
Axios: Trump's adviser called unreliable the data of the report of the dismissed official
Employment data provided by the Bureau of Labor Statistics has become "extremely unreliable," said Kevin Hassett, director of the National Economic Council. One of Trump's leading advisers actually stated that one of the most important indicators of the world's largest economy has not been particularly trustworthy for many years.
Axios
"I don't think it's been explained well enough, and I think the markets may be even more concerned about the fact that the data is so distorted," Hassett said. — Imagine that the revision of the data — that is, the correction of errors — is five times higher than the number itself. Then the question arises: "Can I believe this number at all?" And I think it really needs to be fixed, and fixed as quickly as possible."
Condemnation of Trump's actions followed immediately, not only from Democrats, but also from Republican lawmakers and economists. Despite demands to provide hard evidence that employment statistics were falsified or manipulated for political reasons, Hassett noted that the revised data proved their inaccuracy.
Financial Times: Trump to appoint new member of the Fed Board of Governors
Trump said this week he would appoint a new person to fill the vacant seat on the board of governors of the Federal Reserve System (FRS) in an effort to strengthen control over US economic data and policy. He added that he has "several candidates" to replace Adriana Kugler, who resigned on August 1, five months before her term expired. This will give Trump the opportunity to choose a successor to Fed Chairman Jerome Powell at the US central bank sooner than expected.
Financial Times
"I think she left because she agreed with me about interest rates, but they were at the other end of the scale," Trump said. He criticized the Fed for not lowering interest rates the way he wanted. <...> Trump demanded that Powell and the rest of the members of the federal open market committee lower interest rates, and repeatedly made harsh statements and tirades against the chairman for maintaining the stability of monetary policy.
The favorites to replace Powell are Kevin Hassett, director of the White House National Economic Council, Scott Bessent, US Treasury Secretary, and Kevin Warsh from the Hoover Institution at Stanford University. Powell's term as Fed chairman expires next year, but he has the option to remain on the board of governors until 2028. Powell said he had not yet decided whether he would resign from the central bank or possibly block the appointment of another Trump nominee by remaining on the board of directors.
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