Donald Trump on Tuesday abruptly summoned reporters to the Oval Office to claim that the U.S. economy is, indeed, doing just fine. His announcement was squarely aimed at a dismal jobs report released earlier that day, which sent shockwaves through the media and markets. In other words, Erika McEntarfer was fired from her position as chief of the Bureau of Labor Statistics (BLS).… the charts the former president used to demonstrate his assertions. He had nothing but wishful thinking and supposition to feed his claim that the July jobs report was cooked.
When asked about the unexpected finding in the job report at the Economic Club of New York last week, Trump said I think they did it purposely. He played up the state of the overall economy, as a signal that things are good. Indicating that, “That’s an amazing number.” He did not explain, however, which particular statistic he was talking about. Alongside him was the ever-optimistic Stephen Moore—Senior Visiting Fellow in Economics at the Heritage Foundation. That last part is important—Moore was a key architect of the story that the administration told about the economy.
Job Growth and Economic Indicators
Moore stressed that since these figures were based on unpublished Census Bureau data, independent verification is difficult to do. So when the data came out, he called Trump’s team to present them. He claimed that this data explained why McEntarfer was recently dismissed from the BLS. This recent decision has already come under fire, as Trump heads into a second term where he’ll be faced with a host of difficult economic issues.
Tariffs and Inflationary Pressures
Throughout his administration, Trump has rolled out a flurry of new duties on imports. This decision has increased inflationary pressures, deepening concerns over job creation. These tariffs are increasingly seen as an anti-competitive force holding back vital parts of the economy, while at the same time driving up consumer costs. According to Goldman Sachs, the next reading on inflation due out in early July should reflect a 3% rise in consumer prices on the year. This is a historic increase, up from just 2.3% in April.
Though these are daunting challenges, Trump is aiming for the stars when it comes to economic growth. He has pledged to galvanize a golden age, implying that his policies will produce a cornucopia of riches in the long run. Critics argue that while the stock market has shown resilience under his leadership, job growth continues to lag and inflation remains a pressing concern.
A Closer Look at Economic Sentiment
Trump’s presentation was a calculated move to reassure both the public and investors regarding the state of the economy. His dependence on those charts and data is indicative of a need to combat perceptions created by lackluster job numbers. Absent strong, rigorous empirical analysis to support his assertions of outright data rigging, skepticism remains among economists and analysts.
The Trump administration is taking a direct approach to addressing these economic changes. The main challenges remain fighting inflation and jumpstarting job growth. Public sentiment on the economy is changing and key economic indicators are moving in different directions. The administration will need to be especially savvy to overcome these challenges and help determine their legacy.
