Donald Trump was once a jobs truther, casting doubt upon the Labor Department's credibility when it announced favorable job reports under Barack Obama. But now that the promising economic figures continue during his administration, Trump can barely contain his glee — tweeting a preview of Friday's job report that broke decades of protocol and manipulated the markets.
Under normal circumstances, a jobs report like the one released on Friday would be a political boon to a president. Because our president right now is Donald Trump, however, the situation is far from normal — and the president, who would otherwise have benefited from the good news, has instead stepped on his own headlines.
It all started with this tweet by President Trump early on Friday morning.
Subsequent to that tweet, a glowing jobs report was released... a coincidence that did not go unnoticed.
It is unclear whether Trump behaved inappropriately or not by hinting at the glowing jobs report before it was officially released, although this directive from the Office of Information and Regulatory Affairs in 1985 suggests he may have erred:
All employees of the Executive Branch who receive prerelease distribution of information and data estimates as authorized above are responsible for assuring that there is no release prior to the official release time ... Except for members of the staff of the agency issuing the principal economic indicator who have been designated by the agency head to provide technical explanations of the data, employees of the Executive Branch shall not comment publicly on the data until at least one hour after the official release time.
The economic report for May 2018 was indeed an incredibly positive one. The economy added 223,000 jobs (well above the 190,000 that Wall Street had anticipated), average earnings rose by 8 cents per hour and the overall unemployment rate dropped to 3.8 percent from 3.9 percent in April, making it the lowest that the American economy had seen since 2000, according to The New York Times. The main sign of trouble is that wage growth, though present, has been much more modest than one would anticipate during a period of rapid economic expansion. Economic experts disagree as to why there hasn't been major growth, with explanations ranging from the weakening of unions to slow productivity growth.
Nevertheless, the scope of the economic growth has in its own right been very noteworthy. As the Times reported:
Many of the gains in May were centered in the kind of deeply cyclical sectors that tend to perform best late in the economic cycle, like manufacturing, which added 18,000 jobs, and transportation, which registered a 19,000 gain. Less economically sensitive sectors also kicked in last month, with health-care employment rising by 29,000.
There is another way in which Trump could be stepping on his own economic growth — namely, by getting America into an unnecessary and counterproductive international trade war.
On Thursday Trump announced that he was imposing metal tariffs on the European Union, Canadaand Mexico, with all three political entities making it clear that they would retaliate against him for doing so. These trade announcements have come even as Trump continues to create tensions between the United States and China as he attempts to address ongoing trade disparities.
There are potentially serious long-term ramifications to Trump's belligerent actions when it comes to trade.
"I think most economists would tell you that the Great Depression was initially caused by other factors in the economy, but certainly the actions that were taken by Congress and the Smoot-Hawley tariffs exacerbated that great recession," Ed Gerwin, a senior fellow for trade and global opportunity at the Progressive Policy Institute, told Salon last month. "And I think, more importantly, they poisoned the well for global trade for many years. And one of the great accomplishments of the post-World War II era was developing a more rational system of trade that was more rules-based that would help to prevent these kinds of tit-for-tat tariff retaliations. And I'm very concerned that what the administration is doing is attacking the very foundations of that post-war, rules-based trade regime, in ways that..."
Gerwin trailed off for a moment before adding, "That regime has been hugely beneficial to the United States, despite some of the political rhetoric that you hear. And I'm very, very concerned that this kind of non-strategic lashing out when it comes to tariffs is going to end up really harming the United States as much as anyone globally."
More recently, Larry Summers — the former president of Harvard University as well as a former economic adviser for Presidents Bill Clinton and Barack Obama — denounced Trump's new trade policies as having destroyed the progress made by the economy.
"We shot the economy in our foot," Summers told CNBC on Thursday. He pointed out that the recent metal tariffs hurt companies that buy steel in order to protect workers in industries that make steel, even though there are 6.5 million Americans in the former industries and 140,000 in the latter industries. Summers also dismissed the defense of the policy by Commerce Secretary Wilbur Ross, who was unconcerned that the stock market took a hit when the new tariffs were announced.
"To defend a wanton act of economic aggression that hurts our economy by saying that all things work out in time is absurd. I'm appalled by the action," Summers told CNBC.
Summers also used basic math to counter Ross' attempt to diminish trade experts' concerns by saying that the prices of beer cans, soda cans and soup cans would go up by less than a penny.
"Raising the price of steel by 25 percent adds a lot more than fractions of a penny to the price of domestically produced automobiles," Summers told CNBC.
Trump's opposition to free trade is one of the cornerstones of his political ideology, an issue that he championed as far back as 1988, when he first publicly considered running for president. This was right around the time that "The Art of the Deal" became a national bestseller and transformed Trump from a primarily New York-based celebrity to a household name throughout America. In other words, both his penchant for self-promotion and his opposition to free trade policies have defined who he is for as long as he has been a national figure — which makes it all the more ironic that, at a moment when Trump's presidency should seem to be secured on the economic front, those two attributes are undermining this moment for the president.
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