Trump makes Powell the fall guy of his trade war
Driving the news: The private sector added just 37,000 jobs in May, payroll processor ADP said — down from the 60,000 jobs added in April and well below the 110,000 jobs economists anticipated.
It was the second straight month of soft hiring in the ADP data — but this time, Trump noticed.
Six minutes after the data release, Trump posted on Truth Social: "ADP NUMBER OUT!!! "Too Late" Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!"
Separately, (and after Trump's post), the Institute for Supply Management said that its index of activity in service industries fell to 49.9 in May, from 51.6 in April. That puts it narrowly in contraction territory — 50 is the line.
Its new orders index fell particularly sharply, to 46.4 from 52.3, a sign that even in a month of trade war de-escalation, underlying business activity was softening.
Between the lines: The two reports are evidence — which has been scant so far — that economic activity may be starting to buckle under the pressure of erratic trade policy.
The president's social media comments make clear that he intends to shift blame for any weakening onto the Fed, which has left interest rates unchanged so far this year, as it awaits clear evidence of whether higher inflation or labor market softening is the more urgent concern.
What they're saying: Comments released with the ISM survey show the origins of companies' economic angst.
"Tariff variability has thrown residential construction supply chains into chaos," said an unnamed construction firm.
"Tariffs remain a challenge, as it is not clear what duties apply," said a survey respondent in the information sector. "The best plan is still to delay decisions to purchase where possible."
"Tariffs have increased the cost of doing business," said a firm in transportation and warehousing. "It's too early to tell what the lasting impact of this will be. ... Overall, we are seeing a leveling off in business activity; time will tell if this is temporary or long lasting."
Yes, but: Speaking to reporters Wednesday, ADP chief economist Nela Richardson was less pessimistic about the state of the labor market — despite the soft number.
The weak data doesn't point to a collapsing labor market, she said, "but there is hiring hesitancy."
Private employers added the fewest jobs since March 2023, when ADP's data showed the economy shed 52,000 jobs. "We all know the labor market stayed strong despite that 2023 loss," Richardson said.
https://www.axios.com/2025/06/04/trump-makes-powell-the-fall-guy-of-his-trade-war
it's always someone else's fault in Trump's world... straight from the Roy Cohn playbook.
By
Crnr2Crnr ·
