Trump defends BLS Chief shooting in a tense CNBC exchange
Trump fired BLS commissioner Erica Mantelfer, causing a tense exchange with CNBC’s Joe Kernen on “Squawk Box” over the integrity of employment data.
- The downward revision to US employment growth numbers is attributed to slowing the economy and job markets affected by trade and immigration policies.
- Economists believe the revision reflects true economic slowdown, not data manipulation, citing factors such as lower survey response rates and the impact of tariffs.
The massive downward revision of U.S. employment growth, which led President Donald Trump to fire the heads of agencies who can explain numbers by the rapidly slowing economy and job markets amid Trump’s trade and immigration policies, is explained by the rapidly declining economy and job markets, not by data manipulation.
On August 1, Trump fired Erica Mantelfer, the Bureau of Labor Statistics commissioner, but revised its May and June payroll growth at 258,000 at 258,000 after the agency reported the benefits of the unfortunate 73,000 jobs in July.
Goldman Sachs said it marked the largest two-month revision outside the recession. I averaged 35,000 from May to July and earned monthly jobs.
“These important figures must be fair and accurate. They cannot be manipulated for political purposes,” Trump said in the Truth Society. He added, “I look bad because the number of jobs today was geared up to make Republicans.”
However, the forecaster said the revision would actually clear the gap between the surprisingly resilient job acquisition that was weak this year and other economic indicators such as GDP.
“I think this revision really resolved the discrepancies between GDP data and pay,” said Samuel Tombs, chief economist at Pantheon Macroeconomics. “I can’t see any reason to doubt the operation here.”
“To sum up, economic data confirms our view that the US economy is growing at a sub-potential pace,” Goldman Sachs wrote in a note to his client.
What is the current state of the economy?
Trump’s tariffs defeated activity in the first quarter by promoting imports as retailers and manufacturers restocked foreign goods to avoid imminent taxation (deducted from growth). That led to a second quarter reversal that softened GDP. After the effects of tariffs were cancelled on each other, the economy grew at a modest annual rate of 1.2% in the first half of the year.
There are two ways to grow the economy by adding workers, increasing productivity, or increasing productivity per worker. The slump in the economy coincides with substantial employment improvements in net profits from May to July, as the average rise in GDP of 1.2% can be fully explained by strong productivity gains, Tombs said.
There are other signs that the economy and job markets are losing steam. A June survey by CEO networking group Vistage found that just 42% of small business CEOs will add to their lowest staff next year, up to 2003.
How does the job work?
Each month, BLS reads first the previous month’s job profits and corrects the two-month figures based on follow-up surveys. The downgrade of 133,000 jobs in June marked the first revision of the month, with a 125,000 drop in May being the second final revision.
To come up with monthly employment growth estimates, agents look into 631,000 employment sites run by 121,000 companies and government agencies across the country. The department will modify the data twice as many employers either fail to respond to the initial survey or change the factors the authorities use to adjust the numbers seasonally, Goldman said. For example, because summers are traditionally weak in employment, seasonal adjustments will boost employment tallies to explain that flooding.
Even before the surprising revisions to May and June on Friday, employment growth from January to April was revised monthly at an average of 52,000 based on the third to third estimate from the first estimate. Last year, we saw an average downward revision, but only 20,000. Since 1979, the median total estimated variance over the two months has been an upward revision of 10,000.
Here’s why economists believe that the May and June salary revisions are extremely large:
Lower response rates, lower economy
The declining proportion of employers is in response to BLS employment surveys. According to grave and BLS figures, 58% responded in July, similar to July 2024, but as in July 2022, a decrease from 68% for the same period in 2022 and 2023, an average of 74% in the 2010s.
Small businesses in particular have struggled to deal with Trump’s tariffs, narrowing their profits as they have to be handed over to consumers and absorbed by businesses through higher prices, the grave said.
Among these issues, Jonathan Miller, senior US economist at Barclays, said that “responding to BLS is a high priority” for mid-sized companies.
And despite the investigation being anonymous, some businesses may be hesitant to admit that they blocked employment, the grave said.
Finally, when we reported the number of staffing, the third payroll estimate responded more than 90%. They may have declined from the previous month. According to Millar and the grave, businesses are increasingly restricting employment due to the uncertainty caused by customs duties.
It likely caused a sudden downward revision of job acquisition throughout 2025, but it could have darkened the work picture more dramatically in May and June when job pullbacks reached an “inflection point,” Miller said.
“I don’t think we’re facing a situation where there’s such a deep supply shock,” Miller said, referring to the restrictions on foreign parts and products caused by tariffs.
How the government interprets slowing employment
When employment growth slows, Goldman Sachs said that in the initial estimate, BLS is incorrectly attributed to changing seasonal trends. But as the subsequent measurements are also softer, the agency’s model knows it’s not a result of seasonal adjustment habits, but a true pullback of employment and corrects the total employment, the research firm said.
Immigrant suppression
Former President Joe Biden began restricting intersections at tropical borders in June 2024, with Trump tightening enforcement and launching a massive deportation in 2025, Miller said. He said the crackdown likely began to appear more pronounced in the number of jobs in May and June, as it takes six to nine months for immigrants to settle for employment.
There are few employment, few layoffs
For months, employers have not hired many workers, but have not hired many after tackling the disastrous workforce shortage during the pandemic. That extraordinary dynamic is to abandon seasonal adjusters that expect employment and layoffs to increase at certain times of the year, which could lead to staff members being more sharply corrected employment benefits, Goldman suggested.
State and local government jobs
About 20% of the major downward revisions in May and June came from the challenge of making seasonal adjustments to state and local educational employment figures at the end of the school year when many teachers and other employees dropped out of their pay, Goldman said. Initially, BLS overestimated the total number of jobs in the seasonally adjusted sector, adjusting it to 51,000 times over the course of two months, Goldman said.
Contributor: Joey Garrison, USA Today; Reuters
