Bloomberg Surveillance: Looking Ahead to Jobs
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28 minutes ago
'This Week' Transcript 8-3-25: Larry Summers, Eric Holder & Doctors Without Borders USA CEO Avril Benoît
A rush transcript of "This Week with George Stephanopoulos" airing on Sunday, August 3, 2025 on ABC News is below. This copy may not be in its final form, may be updated and may contain minor transcription errors. For previous show transcripts, visit the "This Week" transcript archive. GEORGE STEPHANOPOULOS, ABC NEWS CO-HOST: After the president fired the head of the BLS on Friday, we invited the White House to provide a guest to respond. They declined. But we're joined now by former Treasury Secretary Larry Summers. Larry, thank you for joining us this morning. I guess this firing of the BLS commissioner goes in the category of shocking but not surprising. LARRY SUMMERS, FORMER TREASURY SECRETARY: Yes, I mean, this is way beyond anything that Richard Nixon ever did. I'm surprised that other officials have not responded by resigning themselves as took place when Richard Nixon fired people lawlessly. This is a preposterous charge. These numbers are put together by teams of literally hundreds of people following detailed procedures that are in manuals. There's no conceivable way that the head of the BLS could have manipulated this number. The numbers are in line with what we're seeing from all kinds of private sector sources. This is the stuff of democracies giving way to authoritarianism. It -- firing statisticians goes with threatening the heads of newspapers. It goes with launching assaults on universities. It goes with launching assaults on law firms that defend clients that the elected boss finds uncongenial. This is really scary stuff. And it can hardly be surprising that when the rule of law is a bit in question, that there's a big uncertainty premium in the markets that is operating to both make their be less investment, which slows the economy down, and also means there's less supply so that there's more inflationary pressure. STEPHANOPOULOS: Adding to that uncertainty is the president's campaign against Jerome Powell, the head of the Federal Reserve, saying he's been a moron, I think was the word the president used for not lowering interest rates so far. What's the impact of that? SUMMERS: Look, I think that this kind of political Fed bashing is a fool's game. The Fed doesn't listen. So, short-term interest rates aren't going to be different because of it. The market does listen. So, longer-term interest rates are going to be higher, which is going to make it more expensive to buy a house. This is hurting the economy, not helping. I think the president understanding that. And what the president is doing is recognizing that for all kinds of reasons, of which his policies are very important ones, the economy is at a lot of risk. And he's looking to set up a scapegoat if the economy performs badly. That's what this attacking Chairman Powell is really about. It's not really about trying to change policy. There's no chance that that's going to happen to any substantial degree. STEPHANOPOULOS: The jobs report on Friday probably does increase the chances that the Fed will cut interest rates in -- in September. What's your take on what that report told us? SUMMERS: I think it told us that the economy is closer to stall speed than we thought that it was. The July number was weak. The big deal is the downwards revision for the two months before that. And that means there's a real possibility that we're in a stall speed kind ofeconomy, which means we could tip over into recession. That wouldn't be my prediction right now, but the risk is greater certainly than it was before. And it's a risk we don't need to be taking, but it's a risk that's made more serious by these tariffs. What your viewers should understand is that these tariffs are not job creators. When you raise tariffs on steel, for example -- yeah, there's some people who work in the steel industry, but there are 50 times as many who work in industries like the automobile industry who are now going to be much less competitive when they try to compete all over the world. So, this is a immense gift that we are giving to our country's adversaries. By alienating our allies like Canada, like Europe, we are making it much easier for China to grow and flourish in the global economy. And I just don't understand why we would want to do that, especially when what we're getting out of it is an increase of more than $2,000 in the bills that typical middle-class families are going to have to pay. STEPHANOPOULOS: You know, the markets have been pretty complacent about the tariffs so far. Are we seeing their impact in this underlying jobs report? SUMMERS: I think that that is an element in it. I think both the direct effects of the tariffs, but probably more importantly, this sense of uncertainty that anything could happen, and who knows what business is going to be attacked next? Who knows what the rules are going to be? In an environment like that, what should a business do? It should sit and it should wait. Wait in terms of hiring people, wait in terms of new factory construction. What's keeping the economy going in significant part is not anything actually that's coming out of the president's policies. It is all of the investment that we're having in data centers which is coming out of the tremendous progress that some companies are making in technology, and that's keeping the economy going. But we're taking needless risks here -- needless risks both on the unemployment side and, George, on the inflation side which makes it harder for us to respond to any incipient recession threat when inflation is above target and when Americans say that cost of living is the biggest issue that's facing them.
Forbes
28 minutes ago
- Forbes
The Federal Reserve Isn't What Pundits Want It To Be, And Never Was
The Fed's mandates are rooted in endless fallacy, most prominently the discredited Phillips Curve which says economic growth causes prices to rise. Please keep this in mind as monetary policy grandees pen high-toned pieces musing about what the next Fed Chairman should think about, and do. All it takes to see the foolishness of everything central-bank related is to contemplate the Fed's 'price stability' mandate. While thinking about it, perhaps Google 'I, Pencil' to see the myriad global inputs that go into the making of something so prosaic. Having done that, stop and think about other market goods like Boeing planes, GM cars, and Apple iPhones. Considering planes alone, the recently mothballed 747 was a consequence of six million different parts manufactured around the world. Rest assured that GM cars aren't much different, after which iPhones can claim inputs from six different continents. Think seriously about all this as economists spend endless time musing about who should take over for Jerome Powell. Oh, the conceit! They desire a focus on 'price stability,' and they think deeply about whether 'the Fed should modify its 2% inflation interpretation' (John Cochrane) without acknowledging what's true: price stability is not only undesirable, it's a mandate that the Fed could never fulfill in the first place. Starting with the undesirable part, it is prices that organize the market economy. That they bounce all around is a feature of the organization as price movements tell producers what to produce more or less of. The movements up and down are evidence of neither inflation nor deflation when it's remembered that a rising price signals fewer dollars for other purchases, and a falling price signals more. Price movements by their very name balance each other. As for the Fed's role in prices, whether stable or unstable, the mere discussion isn't serious. Exactly because market goods are an effect of remarkably sophisticated global cooperation among billions of hands and machines, the idea that Jerome Powell, his lieutenants, and hundreds of egghead economists under them could engineer 'price' anything is too silly for words. To which some will say that the Fed isn't fiddling with prices when it attempts to meddle in the workings of the economy, rather the Fed is trying to manage credit flows through interest rates lest the U.S. economy become too strong and 'overheat,' thus leading to rising prices. Yes, the discredited Phillips Curve. Back to reality, economies aren't machines, rather they're individuals. And individuals don't overheat as much as their innovations attract copious amounts of capital without regard to what the Fed does. Matched with the capital, the innovators find all manner of ways to produce more for less, on the way to falling prices. Yes, the surest sign of economic growth is falling prices. Which is just a comment that 'price stability' is just a variation of Phillips Curve orthodoxy. And it's bogus. As for 'price stability' from the Fed having to do with dollar price stability, that's not part of the Fed's policy portfolio and it never has been. Cochrane observes that 'The Financial and monetary system have evolved past the current Fed,' which is true, but it's 112 years true, not a 2025 thing. Cochrane thinks 'a wise Fed chair will need answers' to his many questions, but the happier truth is that the Fed isn't what Cochrane wants it to be, and thankfully never was. Evidence? The booming U.S. economy.
Yahoo
an hour ago
- Yahoo
'Tariffs are starting to bite': Latest inflation, jobs data sparks Wall Street concern over US economy
Stocks have continued to notch record highs this year as investors bet on a resilient economy and minimal fallout from tariff-driven inflation. But last week, both assumptions came under pressure. It was a packed week for economic data, offering a more nuanced and, in some cases, sobering look at the state of the US economy. The week kicked off with signs of strain in the labor market: The hiring rate fell to a seven-month low, and the quits rate, a key measure of worker confidence, dropped to just 2%. On Wednesday, GDP data showed the economy rebounded at a 3% annualized pace in the second quarter, recovering from a surprise Q1 contraction driven by a pre-tariff surge in imports. But economists cautioned that the headline growth masked underlying softness. Sales to private domestic purchasers, a key proxy for consumer and business demand, rose just 1.2%, the weakest pace since 2022. Greg Daco, chief economist at EY-Parthenon, called the rebound an "economic mirage," adding that policy uncertainty, rising inflation pressures from tariffs, and tighter immigration constraints are starting to weigh more visibly on economic activity. Then, after the Fed held interest rates steady, Thursday's release of its preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, showed price increases accelerated in June as inflation remained above the Fed's 2% target. Consumer spending also showed signs of strain as real personal spending rose just 0.1% in June following a revised 0.2% drop in May. The week culminated in a disappointing July jobs report, which offered the clearest sign yet that the labor market may be cracking. The US added just 73,000 jobs, far short of the 104,000 forecast. Even more striking were sharp downward revisions to May and June, which erased a combined 258,000 jobs, the largest two-month downgrade since May 2020. Taken in totality, last week's data painted a picture of mounting economic pressure, with growing signs that households are beginning to feel the strain as the second half of the year gets underway. "Tariffs are starting to bite," EY's Daco told Yahoo Finance. "They're leading to higher inflationary pressures, which are curtailing consumer spending and prompting businesses to adopt more of a wait-and-see approach." Michael Pearce, deputy chief US economist at Oxford Economics, said the overall trend is becoming clearer: "The signs are that consumer spending is losing momentum." He added that "as real income growth wanes, we expect an increasing drag on consumer spending, particularly on discretionary purchases and goods most exposed to tariff-driven price increases." While auto sales had been front-loaded earlier this year ahead of tariff implementation, Pearce pointed to renewed declines in tariff-sensitive categories like furniture. He noted that any short-term lift from early buying is now "mostly in the rear-view mirror," and warned that consumers have yet to fully absorb the impact of tariff-driven shocks to income and purchasing power. Adding to the pressure, trade tensions escalated as President Trump raised tariff rates on several US trading partners, including a surprise 39% levy on imports from Switzerland. "There's a repeated refrain that tariffs are not having an impact, and that assessment misses the mark," Wells Fargo economists, led by Jay Bryson, said in the latest installment of Yahoo Finance's Chartbook series. "Consumer spending is not as sturdy as it was initially reported in the first quarter," the team added. "With two months of data on hand for the second quarter, it is becoming increasingly clear that households are reducing their discretionary outlays." The strain is also beginning to show in corporate earnings. "When you take a look at companies like Whirlpool, like P&G, they are being impacted by tariffs," Michael Kantrowitz, chief investment strategist at Piper Sandler, told Yahoo Finance's Opening Bid. "There seems to be a sort of bifurcation when it comes to how tariffs are impacting bottom lines. Those that are focused on products for consumers ... And then you've got other companies, like Big Tech, that is sort of immune to the tariff situation." But even Big Tech is starting to feel the squeeze. Apple (AAPL) CEO Tim Cook warned this week that the company expects a $1.1 billion tariff hit this quarter. Elsewhere, a slew of consumer-facing companies, including Shake Shack (SHAK), Canada Goose (GOOS), and snack maker Kellanova (K), have struggled this earnings season as price-sensitive shoppers pull back. With contributing reporting from Yahoo Finance's Josh Schafer. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at
