Last week, exactly one month after the Bureau of Labor Statistics released a jobs report bad enough to convince President Trump to fire the BLS commissioner, the bureau released a new jobs report that was even worse.
According to this latest report, the entire US economy added only 22,000 jobs in August. On top of that, the June numbers were revised down for a second time. They now show that the economy lost 13,000 jobs that month. Together, over the last three months, the economy has only managed to add a meager average of 29,000 jobs a month—many of which are part-time jobs—which suggests a rapidly weakening job market.
Then, yesterday, the BLS released another revision, in which they’re now saying the economy added 911,000 fewer jobs than had previously been reported from March of 2024 to March of 2025.
And all this has come two weeks after a JOLTS report said there are now more unemployed people in the US than job openings, because the number of job openings has continued to fall.
As I have argued here before, it is always good to be skeptical of government data about the economy. However, by all indications, if government bureaucrats have been misleading the public with data under both Biden and Trump so far, it has been to make the economy appear stronger than it actually is, not weaker.
Even Trump has been uncharacteristically silent about this new data release and has, so far, quieted his claim that BLS is releasing fake jobs data—even though he hasn’t gotten his guy in as commissioner yet. That may be because Trump recognizes that bad jobs data makes it a lot more likely the Federal Reserve will elect to cut interest rates in its next meeting at the end of next week.
But Trump should not expect the rate cuts he’s been pushing for to solve his mounting economic problems. Because, although he is far from the only one to blame for the tremendous amount of economic pain that has been locked in by post-pandemic monetary and fiscal policy, his own economic agenda and policy priorities in this second term are only set to make things worse for himself, his team, and the country as a whole.
Trump ran and won on a good economic message. First, he acknowledged the economic pain much of the country was feeling as prices soared under Biden, when the government and its allies in the media were actively denying that pain. And then he (again) spoke to the frustrations of a population that’s struggling to get by in a system that is so clearly rigged to benefit those at the top.
And, to his credit, he did bring Elon Musk on and give both him and his Department of Government Efficiency a lot of power and access—all in the name of cutting government programs.
However, the effort was hampered by the familiar Republican aversion to even acknowledging the specific ways all this government spending is hurting the American people. They conceded the progressive talking point that government spending simply helps to improve whatever issue we’re told it’s being used to combat in direct proportion to how much money is spent.
There was almost no talk about how virtually all of the absurd sum of money the federal government spends each year is used to protect and expand literal rackets that move as much money as possible into the pockets of government officials and their well-connected friends in industry while worsening the problems we’re told these programs are meant to address.
Instead, the Trump administration and DOGE just accepted the progressive idea that more government spending simply makes life better for Americans, which paralyzed their cutting effort when they had to get specific about what to cut. So, they completely ruined their opportunity to meaningfully slash our corrupt federal bureaucracy.
Then, as DOGE was falling apart, Trump pivoted and threw his administration’s entire weight behind his worst economic program: raising import taxes on foreign businesses that choose to do business with Americans.
The president and his supporters celebrated the historic implementation of tariffs on goods and resources from hundreds of countries back in April as “Liberation Day.” We were told, explicitly, that these new trade restrictions would usher in a new golden age of America.
Now, economic theory alone is not particularly helpful for making predictions. Because the policy or concept in question is only one of an inconceivably large swath of factors that determine how the economy grows or contracts. All economic theory can do is tell us how a world with a specific policy compares to an identical world without that one policy.
And what economic theory makes very clear is that tariffs create unavoidable domestic shortages that necessarily make things in the economy more expensive for the population than they would have been without the tariff. Trump’s embrace of tariffs meant that the best his administration could hope for is that those new taxes only hold back an economy that is booming for other reasons—like if they had successfully slashed the federal bureaucracy.
But they left that federal bureaucracy in place. The American economy has not been unshackled enough to dilute the painful effects of tariffs.
That can be seen in the jobs data. Building the American manufacturing sector back up to mid-century levels is one of the stated aims of protectionists who advocate for the kinds of tariffs Trump implemented. Yet, manufacturing jobs have been declining these last three months, along with construction and mining jobs.
In fact, according to ISM data, the manufacturing sector has been contracting for the last six months. According to manufacturers themselves, that’s not despite the tariffs but because of them.
Protectionist tariff advocates often want us to think that their new taxes will, at most, decrease imports of cheap foreign consumer goods that could instead be built here by Americans. But the bulk of products impacted by tariffs are actually the capital goods and natural resources bought by American businesses already producing things here. So it should be no surprise that American manufacturers are hurting from all the shortages resulting from new taxes on the inputs they rely on. And, even if the economy eventually swings back up, these ill effects will remain as long as the tariffs are kept in place.
Trump and his team have entirely bought into the New York Times version of economic history, which characterizes the status quo going back at least to the eighties as a system of totally unfettered capitalism and unbridled free trade—where the defining belief of the US federal government was not that they should rig rules and regulations for themselves and their wealthy friends, but that they should abdicate all their power and not meddle with trade at all. And, therefore, that the economic problems we face today are simply the result of the American people having too much freedom.
Instead of admitting that this narrative is the exact opposite of reality, the Trump administration is leaving its new tax regime in place and staking everything on the Fed flooding the financial sector with more easy money.
A Fed rate cut goes directly against the administration’s stated goal of “putting Main Street ahead of Wall Street.” And because price inflation hasn’t slowed down much in the years since the Fed printed trillions of new dollars during the pandemic and injected them directly into the economy, there’s a risk that printing more money will speed inflation back up—on top of all the higher prices caused by tariffs.
Unless he pivots and starts listening to sound economic advice for a change, the best Trump can hope for is that the economic costs of Washington’s pandemic policies will be kicked down the road a bit longer while the Fed helps the financial sector and well-connected rich get even richer at the direct expense of everyone else.
In other words, on our current path, the best-case scenario is that the terrible, inflationist, corrupt status quo that Trump ran against will continue on as it has been.
