Trump Takes A Nasty Hit On Friday

Friday’s jobs report delivered a major shock to the U.S. economy, with employers cutting an estimated 23,000 jobs in July instead of adding workers as economists had expected.

The result was dramatically weaker than forecasts. Economists surveyed by Dow Jones had anticipated an increase of more than 80,000 jobs, making the unexpected decline likely to intensify questions about the strength of the economy heading into the November midterm elections.

Democrats quickly seized on the report as evidence that President Donald Trump’s economic policies are failing to deliver the improvement many voters expected. Former Transportation Secretary Pete Buttigieg, who is viewed as a potential 2028 Democratic presidential contender, argued that the latest numbers added to what he described as a growing list of economic problems under Trump.

Former House Speaker Nancy Pelosi also criticized the report, calling it another indication that the administration’s economic approach has fallen short. Abdul El-Sayed, who recently won the Democratic nomination for a Michigan Senate race, likewise attempted to tie the disappointing employment numbers to Republican candidates.

The timing could be especially significant for Republicans. Economic concerns are expected to play a major role in the midterms, with voters continuing to focus on inflation, household expenses and job security.

Trump returned to the White House after campaigning heavily on the economy and promising to address the inflation that had become a major political issue during President Joe Biden’s administration. Inflation reached a four-decade high of 9.1% in June 2022 before declining considerably during Biden’s remaining time in office.

However, the improvement has become less consistent. Inflation has remained above 3% since the conflict with Iran began in late February, reaching 4.2% in May before easing to 3.5% in June. The July inflation report is scheduled for release next week.

Polling also indicates that economic concerns remain a difficult issue for the president. RealClearPolitics polling averages show particularly weak approval ratings for Trump on inflation, while his overall handling of the economy also receives more negative than positive evaluations.

There are, however, other economic indicators that paint a less gloomy picture.

Trump and his administration have repeatedly pointed to the stock market as evidence that the broader economy remains resilient. The S&P 500 finished Friday at 7,757, representing a substantial increase from its level when Trump began his second term in January 2025.

Wall Street’s reaction to the jobs report also offered an unexpected twist. Stocks can rise following weak employment data because investors may interpret slowing hiring as a reason for the Federal Reserve to avoid raising interest rates.

Mark Zandi, chief economist at Moody’s Analytics, said the latest employment figures could strengthen the argument for keeping interest rates unchanged. Slower wage growth and relatively moderate increases in housing costs could also reduce pressure on the Federal Reserve to tighten monetary policy.

Trump administration officials rejected the characterization of the economy as broadly weak.

Kevin Hassett, director of the White House National Economic Council, pointed to strong capital spending and durable-goods orders as signs of continued economic activity. He also cautioned against placing too much weight on a single monthly employment report, describing the figures as volatile and arguing that other economic indicators should be considered as well.

Another potentially positive figure was the unemployment rate, which declined from 4.2% in June to 4.1% in July.

Economists, however, have cautioned that the decline does not necessarily mean the labor market strengthened. The unemployment rate can fall when people stop actively looking for work and therefore leave the labor force altogether.

The reasons behind the shrinking labor force remain subject to debate, including questions surrounding retirement, discouraged workers and changes in immigration patterns.

For Republicans, the timing could make the latest report particularly consequential. With the midterm elections only months away, the administration has limited time to convince voters that the economy is moving in the right direction.

A sustained decline in inflation, an improvement in hiring or an easing of energy prices could change the political conversation. But for now, the July jobs report has handed Democrats another opening to argue that Americans are not seeing the economic gains they were promised.

The report also puts renewed attention on a central question facing the administration: whether the economy is temporarily hitting turbulence or entering a more serious slowdown.

For voters heading into the midterms, that distinction could matter considerably.