Trump fires Erika McEntarfer after jobs data shakes the market
Job creation in the United States fell sharply in July, and Donald Trump was quick to act. Hours after the official report, the president fired Erika McEntarfer, commissioner of the Bureau of Labor Statistics (BLS), accusing her of manipulating the data in favor of the Democratic Party. The report showed only 73,000 new nonfarm jobs, well below market expectations. Furthermore, the previous two months were revised downward, with 258,000 jobs eliminated from previous records. The quarterly average of job creation plummeted to just 35,000.
Through Truth Social, Trump accused McEntarfer of being a “Biden political appointee” and of falsifying data to improve Kamala Harris’s electoral chances. “I have ordered her immediate termination. She will be replaced by someone more competent,” the president wrote. The market reaction was immediate. The Dow Jones fell more than 400 points, the Nasdaq lost more than 2%, and Treasury yields fell sharply. After the dismissal was announced, the markets partially moderated their losses, but the institutional blow had already been struck.
The jobs data deepens Trump's confrontation with the Fed
This isn't the first time Trump has attacked the BLS. During his term, he has questioned the validity of the figures, criticizing the constant revisions and the use of estimates. His most recent budget plan proposed an 8% cut in the agency's staff, further weakening its technical capacity. Along with his attack on McEntarfer, the president again lashed out at Federal Reserve Chairman Jerome Powell. He accused him of delaying monetary policy decisions and interfering in the election cycle:
“Jerome ‘Too Late’ Powell should retire,” he wrote.
Institutional tensions are growing as markets bet on a shift in monetary policy. Following the weak report, futures indicate a high probability of a rate cut in September. For now, the Fed has kept its key rate unchanged, but pressure is mounting.
Trump has once again demonstrated that he cannot tolerate data that contradicts his economic narrative. The dismissal of a technical official following an adverse report fuels distrust in the independence of official statistics. "This is not healthy," warned manager Peter Mallouk upon hearing the news.
