"Wait till next year!"" Ever since legendary sportswriter Grantland Rice first coined it more than a century ago, the slogan has been a rallying cry for losing teams from the minor leagues to the NFL.
Now, President Trump has joined the fray.
The U.S. economy added just 22,000 jobs in August, far below the 76,500 economists had forecast. Besides the dismal job growth numbers, Friday's jobs report is worth noting for two other reasons.
First, it's the first jobs data released by the Bureau of Labor Statistics (BLS) since Trump fired the agency's director a month ago, accusing the agency of "falsifying the data." Trump leveled the accusation at former Bureau of Labor Statistics Director Erika McEntarfer after the agency revised downward its employment figures for May and June, shedding tens of thousands of jobs. The second, and arguably more important, reason is that Federal Reserve Chairman Jerome Powell has repeatedly signaled that he's more concerned about the labor market than inflation. As the nation, from Main Street to Wall Street, grapples with uncertainty stemming from tariffs and a host of other policies, the central bank is focusing even more intensely on the issue. On Thursday, Trump made it clear that he's not focused on the current data. He's more concerned about where his policies will take the labor market over the next 12 months. "The real data, whatever it is, I'm talking about, will be known in a year," Trump told reporters at an Oval Office briefing. He added: “You’re going to see job numbers the likes of which our country has never seen before.” Commerce Secretary Howard Lutnick all but echoed his words on Friday. In an interview with CNBC, he promised that the jobs numbers by this time next year will be “like you never imagined.” The labor market recovery will undoubtedly be welcome. Excluding the coronavirus pandemic, net job gains in the United States have averaged 29,000 over the past three months, hovering at a 15-year low, while the official unemployment rate of 4.3% is the highest since 2021. The labor force participation rate—the share of the population that is employed or actively looking for work—has fallen to its lowest level since 1977 after excluding the coronavirus pandemic. While the Trump administration claims tariffs will create significant manufacturing jobs, the sector has lost about 78,000 jobs so far this year, with 12,000 lost last month alone. The August data isn't the end of the story either. Next week, the Bureau of Labor Statistics will release a baseline revision to its job growth data for the 12 months ending in March. Economists estimate this revision could lower the overall employment total by as much as 750,000. Furthermore, the impact of government job cuts under Trump's "DOGE" initiative, briefly led by Musk, will begin to show up in wage data when layoff compensation packages expire at the end of September. "A 'no-hiring' economy is turning into a layoff economy, and if that worsens, it will lead to a recession," said Heather Long, chief economist at Navy Federal Credit Union. "This trend has to be arrested." The Federal Reserve is likely to take more action. Traders are fully betting that policymakers will cut interest rates at their meeting on September 16th and 17th. Wall Street also expects two additional rate cuts before the end of the year. First, however, Trump must clarify his signature tariff policy. Much will depend on the Supreme Court, which will rule on whether Trump has the authority to impose widespread tariffs. However, tariffs currently uncontested, as well as those implemented during the months-long legal battle, are still likely to show up in inflation data. The August Consumer Price Index (CPI) report will be released next Thursday.
"Concerns about the health of the economy are beginning to emerge, and if inflation data is strong next week, it could trigger a new round of panic about stagflation risks," warned Seema Shah, chief global strategist at Principal Asset Management.
The economic concerns are real, including slowing hiring, accelerating inflation and tariff uncertainty.
If things continue like this, the White House needs to come up with a more forceful response than "Wait until next year!"
Catherine