Disappointing employment numbers, tariffs uncertainty dog Trump as Democrats look for silver lining

Weak economic indicators are making President Trump’s supporters nervous and Democrats increasingly hopeful about a political comeback.

The latest job numbers, released Friday, were disappointing. Unemployment ticked up, and employers added just 73,000 jobs in July, and the employment gains from May and June were revised down by a combined 258,000 jobs.

In one bright spot, however, gross domestic product grew by a surprisingly strong 3% in the last quarter, surpassing the expectations of analysts who forecasted a 2.4% increase.

White House economic adviser Kevin Hassett, appearing on two Sunday political talk shows, said the monthly jobs numbers are “unreliable” and “not keeping up with the economy,” even as he touted the GDP growth.

“The eyes on the horizon are seeing really smooth sailing ahead,” the National Economic Council director said on “Fox News Sunday.”

Former Treasury Secretary Larry Summers, who held Mr. Hassett’s position during the Obama administration, said the downward revisions on the early summer job gains “means there’s a real possibility that we’re in a ’stall speed’ kind of economy.”

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Speaking on ABC’s “This Week,” Mr. Summers said he would not yet predict that a recession is coming, but there’s greater risk of one, which he said is “made more serious” by Mr. Trump’s new tariff policies.

These mixed messages arrived as Mr. Trump scored a slew of trade deals and fine-tuned the new tariffs, though plenty of uncertainty remained.

On Thursday, Mr. Trump again moved back the start date of his punishing import taxes from Aug. 1 to Aug. 7.

Mr. Trump also imposed new tariffs ranging between 15% and 41% on 66 nations and the European Union, raising tariffs to their highest levels in more than a century. He announced a new 35% tariff rate on imports from Canada, a 50% tariff rate on imports from Brazil and a 39% rate on imports from Switzerland.

A 90-day pause in tariffs on many Chinese goods will expire Aug. 12, but the president may extend that deadline as trade negotiations with China, the biggest source of U.S. imported goods, “have been very positive,” U.S. Trade Representative Jamieson Greer said Sunday on CBS’s “Face the Nation.”

Mr. Trump’s trade announcements have been somewhat overshadowed by his decision to fire the head of the Bureau of Labor Statistics after the dour jobs report.

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SEE ALSO: Trump fires Biden labor official after negative job report

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The president accused Erika McEntarfer, a Biden appointee, of falsifying the July data to make him and Republicans look bad, as well as fudging numbers ahead of the 2024 election to help Vice President Kamala Harris.

Mr. Summers slammed the firing as “the stuff of democracies giving way to authoritarianism.”

Sen. Alex Padilla, California Democrat, accused Mr. Trump of “trying to weaponize the Bureau of Labor Statistics” because of his “insecurity about the economy.”

“I think an investigation is certainly in order,” he said on NBC’s “Meet the Press.”

Mr. Hassett said Ms. McEntarfer is a “terrific person” but defended Mr. Trump’s decision to remove her as a need for “a fresh set of eyes at the BLS.”

That may involve changing the formulas used to calculate the jobs numbers, about which he said he has been warning since 2015, as unable to keep up with the fast-moving modern economy.

“When the data are unreliable, when they keep being revised all over the place, then they’re going to be people that wonder if there’s a partisan pattern in the data,” Mr. Hassett said.

In another twist, Adriana Kugler announced she’s stepping down as Federal Reserve governor, giving President Trump a shot at filling the spot as he presses for the central bank to lower interest rates.

The Fed voted on Wednesday to keep short-term interest rates between 4.25% and 4.5%, but the decision included the first dissent from two board members in more than 30 years.

Both dissenters are Trump appointees. Ms. Kugler, a Biden appointee, voted with Fed Chair Jerome Powell and other board members to keep rates as they are before announcing she would resign.

“She knew he was doing the wrong thing on Interest Rates. He should resign, also!” Mr. Trump wrote on Truth Social.

The president has “set up an active search” to decide who to appoint as the next Federal Reserve chair when Jerome Powell’s term expires, according to Mr. Hassett.

Treasury Secretary Scott Bessent is working with the president on the search “and they’re going to go through a list of names,” he said on NBC’s “Meet the Press.” “I’m sure the president will pick the best available person.”

That pick may also be who the president decides to appoint to Ms. Kugler’s board seat.

Mr. Powell’s term as Fed chair ends in May, but his board term does not end until Jan. 31, 2028.

The president told reporters he’s “very happy” about the open board seat and has about three candidates in mind for the job.

“I’ve got a lot of good candidates,” he said.

Mr. Trump wants the Federal Reserve to help unlock economic growth with lower interest rates, reducing the cost for Americans to borrow money for auto loans, mortgages, or credit card spending.

Economists expect the Fed to lower rates at its September meeting, given the declining labor market.

Voters are souring on Mr. Trump’s handling of the economy, according to recent polls. It has made Democrats hopeful that the voters’ frustration will turn into big wins for them in next year’s midterm elections.

Just 37% of voters approve of Mr. Trump’s stewardship of the economy, according to a Gallup poll released last week. That’s down 42% from February 2025 and in line with other polls, including from the Wall Street Journal and CBS News.

Most troubling for the White House is that the biggest drop in support comes from independents, with only about 29% saying the president is doing a good job on the economy.

Democrats have struggled to find their footing since Mr. Trump retook the White House and Republicans won the House and Senate.

The left finally sees a message they can sell to the American people, and has started relentlessly hammering Mr. Trump over the economy.

Senate Minority Leader Charles E. Schumer linked the anemic jobs reports to Mr. Trump’s “chaotic tariffs,” which, apart from the merits of tariffs per se, have been also been marked by shifting deadlines and changing amounts.

“That is what tariff whiplash looks like,” the New York Democrat said on the Senate floor after Friday’s jobs report. “Businesses are waving their arms around in the dark without a clue of what Donald Trump is going to do next, and we now have clear evidence that it’s stunting hiring and growth.”

Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, had a dire warning.

“Trump and Republicans need to change course dramatically before they plunge us into a recession because we certainly can’t sustain this chaos and uncertainty for another 3 1/2 years,” he said.

The GOP can fight back against the Democrats’ narrative, said Republican strategist Jimmy Keady.

He said the GOP needs to make the case that Mr. Trump’s tax cuts will boost the economy, which suffered record-high inflation and soaring gas prices under President Biden.

“The Democrats can spin all they want, but voters remember what it was like when $20 filled a tank of gas and they know President Trump is the one who can deliver that again,” he said.

The White House acknowledged the jobs report was disappointing, but insisted that Mr. Trump’s tariffs, in conjunction with his tax cut and spending package known as the One Big Beautiful Bill, will get the economy humming once they are fully implemented.

White House Council of Economic Advisers Stephan Miran said the law’s enactment helped seal trade deals covering 60% of the global economy because “it contains enormously powerful incentives for investment in America.”

“These are both going to be massive tailwinds for the economy that are going to create an economic boom,” he said.

Ryan Young, a senior economist at the Competitive Enterprise Institute, said the economy is strong, but there are plenty of warning signs.

He said tariffs are not strictly inflationary but do raise prices, and businesses are spending resources on finding workarounds for tariffs rather than making better products at more affordable prices.

“Since the economy was in good shape before the tariffs hit, there is still some room to fall before the economy really craters,” Mr. Young said. “But slower jobs growth, tepid growth and the risk of higher inflation pose a triple threat that may be hard to overcome.”

Overall, the economy is sending some contradictory signals. Consumer spending and business spending increased in the second quarter. Consumer spending hit 1.4% in between April and June, up from 0.5% in the first quarter. However, that is projected to slow as the effects of Mr. Trump’s tariffs filter into retail prices.

Meanwhile, business spending increased by 1.9% in the second quarter. Company purchases of computers, delivery trucks, factory machines and other equipment grew at a daily healthy 4.8% while spending on buildings, oil rigs and other structures dropped 10.3%.

While the GDP was better than expected, the gain in economic output was temporarily pumped up by the sharp decline in imports ahead of Mr. Trump’s tariffs. Companies didn’t order as many goods from other countries as imports plunged 30.3%, reversing the 37.9% rise in imports during the first quarter.

• Mallory Wilson contributed to this report.