Trump embraces jobs report signaling slowdown

The White House is trying to capitalize on the latest jobs numbers, arguing they point to a strong economic recovery under President Trump even as millions remain out of work and states grapple with increases in coronavirus infections.

The figures released by the Labor Department on Friday exceeded Wall Street’s expectations, registering 1.8 million jobs gained during July and a drop in the unemployment rate to 10.2 percent at a time when southern and western states were forced to pause or roll back their reopening plans.

But the data nevertheless points to an economic slowdown, challenging the White House’s bullish predictions for a speedy V-shaped recovery. The figures also come amid collapsed talks between the Trump administration and Democratic leaders on a coronavirus relief package, which economists say is desperately needed to prevent a deeper recession.

“This is not a rocket ship,” said Martha Gimbel, senior manager of economic research at Schmidt Futures. “It’s really unclear if the economy is going to achieve escape velocity before the lack of government spending crashes down or before … we have to shut down again, which is a total possibility.”

White House economic adviser Larry Kudlow, who did the rounds on cable news Friday morning, declared that the numbers evidenced a “self-sustaining recovery” and predicted that the United States would see unemployment head into the single digits in the fall months.

“The worries that some partial shutdowns or some pausing shutdowns would wreck the jobs numbers did not pan out. I think that shows signs of strength,” Kudlow said on Fox Business.

July’s job gains were far less than the 2.7 million recovered in May and the 4.8 million regained in June, bearing out predictions that rising coronavirus cases would weaken the economy.

Meanwhile, last month’s unemployment rate was reminiscent of the depths of the Great Recession, when the joblessness peaked at 10 percent in October 2009. As recently as February, it was 3.5 percent.

Economic analysts say that despite the jobs report, there remains a need for additional fiscal stimulus. Many point to an extension of the expanded unemployment benefits and additional aid to states as necessary steps to shepherd the economy through recovery until there is a vaccine for the coronavirus.

“This jobs number doesn’t change the undeniable need for additional federal support,” said Isaac Boltansky, director of policy research at investment bank Compass Point Research & Trading. 

Many conservatives, however, disagree.

Stephen Moore, a conservative economist and informal adviser to Trump, argued that the data shows that a multitrillion-dollar stimulus package is unnecessary because the economy is not in the “free fall” it was earlier this year.

“It was a good number, not a great number,” Moore said on Friday.

Trump is now preparing for potential executive actions to enact economic measures absent a last-minute deal on Capitol Hill with Democrats.

Treasury Secretary Steven Mnuchin, one of Trump’s top two negotiators, told reporters following Friday’s meeting with Democrats that he and White House chief of staff Mark Meadows would recommend Trump move forward with some executive orders over the weekend related to enhanced unemployment benefits, rental foreclosures and student loans. Trump is also weighing an executive order to defer the payroll tax.

“Despite the fact that we had a very good jobs number this morning, there are still too many people that are out of work at no fault of their own because of this coronavirus,” Mnuchin said.

The economy has been a central focus of Trump’s pitch for reelection. The pandemic has forced business closures and wreaked havoc on the economy, forcing Trump to alter his message to voters.

The president and his campaign have focused on the strength of the U.S. economy prior to the coronavirus and sought to make the case that his policies on trade and deregulation would enable a swift rebound.

In a speech in Ohio on Thursday, Trump gave a broad outline of what his second-term economic agenda would look like, such as bringing back jobs and supply chains from overseas.

“We closed it up; we saved millions of lives. But now we’re opening, and it looks like I was right about the ‘V,’ because you’re seeing the kind of numbers that are coming in, and they’re coming in strong,” Trump told the crowd at a Whirlpool plant in Clyde, Ohio, on Thursday afternoon.

Trump, who is at his golf club in Bedminster, N.J., celebrated Friday’s jobs numbers in a pair of tweets and later Friday evening touted them as exceeding expectations during an impromptu press conference. The president staged impromptu press appearances to tout the record increases in jobs from May and June, when states embarked on reopening plans that many public health officials considered too fast and too soon.

Trump has leaned into his economic agenda more recently as polls show him trailing presumptive Democratic presidential nominee Joe Biden nationally and in battleground states. The same surveys tend to show that while Trump is the preferred candidate on handling the economy, Biden leads on other issues like race relations and the coronavirus.

The Trump campaign quickly seized on Friday’s better-than-expected numbers and accused Biden of embracing tax hikes and environmental policies that would cause “job-killing regulations.”

“The fundamental choice for voters is between the fantastic record of President Trump, who built the world’s best economy once and is doing it again, and Joe Biden, whose economic record is terrible and whose plans for the future are ruinous,” said Trump campaign communications director Tim Murtaugh.

In his own statement, Biden focused on the 16 million Americans still unemployed and argued the U.S. is in a “a deeper economic hole than we should be because of Donald Trump’s historic failure to respond to the pandemic.”

Updated at 8:55 p.m.