United States: President Donald Trump received discouraging economic news on Friday and promptly lashed out — by firing the messenger.
Trump dismissed Erika McEntarfer, the head of the Bureau of Labor Statistics (BLS), just hours after the agency released a report showing a significant slowdown in U.S. job growth, which sent markets tumbling. The abrupt move marks an escalation in his efforts to undermine independent economic institutions, a campaign that had previously focused mostly on the Federal Reserve.
That same day, Trump was also handed an unexpected opportunity to reshape the Fed, as Governor Adriana Kugler announced her upcoming resignation. Her departure gives Trump a chance to appoint a new Fed official — potentially one more aligned with his push for lower interest rates — as investors were still digesting the weak job data and the shake-up at the BLS.
The jobs report was a blow to Trump’s narrative of a strong economy, fueled by his tariffs and tax cuts. It showed the weakest employment growth since the pandemic. But his reaction — firing McEntarfer and accusing her, without evidence, of political bias — sparked criticism, even from economists affiliated with his own party. The move also raised alarm among investors, who worry about the growing politicization of institutions that are meant to remain independent.
Concerns are mounting about Trump’s continued pressure on the Fed and its chair, Jerome Powell, to slash interest rates — pressure many believe undermines the credibility of the central bank. Now, his attack on U.S. data agencies threatens to erode trust in the integrity of the nation’s official statistics, which are closely watched by markets worldwide.
“Trump’s move against the BLS is likely to fuel broader market concerns about political interference in economic policymaking,” said Yung-Yu Ma, chief investment strategist at PNC Asset Management Group. “The bigger question now is: what’s next? Could Powell be next in the firing line?”
This turmoil comes as the U.S. faces what Ma describes as a “nasty cycle” of slowing growth and rising inflation.
Trump used the disappointing jobs data as further ammunition against Powell, who had cited a strong labor market just days earlier to justify holding interest rates steady. Ironically, the same data gave markets reason to expect a rate cut in September.
Yields on two-year Treasury bonds — which are highly sensitive to Fed policy — plunged by nearly 30 basis points, the largest drop since 2023. Kugler’s resignation only added fuel to speculation that Trump’s next appointee could push for easier monetary policy.
As markets stumbled and the S&P 500 slumped, Trump continued to blame McEntarfer for the jobs report, while economists from across the political spectrum defended her.
The BLS report not only showed weaker-than-expected July numbers but also included downward revisions for the previous months — a pattern that has previously drawn Trump’s ire, especially around election periods.
“Numbers this important must be accurate and fair — not manipulated for politics,” Trump posted on social media Friday. He later added that the figures were “rigged to make Republicans, and me, look bad.”
However, U.S. statistical agencies are widely respected globally for their objectivity. Economists quickly rejected Trump’s claims of bias.
“There’s absolutely no evidence McEntarfer tried to manipulate the numbers,” said Michael Strain of the conservative American Enterprise Institute.
William Beach, a Trump-era appointee who previously led the BLS, called the firing “completely unwarranted” and warned it sets a “dangerous precedent.”
McEntarfer will be temporarily replaced by BLS deputy chief William Wiatrowski, the administration confirmed.
As for Kugler, whose term was scheduled to end in January, it’s unclear who will succeed her — but the decision could have major implications. Treasury Secretary Scott Bessent has indicated that her replacement could potentially be elevated to Fed chair.
Before Friday’s whirlwind events — the job report, McEntarfer’s firing, and Kugler’s resignation — Trump had already been publicly pressuring Fed board members to overrule Powell and push for rate cuts. “Assume control, and do what everyone knows must be done!” he posted online.
Later that day, as he left the White House, Trump told reporters he was “very happy” about the chance to fill a Fed vacancy — and posted that Powell should follow Kugler’s lead and resign.
