Trump fires commissioner of labor statistics after weaker-than-expected jobs figures slam markets

Economic

Summary:

President Donald Trump on Friday fired Bureau of Labor Statistics Commissioner Erika McEntarfer, hours after the agency reported that job growth in the U.S. had slowed to a near-halt.“We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY,” Trump posted on Truth Social.The stunning move came the same day that the BLS reported a gain of just 73,000 nonfarm jobs in July, below market expectations.

President Donald Trump on Friday fired the Bureau of Labor Statistics commissioner, hours after the agency reported that job growth in the U.S. had slowed to a near-halt.

In a Truth Social post that also directed even more fire at Fed Chair Jerome Powell, Trump accused BLS Commissioner Erika McEntarfer of being a political appointee who was manipulating jobs data.

“I was just informed that our Country’s ‘Jobs Numbers’ are being produced by a Biden Appointee, Dr. Erika McEntarfer, the Commissioner of Labor Statistics, who faked the Jobs Numbers before the Election to try and boost Kamala’s [Harris’] chances of Victory,” Trump wrote.

“We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified,” he added.

A spokesperson for the bureau told CNBC, “BLS can confirm Commissioner Erika McEntarfer was terminated today. Deputy Commissioner William Wiatrowski will serve as Acting Commissioner for BLS.”

The BLS operates under the Department of Labor, whose commissioner, Lori Chavez-DeRemer, is a Trump appointee.

The stunning move came the same day that the BLS reported a gain of just 73,000 nonfarm jobs in July, below market expectations. In addition, the bureau revised the two previous months down sharply, cutting a combined 258,000 from the prior counts, putting the three-month growth rate at a paltry 35,000. It was the biggest two-month downward revision since April 2020, the early days of the Covid crisis.

Trump and congressional Republicans have repeatedly criticized the BLS over the years for its data collection. In particular, the large revisions have been a target. Trump noted that the BLS last year also announced major revisions, taking down the 12-month payrolls gain preceding March 2024 by 818,000.

In his spending plan this year, Trump proposed an 8% reduction in staff at the bureau, raising questions over the integrity of its counts on employment, consumer prices and multiple other economic metrics. The bureau has had to impute a growing amount of estimated data into a number of its reports.

“Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes,” the president wrote. “McEntarfer said there were only 73,000 Jobs added (a shock!) but, more importantly, that a major mistake was made by them, 258,000 Jobs downward, in the prior two months. Similar things happened in the first part of the year, always to the negative.”

Prior to Friday’s report, Trump repeatedly has championed the strength of the labor market. After the June numbers had been released initially, the White House put out a statement calling it a “June Boom.”

The weak jobs report Friday preceded a sharp drop in markets, with the Dow Jones Industrial Average off more than 500 points and the tech-focused Nasdaq off more than 2%. Treasury yields also slumped.

“I can’t believe what I just saw,” said Peter Mallouk, president and chief investment officer of Creative Planning. Trump’s social media post seemed like a parody or satire at first, Mallouk said.

“This is not healthy,” he added. “We can’t have a set of numbers come out and fire somebody that served under numerous administrations in various roles because you don’t like the numbers.”

William Beach, a 2017 Trump appointee and McEntarfer’s immediate predecessor at BLS, also sharply criticized her firing.

“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.

“This escalates the President’s unprecedented attacks on the independence and integrity of the federal statistical system,” Beach added in a statement. “The President seeks to blame someone for unwelcome economic news.”

Along with his tirade against McEntarfer and the BLS, Trump for at least the third time Friday tore into the Fed’s Powell, who has advocated that the central bank not lower interest rates until it has a better idea of how the president’s tariffs will impact inflation.

“The Economy is BOOMING under ‘TRUMP’ despite a Fed that also plays games, this time with Interest Rates, where they lowered them twice, and substantially, just before the Presidential Election, I assume in the hopes of getting ‘Kamala’ elected – How did that work out?” Trump wrote. “Jerome ‘Too Late’ Powell should also be put ‘out to pasture.’”

The Federal Open Market Committee, the central bank’s monetary policy arm, on Wednesday voted to keep its benchmark interest rate steady, where it has been since December. However, following the weak jobs report, futures markets priced in a strong possibility the Fed will cut in September.

Source:CNBC

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Cryptocurrency

Decentralized exchanges (DEX) reached $1 trillion in monthly trading volume for the first time in July.

According to DefiLlama data, spot trading volume grew 29.4% and reached nearly $514 billion last month, bested only by January’s all-time high of $568 billion.

At the same time, perpetual futures’ monthly volume increased 33.6% to register a new all-time high of $487 billion, with Hyperliquid registering a new record in monthly perpetual trading.

BNB dominance on spot

For the third consecutive month, BNB Chain dominated spot trading volumes. The chain’s volumes grew 15.3% and totaled $196.3 billion in July, representing 38.2% the monthly total.

PancakeSwap was the main driver behind growth, which amounted to $188.2 billion in spot trading volume. The BNB-native exchange volume is larger than the other four top DEXs combined, which is approximately $168 billion.

Uniswap registered the second-largest spot volume among DEXs in July, with $96.4 billion. Meanwhile, Solana-based decentralized exchanges wrapped up the top five.

Raydium, Meteora, and Orca registered $31.8 billion, $20 billion, and $19.5 billion, respectively. The five largest blockchains by volume remained the same between June and July, with just one slight change.

Runner-ups

Ethereum registered the second-largest monthly volume at nearly $86 billion, growing 49.3% from June, while Solana slid from second to third place in monthly spot trading volume despite growing 36.6% to reach $85.1 billion.

Base and Arbitrum maintained their posts from June as the fourth- and fifth-largest blockchains by spot trading volume, respectively.

Base’s volume increased by 46.8% and reached $41.6 billion, the first time the layer-2 blockchain surpassed $40 billion since January. At the same time, Arbitrum was the only chain in the top five with one-digit growth, reaching $19.2 billion in volume after jumping 7.4%.

Hyperliquid’s perpetuals reign

Hyperliquid became the first blockchain to surpass the $300 billion threshold in perpetual volume, reaching $323.4 billion in July after a 48.3% growth.

The volume surpasses Ethereum’s $48.7 billion by a large margin, which held the spot of the second-largest chain in perpetual trading volume last month. Despite the difference, Ethereum has grown by almost 56% since June.

The difference is even larger when decentralized exchanges for perpetual’s volumes are considered. Hyperliquid reached $313.4 billion, dominating 64.3% of the market and posting 16 times Jupiter’s volume of $19.4 billion.

Solana, BNB Chain, and Arbitrum wrap up the top five in perpetuals with $37.2 billion, $21.6 billion, and $

Source: Cryptoslate

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Economic

Central Bank

President Trump said in a social media post Friday afternoon that he directed members of his administration to fire Erika McEntarfer, commissioner of the Bureau of Labor Statistics, after the BLS on Friday published a July jobs report that contained what it called "larger than normal" revisions to data from May and June.

The July jobs report published Friday morning showed the US economy added 73,000 jobs last month, fewer than expected, while the unemployment rate rose to 4.2%.

The most notable numbers to emerge from the report, however, were downward revisions to job gains in May and June, which saw 258,000 jobs taken away from what had been initially reported.

May's job gains were revised down to 19,000 from 144,000, while June's additions were cut to just 14,000 from the 147,000 initially reported.

Labor Secretary Lori Chavez-DeRemer appeared to confirm McEntarfer's firing in a post on X, saying Deputy Commissioner William Wiatrowski would serve as interim head of the BLS. McEntarfer was confirmed as BLS commissioner by an 86-8 Senate vote back in January. President Trump Fires BLS Commissioner After July Jobs Report Disappoints_1

President Trump Fires BLS Commissioner After July Jobs Report Disappoints_1

In its release on Friday, the BLS said these revisions "result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors."

As he left the White House for the weekend later Friday, President Trump repeated his charges, without providing evidence, that McEntarfer was acting politically and that her "numbers were wrong."

He added that he he would begin reviewing candidates for her permanent replacement soon and that he has three people in particular in mind without revealing their names.

He responded on the question of whether the candidates he is focused on have labor statistics experience by saying "I'll put someone in who's going to be honest."

Economists meanwhile on Friday were near-unanimous in their view that July's jobs data and the revisions to May and June reflect a labor market that is far weaker than had been suggested by recent data and characterizations by some officials, notably Federal Reserve Chair Jerome Powell.

"The 'solid' state of the labor market described by the FOMC earlier this week looks more questionable after the July employment report," Wells Fargo senior economist Sarah House wrote in a note Friday.

Job gains over the last three months have now averaged just 35,000 after Friday's revisions.

In his post on Friday, Trump accused McEntarfer and the BLS of reporting "faked" jobs numbers in the run-up to last year's election, and noted February's benchmark revision to 2024 jobs data that showed payroll growth last year was overstated by some 818,000 jobs.

"Important numbers like this must be fair and accurate, they can't be manipulated for political purposes," Trump said in his post on Truth Social.

"The Economy is BOOMING under 'TRUMP' despite a Fed that also plays games, this time with Interest Rates, where they lowered them twice, and substantially, just before the Presidential Election, I assume in the hopes of getting 'Kamala' elected - How did that work out? Jerome 'Too Late' Powell should also be put 'out to pasture,'" Trump added.

On Wednesday, the Fed voted to keep interest rates unchanged in a range of 4.25%-4.5%. Trump has for some time called on the central bank to lower interest rates.

Earlier on Friday, two members of the Federal Reserve's Board of Governors, Chris Waller and Michelle Bowman, both of whom voted to lower interest rates this week, issued statements outlining their views, citing downside risks to the labor market the Fed may be overlooking.

Waller said the Fed's "wait and see approach is overly cautious," noting that "downside risks to the labor market have increased." Bowman added in her statement that the "labor market has become less dynamic and shows increasing signs of fragility."

Following Friday's jobs report, data from the CME Group showed traders pricing in an 80% chance the Fed cuts rates at its September meeting; on Thursday, those odds stood at just 37%.

Trump's announcement Friday that he had directed his administration to remove McEntarfer from the BLS comes on the heels of months of speculation Trump may seek to remove Powell from his role at the Federal Reserve.

The legal hurdles to removing Powell from office are considerable, and both Treasury Secretary Scott Bessent and Trump himself have said they would not seek to fire Powell, whose term is set to expire next May. A flurry of reporting earlier this month suggested plans had been drawn up by the administration to remove Powell, which Trump later shot down.

Powell was first nominated as Fed chair by Trump back in 2017 and re-nominated to the post by President Biden in 2021.

Source: Yahoo Finance

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Economic

China–U.S. Trade War

-U.S. Treasury Secretary Scott Bessent said on Friday that he believed that Washington has the makings of a deal with China and that he was "optimistic" about the path forward.

"This week's negotiations in Stockholm have advanced our talks with China, and I believe that we have the makings of a deal that will benefit both of our great nations," Bessent said in a post on X that was subsequently deleted.

"I am optimistic about the path forward," he added.

A Treasury Department spokesperson said the post was being reposted because the images attached to it had not uploaded correctly. The spokesperson also noted that the language in the post was in line with what Bessent had said in various media interviews this week.

In an interview with CNBC on Thursday, Bessent said the United States believes it has the makings of a trade deal with China, but it is "not 100% done."

U.S. negotiators "pushed back quite a bit" over two days of trade talks with the Chinese in Stockholm this week, Bessent told CNBC.

China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end escalating tit-for-tat tariffs and a cut-off of rare earth minerals.

Source: Bloomberg

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Stocks

Bond

Wall Street saw a broad flight from risk assets, with stocks sinking amid mounting signs of job-market weakness, President Donald Trump’s latest volley of tariffs and geopolitical worries. Short-term Treasury yields plunged the most since 2023 on bets the Federal Reserve will cut rates.

The S&P 500 sank 1.6%, the most since May. An uninspiring outlook from Amazon.com Inc. spurred a rout in megacaps. A closely watched volatility gauge - the VIX - topped 20. Two-year yields tumbled 28 basis points to 3.68%. The dollar snapped a six-day advance. Gold climbed as Trump said the US is moving two nuclear submarines to respond to “provocative” statements from former Russian President Dmitry Medvedev.

Job growth cooled sharply and the unemployment rate rose, with payrolls increasing 73,000 in July after the prior two months were revised down by nearly 260,000. In the last three months, employment growth has averaged a paltry 35,000. Money markets fully priced in two rate cuts in 2025, with a 90% chance of a reduction in September.

“What had looked like a Teflon labor market showed some scratches this morning,” said Ellen Zentner at Morgan Stanley Wealth Management. “A Fed that still appeared hesitant to lower rates may see a clearer path to a September cut, especially if data over the next month confirms the trend.”

The pullback in stocks marked a sharp reversal for markets that had raced to record highs on the back of resilient economic growth, signs of cooling inflation, and a frenzy for AI-linked shares. With valuations elevated, traders are now confronting a harsher backdrop amid renewed debate over how quickly the Fed might be forced to cut rates.

“The debate now is whether the White House was right, and the Fed was too late,” said Scott Helfstein at Global X. “The Fed was probably right to wait, but job growth and the economy is slowing from a blistering rate.”

Trump told officials to fire Erika McEntarfer, the commissioner of the Bureau of Labor Statistics, hours after a report showed US job growth cooled sharply.

“The US public statistics represent the gold standard,” said Neil Dutta at Renaissance Macro Research. “Calling them into question because they tell you something you don’t like undercuts market confidence.”

Cleveland Fed President Beth Hammack, speaking on Bloomberg Television after the numbers came out, said the labor market still looked healthy — though it was a “disappointing report to be sure.”

Ahead of the data, Fed Governors Christopher Waller and Michelle Bowman issued statements explaining why they dissented Wednesday from the decision to hold rates steady, expressing concerns that hesitance to cut rates could risk unnecessary damage to the labor market.

Trump said Fed Chair Jerome Powell should be put “out to pasture” and called on the central bank’s board to “assume control” if rates were not lowered.

Fed Governor Adriana Kugler will step down from her position on the central bank’s board, handing Trump a sooner-than-anticipated opportunity to install a new policymaker who aligns with his vision for rates.

To Alexandra Wilson-Elizondo at Goldman Sachs Asset Management, the jobs miss directly challenges the Fed’s hawkish posture from this week’s meeting.

“Just two days after the conclusion of this month’s Fed meeting, suddenly the dual mandate is back on the table,” said Chris Zaccarelli at Northlight Asset Management. “The Fed will again need to balance a slowing job market with inflation which isn’t slowing fast enough.”

Today’s report provides the evidence the Fed needs to make a September rate adjustment, so the only question is how large that will be, according to Rick Rieder at BlackRock.

“September is a lock for a rate cut — and it might even be a 50-basis point move to make up the lost time,” said Jamie Cox at Harris Financial Group.

At eToro, Bret Kenwell says the most-obvious question is: How would the Fed handle a slowdown in the labor market alongside a rise in inflation?

“While neither is at an extreme right now, inflation is moving higher and the labor market is losing steam,” he said. “When push comes to shove, the Fed would likely step in by easing financial conditions if the labor market truly begins to deteriorate, but it may not be as fast or as accommodating if inflation remains stubbornly high.”

To Marvin Loh at State Street Global Markets, the latest jobs data signal what a tough balancing act the Fed has given that wages are still growing at a decent clip and tariffs are still a major uncertainty.

Four months after Trump shocked the world by unveiling a placard full of tariff rates, his revisions Thursday left investors scrambling to grasp the full impacts of those levies. At an average of 15%, the world is still facing some of the steepest US tariffs since the 1930s, roughly six times higher than they were a year ago.

“Our base case remains that the US effective tariff rate should settle at around 15% by the end of the year, and the economic impact is likely to prove manageable,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “Still, tariffs are a headwind for global trade and growth, and they have started to contribute to a rise in inflation.”

With markets already pricing in much of the good news on the trade front, she expects stock volatility to pick up in the near term.

Source: Bloomberg

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Central Bank

Political

The Federal Reserve said Friday that Governor Adriana Kugler is resigning early from her term and will exit the central bank on Aug. 8, potentially shaking up what was already a fractious succession process for Fed leadership amid difficult relations with President Donald Trump.

The Fed said in a statement that Kugler, who became a governor in September 2023, will leave before her term’s conclusion, which was scheduled for Jan. 31, 2026. In a press release, the Fed said Kugler will return to Georgetown University as a professor next autumn.

Kugler did not attend this week’s rate-setting Federal Open Market Committee meeting, which is unusual.

Kugler’s early exit may shake up the timeline for the succession process now surrounding Chair Jerome Powell, whose term ends next May. Trump has threatened to fire Powell repeatedly believing interest rates should be much lower than they are.

Trump will now get to select a Fed governor to replace Kugler and finish out her term. Some speculation had centered on the idea Trump might pick a potential future chair to fill that slot. The White House did not immediately respond to a request for comment about the Fed appointment.

In a letter to Trump announcing her resignation, Kugler wrote “I am proud to have tackled this role with integrity, a strong commitment to serving the public, and with a data-driven approach strongly based on my expertise in labor markets and inflation.”

Kugler’s time at the Fed was a challenging one as central bankers raised rates aggressively to combat high inflation pressures. Those high rates have put them in the crosshairs of Trump and have caused economic challenges, although inflation pressures have moved much closer to the 2% target.

Source: Reuters

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Economic

Central Bank

For months, Wall Street brushed off Donald Trump’s trade war and the Federal Reserve’s higher-for-longer stance — confident a resilient economy would keep propping up US markets.

This week, that confidence began to unravel. Weak job growth and Trump’s latest volley of tariffs rattled investors, intensifying pressure on Fed Chair Jerome Powell to lower interest rates and exposing a new unease with the White House’s protectionist push.

A three-month stretch of nearly unbroken market calm was shattered on Friday after a US report showed a sharp slowdown in the labor market. Traders rushed into the safety of government bonds — pushing down yields on two-year notes to 3.71% in the biggest drop since last August — while ramping up bets for a rate cut next month. The dollar fell and the S&P 500 Index continued its retreat from an all-time high, poised for the worst week since April.

“Today’s release is best characterized as ‘bad news is bad news’ in our view,” said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. “With job creation at stall-speed levels and the tariff headwind lying ahead, there’s a strong possibility of a negative payroll print in the coming months which may conjure up fears of a recession.”

The lackluster jobs results prompted Trump to direct officials to remove the commissioner of the Bureau of Labor Statistics, accusing Erika McEntearfer of politicizing the data without any evidence.

“The US public statistics represent the gold standard,” said Neil Dutta, head of economics at Renaissance Macro Research. “Calling them into question because they tell you something you don’t like undercuts market confidence.”

Geopolitical tensions added to the risk-off tone across markets. Trump said he ordered nuclear submarines to be deployed “in the appropriate regions,” citing “highly provocative” remarks from former Russian President Dmitry Medvedev.

The market action marked a sharp reversal from July, when the dollar rallied, haven trades were abandoned and US equities outpaced their international peers, buoyed by robust earnings and a still‑healthy economy.

By week’s end, that narrative looks far more tenuous. Trump’s new tariffs — lifting the average US levy on global imports to 15%, the steepest since the 1930s — landed just as data showed that job growth averaged a paltry 35,000 in the last three months, the worse since the pandemic in part due to Trump’s efforts to pull back spending. The prospect for a slowdown caused traders to ratchet up the likelihood for a rate cut in September to 88%, up from 40% earlier this week.

‘Eyes on the Exit’

“Lots of folks have their eyes on the exit door,” said Joe Saluzzi, co-head of equity trading at Themis Trading. “Weak job numbers should solidify the rate cut story for September, but there is some worry that the Fed is waiting too long.”

The specter of lower rates sent the dollar down as much as 1%, the worst intraday drop since April. Economically sensitive companies led the retreat in the S&P 500 amid growth angst. The Russell 2000 Index of small-caps extended declines for a fifth day, poised for the worst week in four months.

The latest data, which also showed that US manufacturing contracted by the most in nine months, casts into sharp relief the conundrum that Powell, and rest of the Fed’s rate-setting committee, face in the weeks and months ahead, as Trump and his administration ramp up their criticisms that the central bank isn’t moving quickly enough to lower rates.

Many economists have noted that Trump’s punitive tariffs and his attempt to single-handedly rewrite the rules of international trade are now undermining the economy that lower rates would help support — by raising the cost of production for US companies and imposing a tax on ordinary Americans. At the same time, those very tariffs may spur a pickup in inflation, which could prevent the Fed from easing, even as the labor market weakens.

The current state of play has undercut investor confidence in the direction of the US economy, and by extension, where asset prices are headed.

Volatility whipped up across markets as traders re-assessed the economic reality after $15 trillion was added to equity values since April. The Cboe Volatility Index, a gauge of equity options cost, jumped above the widely watched level of 20 for the first time since April’s tariff-induced rout. Similar measures on high-yield and investment-grade bonds also climbed.

“Investors may have gotten too complacent while waiting for the impacts of slower economic activity resulting from tariffs and higher interest rates,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “The economic cooling associated to tariffs is beginning to take hold. Softer labor conditions should raise eyebrows at the Fed and knowing they have been a reactionary organization in recent years, we should expect a higher chance of Fed action in the coming months.”

The dual retreat in the US dollar and equities is a reminder that American assets aren’t impervious to economic and geopolitical shocks. Betting against the dollar — voted as the “most crowded trade” for the first time on record in Bank of America Corp.’s survey of money managers — turned out to be one of the biggest blunders as the greenback posted its first monthly gain since Trump took office. US skeptics, who continued to dominate in BofA’s survey, also had a setback in stocks as the S&P 500 outperformed the rest of the world for a third straight month.

Significant Negatives

The renewed weakness likely marked a welcome development to those who stuck to a preference in non-US assets of late. Rich Weiss, chief investment officer for multi-asset strategies at American Century Investment Management, has continued to be underweight US equities, citing stretched valuations.

“There are significant potential negatives out there with the deficit, tariffs and inflation,” he said. “The overall volatility, which President Trump himself induces into the whole equation, indicates we still should remain somewhat cautious.”

The whiplash between the America First trade and doubts on the strength of the US economy is creating headaches for money managers who are already struggling to keep up with fast-shifting market narratives.

Take those who make investments based on macroeconomic and market trends. The HFRX Macro/CTA Index is down 3% this year, poised for the worst annual performance since 2018.

“While growth had been firm and investors had become more sanguine on tariffs in recent months, the combination of today’s weak employment report and the tariff uncertainty is challenging,” said Jeffrey Palma, head of multi-asset solutions at Cohen & Steers. “This backdrop is a reminder that there are big risks ahead.”