Economic Outlook Following Disappointing Jobs Report

By Susan Heavey
WASHINGTON (Reuters) – The White House expects the Federal Reserve to consider larger rate cuts following Friday’s disappointing jobs report. President Donald Trump indicated it may be a year before the U.S. sees improved economic data.

White House National Economic Council Director Kevin Hassett stated, “The main market expectation is 25 basis points. But I would guess that there would be an expectation, a discussion of a higher cut, but I wouldn’t expect it to happen,” following the Labor Department’s report showing weaker job growth in August and an increase in the unemployment rate to 4.3%.

Trump has long advocated for lower rates from the U.S. central bank to support his economic agenda, despite concerns regarding the Fed’s independence. He criticized Fed Chairman Jerome Powell’s timing on rate cuts in response to the jobs data.

The unfavorable jobs report is likely to prompt Fed policymakers to consider a 25-basis-point rate cut during their meeting on September 16-17. Hassett expected revisions to the job numbers upward, noting particular strength in the housing sector.

Tariffs and Economic Volatility

After taking office in January, Trump quickly pushed for economic policies, including widespread tariffs. This has heightened market volatility and uncertainty. Despite consumer finances appearing solid, major U.S. banks have forecast potential economic weakness ahead.

There are concerns about the reliability of U.S. economic data, especially after Trump replaced the head of the Labor Department’s Bureau of Labor Statistics over previous weak employment figures. Hassett suggested a review of BLS surveys to address these issues, promoting the need for fresh oversight at the agency.

Commerce Secretary Howard Lutnick expected job data to improve with personnel changes at BLS, implying that current statistics may reflect political bias.

Trump asserted that the country would see “real numbers” in about a year, claiming a significant job growth boost was on the horizon. Hassett, while acknowledging recent job report disappointments, reiterated confidence in the overall economy, citing capital spending and solid economic conditions as strengths.