Trump Calls for Interest Rate Cuts Amid Weak Job Growth
President Donald Trump urges Federal Reserve's Jerome Powell to lower rates, citing disappointing private sector job figures.
On June 6, 2023, President Donald Trump reiterated his demand for the Federal Reserve, led by Chairman Jerome Powell, to reduce interest rates, following a report indicating stagnation in private sector employment for May. This call coincides with a report released by ADP, a payroll processing firm, which revealed that private payrolls added only 37,000 jobs for the month, significantly below analysts' expectations of 110,000.
This figure represents the lowest monthly job growth reported by ADP since March 2023.
Nela Richardson, chief economist at ADP, noted that after a strong start to the year, hiring appears to be losing momentum.
The report highlighted losses of 2,000 net jobs in the goods-producing industries, with natural resources and mining shedding 5,000 positions, while manufacturing lost 3,000 jobs.
Nevertheless, construction sectors saw an increase of 6,000 jobs during the same period.
Despite some strength in leisure and hospitality as well as financial activities, the overall employment figures were weighed down significantly by declines in professional and business services (17,000 jobs lost), education and health services (13,000 jobs lost), and trade, transportation, and utilities (4,000 jobs lost).
ADP also reported annual pay growth remained stable, with a 4.5% increase for those who stayed in their positions and a 7% increase for those who changed jobs.
The current interest rate set by the Federal Reserve is in the range of 4.25% to 4.5%.
Trump has previously urged the Fed to lower rates, arguing that the inflation rate is under control and that his trade policies are generating revenue for the government.
The Federal Open Market Committee (FOMC) is scheduled to meet on June 17 and 18 to discuss potential adjustments to rates.
Trump has had several public disagreements with Powell, publicly accusing him of acting too late and suggesting that he possesses greater economic knowledge.
He has also threatened Powell with dismissal, despite such action being restricted by law.
Last week marked the first face-to-face meeting between Trump and Powell since the former's return to power earlier this year, during which Powell reiterated that monetary policy decisions would depend on economic conditions amidst Trump's ongoing pressure.
The U.S. Federal Reserve has indicated it anticipates 'one or two rate cuts' by the end of the year.
This figure represents the lowest monthly job growth reported by ADP since March 2023.
Nela Richardson, chief economist at ADP, noted that after a strong start to the year, hiring appears to be losing momentum.
The report highlighted losses of 2,000 net jobs in the goods-producing industries, with natural resources and mining shedding 5,000 positions, while manufacturing lost 3,000 jobs.
Nevertheless, construction sectors saw an increase of 6,000 jobs during the same period.
Despite some strength in leisure and hospitality as well as financial activities, the overall employment figures were weighed down significantly by declines in professional and business services (17,000 jobs lost), education and health services (13,000 jobs lost), and trade, transportation, and utilities (4,000 jobs lost).
ADP also reported annual pay growth remained stable, with a 4.5% increase for those who stayed in their positions and a 7% increase for those who changed jobs.
The current interest rate set by the Federal Reserve is in the range of 4.25% to 4.5%.
Trump has previously urged the Fed to lower rates, arguing that the inflation rate is under control and that his trade policies are generating revenue for the government.
The Federal Open Market Committee (FOMC) is scheduled to meet on June 17 and 18 to discuss potential adjustments to rates.
Trump has had several public disagreements with Powell, publicly accusing him of acting too late and suggesting that he possesses greater economic knowledge.
He has also threatened Powell with dismissal, despite such action being restricted by law.
Last week marked the first face-to-face meeting between Trump and Powell since the former's return to power earlier this year, during which Powell reiterated that monetary policy decisions would depend on economic conditions amidst Trump's ongoing pressure.
The U.S. Federal Reserve has indicated it anticipates 'one or two rate cuts' by the end of the year.
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