Economist and former Treasury Secretary Kevin Warsh said President Trump's policies are responsible for a significant slowdown in U.S. job growth.
The assessment comes as the labor market shows signs of cooling, which complicates the Federal Reserve's decision on whether to lower interest rates to stimulate the economy.
Data from the June 2023 jobs report revealed that American employers added only 57,000 nonfarm payrolls [1]. This figure represents roughly half of the 115,000 forecast by the Dow Jones consensus [2]. The result marks a sharp cooldown compared to the previously reported 129,000 figure, which had been downwardly revised [2].
Warsh said that the current economic environment, influenced by the administration's approach, prevents the central bank from easing its monetary policy. He said that the Federal Reserve is unlikely to reduce rates in the immediate future despite the weak employment data.
"The Fed isn’t cutting interest rates anytime soon—and Kevin Warsh is putting the blame squarely on President Trump," Warsh said [3].
The disparity between the projected growth and the actual payroll additions highlights a volatile period for the U.S. labor market. The downward revision of previous months' data suggests that the slowdown may have been more persistent than initially believed by analysts.
“American employers added just 57,000 nonfarm payrolls”
The tension between employment data and interest rate policy creates a precarious balance for the U.S. economy. If job growth continues to miss forecasts while the Federal Reserve maintains high rates to combat other economic pressures, the risk of a deeper recession increases. Warsh's critique suggests that political policy may be creating headwinds that monetary policy alone cannot resolve.
