AILSA CHANG, HOST:
Job growth slowed sharply this spring as President Trump's global tariffs took effect. We got that word from the Labor Department today, just as the White House is preparing for a new round of even higher tariffs. We're going to talk through the consequences with White House correspondent Danielle Kurtzleben and economics correspondent Scott Horsley. Hello to both of you.
SCOTT HORSLEY, BYLINE: Hi.
DANIELLE KURTZLEBEN, BYLINE: Hey, Ailsa.
CHANG: OK, Scott, let's start with this morning's jobs report, which was weaker than forecasters expected, right? What does it show, exactly?
HORSLEY: Yeah, it shows U.S. employers added just 73,000 jobs last month, which was a bigger slowdown than economists projected. More importantly, we got revised figures for May and June that pretty much erased nearly all the job growth that had been tallied for those two months. So when you take it together, this shows the labor market was a lot weaker in the spring and early summer than we had thought. And the news rattled investors who were already nervous about those rising tariffs. The Dow Jones Industrial Average tumbled 542 points, or about one-and-a-quarter percent.
The weakness in the job market's likely to put more pressure on the Federal Reserve to cut interest rates, which it did not do earlier this week when policymakers met. But at the same time, the Fed has to keep a wary eye on inflation, which has been creeping up, partly as a result of those Trump tariffs.
CHANG: Right. And Danielle, for the most part, this new round of tariffs - they're not set to take effect for another week, right? So what's in store at that point?
KURTZLEBEN: Well, higher tariffs pretty much across the board are in store. Yesterday, Trump signed two executive orders on tariffs. One of them said that as of today, tariffs of 35% would apply to many goods from Canada, one of our biggest trading partners. Then another order said that goods from many other countries will soon be taxed at 15% or more. In the case of Brazil, it goes as high as 50%. And those tariffs, like you said, are set to take effect next week.
Now, that means, since there's that time lag, that these new tariffs could still change. After all, Trump announces new tariffs all the time, and he also announces deals before they're even done all the time, so more could happen.
CHANG: More could happen - what do you think the president is trying to achieve, ultimately, with all of these tariffs?
KURTZLEBEN: Well, he's listed a few aims this year. He has said the tariffs are supposed to boost revenue, bolster manufacturing and also encourage foreign countries to change policies on things like, for example, controlling the flow of illegal drugs. But earlier this summer, I was talking to one business leader, and he said that, to him, Trump isn't trying to have a coherent strategy with his tariffs. Rather, it's just that Trump likes tariffs as a tool. Tariffs are a hammer, so he sees every problem as a nail. And it's true that Trump does seem to be most comfortable in a tariff negotiation or any negotiation. He uses the massive U.S. economy to get leverage, and also he sees negotiations as zero-sum. But in international trade, ideally, trade agreements are supposed to be mutually beneficial.
HORSLEY: The tariffs also seem to be backfiring, at least so far, when it comes to boosting manufacturing. U.S. factories have been cutting jobs in each of the last three months. Tariffs are already showing up in higher prices as well, for things like toys and appliances that we import a lot of. And that's pushing inflation in the wrong direction, which is not ideal for a president who campaigned on a promise of bringing prices down.
CHANG: OK. Well, with all of these consequences, Danielle, how would you say Americans are reacting to Trump's tariffs?
KURTZLEBEN: Not well - his overall economic approval rating has fallen off since he took office back in January. That rating was slightly positive according to the poll aggregator RealClearPolling. Now, that rating has been negative for a while now. Right now, it's at around negative-12 points. And we've also seen other polls showing that Americans are just doubtful about tariffs specifically.
Now, right now, we don't know how big the effect of tariffs will be. We're going to see that play out yet. But I talked to Scott Lincicome. He's a trade expert at the libertarian-leaning Cato Institute. And he told me that no matter what size the effects of these tariffs are, the tariffs are still an unforced error.
SCOTT LINCICOME: They can still slow growth. They can still increase prices. You could still do real damage, right? You know, I can cut off my pinkie and still live a full life, but that doesn't mean cutting off my pinkie was a good idea.
KURTZLEBEN: And to continue, maybe torture, that metaphor, the effects of these tariffs - we're still going to see if the effects are bigger than pinkie sized.
CHANG: Indeed. Well, Scott, I mean, we also got a new GDP report this week. What do you think that report tells us about how the president's economic agenda is working out right now?
HORSLEY: Well, tariffs caused a big swing in trade, which depressed GDP early in the year and then made it look somewhat better in the springtime. Overall, the U.S. economy did grow in the first six months of the year but only about half as fast as in each of the two previous years.
Now, of course, tariffs are just one part of the president's agenda. Trump is also cracking down on immigration, and that seems to be driving some people underground. The share of immigrants in the U.S. who are either working or looking for work has fallen pretty sharply in the last year. That might be making it harder for employers in industries like construction or restaurants or home health care, that rely on a lot of immigrant workers, to find the people they need. The administration hopes to fill those jobs by getting more native-born workers to come off the sidelines and join the workforce. However, so far, there's not much evidence that that's happening.
CHANG: OK. Well, given all of these ripple effects, Danielle, how is President Trump talking about all of this?
KURTZLEBEN: Well, today's jobs report clearly got under his skin, and rather than address the slowing job growth, he instead just decided to attack the messenger. He went on social media and posted that he was firing Dr. Erika McEntarfer. She's the commissioner of labor statistics. Now, she was a Biden appointee, and he accuses her, therefore, of manipulating the jobs numbers to hurt him and Republicans. And really, this is an astounding moment.
Now, first of all, we have seen no evidence that she manipulated anything. But furthermore, the Bureau of Labor Statistics - it's just staffed by numbers people, who the - those of us who are reporters and deal with them, we know they keep their work apolitical. And Republican and Democratic administrations have long trusted jobs numbers. So Trump here is really just casting doubt on economic reality, on a shared reality, and the consequences could be huge.
HORSLEY: Yeah, you know, the president can take his Sharpie to the hurricane map, but it does not change the shape of the storm.
CHANG: That is NPR's Scott Horsley and Danielle Kurtzleben. Thank you to both of you.
KURTZLEBEN: Thank you.
HORSLEY: Good to be with you. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
