Suddenly the Numbers Aren't Adding up for Trump, and Boy is He Mad!
Earlier in the week, we had job numbers that boosted stocks again as the numbers were seen as a sign the economy was rising. I didn’t believe them and said as much. Today, we got abysmal job numbers from a more reliable source that infuriated Trump into lashing out at Jerome Powell because he can clearly see he is going to need a scapegoat.
One of the most significant aspects of today’s numbers is that ADP covers only the private sector in this report, and it fell deeply into recession territory. At 37,000 new jobs, Gregory Mannarino describes it as a “eulogy” for the still-born Trump economy. It is “economic hospice,” he says. He’s right in describing it as a “death-rattle” for small businesses, because most of the losses, by far, were taken in businesses with 50-or-fewer employees.
Even GDP estimates for the present quarter, which had just been reported as going up, which I also didn’t believe, were revised down today from 2.0% growth to 1.3% growth. (Of course, I think both numbers are ridiculous, and so does Mannarino.)
Because there is so much conflict in the numbers between today’s economic reports all of them being bad versus earlier reports that were good (and there are others that I’ll come to), its going to take some real digging in order to get deeper into what all of today’s numbers mean, so I will save all of that for the weekend Deeper Dive for my paying subscribers. I believe it will be quite revealing about the true declining state of affairs.
For, now I’ll just summarize how bad the headline numbers were by saying, Trump didn’t even try to say this diminutive addition of new jobs was fake news. Apparently, he knew that even he couldn’t pull that off; so, he tore into Powell, tacitly admitting he knows the numbers are right:
President Donald Trump on Wednesday angrily urged Federal Reserve Chairman Jerome Powell to cut interest rates, minutes after the payroll firm ADP reported its lowest monthly private sector jobs number in years.
“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE,” Trump wrote on Truth Social.
“He is unbelievable!!!” the president said of the central bank chairman….
Not only were today’s numbers far below the 150,000 jobs it takes just to keep the labor market running parallel with population growth (therefore, recessionary), but last month’s bad number that barely reached half of that break-even level, got revised down today to 60,000 jobs. So, even last month’s number turns out to be worse than thought.
37,000 new jobs, which was the lowest number in more than two years, was also far below the estimates of economists, which averaged 110,000; but that’s hardly surprising. Economists are often last to figure it out when things are falling apart. They lack the courage to make bold statements like you’ll find here, lest their colleagues ridicule them.
Powell, of course, does not want to lower interest rates to save Trump’s economy from the Trump Tariffs just yet because he rightly fears the tariffs will be inflationary. So, the one who is “unbelievable” is Trump, who is insisting Powell increase inflation even more with rate cuts when tariffs are already going to send inflation soaring just to save the already moribund Biden economy from a more violent death under the weight of all the Trumponomic tariffs. Having come so close to winning the inflation fight (but still not winning it), Powell is reluctant to just throw in the towel.
I assure you, just as I did with inflation during the Biden years, tariffs will be the big economic news over the months to come for all the damage they will heap onto the collapse. It’s like the economy couldn’t collapse fast enough or hard enough, so Trump is kicking its butt all the way down the steps of the Fed’s Eccles building.
The job news took the Dow down today, breaking the recent rally that surged when there was good job news. All stories pointed to the tariffs as the cause more than the DOGE cuts, which aimed solely at government jobs that weren’t included in this report.
Why so down?
Let’s talk briefly about one of the reasons the numbers are falling. Several articles today point out how the tariffs have clamped down on the willingness of companies to hire well before inflation from tariffs has even had the chance to arrive. Businesses anticipate decline, so they have hit the brakes hard on hiring. They are also so confused by how these massive tariffs flash on again and off again that they don’t know what to plan for. So, American business is stalling.
News that I failed to notice a few days ago, which I added to the headlines today, was that the appeals court for the tariffs that were recently removed by court order put those tariffs back on again until the appeal is decided. Because the tariffs are likely not even constitutional in how they were done by presidential decree without a true emergency (and there is no emergency clause in the constitution, anyway, as one of my readers who is a lawyer pointed out), businesses don’t even know if they are legal. So, who knows if they will stand? It’s chaos.
Other reports that I’ll get to below talk about why government numbers (like that GDP estimate) are all over the place, and that does get blamed on the DOGE cuts, and some of it was blamed on a Trump Admin. cover-up. Some of the really bad stuff that I said could show up quickly is showing up:
Let’s talk about the cover-up first: The government delayed issue of a critical farm report because Trump was angry about its forward estimation of damaged farm sales due to tariffs. Farmers, however, rely on the quarterly report in order to figure out how much they are going to plant this time of year based on projections for the Ag. market and sometimes what they are going to plant.
Trump administration officials delayed and redacted a government forecast because it predicts an increase in the nation’s trade deficit in farm goods later this year….
The numbers run counter to President Donald Trump’s messaging that his economic policies, including tariffs, will reduce U.S. trade imbalances. The politically inconvenient data prompted administration officials to block publication of the written analysis normally attached to the report because they disliked what it said about the deficit….
The highly unusual rollout could raise questions about potential political meddling with government reports that have traditionally been trusted for decades.
“Objectivity is really key here and the public depends on it,” said Joe Glauber, a former USDA chief economist. “To lose that trust would be terrible.”
Apparently, Trump is no more above cooking the numbers or hiding them than Biden was.
The government hinted at another reason for the delay when it replied that the report got “hung up … and was not finalized in time for its typical deadline.” It could be the DOGE cuts have left the government short of the number of people it needs in that department to get the report out on time. That is your option if you don’t like the claim that the government is lying and covering up the truth. This unreliability in government numbers under the sweeping DOGE cuts, is something I warned would happen right when we need good numbers the most in order to see the effects of the tariffs. It might be that all numbers that look bad for the administration will be the ones that are most convenient to put on the back burner when short-staffed.
The hint comes in these words:
"Given this report is not statutory as with many other reports USDA does, the Department is undergoing a review of all of its non-statutory reports, including this one, to determine next steps…."
The May report reflects Trump’s on-again, off-again tariffs, the people said. The president has announced sharply higher tariffs on China and “reciprocal” levies of at least 10 percent on most U.S. trading partners.
Since it is not statutory, it is one report they can delay if they are shorthanded, especially if they don’t like what it says.
Social insecurity
We are also seeing this now in Social Security, a department that had been reduced significantly prior to DOGE and already struggled with its load. The Social Security Administration warned today there is a high likelihood that millions of social security checks will be delayed as, under reduced staffing, it has had to do triage between cutting checks and getting those who have signed up for Social Security and government employees who were legally just made eligible on its roles. The SSA was hit by a higher-than-usual number of new sign-ups as a Biden Admin law that made government workers who had other pensions eligible for Social Security just like all other workers who have pensions are.
As SSA staff scramble to complete their new top priority task, the White House has said that the additional work will not impact other Social Security recipients.
"This project is very important to leadership and it’s critical the agency executes it swiftly, efficiently, and without letting anything else fall through the cracks," said Huston.
Social Security employees, on the other hand, have warned that millions of Americans could be impacted.
Well, apparently, the SS employees who warned of the impact to others that could come from processing their own eligibility for benefits were right because the department is no longer robust enough to handle any added work load.
Making an address or bank account change may take much longer than usual, for example, and many beneficiaries could experience delays or even stopped benefits, Social Security employees told USA Today.
Several of the typical tasks that may be cast aside, such as switching direct deposit details or fixing issues with Medicaid billing, could mean the difference between receiving a check or not, according to the workers….
Beyond the upheaval at the SSA caused by the new Social Security Fairness Act, mass layoffs and buyout offers are shaving down the number of Social Security staff, potentially exacerbating delay issues at the SSA.
The agency is working to cut down its staff by roughly 7,000 jobs, or 12%….
The SSA has also made a handful of changes to its tech systems that have resulted in several website failures, sparking fear among the millions of Americans who rely on their Social Security benefits.
The series of changes has resulted in increased wait times for phone assistance as well as a lengthier wait to schedule an in-person appointment at a field office.
These were all things I specifically warned could come from the obviously haphazard way DOGE was rushing into its cuts as well as quickly changing computer systems. The cuts were so immediate, it is impossible they gave much thought to who was needed most for the tasks at hand. Many of the cuts were made by just offering payouts for anyone who voluntarily quit, hardly a surgical method. More of a slasher methodology.
Inflation numbers get woozy
Economists are also questioning that inflation data that I questioned, and they are right to do so as the Bureau of Labor Statistics also reported today that staff cuts have seriously downgraded its ability to give accurate data (and their data was never too accurate in the first place; hence, why I call them the Bureau of Lying Statistics). Well, now they are even worse by their own admission.
Staffing shortages have disrupted its monthly price survey, The Wall Street Journal writes.
Due to a federal hiring freeze and cuts under the Department of Government Efficiency, the BLS reduced the number of businesses it surveyed in April and relied more heavily on estimates based on loosely related products or different regions—a method economists say increases the likelihood of error.
And it is precisely in their estimates and adjustments that most of their past errors lie. Now they are relying even more on estimates:
Nearly 30% of price data in April’s report used this less precise technique—double the norm— prompting scrutiny from economists and market analysts.
In The Journal report, which is not available without a paid subscription, I read that the way they have been doing estimates when they didn’t have enough staff to survey all prices is to ASSUME that similar items saw the same price changes; such as, if they had factual data on price changes in Levi blue jeans, but didn’t have them on Carhartt work pants, they ASSUMED the Carhartts went up the same percentage. Now, they are doing that on 30% of all the prices they report.
Weather numbers are getting foggy
We’ve been warned that the National Weather Service may not be able to give weather reports as accurately as in the past. (Where I live they have not been so accurate in the past, and they tend to overstate things.) Today, a Florida weather man with a reputation for making some extraordinarily accurate hurricane forecasts stated that he may not be able to do that anymore. Because of the number of employees cut, the service is now collecting a lot less data on things like hurricanes, and so the accuracy of their reporting is dropping.
We obviously have to make cuts in government, and so some of these things may have to be things we have to live with. But I have said all along that Trump’s wrecking-ball approach is bound to cause a lot more damage than is necessary. Maybe, for example, we should cut some of the research that goes into global warming, which seems politically biased anyway, and maintain forces in the forecasting department where people’s lives are more at stake. Maybe better computerization could whittle down administrative staff, etc. Maybe the National Weather Service should not be cut as much as foreign aid, etc.
The Central and South Florida NWS offices were 19 to 39% understaffed, he said. There had also been a nearly 20% reduction in weather balloon releases nationwide and cuts to NOAA’s Hurricane Hunter flight program meant that the aircraft might not be able to fly at all this year.
These cuts had resulted in the quality of weather forecasts “becoming degraded,” said Morales, leaving them “flying blind” and unable to know the strength of a hurricane before it hits land.
We’ve seen that the DOGE approach is so ham-fisted, that the government had to beg some essential employees it mistakenly fired to rush back to their jobs. It looks like the Department of Government Efficiency isn’t any more efficient than other departments, given how it makes big mistakes rapidly like because it rushes to firing straight out of the chute, relying almost entirely on AI to make the determinations.
More on the housing slide
I should note that two reports below confirm the turn in the housing market that I wrote about in my last Deeper Dive. Particularly noteworthy is the sharp increase in the number of “zombie homes,” meaning homes that sit on the market so long they go derelict and bring down values in their neighborhoods. Some areas are up by 50% over last year.
Also notable on the housing collapse is that mortgage applications fell again, even though mortgage rates also fell. Buyers are still on strike.
More war
Finally, Trump took a loss on two of his war fronts. He now concedes that Putin is not ready to make a deal and is more focused on additional conquest and on reprisal for Ukraine’s hugely successful attacks on his sitting-duck Air Force. Of course, we all knew Trump’s braggadocios claim that he could end the war in one day was nothing more than a bellicose campaign lie. I doubt even he believed it. If he did, he has too high of an opinion of himself. Surprise.
At the same time, Iran rejected the Trump deal flat out today, saying it only allows enrichment to continue at lower levels and temporarily. Trump has stated that if Iran did not quickly accept a deal, he would move to a war footing, attacking its nuclear installations. Putin said in his phone call with Trump, reported today, that perhaps he could help get Iran to move on the deal. Trump told him, It will have to happen quickly.