Trump shifts blame to Jerome Powell after shock job report threatens President with worst hiring slowdown in years
President Donald Trump is lashing out on social media. Jerome Powell is on the receiving end of today’s ire.
Powell, the Federal Reserve chair who is slowly cutting back interest rates to minimize the risk of continued inflation, is caught in the President’s crosshairs after a paltry jobs report.
US private payrolls increased far less than expected in May, the ADP National Employment Report showed on Wednesday.
Private payrolls increased by only 37,000 jobs last month, a far cry from analyst projections and the worst private job hiring slump since March 2023.
Economists polled by Reuters had forecast private employment increasing 110,000 following a previously reported gain of 62,000 in April.
‘ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE,’ Trump said in the post.
‘He is unbelievable!!! Europe has lowered NINE TIMES!’
The European Central Bank has only cut interest rates seven times, with its latest slashing coming in mid-April.
President Trump has blamed Jerome Powell for a lower-than-expected jobs report
The ADP report comes two days before the more in-depth Labor Department’s Bureau of Labor Statistics analysis, which drops on Friday.
There is no correlation between the ADP and BLS employment reports.
But Trump’s social media anger comes as investors continue to raise worries about the independence of America’s central bank from political intrusion.
The President has mounted a sustained pressure campaign, relying on personal attacks on Powell, to decrease the interest rates that have remained above four percent.
Fed officials have a joint mandate: to promote price stability and maximum employment.
Price stability has been a major weakness in the US economy, with consumer inflation reaching over nine percent in 2022 as supply chains rebooted after the Covid pandemic.
The Fed cut rates in September, November, and December 2024 to support employment after inflation had cooled.
The bank’s responsibilities have drawn the ire of many Presidents, but Trump’s approach to handling the bank is unique.
A jobs report showed that private companies hired 37,000 new people in May, the lowest rate in two years
The President has launched personal attacks on Powell, with the hopes that the central banker would start to lower rates amid a public pressure campaign.
But the banker has remained steadfast, and has issued warnings that the President’s signature tariffs could threaten to destabilize inflation rates.
Powell and Trump met at the White House on May 29 to discuss the importance of the Federal Reserve’s independence.
‘Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook,’ the Fed said in a statement after the meeting.
Even if President Trump gets a rate cut from the Fed, he’s not guaranteed to see jobs numbers rise.
The ten-year Treasury yield remains above 4.4 percent, which is on the higher end of current interest rates.
If the Fed cuts its interest rate but the ten-year stays elevated, mortgage rates and business borrowing costs won’t necessarily fall.
This dynamic was reportedly a major factor in Trump’s decision to pull back on his ‘Liberation Day’ tariffs.
The labor market continues to ease amid economic uncertainty from tariffs.
Government data on Tuesday showed there were 1.03 job openings for every unemployed person in April, little changed from March.
The unemployment rate is forecast to be unchanged at 4.2 percent.
