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Donald Trump has intensified his attacks on Jay Powell, calling on the US Federal Reserve chair to slash interest rates by a “full point” after official figures pointed to a weakening labour market.
The US economy added 139,000 jobs in May, compared with a downwardly revised 147,000 posts added in April, according to data released by the Bureau of Labor Statistics on Friday.
The BLS also revised down the March figures, bringing the average jobs gains for the year until May to 124,000, compared with 168,000 in 2024.
“‘Too Late’ at the Fed is a disaster!” Trump wrote on his Truth Social platform following the release, using a nickname he has given to the Fed chair. “Despite him, our Country is doing great. Go for a full point, Rocket Fuel!”
“He is costing our Country a fortune,” Trump added, referring to borrowing costs on US debt.
Asked by reporters later who he expected to be the next Fed chair, Trump replied: “It’s coming out very soon.”
He had a “pretty good idea” who that person would be, he added, without elaborating.
Congress’s fiscal watchdog warned this week that the president’s landmark “big, beautiful bill” would add $2.4tn to the US debt by 2034. The Congressional Budget Office report came when many senior executives on Wall Street were already warning that such high debt levels could hit the bond market, sending yields rising.
Trump’s fresh attacks on Powell come after the European Central Bank on Thursday cut rates by a further quarter point. The ECB has halved borrowing costs over the past year.
The Fed has paused a rate-cutting cycle that began in 2024 as policymakers weigh the effects of Trump’s tariffs, which many economists expect to increase inflation while cooling growth. Trump and Powell met last week, with the US president telling the Fed chief he was making a “mistake” by not cutting rates.
Powell has held firm in the face of Trump’s pressure, however, telling the president that its policy decisions would “depend entirely on incoming economic information”.
Friday’s data from the BLS beat market expectations, coming in ahead of the 126,000 predicted by economists polled by Bloomberg. The unemployment rate held steady at 4.2 per cent.
Despite the better than anticipated May figure — which Trump hailed as “GREAT JOB NUMBERS” — economists said that the revisions to prior data suggested the market was weakening.
“The headline beat isn’t nearly as impressive as it appears at first glance,” said Thomas Simons at US investment bank Jefferies, noting the revisions. “Job growth has clearly shifted into a lower trajectory.”
Marc Giannoni, chief US economist at Barclays, added: “We expect more slowing over the course of the year.”
The OECD warned this week that the global economy was heading into its weakest period of growth since the Covid-19 pandemic as Trump’s trade war weighs on the world’s top economies.
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Average hourly earnings rose by 0.4 per cent to $36.24, the BLS said, bringing to 3.9 per cent the increase over the past year.
Treasury yields rose after the data was released as traders marginally scaled back expectations for interest rate cuts this year. Futures markets are now pricing in a small chance that the Fed could cut rates one more time this year, although two reductions remains their central expectation.
“For the Fed this means they are on hold for a while,” said Giannoni. “The latest employment report does not give them any reason to be alarmed.”
The S&P 500 rose 1.1 per cent in afternoon trading in New York.
Friday’s jobs numbers were dragged down by a continued slide in the number of government jobs amid a cost-cutting effort by the so-called Department of Government Efficiency, led until last week by Elon Musk.
Musk and Trump’s relationship erupted into acrimony this week after the billionaire tech executive left his role and blasted the president’s signature tax bill as “a disgusting abomination” that would swell US debt.
But Doge’s efficiency drive has already led to the loss of 59,000 federal government workers since January, according to the BLS. That has been offset slightly by a rise in hiring in the leisure and hospitality sectors.
