The same July jobs report that led President Donald Trump to fire the head of the Bureau of Labor Statistics (BLS) is being viewed by Federal Reserve officials as a sign of a slowing economy—and a reason to consider cutting interest rates.
Fed Governor Michelle Bowman, a Trump appointee, said the report and recent downward revisions confirm “fragility” in the labor market, warning that delaying action could worsen conditions. While only Bowman and fellow Governor Christopher Waller have pushed for immediate cuts, markets now see an 85% chance of a rate reduction at the Fed’s Sept. 16–17 meeting, News.Az reports, citing Reuters.
Trump, who called the jobs numbers “rigged,” replaced former commissioner Erika McEntarfer with Heritage Foundation economist E.J. Antoni. The move has raised questions about the integrity of key economic data, which can influence markets and policy decisions.
Fed officials stressed they rely on multiple data sources—government and private—along with direct business and household feedback to verify economic trends. St. Louis Fed President Alberto Musalem said the central bank cross-checks BLS figures with other indicators, while Minneapolis Fed President Neel Kashkari noted that “you cannot fake economic reality” because hiring trends and inflation are directly experienced by the public.
The BLS report showed slower job growth in May, June, and July, shifting policymakers’ focus from inflation concerns to signs of economic cooling—aligning with Trump’s push for lower interest rates, even as it contradicts his claims of strong economic growth.
