The Memo: Weak jobs report clouds economy as Trump barrels toward midterms
The Hill · C · trust 48/100
Comments: by Niall Stanage - 08/08/26 6:00 AM ET Comments: Link copied by Niall Stanage - 08/08/26 6:00 AM ET Comments: Link copied NOW PLAYING New clouds darkened the economic landscape on Friday, as the latest employment report showed the nation shedding 23,000 jobs in July.
The number came as an unpleasant surprise to most economists. The consensus prediction from experts canvassed by Dow Jones had been that more than 80,000 jobs would be created.
Democrats pounced on the number to reinforce their case that President Trump is mismanaging the economy.
Former Transportation Secretary Pete Buttigieg, a possible 2028 presidential candidate, wrote on social media platform X: “The economic failures of the Trump administration keep piling up. There’s no way to spin these dismal results, because Americans know they’re paying the price every day.”
Rep. Nancy Pelosi (D-Calif,), the former Speaker, chimed in that, “Today’s disastrous report is the latest proof that the Trump economy has failed the American people.”
And Abdul El-Sayed, who this week won the Democratic nomination to battle former Rep. Mike Rogers (R-Mich.) in a U.S. Senate race in Michigan, wrote : “Trump dump...or slump. Either way, it’s bad. Mike Rogers wants to rubber stamp this. I want to stand up to it.”
Democrats believed even before the latest report that the economy would be a strong issue for them in November’s midterm elections.
Trump was elected, at least in part, to ease inflation that had lingered since hitting its highest point in decades in the middle of the Biden presidency.
Progress has been slow and, in recent months, has gone in the wrong direction, however. That’s largely because of Trump’s decision to go to war with Iran and the consequent climb in the price of oil.
Inflation peaked under Biden at an annualized rate of 9.1 percent in June 2022. But it had fallen to 2.7 percent by November 2024, the month in which Trump defeated then-Vice President Harris.
The inflation figure now has been above 3 percent every month since the war on Iran began on Feb. 28. It hit 4.2 percent in May and stood at 3.5 percent for June. New figures covering July will be released next Wednesday.
The public is feeling the effects both of persistent inflation and a broader sense of economic malaise.
According to the polling averages maintained by RealClearPolitics, Trump’s single worst issue is inflation, with more than two-thirds of the public disapproving of his performance.
On the economy in general, Trump doesn’t fare much better: Roughly 61 percent of people disapprove of his performance while about 37 percent approve.
Trump often focuses on the performance of the stock market as an indicator of the economy’s health. The president frequently notes how gains on Wall Street are good news for Americans with 401(k) retirement savings plans as well as for people who hold stocks directly.
The S&P 500, the most broad-based of the three major stock market indices, rose again on Friday, closing at 7,757. That’s a gain of almost 30 percent since Trump was inaugurated in January 2025.
The fact that the market rose on Friday, after a poor jobs report, is not as strange as it might seem.
Broadly speaking, Wall Street’s primary concern is interest rates.
The markets fear that the Federal Reserve will raise interest rates soon to try to fight inflation. But a bad jobs report makes that slightly less likely, since the central bank might think the economy is slowing of its own accord and needs no further pumping of the brakes.
Mark Zandi, chief economist with Moody’s Analytics, noted that there are other indicators, such as decelerating wage growth and comparatively “tame” rises in housing costs, that also weigh against a rate increase.
“There are a lot of gravitational forces to bring inflation back in,” Zandi told this column. “Given the weak economy, I would be holding rates steady. What will [the Fed] do? I think this jobs report strengths the hand of people who want to keep rates unchanged.”
Trump and his allies take issue with the claim that the economy is weak, however.
Kevin Hassett, the director of the White House’s National Economic Council, told reporters on Friday, “The economy continues to be strong. We see durable goods orders, capital spending, through the roof. People aren’t being laid off.”
Hassett also played down the jobs report as “very noisy data... It’s a survey that is, like, one thing to look at but there are a lot of other things to look at too.”
Some Trump allies also note that even as the nation lost jobs, the unemployment rate ticked down, from 4.2 percent in June to 4.1 percent in July.
But, again, that is shaky grounds for optimism.
The unemployment rate decrease is a byproduct of people leaving the labor market.
Economists debate whether this is the consequence of people giving up on finding jobs or being able to retire early, or whether it is caused by immigrants — authorized as well as unauthorized — leaving the U.S.
Whatever the reason, a smaller labor force typically results in less robust economic growth.
There is, of course, the possibility that public sentiment about the economy will improve — perhaps if the conflict in Iran is definitively ended and prices come down.
But time is running short for Trump and the GOP with the midterms just three months away.
And Friday’s jobs report certainly didn’t help.
“There’s absolutely no reason to see any sunshine in this,” said Zandi. “It’s just shades of gray and black.”
The Memo is a reported column by Niall Stanage.
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