Trump keeps heralding an economic boom, but even a solid jobs report is causing problems for him
WASHINGTON (AP) — President Donald Trump has spent 20 months promising that America was on the cusp of an economic boom. But Friday’s surprisingly positive jobs report ultimately provoked frustration from Trump. The August job numbers…
President Donald Trump has spent the past 20 months proclaiming that the United States is about to experience an economic boom. However, the positive jobs report released on Friday proved to be a source of irritation for Trump. While the August employment numbers were welcomed after a period of slow hiring and rising inflation concerns, Trump instead focused on criticizing inflation and interest rates during a speech from the Oval Office.
Trump blamed the financial markets, the Federal Reserve, and U.S. trade partners for the surprise gain of 162,000 jobs in August and argued that such growth does not cause inflation, but rather "stupidity" does. He also expressed disbelief that the stock market fell on concerns of inflation. Trump's second term has been marred by a decline in hiring and rising prices, hindering his promise of rapid economic growth.
He claimed that with a new Trump economic boom, the country would experience significant growth, but so far, the economy has only grown at around 2% annually, slower than the Biden administration's pace. Trump attributes his inability to deliver stronger growth to higher interest rates stemming from the U.S. government debt. The national debt has surpassed $40 trillion, and the 10-year U.S. Treasury note's interest rate rose to 4.79% on Friday.
Trump's credibility as an economic leader has been undermined by the lack of promised growth, and his policies may have inadvertently contributed to the inflation and high interest rates he now blames on others. Joe Brusuelas, chief economist at RSM US, noted that the administration's credibility on growth, inflation, rates, debt, and deficit dynamics has suffered due to overestimations that do not align with economic reality.
Trump suggested that if the Federal Reserve lowered interest rates, more money would flow into the U.S. economy, potentially exacerbating inflation and increasing his political and economic problems. However, Trump dismissed this fundamental principle of monetary policy, stating that GDP would grow by "12, 13, 14, 15%" if rates were lower, seemingly disregarding the inflation risks.
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