Weak Job Growth Sparks Economic Alarm as Trump Fires BLS Chief and Slams Fed

The U.S. labor market showed alarming weakness in July, with the Bureau of Labor Statistics (BLS) reporting the economy added just 73,000 jobs—far below expectations. Even more concerning, the gains came almost entirely from just two sectors: healthcare and social assistance. The national unemployment rate ticked up to 4.2%, signaling growing cracks in an already fragile job market.

But the biggest shock came not from July’s soft figures, but from major revisions to previous months. The BLS revealed that job growth in May and June was dramatically overstated. Instead of the 144,000 and 147,000 jobs initially reported for those months, the revised numbers show the U.S. added just 19,000 jobs in May and a mere 14,000 in June. That’s well below the rate needed to keep pace with population growth.

According to the BLS, the corrections were the result of routine recalculations based on additional data and seasonal adjustments. But the updated data quickly became political.

BLS Commissioner Fired Amid Political Firestorm

Just hours after the revised numbers were released, President Trump abruptly fired BLS Commissioner Erika McEntarfer, accusing her of manipulating the data—though he offered no evidence to support the claim. McEntarfer, a Biden administration appointee, had only been in the role for a short time. Her dismissal raises questions about political interference in a traditionally nonpartisan agency.

Trump Targets the Fed After Weak Jobs Report

In the wake of the labor data, President Trump turned his fury toward Federal Reserve Chair Jerome Powell, blasting him for not cutting interest rates earlier in the week. Trump labeled Powell a “stubborn MORON” and even suggested that the Fed’s Board of Governors should take control of the central bank if Powell fails to act soon.

Powell has resisted calls to cut rates, arguing that the economic impact of Trump’s own policies—particularly on trade and immigration—remains unclear.

Tariffs, Immigration Policies Hit Labor Market

The labor market's malaise appears closely tied to Trump administration policies. Tariff-sensitive industries showed either job losses or stagnant growth in July, underscoring the economic toll of trade tensions. Meanwhile, the labor force contracted for the third consecutive month, with the drop fueled in part by a decline in foreign-born workers amid increasingly strict immigration enforcement.

Fed May Be Forced to Act

With the labor market showing new signs of strain, pressure is mounting on the Federal Reserve to act. Two Fed officials—Christopher Waller and Michelle Bowman, both Trump appointees, have already called for interest rate cuts, explicitly citing labor market concerns. The situation may become even more politically charged following the resignation of Fed Governor Adriana Kugler on Friday. Though her term was not yet complete, Kugler’s exit allows Trump to appoint a new, potentially more dovish member to the Board—one who may be more willing to support rate cuts.

Outlook: Economic Uncertainty Deepens

The latest data underscores a sharp slowdown in job creation, casting doubt on the resilience of the U.S. economy amid turbulent policy shifts. With political drama engulfing both the BLS and the Federal Reserve, the path forward appears increasingly uncertain—and potentially volatile—as both economic and institutional pressures mount.