US President Donald Trump has directed the firing of Erika McEntarfer, Commissioner of the Labor Department’s Bureau of Labor Statistics, following reports of weaker than anticipated employment growth in July and significant downward revisions to job figures for the previous two months.
Ms. McEntarfer, nominated by former President Joe Biden in 2023, was confirmed by the US Senate the following year.
Labor Department data indicated that US job growth underperformed expectations last month, with revised hiring numbers showing the lowest levels since the Covid-19 pandemic.
It remains unclear whether Ms. McEntarfer, whom Mr. Trump accused of falsifying job numbers, has officially been terminated.
On Truth Social, the president stated: “We need accurate Jobs numbers. I have directed my team to fire this Biden political appointee, IMMEDIATELY.
“She will be replaced by someone far more capable and qualified.”
No evidence has been presented to support Mr. Trump’s allegations of data manipulation by the BLS, the statistical agency responsible for the vital employment report as well as consumer and producer price indices.
The White House has yet to respond to inquiries about Mr. Trump’s post.
Howard Lutnick dissolved two committees this year responsible for producing economic statistics
This directive to dismiss Ms. McEntarfer comes amid concerns raised by the Trump administration’s extensive federal worker layoffs, which have sparked worries over the reliability of US economic data, historically regarded as a benchmark.
Earlier in the year, Commerce Secretary Howard Lutnick disbanded two expert panels collaborating with the government on economic statistics.
Mr. Lutnick has also proposed excluding government spending from GDP calculations, stating, “governments historically have tampered with GDP”.
The BLS has already curtailed data collection for the consumer and producer price indices.
Economists have linked the notably slower job growth to Mr. Trump’s trade and immigration policies.
The Department of Labor reported yesterday that the United States added 73,000 jobs last month, while the unemployment rate increased to 4.2% from 4.1%.
May’s hiring figures were revised downward from 144,000 to 19,000.
June’s numbers were adjusted from 147,000 to 14,000.
These figures are significantly lower compared to job creation levels in recent years. During the pandemic, the economy experienced job losses.
The employment data highlights challenges in the crucial labor market as companies adopt a cautious stance on hiring and investment amidst Mr. Trump’s sweeping and rapidly evolving tariff policies this year.
These numbers also place pressure on the central bank as it considers the optimal timing for interest rate cuts.
With tariffs increasing since the start of the year—affecting imports from numerous countries and specific sectors such as steel, aluminum, and automobiles—many businesses face elevated costs.
Some are now passing these costs on to consumers.
A notable decline in the labor market could prompt the Federal Reserve to cut interest rates earlier
William Beach, who formerly held Ms. McEntarfer’s position at the Bureau of Labor Statistics, cautioned that her firing “sets a dangerous precedent and undermines the bureau’s statistical mission”.
The National Association for Business Economics condemned the dismissal, stating that major revisions in job numbers “are not indicative of manipulation but rather the dwindling resources available to statistical agencies”.
“Removing the leader of a key government agency because you dislike the numbers they produce—based on surveys following long-established procedures—is characteristic of authoritarian regimes, not democracies,” said Larry Summers, former US Treasury Secretary under Democratic President Bill Clinton.
Heather Long, chief economist at Navy Federal Credit Union, described the latest jobs report as a “gamechanger”.
“The labor market is deteriorating rapidly,” Ms. Long observed, noting that “75% of the July job growth was concentrated in the healthcare sector.”
“The economy urgently needs clarity on tariffs,” she added.
“Prolonged tariff uncertainty increases the risk that this weak hiring environment could turn into layoffs,” she warned.
It remains uncertain when the situation will stabilize, as Mr. Trump announced the reimposition of higher tariffs on numerous economies late Thursday, set to take effect within a week.
A sharp downturn in the labor market could lead the Federal Reserve to lower interest rates sooner to support the economy.
Yesterday, the two Federal Reserve officials who dissented in this week’s decision to maintain steady rates cautioned that delaying action could further harm the economy.
Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller both asserted that the inflationary impact of tariffs is temporary.
They stated separately that the Federal Reserve should focus on strengthening the economy to prevent further deterioration in the labor market.
Ms. Bowman warned that postponing an interest rate cut “could lead to a weaker labor market and slower economic growth.”
