Jobs data triggered Trump, but Fed officials saw it not as rigged, but as reason to cut

Tue, Aug 12, 2025, 6:14 AM 5 min read

By Howard Schneider

WASHINGTON (Reuters) -The very data that caused President Donald Trump to fire the head of the Bureau of Labor Statistics because he did not like the July employment report, calling it "rigged," is being taken as serious evidence by Federal Reserve officials of a slowing economy and as a justification for the interest rate cuts Trump wants.

"The latest employment report confirmed some of the signs of fragility and reduced dynamism in the labor market," Fed Governor Michelle Bowman, a Trump appointee, said in a Saturday speech that elaborated on how the latest jobs numbers and revisions to prior months' data validated her concerns about a weakening economy. "I see the risk that a delay in taking action could result in a deterioration in labor market conditions and a further slowing in economic growth."

While signs of a weakening labor market could get Trump his wish for the Fed to cut rates, which he believes would result in lower interest costs on the country's increasing debt load, it also flies in the face of his assertions that his tax cuts and immigration and trade agendas are driving growth higher.

Recent comments from policymakers who had recently been focused on rising inflation, for example, show that news of ebbing job growth in May, June and July has begun shifting their sense of risks facing the economy.

While only Bowman and another Trump appointee, Governor Christopher Waller, have so far advocated for immediate rate cuts, both dissenting against last month's decision to hold rates steady, investors now put a more than 85% probability on a cut at the Fed's September 16-17 session.

That, of course, depends on the data arriving in the meantime, including July's consumer inflation figures on Tuesday and employment data for this month released in early September, both coming from a BLS that Trump has suggested is untrustworthy.

For all its recent shortcomings in data production, BLS has dense internal checks to be sure the figures are not manipulated, while the Fed is attentive to shades of gray and almost always cautious when approaching policy shifts.

Trump late on Monday named E.J. Antoni, chief economist at the conservative Heritage Foundation as the new commissioner, a decision that will be watched with the same intensity in economic and investment circles as his coming choice for a successor to Fed Chair Jerome Powell, given the implications for the integrity of data that can influence interest rates, stock prices and political fortunes.