Jason Furman

Opinion | Trump’s Damaging Decision to Fire the Labor Statistics Commissioner

My @nytopinion.nytimes.com blog on Trump's egregious and senseless order to fire the BLS Commissioner. www.nytimes.com/live/2025/08...

And here is the pace of job growth in those sectors in 2024 and 2025 (the difference between these is in the first post).

The pace of job growth in 2025 has been notably better (or less bad) than 2024 in finance, manufacturing and information.

It has been notably worse (or less good) in education & health, leisure and hospitality and especially construction and government.

(The internal logic of the conspiracy allegations is also bizarre.

He claims Biden HELPED himself by publishing initial high numbers & then announcing a downward revision.

Now BLS is HURTING Trump by publishing initial high numbers & then announcing a downward revision?)

This is awful. Reliable economic data is a key strength of the US economy.

When Argentina and Greece faked economic data it contributed to major crises.

I don't think Trump will be able to fake the data given the procedures. But there is now a risk plus an awful appearance.

"The best thing for the Fed over the next few months is to be behind the curve, because the alternative is to risk being ahead of the wrong curve."

--Me on May 6, 2025

Immigration the biggest factor in the jobs slowdown (but tariffs etc. matter too).

One piece of evidence: unemp rate has been steadily marching up by ~0.025pp per month for the last 2-1/2 years while job growth has slowed.

So actual - breakeven job growth roughly constant.

At least no one is using the word polycrisis any more.

Bottom line: No question this was a weak jobs report. It should raise our level of concern. But I would not raise it to panic level, the broader indicators still suggest this is only a gradually slowing labor market that in some respects is still on the tight side.

And average hourly earnings still make it seem like a hot labor market with essentially no slowing of wage growth. A wide range of wage measures all are consistent with underlying inflation around 2.75%.

Average weekly hours, however, have been roughly stable--and even rose a little in July.

Steady state job growth, the amount needed for a stable unemployment rate, is probably around 75K right now. But we were a bit below that. Overall the unemployment rate very slowly creeping up and the unrounded 4.2479 is the highest since October 2021.

But the bigger issues is the slowdown in private job creation.

A small portion of the weaker jobs numbers in recent months are Federal cuts.

The jobs slowdown is here with 73K jobs in July & large downward revisions to May & June bringing the average to 35K/month.

Not quite as bad as you might think because steady-state job growth is much lower in a low net immigration world but unemployment still gradually rising.

I agree with a lot of this. And think a little (but hopefully only a little) applies to me as well.

2. Much of macro is small on a percentage basis. But small things really matter a lot.

0.5% off one year's growth rate and $1,000 per household per year forever are the same. But the former sounds small and the later makes it clear it is a large unforced error.

But there are two broader lessons here:

1. U.S. economy is mostly domestic services. Trade matters but it doesn't matter as much as some of the hype might make you think. (And I confess, I do suffer from TDS, tariff derangement syndrome.)

My latest @nytopinion.nytimes.com attempts to answer, "The Tariffs Kicked In. The Sky Didn’t Fall. Were the Economists Wrong?"

In brief: the economy actually has slowed & inflation has picked up, as you would expect. Plus Trump called off some tariffs and lags.

www.nytimes.com/2025/07/31/o...

So overall whether you look at the last six months of data as a whole or just the last of month of data you get more than a hint of stagflation. Which is a quandary for the Fed. And is almost certainly due in part to the tariffs.

Meanwhile consumer spending was weak in June and overall is down in the first six months of 2025, the last times this happened was COVID and financial crisis.

BTW, the more reliable market-based measure of inflation has been even higher lately. Although it was lower before that.

Here is housing.

Services excluding housing is the one slice that is muted. But that is what we were counting on to get inflation back to 2%. The problem is goods inflation of this magnitude was not expected (prior to tariffs).

Here are the full set of numbers.

A big pop in core PCE inflation in June. Annual rates:

1 month: 3.1%
3 months: 2.6%
6 months: 3.2%
12 months: 2.8%

No matter what horizon you're looking at this is too high. (Although there is a case that it is transitory due to tariffs.)

In sum, in the first half of this year GDP was relatively weak (1.2%) and core inflation was relatively high (3.0%). This is not a catastrophic recession or inflation but it is a cause for serious concern--and a real quandary for the Fed.

Finally, I don't think people appreciate just how much re-inflation we've had. Last year core PCE inflation was 2.8%. It was forecasted to fall to 2.2% in the first half of this year, instead it was 3.0% (annual rate).

Real business fixed investment more positive (6.1% annual rate in H1) but too soon to tell how real that is vs. a big pulling forward of imported equipment investment to get ahead of tariffs.

Looking through the noise, a lot of the weakness in the economy in the first half of this year was in consumer expenditures (up only at a 0.9% annual rate) and structures (nonresidential down at a 6.4% annual rate and residential down at a 3.0% annual rate).