On the first Friday of each month, the Bureau of Labor Statistics (BLS) releases the Employment Situation Summary. Tomorrow morning, the BLS releases its report for the month of August. The official government report, commonly known as the jobs report, provides a comprehensive look at employment, unemployment, the growth of jobs, as well as earnings for the United States.
A few months ago, a number of subscribers asked if I thought the June’s jobs numbers were on the up-and-up. Those questions led me to write a piece on the subject. The upshot was that I felt that month’s report was on the level, with the caveat that, given Trump’s propensity for dishonesty, he may try to put his thumb on the scale in the future.
When the BLS reported jobs numbers a few weeks later, Trump attempted to do exactly that. After a lackluster jobs report for July, which included significant revisions to the two prior months, Trump’s reaction to the was swift.
Later that day, he fired BLS commissioner Erika McEntarfer, claiming that she made up the weak jobs report for July, and the negative revisions for May and June to make him look bad. Like most of what Trump says, this was a lie. To better understand the tenuous jobs situation, let’s look at the data.
For the month of July, the country only created 73,000 jobs, significantly less than analysts and economists had predicted. But what made the overall report so concerning were the revisions to the two previous months.
June’s original report of 147,000 jobs was revised to just 14,000. May, which had been reported as an increase of 144,000 jobs, was revised to an increase of only 19,000 jobs. The net result of the revisions was a combined reduction of more than a quarter million jobs from previous estimates.
Taking a wider view, the picture we now have tells us two things in particular: a) jobs growth peaked in December of 2024, and b) Trump’s tariff policies are having the negative economic effect most economists predicted.
In the following video from the day of the BLS firing, Kathryn Anne Edwards, Ph.D., an economist and Bloomberg columnist, lays the catastrophic impact of Trump’s BLS firing with more clarity than anyone else I’ve seen. I’ve followed her for a while, and she seemed shaken by the incident. I suggest you take a few minutes and watch it.
As Edwards points out, revisions to BLS reports are not uncommon. As the following chart shows, revisions happen under presidents of both parties. The difference is that no president has reacted by firing the head of the Bureau of Labor Statistics. Until now.
As Edward points out, when jobs reports contain massive downward revisions, it’s almost always a harbinger of a significant economic contraction. There may be others, but I only recall negative revisions this sharp on a couple of occasions, the last being during Trump’s first term. I’d just started this newsletter a few months earlier. Here’s what I wrote at the time (emphasis added):
The May [2020] BLS release contained a significant revision for April. From February 16th to March 14th, the economy lost 1.4 million jobs before the lockdowns even started.
…This datapoint underscores the often overlooked fact that the economy was already in trouble under the Trump administration before the pandemic began. Indeed, over eight years of monthly job gains going back to October 2010 came to a halt in February 2019, nearly a year before the pandemic started. That month, the economy lost 50,000 jobs. While the country added 2 million jobs in 2019, that was the lowest annual growth in nearly a decade.
Edwards also mentions the steep downward job revisions in the run up to the Great Financial Crisis. I ran a trading desk on Wall Street as the economy began to deteriorate, so I remember it well.
Around that time, I accompanied a colleague to a meeting at Lehman Brothers. It was like we’d accidentally walking into someone’s funeral. A few weeks later—September 15, 2008 to be precise—the company filed for bankruptcy. It was the largest bankruptcy in U.S. history at the time. This was the jobs revision for that month:
[T]he BLS initially reported that employment declined by 159,000 jobs during September 2008. In fact, after additional data became available, the BLS revised its estimate to show that employment had declined by 460,000 jobs during the month—a difference of 300,000 more jobs lost. As the recession deepened between April 2008 and April 2009, the BLS’s initial reports underestimated the number of jobs lost by 2.3 million. In other words, the recession of 2007–2009 turned out to be much more severe than economists and policymakers realized at the time.
I guarantee you that the White House knows how things are shaping up. Most of the economic reports are in direct opposition to the Trump narrative that the economy is doing well.
Since McEntarfer’s termination, a variety of Trump surrogates have bobbed from one media outlet to another. They say the economy is actually doing great. Tariffs are going great. The massive tax giveaway is going to be even better.
The problem, according to guys like Peter Navarro and Howard Lutnick, is that the BLS doesn’t want us to know about it, that the agency isn’t transparent enough. But the problem isn’t that the BLS isn’t being transparent. It’s being too transparent.
Ask yourself, why is Trump pressuring the Fed to cut interest rates? Cutting interest rates to the levels Trump has suggested would be the Federal Reserve’s response to weak employment conditions, not a stable or booming economy. This is economics 101.
The Fed doesn’t cut interest rates just because the president wants them to, JD Vance’s assertion that presidents should decide monetary policy notwithstanding.
Trump’s urgency to get interest rates down also explains why he is scrambling to add more red seats in the House. He knows that by the midterms, the economic slowdown will be apparent.
And everyone will know who is at fault.
So, if I can speak plainly, who on planet earth believes that a career statistician would have the balls to just go making shit up for her little agenda? Obviously Trump is the lying sack of shit here who is deeply jeopardizing our economy. I just don’t know how we get through the monstrous level of chaos that this guy is spewing upon the nation. It ain’t gonna be easy.
His actions could boomerang on him, I would imagine. If the report is good, will good numbers be trusted?
Only bad numbers are to be trusted? This is a move comparable to his loan applications. Make the numbers fit his personal agenda.