According to data released by the US Bureau of Labor Statistics (BLS) last night, the number of non-farm jobs in the United States in July increased by only 73,000, far below the market expectation of 110,000, with the previous value revised to 139,000. The unemployment rate remained at 4.2%, in line with market expectations, but slightly increased from the previous 4.1%.
More notably, this non-farm employment report revised the employment data for May and June down to 19,000 and 14,000 respectively, totaling a downward revision of 258,000 positions, highlighting the weakness in the labor market and reflecting the challenges faced by the US economy under high interest rates and Trump's tariff policies. The market believes this was the main reason for the collapse of the cryptocurrency market this morning.
September Rate Cut Expectation Surges
This non-farm data confirmed the previous concerns of Federal Reserve (Fed) governors Waller (Christopher Waller) and Bowman (Michelle Bowman). At the FOMC meeting that just ended in late July, both cast dissenting votes against maintaining the benchmark interest rate (4.25%-4.50%) and emphasized in their post-meeting statement that the labor market has shown signs of weakness, contrary to the views of Chairman Powell (Jerome Powell) and other policymakers.
Waller pointed out: "The current wait-and-see attitude is too cautious and fails to balance economic prospects and risks, which may lead to policy lag." He particularly mentioned that frequent data revisions and stagnant private sector employment growth have long suggested an increased risk of labor market downturn. Bowman stated: "The vitality of the labor market is weakening, with increasingly fragile signs."
After the non-farm data was released, market expectations for a Fed rate cut in September significantly increased. According to the CME FedWatch tool, the probability of a 25 basis point rate cut in September has risen to 80.3%, a substantial increase from the previous day's 37.7%.
Trump Attacks Powell and Labor Bureau Chief
The latest non-farm data results ignited the dissatisfaction of US President Trump (Donald Trump), who had previously emphasized that the Fed should cut rates quickly. On his social platform Truth Social, he launched a fierce attack on Fed Chairman Powell and Labor Statistics Bureau Director Erika McEntarfer.
Trump first called Powell a "disaster", accusing the Federal Reserve of "cutting rates twice" before the 2024 election to help Democratic candidate Kamala Harris's campaign, and said Powell "should retire".
Regarding Erika McEntarfer, Trump accused her of "fabricating" employment data to increase Harris's chances of winning, claiming that previous employment data was "manipulated". Trump announced that he has instructed his team to dismiss McEntarfer, emphasizing that the US and its people need "fair and accurate" data.
I just learned that our "employment data" is compiled by Biden-appointed Labor Statistics Bureau Director Dr. Erika McEntarfer, who fabricated employment data before the 2024 election to try to increase Kamala Harris's chances of winning. The Labor Statistics Bureau overestimated employment growth by about 818,000 in March 2024 and again overestimated by 112,000 in August and September before the 2024 presidential election, setting a record - how could it be so wrong? We need accurate employment data. I have instructed my team to immediately dismiss this Biden-appointed political official, who will be replaced by a more competent and qualified person. Such important data must be fair and accurate, not manipulated for political purposes. She claimed only 73,000 jobs were added in July (shocking!), and more importantly, the data for the previous two months was revised down by 258,000. Similar situations have occurred in the first half of this year, and they are always negative adjustments. Although the Federal Reserve is also playing games - this time with interest rates, they will cut rates twice before the election, I guess hoping to elect "Kamala" - how did it turn out? Under "Trump's" leadership, the economy was thriving. Jerome is "too late"! Powell should also be "asked to leave the Federal Reserve".
US Stocks Turn Completely Red
Affected by the non-farm data, the US stock market also suffered a severe blow. According to Google Finance data, all four major US stock indices fell, specifically:
- Dow Jones Industrial Average: Down 1.23%, or 542.4 points, closing at 44,130.98 points.
- S&P 500 Index: Down 1.6%, or 101.38 points, closing at 6,339.39 points.
- Nasdaq Index: Down 2.24%, or 472.32 points, closing at 21,122.45 points.
- Philadelphia Semiconductor Index: Down 1.43%, or 80.31 points, closing at 5,607.92 points.
