Sluggish hiring data reshapes economic message
President Donald Trump unleashed a sharp attack on Federal Reserve chair Jerome Powell this week, demanding immediate interest rate cuts after a private jobs report showed the weakest hiring in over two years.
The ADP payroll report revealed that US private employers added just 37,000 jobs in May, marking the lowest monthly gain since March 2023. Trump responded swiftly on Truth Social, writing: “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!"
A president’s economic frustration
The president’s fury stems from his ongoing battle with Powell over monetary policy. A report from The Independent highlighted that Trump has consistently pressured the Fed to cut interest rates, arguing that higher borrowing costs are hampering economic growth. His latest nickname for Powell—“Too Late”—reflects his belief that the Fed chair acts too slowly on rate decisions.
Earlier that morning, Trump had celebrated what he called America’s “best May in 30 years” on social media. Within hours, the weak jobs data transformed his triumphant tone into an angry demand for action. The ADP report comes amid broader economic challenges. Economists have linked the tariff policies to uncertainty in financial markets, while the US dollar recently fell to its lowest value in three years. Major retailers like Amazon have blamed the trade barriers for driving up consumer prices.
The Fed’s stance on independence
Powell has maintained the Fed’s independence despite Trump’s pressure campaign. At a recent press conference, the Fed chair acknowledged that economic risks have increased, directly linking them to the administration’s trade policies. “It’s really not clear at all what we should do,” Powell said, noting that tariffs could “generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment.”
The central bank has taken a cautious approach, with Powell stating that officials are “well positioned to wait for greater clarity before considering any adjustments to our policy stance.” This wait-and-see strategy has infuriated Trump, who previously called Powell a “major loser” and blamed him for insufficient rate cuts.
The ADP report’s significance extends beyond the immediate political drama. While the private survey often differs from official government data, it serves as an early indicator of labor market trends, a report from CNBC noted. The Bureau of Labor Statistics will release the official May employment report Friday, which economists and traders watch more closely.
Increasing economic uncertainty
Trump’s reaction highlights his concern about economic performance during his second term. Despite his public optimism, several indicators suggest challenges ahead. Consumer confidence has declined, spending has slowed, and GDP contracted in the first quarter—the first decline since 2022.
As the official jobs report approaches, the Fed chair faces the delicate task of maintaining monetary policy independence while navigating political pressure from a president who has made economic performance central to his political brand.
What are your thoughts on the impact of lowering interest rates during a time of significant global economic uncertainty? Share your insights below.
