Disappointing labor market numbers and a bad mood in industry, but the economy is growing: the situation in the USA seems to be divided into two. But the economic alarm signals are piling up.
US President Donald Trump is now in office a little more than half a year. At that time he took over a strong US economy with low unemployment, solid economic growth and moderate inflation.
“No matter which direction you look at the US economy: you can only come to the conclusion that it is very healthy,” said Markt expert Robert Rethfeld from Wellenreiter-Invest in view of this situation in January Evidence Network.de. Since then, a lot has moved in the US economy – not always for the better.
Surprisingly weak job market
For example, the latest numbers draw a surprisingly weak picture of the US labor market. In July, only 73,000 new jobs were added outside of agriculture, as can be seen from the government published last Friday. Economists surveyed by Reuters had an increase of 110,000 new positions on the slip.
At the same time, the number of positions created in June was massively revised – from 147,000 to only 14,000. According to the revised data, significantly fewer jobs are said to have been created in May than originally assumed.
“The numbers are worse than any forecast,” said Helen Given, chief of chief at the financial service provider Monex, with a view to the labor market data. The sticking point is above all the downward correction for the previous month.
Trump’s reaction to the data
In view of the surprisingly weak data, Trump had announced on Friday that the head of the Office for Labor Market Statistics, Erika Mcentarfer. He accused her of manipulated labor market numbers for political purposes. “We need accurate labor market numbers,” said Trump. Shortly afterwards, he wrote without providing evidence that labor market data had been manipulated.
The decision of the US president causes a lot of criticism in the USA – but Trump’s economic advisor Kevin Hassett defends the step. When asked whether the government had any evidence that the labor market numbers had been manipulated, Hassett told NBC News: “Well, the proof is that there were a number of revisions.” These could seem too partisan. Hassett replied to the hook, whether there are also tangible evidence: “I think the revisions are tangible evidence.”
Alarm signals are piling up
But not only the labor market data question the strength of the US economy, as it prevailed at the beginning of the year. Another alarm sign came from the US industry, which surprisingly accelerated its descent in July. The mood in the US industry fell to 48.0 points – the lowest level since October 2024. This emerges from the latest corporate survey by the Institute for Supply Management (ISM).
This is particularly noteworthy because a good ten percent of the USA’s economic output is eliminated. It was surprisingly robust recently: in the second quarter, the US economy grew up to the year by 3.0 percent, as the Ministry of Commerce announced after an initial estimate at the end of July.
How sustainable this growth is is completely unclear. In this way, economists warn of a structural weakening of the economy. Chief economist Cyrus de la Rubia from Hamburg Commercial Bank said: “The investments are declining at a strikingly strong pace and the US consumer continues to be released.”
These are two quite clear signals that companies and households in the United States are careful – especially for companies, the lack of planning security in the face of many trade conflicts is a problem. First of all, they wanted to wait and see what the US government was doing in the coming months.
Is the Dollar weakness a Distrust vote?
And last but not least, the current weakness of the dollar is seen by experts as a vote of no confidence against Trump’s politics – although Trump should have achieved exactly what he wanted. Because the devaluation of the dollar, which has lost significantly since the beginning of the year, exports are cheaper for the United States and imports are more expensive. This relieved the deficit trade balance of the United States.
And at the same time, the devaluation of the US currency also shows the fear of investors from the consequences of Trump’s erratic customs policy; Many investors deducted money from the USA.
Customs policy as a reason for high interest rates
Trump’s erratic customs policy has also been mentioned as the reason why the US Federal Reserve Fed does not lower its interest. Last week, the central bank again left the key interest rate in the range of 4.25 to 4.50 percent. According to its boss Jerome Powell, the FED wants to gain more clarity about how Trump’s trade policy characterized by customs increases affects the entire economic image.
However, the mood within the Fed is no longer uniform: In the interest decision for a new break, there were two deviators who advocated a reduction. Director Michelle Bowman justified the step with “signs of a less dynamic labor market”. Her colleague Christopher Waller said that the FED should not wait with an interest reduction until the labor market has deteriorated. In his view, the current waiting attitude of the FED is “overly cautious”.
And in particular, the US Federal Reserve is likely to put pressure on the US Federal Reserve, says NordLB analyst Tobias Basse. When it comes to key interest rates, the FED “under really great pressure”. According to a rule of thumb, a number of 100,000 new positions per month is considered necessary to supply the growing US population with sufficient jobs. LBBW economist Elmar Völker sees it similarly: The data is “certainly water on the mills of monetary political pigeons around Fed governor Christopher Waller”. Tauben means currency keepers who prefer a relaxed monetary policy course.
Trump’s chance at the Fed?
For US President Trump, who has been calling for a reduction in the key interest rate for months, a chance may be a chance. Last Friday, the governor Adriana Kugler surprisingly gave up her office in the Fed management committee prematurely. Now Trump can re -fill this important item, because the President nominates the Fed board members – which can be confirmed by the Senate -, which in turn make up the majority of the powerful central bank council. So it is not surprising that he is “very happy” about the surprising resignation of the governor because a place in the Central Bank Council is now free.
In January 2026, Kugler’s term would not have expired on a regular basis. With the upcoming new occupation, Trump now wants to influence the future course of the Fed in his sense, because the committee defines the important key interest rate, which can indirectly promote economic growth.
The fact that on top of that there was also the discharge of the boss of the Office for Labor Market statistics is further indecisory. According to Jürgen Molnar, capital market strategist at Robomarkets, Trump’s approach “once again awakens the fear of the future political independence of such institutions and reports”.
With information from Lilli-Marie Hiltscher, ARD finance editor.
