US stocks slump on latest tariffs, soft jobs data
NEW YORK: US stocks slumped on Friday, and the S&P suffered its biggest daily percentage decline in more than two months as new US tariffs on dozens of trading partners and a surprisingly weak jobs report spurred selling pressure.
Also weighing on equities was an 8.3% tumble in Amazon.com shares after the company posted quarterly results but failed to meet lofty expectations for its Amazon Web Services cloud computing unit.
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The Star
12 hours ago
- The Star
Trump fires US labor official over data and gets earlier than expected chance to reshape Fed
WASHINGTON/NEW YORK (Reuters) -President Donald Trump on Friday fired a top Labor Department official on the heels of a market-shocking weak scorecard of the U.S. job market, accusing her without evidence of manipulating the figures and adding to already growing concerns about the quality of economic data published by the federal government. In a second surprise economic policy development, the door for Trump to make an imprint on a Federal Reserve with which he clashes almost daily for not lowering interest rates opened much earlier than anticipated when Fed Governor Adriana Kugler unexpectedly announced her resignation on Friday afternoon. The two developments further rattled a stock market already reeling from his latest barrage of tariff announcements and the weak jobs data. The benchmark S&P 500 Index sank 1.6% in its largest daily drop in more than two months. Trump accused Erika McEntarfer, appointed by former President Joe Biden, of faking the jobs numbers. There is no evidence to back Trump's claims of data manipulation by the Bureau of Labor Statistics, the statistical agency that compiles the closely watched employment report as well as consumer and producer price data. A representative for the BLS did not respond to a request for comment. Friday began with BLS reporting the U.S. economy created only 73,000 jobs in July, but more stunning were net downward revisions showing 258,000 fewer jobs had been created in May and June than previously reported. "We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified," Trump said in a post on Truth Social. DATA CONCERNS A Trump administration official who requested anonymity said that while all economic data is noisy, the White House has been dissatisfied with how large the revisions have been in the recent data and issues with lower survey responses. The problem started during COVID and has not been addressed in the years since. "There are these underlying problems that have been festering here for years now that have not been rectified," the person said. "The markets and companies and the government need accurate data, and like, we just weren't getting that," the official said. The BLS has already reduced the sample collection for consumer price data as well as the producer price report, citing resource constraints. The government surveys about 121,000 businesses and government agencies, representing approximately 631,000 individual worksites for the employment report. The response rate has declined from 80.3% in October 2020 to about 67.1% in July, BLS data shows. A Reuters poll last month found 89 of 100 top policy experts had at least some worries about the quality of U.S. economic data, with most also concerned that authorities are not addressing the issue urgently enough. In addition to the concerns over job market data, headcount reductions at BLS have resulted in it scaling back the scope of data collection for the Consumer Price Index, one of the most important gauges of U.S. inflation, watched by investors and policymakers worldwide. Trump's move fed into concerns that politics may influence data collection and publication. "Politicizing economic statistics is a self-defeating act," said Michael Madowitz, principal economist at the Roosevelt Institute's Roosevelt Forward. "Credibility is far easier to lose than rebuild, and the credibility of America's economic data is the foundation on which we've built the strongest economy in the world. Blinding the public about the state of the economy has a long track record, and it never ends well." FED CHANGE SOONER THAN EXPECTED Meanwhile, Kugler's surprise decision to leave the Fed at the end of next week presents Trump an earlier-than-expected opportunity to install a potential successor to Fed Chair Jerome Powell on the central bank's Board of Governors. Trump has threatened to fire Powell repeatedly because the Fed chief has overseen a policymaking body that has not cut interest rates as Trump has demanded. Powell's term expires next May, although he could remain on the Fed board until January 31, 2028, if he chooses. Trump will now get to select a Fed governor to replace Kugler and finish out her term, which expires on January 31, 2026. A governor filling an unexpired term may then be reappointed to a full 14-year term. Some speculation has centered on the idea Trump might pick a potential future chair to fill that slot as a holding place. Leading candidates for the next Fed chair include Trump economic adviser Kevin Hassett, Treasury Secretary Scott Bessent, former Fed Governor Kevin Warsh and Fed Governor Chris Waller, a Trump appointee who this week dissented with the central bank's decision to keep rates on hold, saying he preferred to start lowering them now. Trump, as he was leaving the White House to spend the weekend at his Bedminster, New Jersey, estate, said he was happy to have the open slot to fill. "I would not read any political motivation into what [Kugler is] doing, although the consequence of what she's doing is she's calling Trump's bluff,"said Derek Tang, an analyst at LH Meyer, a research firm. "She's putting the ball in his court and saying, look, you're putting so much pressure on the Fed, and you want some control over nominees, well, here's a slot." (Additional reporting by Jasper Ward and Trevor Hunnicutt; Writing by Daniel Burns; Editing by Chris Reese and Nia Williams and Anna Driver)
The Sun
20 hours ago
- The Sun
Trump fires US labor official over data
WASHINGTON/NEW YORK: President Donald Trump dismissed a senior Labor Department official on Friday, accusing her of manipulating jobs data without evidence. The move intensified worries about the reliability of federal economic reports. In a separate development, Federal Reserve Governor Adriana Kugler unexpectedly announced her resignation, offering Trump an earlier-than-expected opportunity to reshape the central bank's leadership. The twin announcements rattled markets, with the S&P 500 dropping 1.6%, its steepest fall in over two months. Trump targeted Erika McEntarfer, a Biden appointee, claiming she falsified employment figures. No proof supports his allegations against the Bureau of Labor Statistics (BLS), which produces key economic indicators like jobs and inflation data. A BLS representative declined to comment. The July jobs report showed only 73,000 new positions, with downward revisions erasing 258,000 previously reported jobs for May and June. 'We need accurate Jobs Numbers,' Trump posted on Truth Social, ordering McEntarfer's immediate replacement. A Trump administration official, speaking anonymously, cited dissatisfaction with recent data revisions and declining survey response rates. The BLS has scaled back data collection for inflation metrics due to resource constraints. Response rates for employment surveys fell from 80.3% in 2020 to 67.1% last month. A Reuters poll revealed 89 of 100 policy experts worry about U.S. data quality, with many criticizing the lack of urgency in addressing issues. Reduced BLS staffing has also narrowed the scope of Consumer Price Index reporting, a critical inflation measure. 'Politicizing economic statistics is a self-defeating act,' warned Michael Madowitz of the Roosevelt Institute. 'Credibility is far easier to lose than rebuild.' Meanwhile, Kugler's departure lets Trump appoint a Fed governor ahead of schedule. The president has repeatedly clashed with Chair Jerome Powell over interest rates. Potential successors include Trump adviser Kevin Hassett and former Fed Governor Kevin Warsh. 'I would not read any political motivation into [Kugler's] decision,' said analyst Derek Tang. 'But she's calling Trump's bluff by handing him a vacancy to fill.' - Reuters
The Star
20 hours ago
- The Star
U.S. stocks sink on tepid U.S. jobs data, erratic trade policies
NEW YORK, Aug. 1 (Xinhua) -- U.S. stocks tumbled Friday, weighed down by a weaker-than-expected jobs report that signaled a cooling labor market and growing investor unease over the Trump administration's erratic trade policies. The Dow Jones Industrial Average dropped 542.4 points, or 1.23 percent, to 43,588.58. The S&P 500 declined 1.6 percent to 6,238.01, and the Nasdaq Composite slid 2.24 percent to 20,650.13. Losses were broad across the market, with eight of the 11 primary S&P 500 sectors closing lower. Consumer discretionary and technology stocks led the decline, falling 3.59 percent and 2.07 percent, respectively. Health care and consumer staples were among the few bright spots, rising 0.58 percent and 0.53 percent. The U.S. economy added just 73,000 jobs in July, far below the 104,000 forecast. Previous months' job gains were also revised down sharply, and the unemployment rate rose to 4.2 percent from 4.1 percent in June. U.S. President Donald Trump criticized the report as a "mistake," and announced the dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer. He also renewed criticism of Federal Reserve Chair Jerome Powell. "This is a gamechanger jobs report. The labor market now looks a lot weaker than expected," said Heather Long, chief economist at Navy Federal Credit Union. Bank of America warned that the data raised the risk of "bad cuts" by the Fed on Friday. Markets see a nearly 90 percent chance that the Federal Reserve will cut interest rates in September, according to the CME FedWatch Tool. Markets were also rattled by a sweeping executive order signed by Trump on Thursday, which hiked tariffs on Canadian goods to 35 percent and set "reciprocal" tariffs on dozens of other countries. Tech stocks were hit hard. Amazon dropped 8.27 percent despite posting better-than-expected second-quarter results. Apple declined 2.5 percent, reversing earlier gains after releasing strong earnings. Meta lost about 3 percent, while Nvidia, Microsoft, Alphabet, Broadcom, and Tesla all slid more than 1.5 percent. "Traders are locking in gains as tech earnings fade, macro risks grow, and seasonality turns negative. Breadth is narrowing, valuations are stretched, and defensive positioning is quietly building," said Joseph Cusick, portfolio specialist at Calamos Investments.
